-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VtCCU6p25Ri+yPNiaTn+EDcM4hWINc7hPD02tuXqyQ+xroUikGmaiG33sLxbPb+6 96wuM+SPSmBTQ/k9MNb3TQ== 0000773141-03-000004.txt : 20030530 0000773141-03-000004.hdr.sgml : 20030530 20030530172351 ACCESSION NUMBER: 0000773141-03-000004 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030530 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MDC HOLDINGS INC CENTRAL INDEX KEY: 0000773141 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 840622967 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08951 FILM NUMBER: 03726707 BUSINESS ADDRESS: STREET 1: 3600 S YOSEMITE ST STE 900 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 3037731100 MAIL ADDRESS: STREET 1: 3600 S YOSEMITE ST STREET 2: SUITE 900 CITY: DENVER STATE: CO ZIP: 80237 11-K 1 form11_k.txt M.D.C. HOLDINGS, INC. DECEMBER 31, 2002 FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 Commission file number 1-8951 M.D.C. Holdings, Inc. 401(k) Savings Plan 3600 South Yosemite Suite 900 Denver, Colorado 80237 (Full Title and Address of the Plan) M.D.C. Holdings, Inc. - ------------------------------------------------------------------------------- (Name and Issuer of Securities Held Pursuant to the Plan) 3600 South Yosemite Street Suite 900 Denver, Colorado 80237 (Address of Principal Executive Office of Issuer of the Securities Held Pursuant to the Plan) REQUIRED INFORMATION 1. Audited Statements of Net Assets Available for Benefits as of December 31, 2002 and 2001 (incorporated by reference to the M.D.C. Holdings, Inc. 401(k) Savings Plan Financial Statements and Supplemental Schedule attached hereto as Exhibit 99.1). 2. Audited Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2002 (incorporated by reference to the M.D.C. Holdings, Inc. 401(k) Savings Plan Financial Statements and Supplemental Schedule attached hereto as Exhibit 99.1). 3. Notes to Financial Statements (incorporated by reference to the M.D.C. Holdings, Inc. 401(k) Savings Plan Financial Statements and Supplemental Schedule attached hereto as Exhibit 99.1). 4. Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2002 (incorporated by reference to the M.D.C. Holdings, Inc. 401(k) Savings Plan Financial Statements and Supplemental Schedule attached hereto as Exhibit 99.1). Pursuant to the requirements of the Securities Exchange Act of 1934, the administrator of the Plan has duly caused the annual report to be signed by the undersigned thereunto duly authorized. Date: May 30, 2003 M.D.C. Holdings, Inc. By: /s/ Paris G. Reece III ------------------------------------- Paris G. Reece III, Executive Vice President Chief Financial Officer and Principal Accounting Officer EXHIBITS Exhibit Number Description 23.1 Consent of Ernst & Young LLP, Independent Auditors 99.1 M.D.C. Holdings, Inc. 401(k) Savings Plan Financial Statements and Supplemental Schedule as of December 31, 2002 and 2001, and for the year ended December 31, 2002, including Report of Independent Auditors EX-99 2 exhibit99_1.txt M.D.C. HOLDINGS, INC. 401(K) FINANCIALS Exhibit 99.1 M.D.C. Holdings, Inc. 401(k) Savings Plan Financial Statements and Supplemental Schedule Year Ended December 31, 2002 M.D.C. Holdings, Inc. 401(k) Savings Plan Year Ended December 31, 2002 Contents - ------------------------------------------------------------------------------- Page Report of Independent Auditors 1 Financial Statements: Statements of Net Assets Available for Benefits 2 Statement of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4 Supplemental Schedule: Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 9 Report of Independent Auditors Board of Directors M.D.C. Holdings, Inc. 401(k) Savings Plan We have audited the accompanying statements of net assets available for benefits of M.D.C. Holdings, Inc. 401(k) Savings Plan as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. April 25, 2003 M.D.C. Holdings, Inc. 401(k) Savings Plan Statements of Net Assets Available for Benefits - -------------------------------------------------------------------------------
December 31, -------------------------------------------- 2002 2001 -------------------- -------------------- Assets Cash $ 171,526 $ - Investments, at fair value 42,751,789 38,546,684 Receivables: Employer contributions 3,081,273 2,752,728 Employee contributions 143,310 164,132 Accrued investment income 10,539 - -------------------- -------------------- Total receivables 3,235,122 2,916,860 -------------------- -------------------- Net assets available for benefits $ 46,158,437 $ 41,463,544 ==================== ====================
See accompanying notes to financial statements. 2 M.D.C. Holdings, Inc. 401(k) Savings Plan Statement of Changes in Net Assets Available for Benefits - ------------------------------------------------------------------------------
Year Ended December 31, 2002 --------------------- Additions Investment income (loss): Interest and dividends $ 572,205 Net depreciation in fair value of investments (2,962,424) --------------------- Net investment loss (2,390,219) Contributions: Employer 3,137,595 Employee 6,714,460 Rollovers 331,214 --------------------- Total contributions 10,183,269 --------------------- Net additions 7,793,050 Deductions Benefit payments 2,984,981 Transaction charges and administrative expenses 113,176 --------------------- Total deductions 3,098,157 --------------------- Net increase in net assets available for benefits 4,694,893 Net assets available for benefits at beginning of year 41,463,544 --------------------- Net assets available for benefits at end of year $ 46,158,437 =====================
See accompanying notes to financial statements. 3 M.D.C. Holdings, Inc. 401(k) Savings Plan Notes to Financial Statements December 31, 2002 - ------------------------------------------------------------------------------- 1. Description of Plan The following description of the M.D.C. Holdings, Inc. 401(k) Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. General The Plan is a defined contribution plan established effective January 1, 1992 and most recently amended effective June 1, 2001. All employees of M.D.C. Holdings, Inc. (the "Company") become eligible to participate upon completing six months of service and attaining the age of 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Contributions Participants may contribute an amount up to 100%, in whole percentages, of their pretax annual compensation to a maximum amount of $11,000, in accordance with Internal Revenue Service regulations. Participants over the age of 55 can contribute an additional pretax $1,000 in 2002. The Company may make matching contributions in a discretionary amount to be determined by resolution of the Company's Board of Directors, on an annual basis. The Company may make a discretionary profit sharing contribution without regard to the current or accumulated net profits of the Company for the taxable year ending with, or within, the plan year. The Company's matching and profit sharing contributions may be made in cash or in shares of M.D.C. Holdings, Inc. common stock. Participant Accounts Each participant's account is credited with the participant's contribution, allocations of the Company's contributions, if any, and Plan earnings and losses. Plan earnings and losses are allocated by funds based on the ratio of a participant's account invested in a particular fund to all participants' investments in that fund. Forfeited balances of terminated participants' non-vested accounts are used first to pay the expenses to administer the Plan, and are then allocated to reduce future contributions by the Company. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Vesting The interest of any participant in contributions made by the Company, and earnings thereon, will become vested to the extent of the following percentages: Years of Service Vested % Less than 2 years 0% After 2 years 40% After 3 years 60% After 4 years 80% After 5 years 100% 4 M.D.C. Holdings, Inc. 401(k) Savings Plan Notes to Financial Statements (continued) - ------------------------------------------------------------------------------- 1. Description of Plan (continued) If a participant dies, suffers disability or attains the normal retirement age while still employed by the Company, the participant becomes 100% vested without regard to length of service. Investment Options Upon enrollment in the Plan, a participant may direct contributions among any of the investment options offered by the Plan. Participants may change or transfer their investments at any time. Payment of Benefits A participant who has attained the age of 59 1/2, or has satisfied the terms for a financial hardship, may elect to commence distributions regardless of whether employed by the Company. The participant or beneficiary may elect to receive a lump-sum distribution, an annuity, or a combination of both. Distributions are subject to the applicable provisions of the Plan document. Participant Notes Receivable Participants are permitted to borrow a portion of their vested benefits under the Plan. Participants may borrow up to the lesser of (1) $50,000, reduced by (a) the applicant's highest outstanding loan balance from the Plan during the one-year period ending on the day before the loan is made and (b) the applicant's outstanding loan balance from the Plan on the day before the loan is made, or (2) 50% of the present value of the participant's non-forfeitable accrued benefit. Loan transactions are treated as a transfer between the investment fund and the loan fund. The loans are secured by the participant's account balance and bear interest at a fixed rate equal to the current prime rate plus 100 basis points at the date the application is approved. Interest rates on outstanding loans range from 5.25% to 10.5%. Principal and interest are paid ratably through monthly payroll deductions. Forfeitures Forfeitures result from non-vested benefit payments remaining in the Plan for all terminated employees. Upon reaching the break-in-service, as determined in the Plan document, amounts forfeited are added to the forfeitures in the Plan. Forfeitures are available to offset contributions or to pay Plan expenses, which would be otherwise payable by the Company, in accordance with the Plan document. The balance of forfeited non-vested accounts at December 31, 2002 and 2001 was $366,090 and $279,913, respectively. During 2002, $113,176 was used to pay for the Plan's administrative expenses. 2. Summary of Accounting Policies Method of Accounting The Plan's financial statements are prepared on the accrual basis of accounting. 5 M.D.C. Holdings, Inc. 401(k) Savings Plan Notes to Financial Statements (continued) - ------------------------------------------------------------------------------- 2. Summary of Accounting Policies (continued) Investments Shares of registered investment companies are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Shares of the Company's common stock are valued at their quoted market price. Participant notes receivable are valued at cost, which approximates fair value. Use of Estimates The preparation of these financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Payment of Benefits Benefits are recorded when paid. Expenses The Plan's administrative expenses are paid either by the Plan or the Company, as provided by the Plan document. Reclassifications Certain amounts reported in the 2001 financial statements have been reclassified to conform with the 2002 presentation. 3. Investments Investments that represent 5% or more of the Plan's net assets are separately identified below.
December 31, ------------------------------------------ 2002 2001 ------------------- ------------------- M.D.C. Holdings, Inc. common stock $ 14,341,799 $ 12,680,748 VDCS Victory Government Reserve Fund G 8,194,060 7,135,863 The Victory Stock Index Fund; Class A Shares 3,148,747 3,614,898 INVESCO Dynamics Fund * 3,322,304 Neuberger Berman Genesis Fund 2,856,390 2,081,509 PIMCO Total Return 2,801,480 * American Balanced Income Fund 2,582,730 * * Balance was less than 5% of the Plan's net assets.
6 M.D.C. Holdings, Inc. 401(k) Savings Plan Notes to Financial Statements (continued) - ------------------------------------------------------------------------------- 3. Investments (continued) During 2002 and 2001, the Plan's investments (including investments purchased and sold as well as held during the year) appreciated (depreciated) in fair value as follows: Year Ended December 31, 2002 --------------------- Common stock $ 720,388 Collective trust 84,142 Mutual funds (3,766,954) --------------------- $ (2,962,424) ===================== 4. Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. 5. Income Taxes The Plan has received a determination letter from the Internal Revenue Service dated August 2, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the "Code") and, therefore, the related trust is exempt from taxation. Subsequent to this issuance of the determination letter, the Plan was amended, however the plan administrator believes the plan document continues to qualify in form. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt. 6. Reconciliations of Plan Financial Statements to the Form 5500 The Annual Return/Report of Employee Benefit Plan (the "Form 5500") is prepared on the modified cash basis. Accordingly, certain balances included on Schedule H, Parts I and II, of the Form 5500 differ from those included in these financial statements. Contributions in the statement of changes in net assets available for benefits differ from contributions on the Form 5500 by the amount of contributions accrued at December 31. Additionally, net assets available for benefits include certain delinquent loans at December 31. When a participant terminates employment, the participant has 90 days from the date of termination to repay any outstanding loan balance in the participant's account. If the loan is not repaid, the participant receives a deemed distribution that is reported on Form 1099 and is subject to federal and state income taxes. 7 M.D.C. Holdings, Inc. 401(k) Savings Plan Notes to Financial Statements (continued) - ------------------------------------------------------------------------------- 7. Reconciliations of Plan Financial Statements to the Form 5500 The following is a reconciliation of financial information per the financial statements to the Form 5500:
December 31, ------------------------------------------- 2002 2001 -------------------- -------------------- Net assets available for benefits, per financial statements $ 46,158,437 $ 41,463,544 Less: Employer contributions receivable (3,081,273) (2,752,728) Employee contributions receivable (143,310) (164,132) Deemed distributions (12,577) (1,862) -------------------- -------------------- Net assets available for benefits, per Form 5500 $ 42,921,277 $ 38,544,822 ==================== ====================
Year Ended December 31, 2002 ------------------------------------------- Employee Employer Contributions Contributions -------------------- -------------------- Contributions made to participant accounts per the financial statements $ 6,714,460 $ 3,137,595 Add: Prior year contribution receivables per the financial statements 164,132 2,752,728 Less: Current year contribution receivables per the financial statements (143,310) (3,081,273) -------------------- -------------------- Contributions made to participant accounts per the Form 5500 $ 6,735,282 $ 2,809,050 ==================== ====================
8. Subsequent Events In 2002, the Company's Board of Directors approved changing trustees from Key Bank to INVESCO effective January 1, 2003. This does not impact any of the amounts contained herein. 8 Supplemental Schedule M.D.C. Holdings, Inc. EIN 84-0622967 401(k) Savings Plan Plan 004 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2002 - -------------------------------------------------------------------------------
Description of investment including Identity of issue, borrower, maturity date, rate of interest, Current lessor, or similar party collateral, par, or maturity value Value** ------------------------------------------------------------------------------------------------------------------ * M.D.C. Holdings, Inc. Common Stock $38.26/share $14,341,799 * Key Bank VDCS Victory Government Reserve Fund G $11.34/share 8,194,060 * Key Bank The Victory Stock Index Fund; Class A Shares $13.01/share 3,148,747 Neuberger Berman Management, Inc. Neuberger Berman Genesis Fund $16.56/share 2,856,390 PIMCO PIMCO Total Return Fund $10.67/share 2,801,480 The American Funds Group American Balanced Income Fund $14.42/share 2,582,730 The American Funds Group American Washington Mutual Investors Fund $23.51/share 2,296,865 INVESCO Equity, Inc. INVESCO Dynamics Fund $10.66/share 2,158,407 * Participant Notes Receivable Interest rates of 5.25% - 10.50% and maturity dates of 8 months to 15 years 1,352,136 The American Funds Group Europacific Growth Fund $22.97/share 1,031,859 Janus Investment Fund Janus Mutual Fund $17.82/share 1,005,846 INVESCO Equity, Inc. INVESCO Small Growth Fund $8.33/share 692,217 * The Victory Portfolios Victory Real Estate Fund $12.34/share 289,253 ------------- $42,751,789 =============
* Indicates an identified entity known to be a party-in-interest to the Plan. ** Cost information has been omitted as all investments are participant directed. 9 EX-23 4 exhibit23_1.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.1 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement No. 333-22167 on Form S-8 pertaining to the M.D.C. Holdings, Inc. 401(k) Savings Plan of our report dated April 25, 2003, with respect to the financial statements and supplemental schedule of the M.D.C. Holdings, Inc. 401(k) Savings Plan included in this Annual Report on Form 11-K for the year ended December 31, 2002. /s/Ernst & Young LLP Denver, Colorado May 27, 2003 -----END PRIVACY-ENHANCED MESSAGE-----