10-Q

City

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-8951

M.D.C. HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	84-0622967
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

4350 South Monaco Street, Suite 500	80237
Denver, Colorado	(Zip code)
(Address of principal executive offices)

(303) 773-1100

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	MDC	New York Stock Exchange
6% Senior Notes due January 2043	MDC 43	New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒  No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐  No  ☒

As of April 28, 2023, 73,117,639 shares of M.D.C. Holdings, Inc. common stock were outstanding.

M.D.C. HOLDINGS, INC.

FORM 10-Q

FOR THE QUARTER ENDED March 31, 2023

INDEX

		Page No.
Part I. Financial Information:
Item 1.	Unaudited Consolidated Financial Statements:
	Consolidated Balance Sheets at March 31, 2023 and December 31, 2022	1
	Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2023 and 2022	2
	Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2023 and 2022	3
	Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	4
	Notes to Unaudited Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
Part II. Other Information:
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	41
Signatures		41

(i)

PART I. FINANCIAL INFORMATION

Item 1.    Unaudited Consolidated Financial Statements

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

	March 31, 2023		December 31, 2022
	(unaudited)
	(Dollars in thousands, except share and per share amounts)
ASSETS
Homebuilding:
Cash and cash equivalents	$	781,738	$	696,075
Restricted cash	2,268		3,143
Marketable securities	691,767		443,712
Trade and other receivables	67,865		116,364
Inventories:
Housing completed or under construction	1,585,951		1,722,061
Land and land under development	1,671,824		1,793,718
Total inventories	3,257,775		3,515,779
Property and equipment, net	63,787		63,730
Deferred tax asset, net	46,528		49,252
Prepaids and other assets	66,721		70,007
Total homebuilding assets	4,978,449		4,958,062
Financial Services:
Cash and cash equivalents	20,985		17,877
Marketable securities	117,610		117,388
Mortgage loans held-for-sale, net	166,252		229,513
Other assets	32,525		40,432
Total financial services assets	337,372		405,210
Total Assets	$	5,315,821	$	5,363,272
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	119,351	$	109,218
Accrued and other liabilities	342,167		383,406
Revolving credit facility	10,000		10,000
Senior notes, net	1,482,779		1,482,576
Total homebuilding liabilities	1,954,297		1,985,200
Financial Services:
Accounts payable and accrued liabilities	100,876		110,536
Mortgage repurchase facility	130,527		175,752
Total financial services liabilities	231,403		286,288
Total Liabilities	2,185,700		2,271,488
Stockholders' Equity
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value; 250,000,000 shares authorized; 73,087,335 and 72,585,596 issued and outstanding at March 31, 2023 and December 31, 2022, respectively	731		726
Additional paid-in-capital	1,778,025		1,784,173
Retained earnings	1,351,042		1,306,885
Accumulated other comprehensive income	323		—
Total Stockholders' Equity	3,130,121		3,091,784
Total Liabilities and Stockholders' Equity	$	5,315,821	$	5,363,272

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

-1-

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands, except share and per share amounts)
Homebuilding:
Home sale revenues	$	1,020,016	$	1,240,520
Home cost of sales	(840,747)		(921,378)
Inventory impairments	(7,800)		(660)
Total cost of sales	(848,547)		(922,038)
Gross profit	171,469		318,482
Selling, general and administrative expenses	(94,988)		(129,314)
Interest and other income	13,459		755
Other expense	1,059		(1,424)
Homebuilding pretax income	90,999		188,499
Financial Services:
Revenues	29,486		29,131
Expenses	(15,250)		(16,935)
Other income, net	3,734		1,187
Financial services pretax income	17,970		13,383
Income before income taxes	108,969		201,882
Provision for income taxes	(28,269)		(53,461)
Net income	$	80,700	$	148,421
Other comprehensive income (loss) net of tax:
Unrealized gain (loss) related to available-for-sale debt securities	$	323	$	—
Other comprehensive income (loss)	323		—
Comprehensive income	$	81,023	$	148,421
Earnings per share:
Basic	$	1.10	$	2.09
Diluted	$	1.08	$	2.02
Weighted average common shares outstanding:
Basic	72,647,659		70,766,146
Diluted	74,021,989		72,938,414
Dividends declared per share	$	0.50	$	0.50

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

-2-

M.D.C. HOLDINGS, INC.

Consolidated Statements of Changes in Stockholders’ Equity

(Dollars in thousands, except share amounts)

	Three Months Ended March 31, 2023
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance at December 31, 2022	72,585,596	$	726	$	1,784,173	$	1,306,885	$	—	$	3,091,784
Net income	—	—		—		80,700		—		80,700
Other comprehensive income (loss)	—	—		—		—		323		323
Shares issued under stock-based compensation programs, net	503,022	5		(11,745)		—		—		(11,740)
Cash dividends declared	—	—		—		(36,543)		—		(36,543)
Stock-based compensation expense	—	—		5,597		—		—		5,597
Forfeiture of restricted stock	(1,283)	—		—		—		—		—
Balance at March 31, 2023	73,087,335	$	731	$	1,778,025	$	1,351,042	$	323	$	3,130,121

	Three Months Ended March 31, 2022
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance at December 31, 2021	70,668,093	$	707	$	1,709,276	$	887,163	$	—	$	2,597,146
Net income	—	—		—		148,421		—		148,421
Shares issued under stock-based compensation programs, net	498,921	5		(12,633)		—		—		(12,628)
Cash dividends declared	—	—		—		(35,583)		—		(35,583)
Stock-based compensation expense	—	—		13,726		—		—		13,726
Forfeiture of restricted stock	(4,769)	—		—		—		—		—
Balance at March 31, 2022	71,162,245	$	712	$	1,710,369	$	1,000,001	$	—	$	2,711,082

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

-3-

M.D.C. HOLDINGS, INC.

Consolidated Statements of Cash Flows

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Operating Activities:
Net income	$	80,700	$	148,421
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	5,498		14,882
Depreciation and amortization	5,500		6,652
Inventory impairments	7,800		660
Project abandonment costs	(1,048)		1,434
Amortization of discount of marketable debt securities	(8,472)		—
Deferred income tax benefit	2,617		842
Net changes in assets and liabilities:
Trade and other receivables	55,868		(16,677)
Mortgage loans held-for-sale, net	63,261		94,615
Housing completed or under construction	135,581		(277,187)
Land and land under development	115,874		107,321
Prepaids and other assets	3,470		(20,479)
Accounts payable and accrued and other liabilities	(40,485)		57,571
Net cash provided by operating activities	426,164		118,055
Investing Activities:
Purchases of marketable securities	(434,374)		—
Maturities of marketable securities	195,000		—
Purchases of property and equipment	(5,386)		(6,884)
Net cash used in investing activities	(244,760)		(6,884)
Financing Activities:
Payments on mortgage repurchase facility, net	(45,225)		(78,069)
Dividend payments	(36,543)		(35,583)
Issuance of shares under stock-based compensation programs, net	(11,740)		(12,628)
Net cash used in financing activities	(93,508)		(126,280)
Net increase (decrease) in cash, cash equivalents and restricted cash	87,896		(15,109)
Cash, cash equivalents and restricted cash:
Beginning of period	717,095		603,459
End of period	$	804,991	$	588,350
Reconciliation of cash, cash equivalents and restricted cash:
Homebuilding:
Cash and cash equivalents	$	781,738	$	474,447
Restricted cash	2,268		6,400
Financial Services:
Cash and cash equivalents	20,985		107,503
Total cash, cash equivalents and restricted cash	$	804,991	$	588,350

The accompanying Notes are an integral part of these Unaudited Consolidated Financial Statements.

-4-

1.    Basis of Presentation

The Unaudited Consolidated Financial Statements of M.D.C. Holdings, Inc. ("MDC," “the Company," “we,” “us,” or “our,” which refer to M.D.C. Holdings, Inc. and its subsidiaries) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of MDC at March 31, 2023 and for all periods presented. These statements should be read in conjunction with MDC’s Consolidated Financial Statements and Notes thereto included in MDC’s Annual Report on Form 10-K for the year ended December 31, 2022.

Included in these footnotes are certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this section are reasonable, we cannot guarantee future results. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered.

Where necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.

2.    Recently Issued Accounting Standards

Not Yet Adopted New Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2020-04, “Reference Rate Reform (Topic 848),” as amended by ASU 2021-01 in January 2021 and ASU 2022-06 in December 2022, directly addressing the effects of reference rate reform on financial reporting as a result of the cessation of the publication of certain LIBOR rates beginning December 31, 2021, with complete elimination of the publication of the LIBOR rates by June 30, 2023. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform by virtue of referencing LIBOR or another reference rate expected to be discontinued. This guidance became effective on March 12, 2020 and can be adopted no later than December 31, 2024, with early adoption permitted. We plan to adopt this amendment in the second quarter of 2023. We are currently evaluating the impact, but do not expect that the adoption of ASU 2020-04, as amended by ASU 2021-01 and ASU 2022-06, will have a material impact on our consolidated balance sheet or consolidated statement of operations and comprehensive income.

-5-

3.    Segment Reporting

An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. We have identified our CODM as two key executives—the Executive Chairman and the Chief Executive Officer (“CEO”).

We have identified each homebuilding division as an operating segment. Our homebuilding operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments conducted ongoing operations in the following states:

•West (Arizona, California, Nevada, New Mexico, Oregon, Texas and Washington)

•Mountain (Colorado, Idaho and Utah)

•East (Alabama, Florida, Maryland, Pennsylvania, Tennessee and Virginia)

Our financial services business consists of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income, we consider HomeAmerican to be a reportable segment (“mortgage operations”). The remaining operating segments have been aggregated into one reportable segment (“other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (a) the combined reported profit of all operating segments that did not report a loss or (b) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets.

Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance, treasury, information technology, insurance, risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support MDC as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding operations section of our consolidated statements of operations and comprehensive income.

The following table summarizes revenues for our homebuilding and financial services operations:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding
West	$	577,933	$	707,311
Mountain	301,155		335,128
East	140,928		198,081
Total homebuilding revenues	$	1,020,016	$	1,240,520
Financial Services
Mortgage operations	$	18,419	$	17,601
Other	11,067		11,530
Total financial services revenues	$	29,486	$	29,131

-6-

The following table summarizes pretax income for our homebuilding and financial services operations:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding
West	$	43,200	$	130,526
Mountain	25,036		50,506
East	15,309		31,394
Corporate	7,454		(23,927)
Total homebuilding pretax income	$	90,999	$	188,499
Financial Services
Mortgage operations	$	9,726	$	7,433
Other	8,244		5,950
Total financial services pretax income	$	17,970	$	13,383
Total pretax income	$	108,969	$	201,882

The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents, marketable securities and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Homebuilding assets
West	$	2,098,329	$	2,275,144
Mountain	898,227		1,005,622
East	407,046		427,926
Corporate	1,574,847		1,249,370
Total homebuilding assets	$	4,978,449	$	4,958,062
Financial services assets
Mortgage operations	$	198,938	$	267,309
Other	138,434		137,901
Total financial services assets	$	337,372	$	405,210
Total assets	$	5,315,821	$	5,363,272

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4.     Earnings Per Share

Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	80,700	$	148,421
Less: distributed earnings allocated to participating securities	(216)		(194)
Less: undistributed earnings allocated to participating securities	(230)		(562)
Net income attributable to common stockholders (numerator for basic earnings per share)	80,254		147,665
Add back: undistributed earnings allocated to participating securities	230		562
Less: undistributed earnings reallocated to participating securities	(226)		(546)
Numerator for diluted earnings per share under two-class method	$	80,258	$	147,681
Denominator
Weighted-average common shares outstanding	72,647,659		70,766,146
Add: dilutive effect of stock options	1,355,303		1,998,156
Add: dilutive effect of contingently issuable equity awards	19,027		174,112
Denominator for diluted earnings per share under two-class method	74,021,989		72,938,414
Basic Earnings Per Common Share	$	1.10	$	2.09
Diluted Earnings Per Common Share	$	1.08	$	2.02

Diluted EPS for the three months ended March 31, 2023 and 2022 both excluded options to purchase 15,000 shares of common stock, because the effect of their inclusion would be anti-dilutive.

5.    Fair Value Measurements

ASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs, other than quoted prices in active markets, that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

-8-

The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis, except those for which the carrying values approximate fair values:

		Fair Value
Financial Instrument	Hierarchy	March 31, 2023		December 31, 2022
		(Dollars in thousands)
Marketable securities
Debt securities (available-for-sale)	Level 1	$	809,377	$	561,100
Mortgage loans held-for-sale, net	Level 2	$	166,252	$	229,513

The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of March 31, 2023 and December 31, 2022.

Debt securities. Our debt securities consist of U.S. government treasury securities with original maturities upon acquisition of less than six months and are treated as available-for-sale investments and, as such, are recorded at fair value with all changes in fair value initially recorded through other comprehensive income. Debt securities are reviewed on a regular basis for impairment.

Mortgage loans held-for-sale, net.  Our mortgage loans held-for-sale, which are measured at fair value on a recurring basis, include (1) mortgage loans held-for-sale that are under commitments to sell and (2) mortgage loans held-for-sale that are not under commitments to sell. At March 31, 2023 and December 31, 2022, we had $111.3 million and $142.9 million, respectively, of mortgage loans held-for-sale at fair value under commitments to sell. The fair value for those loans was based on quoted market prices for those mortgage loans, which are Level 2 fair value inputs. At March 31, 2023 and December 31, 2022, we had $55.0 million and $86.6 million, respectively, of mortgage loans held-for-sale that were not under commitments to sell. The fair value for those loans was primarily based upon the estimated market price received from an outside party, which is a Level 2 fair value input.

Gains (losses) on mortgage loans, net, are included as a component of revenues in the financial services section of our consolidated statements of operations and comprehensive income. For the three months ended March 31, 2023, we recorded a loss on mortgage loans held-for-sale, net of $2.3 million compared to $5.0 million for the same period in the prior year.

For the financial assets and liabilities that the Company does not reflect at fair value, the following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and cash equivalents (excluding debt securities with an original maturity of three months or less), restricted cash, trade and other receivables, prepaids and other assets, accounts payable, accrued and other liabilities and borrowings on our revolving credit facility. Fair value approximates carrying value.

Mortgage Repurchase Facility. The debt associated with our mortgage repurchase facility (see Note 18 for further discussion) is at floating rates that approximate current market rates and have relatively short-term maturities, generally within 30 days. The fair value approximates carrying value and is based on Level 2 inputs.

Senior Notes. The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources.

	March 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in thousands)
$300 million 3.850% Senior Notes due January 2030, net	$	298,012	$	256,148	$	297,949	$	246,236
$350 million 2.500% Senior Notes due January 2031, net	347,486		272,690		347,413		255,374
$500 million 6.000% Senior Notes due January 2043, net	491,176		432,430		491,120		414,017
$350 million 3.966% Senior Notes due August 2061, net	346,105		205,959		346,094		204,014
Total	$	1,482,779	$	1,167,227	$	1,482,576	$	1,119,641

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6.    Inventories

The following table sets forth, by reportable segment, information relating to our homebuilding inventories:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Housing completed or under construction:
West	$	954,131	$	1,026,880
Mountain	455,785		511,092
East	176,035		184,089
Subtotal	1,585,951		1,722,061
Land and land under development:
West	1,065,767		1,145,119
Mountain	405,725		433,893
East	200,332		214,706
Subtotal	1,671,824		1,793,718
Total inventories	$	3,257,775	$	3,515,779

Our inventories are primarily associated with communities where we intend to construct and sell homes, including models and unsold homes. Costs capitalized to land and land under development primarily include: (1) land costs; (2) land development costs; (3) entitlement costs; (4) capitalized interest; (5) engineering fees; and (6) title insurance, real property taxes and closing costs directly related to the purchase of the land parcel. Components of housing completed or under construction primarily include: (1) land costs transferred from land and land under development; (2) direct construction costs associated with a house; (3) real property taxes, engineering fees, permits and other fees; (4) capitalized interest; and (5) indirect construction costs, which include field construction management salaries and benefits, utilities and other construction related costs. Land costs are transferred from land and land under development to housing completed or under construction at the point in time that construction of a home on an owned lot begins.

In accordance with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), homebuilding inventories, excluding those classified as held for sale, are carried at cost unless events and circumstances indicate that the carrying value of the underlying subdivision may not be recoverable.  We evaluate inventories for impairment at each quarter end on a subdivision level basis as each such subdivision represents the lowest level of identifiable cash flows. In making this determination, we review, among other things, the following for each subdivision:

•actual and trending “Operating Margin” (which is defined as home sale revenues less home cost of sales and all incremental costs associated directly with the subdivision, including sales commissions and marketing costs);

•forecasted Operating Margin for homes in backlog;

•actual and trending net home orders;

•homes available for sale;

•market information for each sub-market, including competition levels, home foreclosure levels, the size and style of homes currently being offered for sale and lot size; and

•known or probable events indicating that the carrying value may not be recoverable.

If events or circumstances indicate that the carrying value of our inventory may not be recoverable, assets are reviewed for impairment by comparing the undiscounted estimated future cash flows from an individual subdivision (including capitalized interest) to its carrying value. If the undiscounted future cash flows are less than the subdivision’s carrying value, the carrying value of the subdivision is written down to its then estimated fair value. We generally determine the estimated fair value of each subdivision by determining the present value of the estimated future cash flows at discount rates, which are Level 3 inputs, that are commensurate with the risk of the subdivision under evaluation. The evaluation for the recoverability of the carrying value of the assets for each individual subdivision can be impacted significantly by our estimates of future home sale revenues, home construction costs, and development costs per home, all of which are Level 3 inputs.

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If land is classified as held for sale, we measure it in accordance with ASC 360 at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, we primarily rely upon the most recent negotiated price, which is a Level 2 input. If a negotiated price is not available, we will consider several factors including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies, which are considered Level 3 inputs. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired down to its estimated fair value less costs to sell.

Inventory impairments recognized by segment for the three months ended March 31, 2023 and 2022 are shown in the table below.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	—	$	660
Mountain	664		—
East	—		—
Subtotal	664		660
Land and Land Under Development:
West	—		—
Mountain	7,136		—
East	—		—
Subtotal	7,136		—
Total Inventory Impairments	$	7,800	$	660

The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.

	Impairment Data					Quantitative Data
Three Months Ended	Number of Subdivisions Impaired	Inventory Impairments		Fair Value of Inventory After Impairments		Discount Rate
	(Dollars in thousands)
March 31, 2023	1	$	7,800	$	13,016	18%
Total		$	7,800
March 31, 2022	1	$	660	$	1,728		N/A
Total		$	660

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7.    Capitalization of Interest

We capitalize interest to inventories during the period of development in accordance with ASC Topic 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales during the period that related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity. For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding interest incurred	$	17,454	$	17,258
Less: Interest capitalized	(17,454)		(17,258)
Homebuilding interest expensed	$	—	$	—
Interest capitalized, beginning of period	$	59,921	$	58,054
Plus: Interest capitalized during period	17,454		17,258
Less: Previously capitalized interest included in home cost of sales	(16,065)		(14,844)
Interest capitalized, end of period	$	61,310	$	60,468

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8.    Leases

We lease certain property, land and equipment, the majority of which comprise property related leases to provide office space where we operate our business. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Our property related leases typically have terms of between three and five years, with the exception of the lease governing the Company’s headquarters. All of our property related leases are classified as operating leases. These leases do not contain any residual value guarantees or restrictive covenants and do not include variable lease payments, except for the payment of common area maintenance and real estate taxes. Many of our property related leases give us the option to extend the lease term for a period of time, generally consistent with the initial lease term. These options are excluded from our calculation of the right-of-use asset and lease liability until such time as we determine it is reasonably certain that the option will be exercised.

The property related lease for the Company’s headquarters in Denver, Colorado is ten years in length with an expiration date of October 31, 2026 and contains a ten year option to extend the term of the lease through 2036. This option has been excluded from our calculation of the right-of-use asset and lease liability as it is not currently considered reasonably certain that the option will be exercised.

Operating lease expense is included as a component of selling, general and administrative expenses in the homebuilding section and expenses in the financial services section of our consolidated statements of operations and comprehensive income. Components of operating lease expense were as follows:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Operating lease cost 1	$	2,156	$	2,131
Less: Sublease income	(144)		(83)
Net lease cost	$	2,012	$	2,048

1Includes variable lease costs, which are immaterial.

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,061	$	2,022
Leased assets obtained in exchange for new operating lease liabilities	$	1,646	$	3,748

Weighted-average remaining lease term and discount rate for operating leases were as follows:

	March 31, 2023		March 31, 2022
Weighted-average remaining lease term (in years)	3.8		4.5
Weighted-average discount rate	5.5	%	5.5	%

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Maturities of operating lease liabilities were as follows:

	Year Ended December 31,
	(Dollars in thousands)
2023 (excluding the three months ended March 31, 2023)	$	5,148
2024	7,706
2025	7,621
2026	6,353
2027	1,133
Thereafter	552
Total operating lease payments 1	$	28,513
Less: Effects of discounting	2,842
Present value of operating lease liabilities 2	$	25,671

_______________________________________________________________

1Operating lease payments exclude $1.2 million of legally binding lease payments for leases signed but not yet commenced.

2Homebuilding and financial services operating lease liabilities of $25.4 million and $0.2 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services sections of our consolidated balance sheet at March 31, 2023.

9.    Homebuilding Prepaids and Other Assets

The following table sets forth the components of homebuilding prepaids and other assets:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Land option deposits	$	20,058	$	19,539
Operating lease right-of-use asset (Note 8)	24,559		25,636
Prepaids	11,073		13,333
Goodwill	6,008		6,008
Deferred debt issuance costs on revolving credit facility, net	4,766		5,241
Other	257		250
Total prepaids and other assets	$	66,721	$	70,007

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10.    Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities

The following table sets forth information relating to homebuilding accrued and other liabilities:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Accrued compensation and related expenses	$	57,040	$	100,653
Customer and escrow deposits	47,191		42,296
Warranty accrual (Note 11)	46,666		46,857
Lease liability (Note 8)	25,426		26,574
Land development and home construction accruals	17,538		20,028
Accrued interest	14,889		30,934
Income taxes payable	49,461		23,880
Construction defect claim reserves (Note 12)	10,322		10,466
Retentions payable	19,417		21,519
Other accrued liabilities	54,217		60,199
Total accrued and other liabilities	$	342,167	$	383,406

A reclassification was made to our prior period financial information, where $21.5 million was reclassed from other accrued liabilities to retentions payable to conform to the current year presentation.

The following table sets forth information relating to financial services accounts payable and accrued liabilities:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Insurance reserves (Note 12)	$	82,815	$	84,108
Accounts payable and other accrued liabilities	18,061		26,428
Total accounts payable and accrued liabilities	$	100,876	$	110,536

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11.    Warranty Accrual

Our homes are sold with limited third-party warranties and, under our agreement with the issuer of the third-party warranties, we are responsible for performing all of the work for the first two years of the warranty coverage, and paying for certain work required to be performed subsequent to year two. We record accruals for general and structural warranty claims, as well as accruals for known, unusual warranty-related expenditures. Our warranty accrual is recorded based upon historical payment experience in an amount estimated to be adequate to cover expected costs of materials and outside labor during warranty periods. The determination of the warranty accrual rate for closed homes and the evaluation of our warranty accrual balance at period end are based on an internally developed analysis that includes known facts and interpretations of circumstances, including, among other things, our trends in historical warranty payment levels and warranty payments for claims not considered to be normal and recurring.

Our warranty accrual is included in accrued and other liabilities in the homebuilding section of our consolidated balance sheets and adjustments to our warranty accrual are recorded as an increase or reduction to home cost of sales in the homebuilding section of our consolidated statements of operations and comprehensive income.

The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three months ended March 31, 2023 and 2022. The warranty accrual during the three months ended March 31, 2023 decreased compared to an increase during the three months ended March 31, 2022 due to the increase in cash payments and a decrease in the number of home closings. Further, there was a $2.4 million adjustment to increase our warranty accrual during the three months ended March 31, 2022. This adjustment was due to higher general warranty related expenditures.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Balance at beginning of period	$	46,857	$	37,491
Expense provisions	5,635		5,832
Cash payments	(5,826)		(4,817)
Adjustments	—		2,440
Balance at end of period	$	46,666	$	40,946

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12.    Insurance and Construction Defect Claim Reserves

The establishment of reserves for estimated losses associated with insurance policies issued by Allegiant and re-insurance agreements issued by StarAmerican are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns, and changing regulatory and legal environments. It is possible that changes in the insurance payment experience used in estimating our ultimate insurance losses could have a material impact on our insurance reserves.

The establishment of reserves for estimated losses to be incurred by our homebuilding subsidiaries associated with: (1) the self-insured retention (“SIR”) portion of construction defect claims that are expected to be covered under insurance policies with Allegiant and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies with Allegiant, are based on third party actuarial studies that include known facts similar to those for our insurance reserves. It is possible that changes in the payment experience used in estimating our ultimate losses for construction defect claims could have a material impact on our reserves.

The table set forth below summarizes our insurance and construction defect claim reserves activity for the three months ended March 31, 2023 and 2022. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Balance at beginning of period	$	94,574	$	82,187
Expense provisions	3,789		4,432
Cash payments, net of recoveries	(5,226)		(2,195)
Balance at end of period	$	93,137	$	84,424

In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the three months ended March 31, 2023 and 2022 are not necessarily indicative of what future cash payments will be for subsequent periods.

13.    Income Taxes

Our overall effective income tax rates were 25.9% and 26.5% for the three months ended March 31, 2023 and 2022, respectively, resulting in income tax expense of $28.3 million and $53.5 million for the same periods, respectively. The year-over-year decrease in our effective tax rate for the three months ended March 31, 2023 was primarily due to energy tax credits benefiting 2023, which had not been extended into 2022 as of March 31, 2022. This decrease was partially offset by the tax impact of non-deductible executive compensation under Internal Revenue Code Section 162(m).

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14.    Senior Notes

The carrying values of our senior notes as of March 31, 2023 and December 31, 2022, net of any unamortized debt issuance costs or discount, were as follows:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
3.850% Senior Notes due January 2030, net	$	298,012	$	297,949
2.500% Senior Notes due January 2031, net	347,486		347,413
6.000% Senior Notes due January 2043, net	491,176		491,120
3.966% Senior Notes due August 2061, net	346,105		346,094
Total	$	1,482,779	$	1,482,576

Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries.

15.    Stock-Based Compensation

The following table sets forth share-based award expense activity for the three months ended March 31, 2023 and 2022, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections, respectively, of our consolidated statements of operations and comprehensive income:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Stock option grants expense	$	157	$	587
Restricted stock awards expense	3,562		2,587
Performance share units expense	1,779		11,708
Total stock-based compensation	$	5,498	$	14,882

Additional detail on the performance share units ("PSUs") expense is included below:

2020 PSU Grants. The 2020 PSU awards vested on February 3, 2023. For the three months ended March 31, 2022, the Company recorded share-based award expense of $2.5 million related to these awards.

2021 PSU Grants. As of March 31, 2023, the Company recorded the required share-based award expense related to the awards of $1.8 million for the three months ended March 31, 2023, based on its assessment of the probability for achievement of the performance targets. For the three months ended March 31, 2022, the Company recorded share-based award expense of $9.3 million related to these awards.

16.    Commitments and Contingencies

Surety Bonds and Letters of Credit. We are required to obtain surety bonds and letters of credit in support of our obligations for land development and subdivision improvements, homeowner association dues, warranty work, contractor license fees and earnest money deposits. At March 31, 2023, we had outstanding surety bonds and letters of credit totaling $359.1 million and $116.0 million, respectively, including $68.9 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $157.3 million and $75.1 million, respectively. All letters of credit as of March 31, 2023, excluding those issued by HomeAmerican, were issued under our unsecured revolving credit facility (see Note 18 for further discussion of the revolving credit facility). We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of

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business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit.

We have made no material guarantees with respect to third-party obligations.

Litigation. Due to the nature of the homebuilding business, we have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows.

Lot Option Contracts. In the ordinary course of business, we enter into lot option purchase contracts (“Option Contracts”), generally through a deposit of cash or a letter of credit, for the right to purchase land or lots at a future point in time with predetermined terms. The use of such land option and other contracts generally allow us to reduce the risks associated with direct land ownership and development, reduces our capital and financial commitments, and minimizes the amount of land inventories on our consolidated balance sheets. In certain cases, these contracts will be settled shortly following the end of the period. Our obligation with respect to Option Contracts is generally limited to forfeiture of the related deposits. At March 31, 2023, we had cash deposits, capitalized costs and letters of credit totaling $19.2 million, $2.6 million and $2.2 million, respectively, at risk associated with the option to purchase 2,951 lots.

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17.    Derivative and Financial Instruments

In the normal course of business, we enter into interest rate lock commitments ("IRLCs") with borrowers who have applied for loan funding and meet defined credit and underwriting criteria. Since we can terminate IRLCs if the borrower does not comply with the terms of the contract, and some IRLCs may expire without being utilized, these IRLCs do not necessarily represent future cash requirements.

Market risk arises if interest rates move adversely between the time we originate a mortgage loan or we enter into an IRLC and the date the loan is committed or sold to an investor. We mitigate our exposure to interest rate market risk relating to mortgage loans held-for-sale and IRLCs using: (1) forward sales of mortgage-backed securities, which are commitments to sell a specified financial instrument at a specified future date for a specified price, (2) mandatory delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price within a specified time period, and (3) best-effort delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price subject to the underlying mortgage loans being funded and closed. The best-effort delivery forward loan sale commitments do not meet the definition of a derivative financial instrument in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). We have elected the fair value option for the best-effort delivery forward loan sale commitments in accordance with ASC Topic 825, Financial Instruments ("ASC 825").

Forward sales of mortgage-backed securities are the predominant derivative and financial instruments we use to minimize market risk during the period from the time we extend an interest rate lock to a loan applicant until the time the loan is committed under a best-effort or mandatory delivery forward loan sale commitment.

The following table sets forth the notional amounts and fair value measurement of our derivative and financial instruments at March 31, 2023 and December 31, 2022:

	March 31, 2023								December 31, 2022
	Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net		Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net
	(Dollars in thousands)								(Dollars in thousands)
Interest rate lock commitments	$	391,487	$	3,504	$	822	$	2,682	$	394,004	$	1,566	$	3,244	$	(1,678)
Forward sales of mortgage-backed securities	362,500		1,258		3,607		(2,349)		323,000		580		5,849		(5,269)
Mandatory delivery forward loan sale commitments	106,607		102		183		(81)		105,060		794		3		791
Best-effort delivery forward loan sale commitments	11,237		77		74		3		139,972		2,161		185		1,976

For the three months ended March 31, 2023 and March 31, 2022, we recorded net gains (loss) on these derivative and financial instruments measured on a recurring basis of $(3.8) million and $17.5 million, respectively, in revenues in the financial services section of our consolidated statements of operations and comprehensive income. There are no credit-risk-related contingent features within our derivative agreements, and counterparty risk is considered minimal.

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18.    Lines of Credit

Revolving Credit Facility. We have an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders which may be used for general corporate purposes. This agreement was amended on December 28, 2020 to (1) increase the aggregate commitment from $1.0 billion to $1.2 billion (the “Commitment”), (2) extend the Revolving Credit Facility maturity of $1.125 billion of the Commitments to December 18, 2025 with the remaining Commitment continuing to terminate on December 18, 2023 and (3) provide that the aggregate amount of the commitments may increase to an amount not to exceed $1.7 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents.

Effective April 11, 2023, the Revolving Credit Facility was amended to transition from a eurocurrency based interest rate to an interest rate based on the Secured Overnight Financing Rate ("SOFR"). As defined in the Revolving Credit Facility, interest rates on base rate borrowings are equal to the highest of (1) 0.0%, (2) a prime rate, (3) a federal funds effective rate plus 0.50%, and (4) the one month term SOFR screen rate plus the SOFR adjustment plus 1.00% and, in each case, plus a margin that is determined based on our credit ratings and leverage ratio. Interest rates on SOFR borrowings are equal to the greater of (1) 0.0% and (2) the sum of the term SOFR screen rate for such interest period plus the SOFR adjustment, plus a margin that is determined based on our credit ratings and leverage ratio. At any time at which our leverage ratio, as of the last day of the most recent calendar quarter, exceeds 55%, the aggregate principal amount of all consolidated senior debt borrowings outstanding may not exceed the borrowing base. There is no borrowing base requirement if our leverage ratio, as of the last day of the most recent calendar quarter, is 55% or less.

The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated tangible net worth test and a leverage test, along with a consolidated tangible net worth covenant, all as defined in the Revolving Credit Facility. A failure to satisfy the foregoing tests does not constitute an event of default, but can trigger a “term-out” of the facility. A breach of the consolidated tangible net worth covenant (but not the consolidated tangible net worth test) or a violation of anti-corruption or sanctions laws would result in an event of default.

The Revolving Credit Facility is subject to acceleration upon certain specified events of default, including breach of the consolidated tangible net worth covenant, a violation of anti-corruption or sanctions laws, failure to make timely payments, breaches of certain representations or covenants, failure to pay other material indebtedness, or another person becoming beneficial owner of 50% or more of our outstanding common stock. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of March 31, 2023.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At March 31, 2023 and December 31, 2022, there were $47.1 million and $48.3 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At March 31, 2023 and December 31, 2022, we had $10.0 million and $10.0 million, respectively, outstanding under the Revolving Credit Facility. As of March 31, 2023, availability under the Revolving Credit Facility was approximately $1.14 billion.

Mortgage Repurchase Facility. HomeAmerican has a Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”). The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $75 million (subject to increase by up to $75 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Custody Agreement (“Custody Agreement”), dated as of November 12, 2008, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The Mortgage Repurchase Facility was amended on September 24, 2020, March 25, 2021, May 20, 2021, December 21, 2021 and May 19, 2022 to adjust the commitments to purchase for specific time periods. The total capacity of the facility at March 31, 2023 was $230 million. The May 19, 2022 amendment extended the termination date of the Repurchase Agreement to May 18, 2023. We are currently in negotiations to extend the Mortgage Repurchase Facility.

At March 31, 2023 and December 31, 2022, HomeAmerican had $130.5 million and $175.8 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. Pricing under the Mortgage Repurchase Facility is based on the SOFR.

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The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of March 31, 2023.

19.    Related Party Transactions

The Company has a sublease agreement with CVentures, Inc. Larry A. Mizel, the Executive Chairman of the Company, is the President of CVentures, Inc. The sublease is for office space that CVentures, Inc. has continuously leased from the Company as disclosed in the Form 8-K filed July 27, 2005 and the Form 8-K filed March 28, 2006. The current sublease term commenced November 1, 2016 and will continue through October 31, 2026. The sublease agreement is for approximately 5,437 rentable square feet at a base rent that increases over the term from $26.50 to $31.67 per rentable square foot per year. The sublease rent is an allocation of the rent under the master lease agreement based on the sublease square footage.

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20.    Supplemental Guarantor Information

Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by the following subsidiaries (collectively, the "Guarantor Subsidiaries"), which are 100%-owned subsidiaries of the Company:

•M.D.C. Land Corporation

•RAH of Florida, Inc.

•Richmond American Construction, Inc.

•Richmond American Construction NM, Inc.

•Richmond American Homes of Arizona, Inc.

•Richmond American Homes of Colorado, Inc.

•Richmond American Homes of Florida, LP

•Richmond American Homes of Idaho, Inc.

•Richmond American Homes of Maryland, Inc.

•Richmond American Homes of Nevada, Inc.

•Richmond American Homes of New Mexico, Inc.

•Richmond American Homes of Oregon, Inc.

•Richmond American Homes of Pennsylvania, Inc.

•Richmond American Homes of Tennessee, Inc.

•Richmond American Homes of Texas, Inc.

•Richmond American Homes of Utah, Inc.

•Richmond American Homes of Virginia, Inc.

•Richmond American Homes of Washington, Inc.

The senior note indentures do not provide for a suspension of the guarantees. Other than for the senior notes due 2061, the senior note indentures, provide that any Guarantor may be released from its guarantee so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (3) the Guarantors released from their guarantees in any year-end period comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (4) such release would not have a material adverse effect on the homebuilding business of the Company and its subsidiaries and (5) the Guarantor is released from its guarantee(s) under all Specified Indebtedness (other than by reason of payment under its guarantee of Specified Indebtedness). The indenture for the senior notes due 2061 provides that, if a Guarantor is released under its guarantees of our credit facilities or other publicly traded debt securities, the Guarantor will also be released under its guarantee of the senior notes due 2061. Upon delivery of an officers’ certificate and an opinion of counsel stating that all conditions precedent provided for in the indenture relating to such transactions have been complied with and the release is authorized, the guarantee will be automatically and unconditionally released. “Specified Indebtedness” means indebtedness under the senior notes, the Company’s Indenture dated as of December 3, 2002, the Revolving Credit Facility, and any refinancing, extension, renewal or replacement of any of the foregoing.

As the combined assets, liabilities and results of operations of M.D.C. Holdings, Inc. and the Guarantor Subsidiaries (the “Obligor Group”) are not materially different from those in the homebuilding section of our consolidated balance sheets and consolidated statements of operations and comprehensive income, separate summarized financial information of the Obligor Group has not been included. As of March 31, 2023 and December 31, 2022, amounts due to non-guarantor subsidiaries from the Obligor Group totaled $46.7 million and $29.7 million, respectively.

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Item 2.        Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Unaudited Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are based upon management’s experiences, observations, and analyses. Actual results may differ materially from those indicated in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those discussed in "Item 1A. Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2022 and this Quarterly Report on Form 10-Q.

	Three Months Ended March 31,
	2023			2022
	(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues	$	1,020,016		$	1,240,520
Home cost of sales	(840,747)			(921,378)
Inventory impairments	(7,800)			(660)
Total cost of sales	(848,547)			(922,038)
Gross profit	171,469			318,482
Gross margin	16.8		%	25.7		%
Selling, general and administrative expenses	(94,988)			(129,314)
Interest and other income	13,459			755
Other expense	1,059			(1,424)
Homebuilding pretax income	90,999			188,499
Financial Services:
Revenues	29,486			29,131
Expenses	(15,250)			(16,935)
Other income, net	3,734			1,187
Financial services pretax income	17,970			13,383
Income before income taxes	108,969			201,882
Provision for income taxes	(28,269)			(53,461)
Net income	$	80,700		$	148,421
Earnings per share:
Basic	$	1.10		$	2.09
Diluted	$	1.08		$	2.02
Weighted average common shares outstanding:
Basic	72,647,659			70,766,146
Diluted	74,021,989			72,938,414
Dividends declared per share	$	0.50		$	0.50
Cash provided by (used in):
Operating Activities	$	426,164		$	118,055
Investing Activities	$	(244,760)		$	(6,884)
Financing Activities	$	(93,508)		$	(126,280)

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Overview

Industry Conditions and Outlook for MDC*

The housing market in the first quarter of 2023 presented more challenging conditions compared to the same period in the prior year, as the historically strong demand experienced in the prior year quarter began to weaken beginning in mid-2022 due to the sharp increases in interest rates, inflation concerns, and various other economic uncertainties. As a result, our net orders and net order value decreased 44% and 48%, respectively, in the first quarter of 2023 as compared to the first quarter of 2022. While our 2023 first quarter monthly absorption rate of 2.6 homes per community per month remained below our pre-pandemic levels, we experienced sequential increases in our monthly absorption rate as the quarter progressed. On a gross basis (excluding cancellations) our monthly absorption rate was 3.7 homes per community per month for the first quarter of 2023. We were pleased with our ability to sell and close our quick move-in inventory during the quarter, which allowed us to turn our inventories quicker than expected. We remain focused on balancing our pace of sales and pricing and incentive levels to maximize profitability while continuing to turn our inventory. As a result, we delivered strong top and bottom line results and generated positive cash flow from operations in the first quarter of 2023 despite the volatile market conditions that continue to impact the homebuilding industry.

We remain confident in the long-term growth prospects for the industry given the underproduction of new homes over the past decade and the softening supply of re-sale home inventory due to homeowners holding on to extremely low mortgage rates. With that said, the current demand for new homes is subject to continued uncertainty due to many factors, including ongoing inflation concerns, the Federal Reserve's quantitative tightening and the resulting impact on mortgage interest rates, consumer confidence, the current geopolitical environment and other factors. The potential effect of these factors is highly uncertain and could adversely and materially impact our operations and financial results in future periods.

We believe that we are uniquely equipped to navigate these uncertainties and any continued market volatility given our seasoned leadership team, strong financial position and distinct operating strategy. We remain focused on maximizing risk-adjusted returns while minimizing the risks of excess leverage and land ownership. We ended the quarter with total cash and cash equivalents and marketable securities of $1.61 billion, total liquidity of $2.79 billion, a debt-to-capital ratio of 32.3% and no senior note maturities until 2030.

Three Months Ended March 31, 2023

For the three months ended March 31, 2023, our net income was $80.7 million, or $1.08 per diluted share, a 46% decrease compared to net income of $148.4 million, or $2.02 per diluted share, for the same period in the prior year. Our homebuilding business was the primary driver of the decrease, as pretax income decreased $97.5 million, or 52% year-over-year. This decrease was partially offset by our financial services business, as pretax income increased $4.6 million, or 34%, compared to the same period in the prior year. The decrease in homebuilding pretax income was primarily due to an 18% decrease in home sale revenues and an 890 basis point decrease in gross margin from home sales. The decrease in gross margin from home sales was driven largely by an increase in both incentives and construction costs year-over-year, and to a lesser extent by $7.8 million of inventory impairments recognized during the current year period. These items were partially offset by a 110 basis point decrease in our selling, general and administrative expenses as a percentage of revenue. The increase in financial services pretax income was due to both our mortgage and other financial services operations. The increase in pretax income for our mortgage operations was due to a decrease in salary related expenses driven by lower headcount, an increase in capture rate and the allocation of revenue from our homebuilding business associated with our financing incentives. Our other financial services operations and homebuilding business each saw an increase in interest income due to increases in both interest rates and our cash and short-term investments year-over-year.

* See "Forward-Looking Statements" below.

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Homebuilding

Pretax Income (Loss):

	Three Months Ended
	March 31,				Change
	2023		2022		Amount		%
	(Dollars in thousands)
West	$	43,200	$	130,526	$	(87,326)	(67)	%
Mountain	25,036		50,506		(25,470)		(50)	%
East	15,309		31,394		(16,085)		(51)	%
Corporate	7,454		(23,927)		31,381		131	%
Total Homebuilding pretax income	$	90,999	$	188,499	$	(97,500)	(52)	%

For the three months ended March 31, 2023, we recorded homebuilding pretax income of $91.0 million, a decrease of 52% from $188.5 million for the same period in the prior year. The decrease was due to an 18% decrease in home sale revenues and an 890 basis point decrease in gross margin from home sales. This was partially offset by a 110 basis point decrease in our selling, general and administrative expenses as a percentage of home sale revenues.

Our West segment experienced an $87.3 million year-over-year decrease in pretax income, due to a decrease in gross margin from home sales, an 18% decrease in home sale revenues and an increase in selling, general and administrative expenses as a percentage of home sale revenues. Our Mountain segment experienced a $25.5 million decrease in pretax income from the prior year, as a result of a 10% decrease in home sale revenues and a decrease in gross margin from home sales, partially offset by a decrease in selling, general and administrative expenses as a percentage of home sale revenues. Our East segment experienced a $16.1 million decrease in pretax income from the prior year, due primarily to a 29% decrease in home sale revenues, a decrease in gross margin from home sales, and an increase in selling, general and administrative expenses as a percentage of home sale revenues. Our Corporate segment experienced a $31.4 million increase in pretax income, due to decreased compensation related costs associated with a decrease in headcount, decreased stock-based and deferred compensation expenses and an increase in interest income.

Assets:

	March 31, 2023		December 31, 2022		Change
					Amount		%
	(Dollars in thousands)
West	$	2,098,329	$	2,275,144	$	(176,815)	(8)	%
Mountain	898,227		1,005,622		(107,395)		(11)	%
East	407,046		427,926		(20,880)		(5)	%
Corporate	1,574,847		1,249,370		325,477		26	%
Total homebuilding assets	$	4,978,449	$	4,958,062	$	20,387	0	%

Total homebuilding assets remained relatively flat from December 31, 2022 to March 31, 2023. The increase in the Corporate segment assets was driven by an increase to cash and cash equivalents as well as marketable securities. The decrease in the West and Mountain segments assets was driven by a decrease in home sale receivables, land and land under development and housing completed or under construction.

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New Home Deliveries & Home Sale Revenues:

Changes in home sale revenues are impacted by changes in the number of new homes delivered and the average selling price of those delivered homes. Commentary for each of our segments on significant changes in these two metrics is provided below.

	Three Months Ended March 31,
	2023					2022					% Change
	Homes	Home Sale Revenues		Average Price		Homes	Home Sale Revenues		Average Price		Homes		Home Sale Revenues		Average Price
	(Dollars in thousands)
West	1,064	$	577,933	$	543.2	1,243	$	707,311	$	569.0	(14)	%	(18)	%	(5)	%
Mountain	487	301,155		618.4		548	335,128		611.5		(11)	%	(10)	%	1	%
East	300	140,928		469.8		442	198,081		448.1		(32)	%	(29)	%	5	%
Total	1,851	$	1,020,016	$	551.1	2,233	$	1,240,520	$	555.5	(17)	%	(18)	%	(1)	%

For the three months ended March 31, 2023, the decrease in the number of new homes delivered in each of our segments was the result of a decrease in the number of homes in backlog to begin the period. This decrease was partially offset within each segment by an increase in backlog conversion rates due to an increase in the number of homes both sold and closed during the quarter. This increase was a result of the year-over-year increase in the number of unsold started homes to begin the period as a result of the above average cancellation rates experienced in the second half of 2022 and our recent pivot to focus more on speculative construction starts.

West Segment Commentary

For the three months ended March 31, 2023, the decrease in new home deliveries, as discussed above, was further impacted by an increase in construction cycle times year-over-year in our Phoenix division. The average selling price of homes delivered decreased as a result of a shift in mix from our California divisions to our Arizona divisions.

Mountain Segment Commentary

For the three months ended March 31, 2023, the decrease in new home deliveries was driven by the factors discussed above.

East Segment Commentary

For the three months ended March 31, 2023, the decrease in new home deliveries, as discussed above, was partially offset by a decrease in cycle times. For the three months ended March 31, 2023, the average selling price of homes delivered increased driven by our Florida markets, due to a shift in mix to higher priced communities.

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Gross Margin from Home Sales:

Our gross margin from home sales for the three months ended March 31, 2023, decreased 890 basis points year-over-year from 25.7% to 16.8%. The decrease in gross margin from home sales was driven largely by increases in both incentives and construction costs year-over-year, and to a lesser extent by $7.8 million of inventory impairments recognized during the current year period compared to $0.6 million in the prior year period. These decreases were partially offset by price increases implemented during 2021 and the first quarter of 2022.

Inventory Impairments:

Inventory impairments recognized by segment for the three months ended March 31, 2023 and 2022 are shown in the table below.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	—	$	660
Mountain	664		—
East	—		—
Subtotal	664		660
Land and Land Under Development:
West	—		—
Mountain	7,136		—
East	—		—
Subtotal	7,136		—
Total Inventory Impairments	$	7,800	$	660

The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.

	Impairment Data					Quantitative Data
Three Months Ended	Number of Subdivisions Impaired	Inventory Impairments		Fair Value of Inventory After Impairments		Discount Rate
	(Dollars in thousands)
March 31, 2023	1	$	7,800	$	13,016	18%
Total		$	7,800
March 31, 2022	1	$	660	$	1,728		N/A
Total		$	660

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Selling, General and Administrative Expenses:

	Three Months Ended March 31,
	2023			2022			Change
	(Dollars in thousands)
General and administrative expenses	$	42,776		$	71,983		$	(29,207)
General and administrative expenses as a percentage of home sale revenues	4.2		%	5.8		%	-160 bps
Marketing expenses	$	23,096		$	25,632		$	(2,536)
Marketing expenses as a percentage of home sale revenues	2.3		%	2.1		%	20 bps
Commissions expenses	$	29,116		$	31,699		$	(2,583)
Commissions expenses as a percentage of home sale revenues	2.9		%	2.6		%	30 bps
Total selling, general and administrative expenses	$	94,988		$	129,314		$	(34,326)
Total selling, general and administrative expenses as a percentage of home sale revenues	9.3		%	10.4		%	-110 bps

General and administrative expenses decreased for the three months ended March 31, 2023 due to decreased compensation related costs associated with a decrease in headcount as well as decreased stock-based and deferred compensation expenses.

Marketing expenses decreased for the three months ended March 31, 2023 compared to the previous period, as decreased compensation related expenses, amortization of deferred selling cost, and model home expenses were partially offset by increased product advertising expenses.

Commissions expenses decreased for the three months ended March 31, 2023 due to decreases in home sale revenues, partially offset by changes in our commission structure.

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Other Homebuilding Operating Data

Net New Orders and Active Subdivisions:

Changes in the dollar value of net new orders are impacted by changes in the number of net new orders and the average selling price of those homes. Commentary for each of our segments on significant changes in these two metrics is provided below.

	Three Months Ended March 31,
	2023						2022						% Change
	Homes	Dollar Value		Average Price		Monthly Absorption Rate *	Homes	Dollar Value		Average Price		Monthly Absorption Rate *	Homes		Dollar Value		Average Price		Monthly Absorption Rate
	(Dollars in thousands)
West	1,012	$	566,909	$	560.2	2.47	1,704	$	1,000,954	$	587.4	5.54	(41)	%	(43)	%	(5)	%	(55)	%
Mountain	410	237,546		579.4		2.47	920	581,971		632.6		5.63	(55)	%	(59)	%	(8)	%	(56)	%
East	345	152,809		442.9		3.03	527	253,850		481.7		4.78	(35)	%	(40)	%	(8)	%	(37)	%
Total	1,767	$	957,264	$	541.7	2.56	3,151	$	1,836,775	$	582.9	5.42	(44)	%	(48)	%	(7)	%	(53)	%

*Calculated as total net new orders (gross orders less cancellations) in period ÷ average active communities during period ÷ number of months in period.

					Average Active Subdivisions
	Active Subdivisions				Three Months Ended
	March 31,		%		March 31,		%
	2023	2022	Change		2023	2022	Change
West	141	112	26	%	137	103	33	%
Mountain	56	53	6	%	55	55	—	%
East	39	35	11	%	38	37	3	%
Total	236	200	18	%	230	195	18	%

For the three months ended March 31, 2023, the decrease in the number of net new orders in each of our segments was the result of a decrease in the monthly sales absorption pace. This was driven by a lower pace of gross orders (before cancellations) as well as an increase in cancellations as both a percentage of homes in beginning backlog to start the quarter and a percentage of gross sales during the quarter (“cancellation rates”). Gross orders in the prior year quarter benefited from historically strong demand, which began to weaken beginning in mid-2022 due to the sharp increases in interest rates, inflation concerns, and various other economic uncertainties. See the "Cancellation Rate" section below for commentary on the increase in our cancellation rates. The decrease in the monthly sales absorption pace in our West and East segments was partially offset by an increase in average active subdivisions year-over-year.

For the three months ended March 31, 2023, the decrease in the average selling price in each of our segments was due to decreases in base pricing during the second half of 2022 in most communities and to a lesser extent increased incentives.

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Cancellation Rate:

	Cancellations as a Percentage of Homes in Beginning Backlog
	2023		2022
	Three Months Ended
	March 31,		March 31,
West	26	%	8	%
Mountain	25	%	8	%
East	24	%	9	%
Total	25	%	8	%

	Cancellations as a Percentage of Gross Sales
	2023		2022
	Three Months Ended
	March 31,		March 31,
West	32	%	17	%
Mountain	31	%	16	%
East	21	%	18	%
Total	30	%	17	%

In light of our recent pivot to focus more on speculative construction starts, we believe it is appropriate to view our cancellations as a product of both our beginning backlog as well as our gross sales during the period. While our cancellation rate as a percentage of homes in beginning backlog increased year-over-year in each of our segments, this increase was less significant when viewed as a percentage of gross sales. These increases were a result of the recent softening in housing market demand, homebuyer sentiment, as well as the strong demand levels we experienced in the first quarter of the prior year.

Backlog:

	March 31,
	2023					2022					% Change
	Homes	Dollar Value		Average Price		Homes	Dollar Value		Average Price		Homes		Dollar Value		Average Price
	(Dollars in thousands)
West	1,839	$	1,020,206	$	554.8	4,677	$	2,651,123	$	566.8	(61)	%	(62)	%	(2)	%
Mountain	638	444,681		697.0		2,546	1,668,048		655.2		(75)	%	(73)	%	6	%
East	413	197,034		477.1		1,335	628,631		470.9		(69)	%	(69)	%	1	%
Total	2,890	$	1,661,921	$	575.1	8,558	$	4,947,802	$	578.1	(66)	%	(66)	%	(1)	%

At March 31, 2023, we had 2,890 homes in backlog with a total value of $1.66 billion. This represented a 66% decrease in both the number of homes in backlog and the dollar value of those homes in backlog from March 31, 2022. The decrease in the number of homes in backlog was primarily a result of a decrease in the level of net new orders during the second half of 2022, which continued to a lesser degree into the first quarter of 2023, as well as a shift in consumer preference to quick move-in homes and our associated pivot to focus on more speculative construction starts to supplement build-to-order construction activity. This was partially offset by an increase in cycle times year-over-year. The increase in average selling price in our Mountain segment was driven by a change in mix to higher priced communities. Our ability to convert backlog into closings could be negatively impacted in future periods by ongoing inflation concerns, the Federal Reserve's quantitative tightening and the resulting impact on mortgage interest rates, consumer confidence, the current geopolitical environment and other factors, the extent to which is highly uncertain and depends on future developments.

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Homes Completed or Under Construction (WIP lots):

	March 31,		%
	2023	2022	Change
Unsold:
Completed	255	19	1,242	%
Under construction	1,277	313	308	%
Total unsold started homes	1,532	332	361	%
Sold homes under construction or completed	2,493	7,445	(67)	%
Model homes under construction or completed	560	513	9	%
Total homes completed or under construction	4,585	8,290	(45)	%

The increase in total unsold started homes is due to an increase in our cancellation rates during the second half of 2022, which continued to a lesser extent into the first quarter of 2023, as well as our recent pivot to focus more on speculative construction starts.

Lots Owned and Optioned (including homes completed or under construction):

	March 31, 2023			March 31, 2022
	Lots Owned	Lots Optioned	Total	Lots Owned	Lots Optioned	Total	Total % Change
West	11,766	422	12,188	15,548	4,237	19,785	(38)	%
Mountain	4,944	1,034	5,978	6,741	4,240	10,981	(46)	%
East	3,281	1,495	4,776	4,318	2,728	7,046	(32)	%
Total	19,991	2,951	22,942	26,607	11,205	37,812	(39)	%

Our total owned and optioned lots at March 31, 2023 were 22,942, which represented a 39% decrease year-over-year. This decrease is a result of our intentional slowdown in land acquisition and approval activity due to current market uncertainty. We believe that our total lot supply is sufficient to meet our operating needs, consistent with our philosophy of maintaining a two to three year supply of land. See "Forward-Looking Statements" below.

Financial Services

	Three Months Ended
	March 31,				Change
	2023		2022		Amount		%
	(Dollars in thousands)
Financial services revenues
Mortgage operations	$	18,419	$	17,601	$	818	5	%
Other	11,067		11,530		(463)		(4)	%
Total financial services revenues	$	29,486	$	29,131	$	355	1	%
Financial services pretax income
Mortgage operations	$	9,726	$	7,433	$	2,293	31	%
Other	8,244		5,950		2,294		39	%
Total financial services pretax income	$	17,970	$	13,383	$	4,587	34	%

For the three months ended March 31, 2023, our financial services pretax income increased to $18.0 million compared to $13.4 million in the first quarter of 2022. The increase in financial services pretax income was due to both our mortgage and our other financial services operations. The increase in pretax income for our mortgage operations was due to a decrease in salary related expenses driven by lower headcount, an increase in capture rate and the allocation of revenue from our homebuilding business associated with our financing incentives. The increase in other financial services was driven by our insurance operations which saw an increase in interest income due to increases in both interest rates and our cash and short-term investments year-over-year.

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The following table sets forth information for our mortgage operations segment relating to mortgage loans originated and capture rate.

	Three Months Ended						% or Percentage
	March 31,
	2023			2022			Change
	(Dollars in thousands)
Total Originations (including transfer loans):
Loans	1,221			1,314			(7)	%
Principal	$	555,608		$	605,800		(8)	%
Capture Rate Data:
Capture rate as % of all homes delivered	66		%	59		%	7	%
Capture rate as % of all homes delivered (excludes cash sales)	72		%	62		%	10	%
Mortgage Loan Origination Product Mix:
FHA loans	17		%	12		%	5	%
Other government loans (VA & USDA)	19		%	20		%	(1)	%
Total government loans	36		%	32		%	4	%
Conventional loans	64		%	68		%	(4)	%
	100		%	100		%	—	%
Loan Type:
Fixed rate	99		%	99		%	—	%
ARM	1		%	1		%	—	%
Credit Quality:
Average FICO Score	740			742			—	%
Other Data:	`
Average Combined LTV ratio	82		%	82		%	—	%
Full documentation loans	100		%	100		%	—	%
Loans Sold to Third Parties:
Loans	1,354			1,527			(11)	%
Principal	$	620,329		$	691,358		(10)	%

Income Taxes

Our overall effective income tax rates were 25.9% and 26.5% for the three months ended March 31, 2023 and 2022, respectively. The rates for the three months ended March 31, 2023 and 2022 resulted in income tax expense of $28.3 million and $53.5 million, respectively. The year-over-year decrease in our effective tax rate for the three months ended March 31, 2023 was primarily due to energy tax credits benefiting 2023, which had not been extended into 2022 as of March 31, 2022. This decrease was partially offset by the tax impact of non-deductible executive compensation under Internal Revenue Code Section 162(m).

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CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Management evaluates such estimates and judgments on an on-going basis and makes adjustments as deemed necessary. Actual results could differ from these estimates if conditions are significantly different in the future. See "Forward-Looking Statements" below.

Our critical accounting estimates and policies have not changed from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2022.

LIQUIDITY AND CAPITAL RESOURCES

We use our liquidity and capital resources to (1) support our operations, including the purchase of land, land development and construction of homes; (2) provide working capital; and (3) provide mortgage loans for our homebuyers. Our liquidity includes our cash and cash equivalents, marketable securities, Revolving Credit Facility (as defined below) and Mortgage Repurchase Facility (as defined below). Additionally, we have an existing effective shelf registration statement that allows us to issue equity, debt or hybrid securities up to $5.0 billion, of which $5.0 billion remains.

Material Cash Requirements

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Consolidated Balance Sheet as of March 31, 2023, while others are considered future commitments. Our contractual obligations primarily consist of long-term debt and related interest payments, payments due on our Mortgage Repurchase Facility, purchase obligations related to expected acquisition of land under purchase agreements and land development agreements (many of which are secured by letters of credit or surety bonds) and operating leases. Other material cash requirements include land acquisition and development costs not yet contracted for, home construction costs, operating expenses, including our selling, general and administrative expenses, investments and funding of capital improvements and dividend payments.

At March 31, 2023, we had outstanding senior notes with varying maturities totaling an aggregate principal amount of $1.5 billion, with none payable within 12 months. Future interest payments associated with the notes total $1.3 billion, with $64.2 million payable within 12 months. As of March 31, 2023, we had $28.5 million of required operating lease future minimum payments.

At March 31, 2023, we had deposits of $20.1 million in the form of cash and $2.7 million in the form of letters of credit that secured option contracts to purchase 2,951 lots for a total estimated purchase price of $332.8 million.

At March 31, 2023, we had outstanding surety bonds and letters of credit totaling $359.1 million and $116.0 million, respectively, including $68.9 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit was approximately $157.3 million and $75.1 million, respectively. We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit. We have made no material guarantees with respect to third-party obligations.

Capital Resources

Our capital structure is primarily a combination of (1) permanent financing, represented by stockholders’ equity; (2) long-term financing, represented by our 3.850% senior notes due 2030, 2.500% senior notes due 2031, 6.000% senior notes due 2043, and 3.966% senior notes due 2061; (3) our Revolving Credit Facility and (4) our Mortgage Repurchase Facility. Because of our current balance of cash, cash equivalents, marketable securities, ability to access the capital markets, and available capacity under both our Revolving Credit Facility and Mortgage Repurchase Facility, we believe that our capital resources are

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adequate to satisfy our short and long-term capital requirements, including meeting future payments on our senior notes as they become due. See “Forward-Looking Statements” below.

We may from time to time seek to retire or purchase our outstanding senior notes through cash purchases, whether through open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Senior Notes, Revolving Credit Facility and Mortgage Repurchase Facility

Senior Notes. Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries. We believe that we are in compliance with the representations, warranties and covenants in the senior note indentures.

Revolving Credit Facility. We have an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders, which may be used for general corporate purposes. This agreement was amended on December 28, 2020 to (1) increase the aggregate commitment from $1.0 billion to $1.2 billion (the "Commitment"), (2) extend the Revolving Credit Facility maturity of $1.125 billion of the Commitments to December 18, 2025 with the remaining Commitment continuing to terminate on December 18, 2023 and (3) provide that the aggregate amount of the commitments may increase to an amount not to exceed $1.7 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents.

Effective April 11, 2023, the Revolving Credit Facility was amended to transition from a eurocurrency based interest rate to an interest rate based on the Secured Overnight Financing Rate ("SOFR"). As defined in the Revolving Credit Facility, interest rates on base rate borrowings are equal to the highest of (1) 0.0%, (2) a prime rate, (3) a federal funds effective rate plus 0.50%, and (4) the one month term SOFR screen rate plus the SOFR adjustment plus 1.00% and, in each case, plus a margin that is determined based on our credit ratings and leverage ratio. Interest rates on SOFR borrowings are equal to the greater of (1) 0.0% and (2) the sum of the term SOFR screen rate for such interest period plus the SOFR adjustment, plus a margin that is determined based on our credit ratings and leverage ratio. At any time at which our leverage ratio, as of the last day of the most recent calendar quarter, exceeds 55%, the aggregate principal amount of all consolidated senior debt borrowings outstanding may not exceed the borrowing base. There is no borrowing base requirement if our leverage ratio, as of the last day of the most recent calendar quarter, is 55% or less.

The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated tangible net worth test and a leverage test, along with a consolidated tangible net worth covenant, all as defined in the Revolving Credit Facility. A failure to satisfy the foregoing tests does not constitute an event of default, but can trigger a “term-out” of the facility. A breach of the consolidated tangible net worth covenant (but not the consolidated tangible net worth test) or a violation of anti-corruption or sanctions laws would result in an event of default.

The Revolving Credit Facility is subject to acceleration upon certain specified events of default, including breach of the consolidated tangible net worth covenant, a violation of anti-corruption or sanctions laws, failure to make timely payments, breaches of certain representations or covenants, failure to pay other material indebtedness, or another person becoming beneficial owner of 50% or more of our outstanding common stock. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of March 31, 2023.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At March 31, 2023 and December 31, 2022, there were $47.1 million and $48.3 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At March 31, 2023 and December 31, 2022, we had $10.0 million and $10.0 million, respectively, outstanding under the Revolving Credit Facility. As of March 31, 2023, availability under the Revolving Credit Facility was approximately $1.14 billion.

-35-

Mortgage Repurchase Facility. HomeAmerican has a Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”). The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $75 million (subject to increase by up to $75 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Custody Agreement (“Custody Agreement”), dated as of November 12, 2008, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The Mortgage Repurchase Facility was amended on September 24, 2020, March 25, 2021, May 20, 2021, December 21, 2021 and May 19, 2022 to adjust the commitments to purchase for specific time periods. The total capacity of the facility at March 31, 2023 was $230 million. The May 19, 2022 amendment extended the termination date of the Repurchase Agreement to May 18, 2023. We are currently in negotiations to extend the Mortgage Repurchase Facility.

At March 31, 2023 and December 31, 2022, HomeAmerican had $130.5 million and $175.8 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. Pricing under the Mortgage Repurchase Facility is based on the SOFR.

The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of March 31, 2023.

Dividends

During the three months ended March 31, 2023 and 2022, we paid cash dividends of $0.50 per share.

MDC Common Stock Repurchase Program

At March 31, 2023, we were authorized to repurchase up to 4.0 million shares of our common stock. We did not repurchase any shares of our common stock during the three months ended March 31, 2023.

-36-

Consolidated Cash Flow

During the three months ended March 31, 2023, net cash provided by operating activities was $426.2 million compared with net cash provided by operating activities of $118.1 million in the prior year period. During the three months ended March 31, 2023 and 2022, one of the most significant sources of cash provided by operating activities was net income of $80.7 million and $148.4 million, respectively. Another significant source of cash provided by operating activities during the three months ended March 31, 2023 and 2022 was cash provided by the decrease in land and land under development of $115.9 million and $107.3 million, respectively. This decrease was the result of home starts outnumbering lot acquisitions during the respective periods. During the three months ended March 31, 2023, cash provided by housing completed or under construction was $135.6 million compared to the three months ended March 31, 2022, where cash used by housing completed or under construction was $277.2 million. This increase in cash provided in the first quarter of 2023 was due to homes in inventory decreasing during the three months ended March 31, 2023 compared to homes in inventory increasing during the prior year quarter. Cash provided to decrease trade and other receivables for the three months ended March 31, 2023 was $55.9 million compared to cash used to increase trade and other receivables for the three months ended March 31, 2022 of $16.7 million. This change was due to a year-over-year decrease in home deliveries in the first quarter of 2023. Cash provided to decrease prepaids and other assets for the three months ended March 31, 2023 was $3.5 million compared to cash used to increase prepaids and other assets for the three months ended March 31, 2022 of $20.5 million. Cash used by the change in accounts payable and accrued liabilities for the three months ended March 31, 2023 was $40.5 million compared to cash provided of $57.6 million for the three months ended March 31, 2022. The changes in both prepaids and other assets and accounts payable and accrued liabilities were due to decreased construction spend during the first quarter of 2023 as a result of the year-over-year decrease in home deliveries and homes in inventory.

During the three months ended March 31, 2023 and 2022, net cash used in investing activities was $244.8 million and $6.9 million, respectively. The increase in net cash used in investing activities was driven by $434.4 million of cash used in the purchase of marketable securities during the three months ended March 31, 2023. This was partially offset by cash provided by the maturities of marketable securities of $195.0 million during the three months ended March 31, 2023.

During the three months ended March 31, 2023 and 2022, net cash used in financing activities was $93.5 million and $126.3 million respectively. The primary driver of this decrease in net cash used by financing activities was the decrease in cash used on the net payments made on the mortgage repurchase facility. The three months ended March 31, 2023 and 2022 saw cash used of $45.2 million and $78.1 million, respectively on the mortgage repurchase facility. This was driven by the decreased proceeds from the sale of mortgage loans.

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OTHER

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases, oral statements made by our officials in the course of presentations about the Company and conference calls in connection with quarterly earnings releases, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this Report are reasonable, we cannot guarantee future results. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered. Additionally, information about issues that could lead to material changes in performance and risk factors that have the potential to affect us is contained under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 and Item 1A of Part II of this Quarterly Report on Form 10-Q.

Item 3.         Quantitative and Qualitative Disclosures About Market Risk

We have a cash and investment policy that enables us to achieve an appropriate investment return while preserving principal and managing risk. Under this policy, cash and cash equivalents may include U.S. government securities, commercial bank deposits, commercial paper, certificates of deposit, money market funds, and time deposits, with maturities of three months or less. Marketable securities under this policy may include holdings in U.S. government securities with a maturity of more than three months, equity securities and corporate debt securities.

As of March 31, 2023, our cash and cash equivalents included commercial bank deposits and money market funds and our marketable securities included U.S. government treasury securities with original maturities upon acquisition of less than six months.

We are exposed to market risks related to fluctuations in interest rates on mortgage loans held-for-sale, mortgage interest rate lock commitments, marketable securities and debt. Financial instruments utilized in the normal course of business by HomeAmerican include forward sales of mortgage-backed securities, which are commitments to sell a specified financial instrument at a specified future date for a specified price, mandatory delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price within a specified time period, and best-effort delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price subject to the underlying mortgage loans being funded and closed. Such contracts are the only significant financial and derivative instruments utilized by MDC. HomeAmerican’s mortgage loans in process for which an interest rate lock commitment had been made to a borrower that had not closed at March 31, 2023 had an aggregate principal balance of $391.5 million, of which $385.7 million had not yet been committed to a mortgage purchaser. In addition, HomeAmerican had mortgage loans held-for-sale with an aggregate principal balance of $165.9 million at March 31, 2023, of which $53.8 million had not yet been committed to a mortgage purchaser. In order to hedge the changes in fair value of interest rate lock commitments and mortgage loans held-for-sale that had not yet been committed to a mortgage purchaser, HomeAmerican had forward sales of securities totaling $362.5 million and $323.0 million at March 31, 2023 and December 31, 2022, respectively.

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HomeAmerican provides mortgage loans that generally are sold forward on a best-efforts or mandatory commitment basis and subsequently delivered to a third-party purchaser between 5 and 35 days after closing. Forward sale commitments and forward sales of mortgage-backed securities are used for non-trading purposes to sell mortgage loans and economically hedge price risk due to fluctuations in interest rates on rate-locked mortgage loans in process that have not closed and mortgage loans held-for-sale. Due to this economic hedging philosophy, the market risk associated with these mortgages is limited. For forward sales commitments, forward sales of mortgage-backed securities and commitments to originate mortgage loans that are still outstanding at the end of a reporting period, we record the changes in fair value of these financial instruments in revenues in the financial services section of the consolidated statements of operations and comprehensive income with an offset to either other assets or accounts payable and accrued liabilities in the financial services section of our consolidated balance sheets, depending on the nature of the change.

We utilize our Revolving Credit Facility, our Mortgage Repurchase Facility and senior notes in our financing strategy. For fixed rate debt, changes in interest rates generally affect the fair value of the debt instrument, but do not affect our earnings or cash flows. We do not have an obligation to prepay our senior notes prior to maturity and, as a result, interest rate risk and changes in fair value do not have an impact on our financial position, results of operations or cash flows. For variable rate debt such as our Revolving Credit Facility and Mortgage Repurchase Facility, changes in interest rates generally do not affect the fair value of the outstanding borrowing on the debt facilities, but do affect our earnings and cash flows. See “Forward-Looking Statements” above.

Item 4.        Controls and Procedures

(a)Conclusion regarding the effectiveness of disclosure controls and procedures - An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed under the supervision, and with the participation, of our management, including the Executive Chairman (principal executive officer) and the Chief Financial Officer (principal financial officer).  Based on that evaluation, our management, including the Executive Chairman and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

(b)Changes in internal control over financial reporting - There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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M.D.C. HOLDINGS, INC.

FORM 10-Q

PART II. OTHER INFORMATION

Item 1.        Legal Proceedings

Because of the nature of the homebuilding business, we and certain of our subsidiaries and affiliates have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of our homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows.

Item 1A.     Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A. Risk Factors in the Company’s 2022 Annual Report on Form 10-K. There are no material changes from the risk factors included within the Company’s 2022 Annual Report on Form 10-K.

Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about our repurchase of common stock during the three months ended March 31, 2023:

Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program (2)	Maximum Number of Shares that may yet be Purchased under the Plan or Program (2)
January 1 to January 31, 2023	—	N/A		—	4,000,000
February 1 to February 28, 2023	47,131	$	40.33	—	4,000,000
March 1 to March 31, 2023	—	N/A		—	4,000,000

(1) Represents shares of common stock withheld by us to cover withholding taxes due upon the vesting of restricted stock award shares, at the election of certain holders of nonvested shares, with market value approximating the amount of withholding taxes due.

(2) We are authorized to repurchase up to 4,000,000 shares of our common stock. There were no shares of MDC common stock repurchased under this repurchase program during the three month period ended March 31, 2023.

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Item 6.        Exhibits

10.1	Credit Agreement by and among M.D.C. Holding, Inc., U.S. Bank National Association, as designated agent and co-administrative agent, Citibank, N.A., as co-administrative agent, and the other Lenders identified therein, as amended as of April 11, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed April 13, 2023). *
10.2	First Amendment to the M.D.C. Holdings, Inc. 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed April 19, 2023).*
10.3	M.D.C. Holdings, Inc. 2021 Equity Incentive Plan, as amended as of April 17, 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed April 19, 2023). *
22	Subsidiary Guarantors (incorporated by reference to Exhibit 22 to the Company's Form 10-Q for the quarter ended June 30, 2021). *
31.1	Certification of principal executive officer required by 17 CFR 240.13a-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of principal financial officer required by 17 CFR 240.13a-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of principal executive officer required by 17 CFR 240.13a-14(b), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of principal financial officer required by 17 CFR 240.13a-14(b), pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022, (ii) Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2023 and 2022, (iii) Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2023 and 2022, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022; and (v) Notes to the Unaudited Consolidated Financial Statements, tagged as blocks of text.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

____________________

*Incorporated by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	M.D.C. HOLDINGS, INC.
	(Registrant)
Date: May 2, 2023	By: /s/ Robert N. Martin
	Robert N. Martin Senior Vice President and Chief Financial Officer (principal financial officer and duly authorized officer)
Date: May 2, 2023	By: /s/ Derek R. Kimmerle
	Derek R. Kimmerle
	Vice President, Controller and Chief Accounting Officer (principal accounting officer and duly authorized officer)

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Larry A. Mizel, certify that:

1.I have reviewed this report on Form 10-Q of M.D.C. Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2023	/s/ Larry A. Mizel
	Larry A. Mizel Executive Chairman (principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Robert N. Martin, certify that:

1.I have reviewed this report on Form 10-Q of M.D.C. Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2023	/s/ Robert N. Martin
	Robert N. Martin Senior Vice President, Chief Financial Officer (principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned principal executive officer of M.D.C. Holdings, Inc. (the "Company") hereby certifies that the Report on Form 10-Q of the Company for the period ended March 31, 2023 accompanying this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2023	/s/ Larry A. Mizel
	Larry A. Mizel Executive Chairman (principal executive officer)

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Title 18, United States Code, and is not being filed as part of the report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned principal financial officer of M.D.C. Holdings, Inc. (the "Company") hereby certifies that the Report on Form 10-Q of the Company for the period ended March 31, 2023 accompanying this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2023	/s/ Robert N. Martin
	Robert N. Martin Senior Vice President, Chief Financial Officer (principal financial officer)

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Title 18, United States Code, and is not being filed as part of the report or as a separate disclosure document.

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 28, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	1-8951
Entity Registrant Name	M.D.C. HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-0622967
Entity Address, Address Line One	4350 South Monaco Street, Suite 500
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80237
City Area Code	303
Local Phone Number	773-1100
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		73,117,639
Entity Central Index Key	0000773141
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	MDC
Security Exchange Name	NYSE
Senior Notes 6.000 % Due January 2043
Document Information [Line Items]
Title of 12(b) Security	6% Senior Notes due January 2043
Trading Symbol	MDC 43
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventories:
Housing completed or under construction	$ 1,585,951	$ 1,722,061
Land and land under development	1,671,824	1,793,718
Total inventories	3,257,775	3,515,779
Total Assets	5,315,821	5,363,272
LIABILITIES AND EQUITY
Total Liabilities	2,185,700	2,271,488
Stockholders' Equity
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding	0	0
Common stock, $0.01 par value; 250,000,000 shares authorized; 73,087,335 and 72,585,596 issued and outstanding at March 31, 2023 and December 31, 2022, respectively	731	726
Additional paid-in-capital	1,778,025	1,784,173
Retained earnings	1,351,042	1,306,885
Accumulated other comprehensive income	323	0
Total Stockholders' Equity	3,130,121	3,091,784
Total Liabilities and Stockholders' Equity	5,315,821	5,363,272
Homebuilding:
ASSETS
Cash and cash equivalents	781,738	696,075
Restricted cash	2,268	3,143
Marketable securities	691,767	443,712
Trade and other receivables	67,865	116,364
Inventories:
Housing completed or under construction	1,585,951	1,722,061
Land and land under development	1,671,824	1,793,718
Total inventories	3,257,775	3,515,779
Property and equipment, net	63,787	63,730
Deferred tax asset, net	46,528	49,252
Prepaids and other assets	66,721	70,007
Total Assets	4,978,449	4,958,062
LIABILITIES AND EQUITY
Accounts payable	119,351	109,218
Accrued and other liabilities	342,167	383,406
Revolving credit facility	10,000	10,000
Senior notes, net	1,482,779	1,482,576
Total Liabilities	1,954,297	1,985,200
Financial Services:
ASSETS
Cash and cash equivalents	20,985	17,877
Marketable securities	117,610	117,388
Inventories:
Mortgage loans held-for-sale, net	166,252	229,513
Other assets	32,525	40,432
Total Assets	337,372	405,210
LIABILITIES AND EQUITY
Total accounts payable and accrued liabilities	100,876	110,536
Mortgage repurchase facility	130,527	175,752
Total Liabilities	$ 231,403	$ 286,288

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	73,087,335	72,585,596
Common stock, shares outstanding (in shares)	73,087,335	72,585,596

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Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Inventory impairments	$ (7,800)	$ (660)
Income before income taxes	108,969	201,882
Provision for income taxes	(28,269)	(53,461)
Net income	80,700	148,421
Other comprehensive income (loss) net of tax:
Unrealized gain (loss) related to available-for-sale debt securities	323	0
Other comprehensive income (loss)	323	0
Comprehensive income	$ 81,023	$ 148,421
Earnings per share:
Basic (in dollars per share)	$ 1.10	$ 2.09
Diluted (in dollars per share)	$ 1.08	$ 2.02
Weighted average common shares outstanding:
Basic (in shares)	72,647,659	70,766,146
Diluted (in shares)	74,021,989	72,938,414
Dividends declared per share (in dollars per share)	$ 0.50	$ 0.50
Homebuilding:
Revenues	$ 1,020,016	$ 1,240,520
Home cost of sales	(840,747)	(921,378)
Inventory impairments	(7,800)	(660)
Total cost of sales	(848,547)	(922,038)
Gross profit	171,469	318,482
Selling, general and administrative expenses	(94,988)	(129,314)
Interest and other income	13,459	755
Other expense	1,059	(1,424)
Income before income taxes	90,999	188,499
Financial Services:
Revenues	29,486	29,131
Expenses	(15,250)	(16,935)
Other income, net	3,734	1,187
Income before income taxes	$ 17,970	$ 13,383

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income
Beginning balance (in shares) at Dec. 31, 2021		70,668,093
Beginning balance at Dec. 31, 2021	$ 2,597,146	$ 707	$ 1,709,276	$ 887,163	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	148,421			148,421
Other comprehensive income (loss)	0
Unrealized gain (loss) related to available-for-sale debt securities	0				0
Shares issued under stock-based compensation programs, net (in shares)		498,921
Shares issued under stock-based compensation programs, net	(12,628)	$ 5	(12,633)
Cash dividends declared	(35,583)			(35,583)
Stock-based compensation expense	13,726		13,726
Forfeiture of restricted stock (in shares)		(4,769)
Forfeiture of restricted stock	0
Ending balance (in shares) at Mar. 31, 2022		71,162,245
Ending balance at Mar. 31, 2022	$ 2,711,082	$ 712	1,710,369	1,000,001	0
Beginning balance (in shares) at Dec. 31, 2022	72,585,596	72,585,596
Beginning balance at Dec. 31, 2022	$ 3,091,784	$ 726	1,784,173	1,306,885	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	80,700			80,700
Other comprehensive income (loss)	323				323
Unrealized gain (loss) related to available-for-sale debt securities	323
Shares issued under stock-based compensation programs, net (in shares)		503,022
Shares issued under stock-based compensation programs, net	(11,740)	$ 5	(11,745)
Cash dividends declared	(36,543)			(36,543)
Stock-based compensation expense	5,597		5,597
Forfeiture of restricted stock (in shares)		(1,283)
Forfeiture of restricted stock	$ 0
Ending balance (in shares) at Mar. 31, 2023	73,087,335	73,087,335
Ending balance at Mar. 31, 2023	$ 3,130,121	$ 731	$ 1,778,025	$ 1,351,042	$ 323

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating Activities:
Net income	$ 80,700	$ 148,421
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	5,498	14,882
Depreciation and amortization	5,500	6,652
Inventory impairments	7,800	660
Project abandonment costs	(1,048)	1,434
Amortization of discount of marketable debt securities	(8,472)	0
Deferred income tax benefit	2,617	842
Net changes in assets and liabilities:
Trade and other receivables	55,868	(16,677)
Mortgage loans held-for-sale, net	63,261	94,615
Prepaids and other assets	3,470	(20,479)
Accounts payable and accrued and other liabilities	(40,485)	57,571
Net cash provided by operating activities	426,164	118,055
Investing Activities:
Purchases of marketable securities	(434,374)	0
Maturities of marketable securities	195,000	0
Purchases of property and equipment	(5,386)	(6,884)
Net cash used in investing activities	(244,760)	(6,884)
Financing Activities:
Payments on mortgage repurchase facility, net	(45,225)	(78,069)
Dividend payments	(36,543)	(35,583)
Issuance of shares under stock-based compensation programs, net	(11,740)	(12,628)
Net cash used in financing activities	(93,508)	(126,280)
Net increase (decrease) in cash, cash equivalents and restricted cash	87,896	(15,109)
Cash, cash equivalents and restricted cash:
Beginning of period	717,095	603,459
End of period	804,991	588,350
Reconciliation of cash, cash equivalents and restricted cash:
Total cash, cash equivalents and restricted cash	804,991	588,350
Homebuilding:
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Inventory impairments	7,800	660
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	781,738	474,447
Restricted cash	2,268	6,400
Financial Services:
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	20,985	107,503
Housing completed or under construction
Net changes in assets and liabilities:
Housing completed or under construction and land under development	135,581	(277,187)
Land and land under development
Net changes in assets and liabilities:
Housing completed or under construction and land under development	$ 115,874	$ 107,321

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Basis of Presentation

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The Unaudited Consolidated Financial Statements of M.D.C. Holdings, Inc. ("MDC," “the Company," “we,” “us,” or “our,” which refer to M.D.C. Holdings, Inc. and its subsidiaries) have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of MDC at March 31, 2023 and for all periods presented. These statements should be read in conjunction with MDC’s Consolidated Financial Statements and Notes thereto included in MDC’s Annual Report on Form 10-K for the year ended December 31, 2022.

Included in these footnotes are certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. These forward-looking statements may be identified by terminology such as “likely,” “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained in this section are reasonable, we cannot guarantee future results. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in subsequent reports on Forms 10-K, 10-Q and 8-K should be considered.

Where necessary, reclassifications have been made to our prior period financial information to conform to the current year presentation.

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Recently Issued Accounting Standards

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Not Yet Adopted New Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2020-04, “Reference Rate Reform (Topic 848),” as amended by ASU 2021-01 in January 2021 and ASU 2022-06 in December 2022, directly addressing the effects of reference rate reform on financial reporting as a result of the cessation of the publication of certain LIBOR rates beginning December 31, 2021, with complete elimination of the publication of the LIBOR rates by June 30, 2023. The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform by virtue of referencing LIBOR or another reference rate expected to be discontinued. This guidance became effective on March 12, 2020 and can be adopted no later than December 31, 2024, with early adoption permitted. We plan to adopt this amendment in the second quarter of 2023. We are currently evaluating the impact, but do not expect that the adoption of ASU 2020-04, as amended by ASU 2021-01 and ASU 2022-06, will have a material impact on our consolidated balance sheet or consolidated statement of operations and comprehensive income.

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Segment Reporting

3 Months Ended

Mar. 31, 2023

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Segment Reporting

Segment Reporting

An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, to evaluate performance and make operating decisions. We have identified our CODM as two key executives—the Executive Chairman and the Chief Executive Officer (“CEO”).

We have identified each homebuilding division as an operating segment. Our homebuilding operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments conducted ongoing operations in the following states:

•West (Arizona, California, Nevada, New Mexico, Oregon, Texas and Washington)

•Mountain (Colorado, Idaho and Utah)

•East (Alabama, Florida, Maryland, Pennsylvania, Tennessee and Virginia)

Our financial services business consists of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income, we consider HomeAmerican to be a reportable segment (“mortgage operations”). The remaining operating segments have been aggregated into one reportable segment (“other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (a) the combined reported profit of all operating segments that did not report a loss or (b) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets.

Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance, treasury, information technology, insurance, risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support MDC as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding operations section of our consolidated statements of operations and comprehensive income.

The following table summarizes revenues for our homebuilding and financial services operations:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding
West	$	577,933	$	707,311
Mountain	301,155		335,128
East	140,928		198,081
Total homebuilding revenues	$	1,020,016	$	1,240,520
Financial Services
Mortgage operations	$	18,419	$	17,601
Other	11,067		11,530
Total financial services revenues	$	29,486	$	29,131

The following table summarizes pretax income for our homebuilding and financial services operations:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding
West	$	43,200	$	130,526
Mountain	25,036		50,506
East	15,309		31,394
Corporate	7,454		(23,927)
Total homebuilding pretax income	$	90,999	$	188,499
Financial Services
Mortgage operations	$	9,726	$	7,433
Other	8,244		5,950
Total financial services pretax income	$	17,970	$	13,383
Total pretax income	$	108,969	$	201,882

The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents, marketable securities and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Homebuilding assets
West	$	2,098,329	$	2,275,144
Mountain	898,227		1,005,622
East	407,046		427,926
Corporate	1,574,847		1,249,370
Total homebuilding assets	$	4,978,449	$	4,958,062
Financial services assets
Mortgage operations	$	198,938	$	267,309
Other	138,434		137,901
Total financial services assets	$	337,372	$	405,210
Total assets	$	5,315,821	$	5,363,272

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Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Accounting Standards Codification ("ASC") Topic 260, Earnings per Share ("ASC 260") requires a company that has participating security holders (for example, holders of unvested restricted stock that have non-forfeitable dividend rights) to utilize the two-class method for calculating earnings per share (“EPS”) unless the treasury stock method results in lower EPS. The two-class method is an allocation of earnings/(loss) between the holders of common stock and a company’s participating security holders. Under the two-class method, earnings/(loss) for the reporting period are allocated between common shareholders and other security holders based on their respective rights to receive distributed earnings (i.e., dividends) and undistributed earnings (i.e., net income/(loss)). Our common shares outstanding are comprised of shareholder owned common stock and shares of unvested restricted stock held by participating security holders. Basic EPS is calculated by dividing income or loss attributable to common stockholders by the weighted average number of shares of common stock outstanding, excluding participating shares in accordance with ASC 260. To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	80,700	$	148,421
Less: distributed earnings allocated to participating securities	(216)		(194)
Less: undistributed earnings allocated to participating securities	(230)		(562)
Net income attributable to common stockholders (numerator for basic earnings per share)	80,254		147,665
Add back: undistributed earnings allocated to participating securities	230		562
Less: undistributed earnings reallocated to participating securities	(226)		(546)
Numerator for diluted earnings per share under two-class method	$	80,258	$	147,681
Denominator
Weighted-average common shares outstanding	72,647,659		70,766,146
Add: dilutive effect of stock options	1,355,303		1,998,156
Add: dilutive effect of contingently issuable equity awards	19,027		174,112
Denominator for diluted earnings per share under two-class method	74,021,989		72,938,414
Basic Earnings Per Common Share	$	1.10	$	2.09
Diluted Earnings Per Common Share	$	1.08	$	2.02

Diluted EPS for the three months ended March 31, 2023 and 2022 both excluded options to purchase 15,000 shares of common stock, because the effect of their inclusion would be anti-dilutive.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value MeasurementsASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs, other than quoted prices in active markets, that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis, except those for which the carrying values approximate fair values:

		Fair Value
Financial Instrument	Hierarchy	March 31, 2023		December 31, 2022
		(Dollars in thousands)
Marketable securities
Debt securities (available-for-sale)	Level 1	$	809,377	$	561,100
Mortgage loans held-for-sale, net	Level 2	$	166,252	$	229,513

The following methods and assumptions were used to estimate the fair value of each class of financial instruments as of March 31, 2023 and December 31, 2022.

Debt securities. Our debt securities consist of U.S. government treasury securities with original maturities upon acquisition of less than six months and are treated as available-for-sale investments and, as such, are recorded at fair value with all changes in fair value initially recorded through other comprehensive income. Debt securities are reviewed on a regular basis for impairment.

Mortgage loans held-for-sale, net.  Our mortgage loans held-for-sale, which are measured at fair value on a recurring basis, include (1) mortgage loans held-for-sale that are under commitments to sell and (2) mortgage loans held-for-sale that are not under commitments to sell. At March 31, 2023 and December 31, 2022, we had $111.3 million and $142.9 million, respectively, of mortgage loans held-for-sale at fair value under commitments to sell. The fair value for those loans was based on quoted market prices for those mortgage loans, which are Level 2 fair value inputs. At March 31, 2023 and December 31, 2022, we had $55.0 million and $86.6 million, respectively, of mortgage loans held-for-sale that were not under commitments to sell. The fair value for those loans was primarily based upon the estimated market price received from an outside party, which is a Level 2 fair value input.

Gains (losses) on mortgage loans, net, are included as a component of revenues in the financial services section of our consolidated statements of operations and comprehensive income. For the three months ended March 31, 2023, we recorded a loss on mortgage loans held-for-sale, net of $2.3 million compared to $5.0 million for the same period in the prior year.

For the financial assets and liabilities that the Company does not reflect at fair value, the following methods and assumptions were used to estimate the fair value of each class of financial instruments.

Cash and cash equivalents (excluding debt securities with an original maturity of three months or less), restricted cash, trade and other receivables, prepaids and other assets, accounts payable, accrued and other liabilities and borrowings on our revolving credit facility. Fair value approximates carrying value.

Mortgage Repurchase Facility. The debt associated with our mortgage repurchase facility (see Note 18 for further discussion) is at floating rates that approximate current market rates and have relatively short-term maturities, generally within 30 days. The fair value approximates carrying value and is based on Level 2 inputs.

Senior Notes. The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources.

	March 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in thousands)
$300 million 3.850% Senior Notes due January 2030, net	$	298,012	$	256,148	$	297,949	$	246,236
$350 million 2.500% Senior Notes due January 2031, net	347,486		272,690		347,413		255,374
$500 million 6.000% Senior Notes due January 2043, net	491,176		432,430		491,120		414,017
$350 million 3.966% Senior Notes due August 2061, net	346,105		205,959		346,094		204,014
Total	$	1,482,779	$	1,167,227	$	1,482,576	$	1,119,641

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Inventories

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

The following table sets forth, by reportable segment, information relating to our homebuilding inventories:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Housing completed or under construction:
West	$	954,131	$	1,026,880
Mountain	455,785		511,092
East	176,035		184,089
Subtotal	1,585,951		1,722,061
Land and land under development:
West	1,065,767		1,145,119
Mountain	405,725		433,893
East	200,332		214,706
Subtotal	1,671,824		1,793,718
Total inventories	$	3,257,775	$	3,515,779

Our inventories are primarily associated with communities where we intend to construct and sell homes, including models and unsold homes. Costs capitalized to land and land under development primarily include: (1) land costs; (2) land development costs; (3) entitlement costs; (4) capitalized interest; (5) engineering fees; and (6) title insurance, real property taxes and closing costs directly related to the purchase of the land parcel. Components of housing completed or under construction primarily include: (1) land costs transferred from land and land under development; (2) direct construction costs associated with a house; (3) real property taxes, engineering fees, permits and other fees; (4) capitalized interest; and (5) indirect construction costs, which include field construction management salaries and benefits, utilities and other construction related costs. Land costs are transferred from land and land under development to housing completed or under construction at the point in time that construction of a home on an owned lot begins.

In accordance with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), homebuilding inventories, excluding those classified as held for sale, are carried at cost unless events and circumstances indicate that the carrying value of the underlying subdivision may not be recoverable.  We evaluate inventories for impairment at each quarter end on a subdivision level basis as each such subdivision represents the lowest level of identifiable cash flows. In making this determination, we review, among other things, the following for each subdivision:

•actual and trending “Operating Margin” (which is defined as home sale revenues less home cost of sales and all incremental costs associated directly with the subdivision, including sales commissions and marketing costs);

•forecasted Operating Margin for homes in backlog;

•actual and trending net home orders;

•homes available for sale;

•market information for each sub-market, including competition levels, home foreclosure levels, the size and style of homes currently being offered for sale and lot size; and

•known or probable events indicating that the carrying value may not be recoverable.

If events or circumstances indicate that the carrying value of our inventory may not be recoverable, assets are reviewed for impairment by comparing the undiscounted estimated future cash flows from an individual subdivision (including capitalized interest) to its carrying value. If the undiscounted future cash flows are less than the subdivision’s carrying value, the carrying value of the subdivision is written down to its then estimated fair value. We generally determine the estimated fair value of each subdivision by determining the present value of the estimated future cash flows at discount rates, which are Level 3 inputs, that are commensurate with the risk of the subdivision under evaluation. The evaluation for the recoverability of the carrying value of the assets for each individual subdivision can be impacted significantly by our estimates of future home sale revenues, home construction costs, and development costs per home, all of which are Level 3 inputs.

If land is classified as held for sale, we measure it in accordance with ASC 360 at the lower of the carrying value or fair value less estimated costs to sell. In determining fair value, we primarily rely upon the most recent negotiated price, which is a Level 2 input. If a negotiated price is not available, we will consider several factors including, but not limited to, current market conditions, recent comparable sales transactions and market analysis studies, which are considered Level 3 inputs. If the fair value less estimated costs to sell is lower than the current carrying value, the land is impaired down to its estimated fair value less costs to sell.

Inventory impairments recognized by segment for the three months ended March 31, 2023 and 2022 are shown in the table below.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	—	$	660
Mountain	664		—
East	—		—
Subtotal	664		660
Land and Land Under Development:
West	—		—
Mountain	7,136		—
East	—		—
Subtotal	7,136		—
Total Inventory Impairments	$	7,800	$	660

The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.

	Impairment Data					Quantitative Data
Three Months Ended	Number of Subdivisions Impaired	Inventory Impairments		Fair Value of Inventory After Impairments		Discount Rate
	(Dollars in thousands)
March 31, 2023	1	$	7,800	$	13,016	18%
Total		$	7,800
March 31, 2022	1	$	660	$	1,728		N/A
Total		$	660

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Capitalization of Interest

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Capitalization of Interest

Capitalization of Interest

We capitalize interest to inventories during the period of development in accordance with ASC Topic 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales during the period that related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity. For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding interest incurred	$	17,454	$	17,258
Less: Interest capitalized	(17,454)		(17,258)
Homebuilding interest expensed	$	—	$	—
Interest capitalized, beginning of period	$	59,921	$	58,054
Plus: Interest capitalized during period	17,454		17,258
Less: Previously capitalized interest included in home cost of sales	(16,065)		(14,844)
Interest capitalized, end of period	$	61,310	$	60,468

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Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

Leases

We lease certain property, land and equipment, the majority of which comprise property related leases to provide office space where we operate our business. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Our property related leases typically have terms of between three and five years, with the exception of the lease governing the Company’s headquarters. All of our property related leases are classified as operating leases. These leases do not contain any residual value guarantees or restrictive covenants and do not include variable lease payments, except for the payment of common area maintenance and real estate taxes. Many of our property related leases give us the option to extend the lease term for a period of time, generally consistent with the initial lease term. These options are excluded from our calculation of the right-of-use asset and lease liability until such time as we determine it is reasonably certain that the option will be exercised.

The property related lease for the Company’s headquarters in Denver, Colorado is ten years in length with an expiration date of October 31, 2026 and contains a ten year option to extend the term of the lease through 2036. This option has been excluded from our calculation of the right-of-use asset and lease liability as it is not currently considered reasonably certain that the option will be exercised.

Operating lease expense is included as a component of selling, general and administrative expenses in the homebuilding section and expenses in the financial services section of our consolidated statements of operations and comprehensive income. Components of operating lease expense were as follows:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Operating lease cost 1	$	2,156	$	2,131
Less: Sublease income	(144)		(83)
Net lease cost	$	2,012	$	2,048

1Includes variable lease costs, which are immaterial.

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,061	$	2,022
Leased assets obtained in exchange for new operating lease liabilities	$	1,646	$	3,748

Weighted-average remaining lease term and discount rate for operating leases were as follows:

	March 31, 2023		March 31, 2022
Weighted-average remaining lease term (in years)	3.8		4.5
Weighted-average discount rate	5.5	%	5.5	%

Maturities of operating lease liabilities were as follows:

	Year Ended December 31,
	(Dollars in thousands)
2023 (excluding the three months ended March 31, 2023)	$	5,148
2024	7,706
2025	7,621
2026	6,353
2027	1,133
Thereafter	552
Total operating lease payments 1	$	28,513
Less: Effects of discounting	2,842
Present value of operating lease liabilities 2	$	25,671

_______________________________________________________________

1Operating lease payments exclude $1.2 million of legally binding lease payments for leases signed but not yet commenced.

2Homebuilding and financial services operating lease liabilities of $25.4 million and $0.2 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services sections of our consolidated balance sheet at March 31, 2023.

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Homebuilding Prepaids and Other Assets

3 Months Ended

Mar. 31, 2023

Prepaid Expense and Other Assets [Abstract]

Homebuilding Prepaids and Other Assets

Homebuilding Prepaids and Other Assets

The following table sets forth the components of homebuilding prepaids and other assets:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Land option deposits	$	20,058	$	19,539
Operating lease right-of-use asset (Note 8)	24,559		25,636
Prepaids	11,073		13,333
Goodwill	6,008		6,008
Deferred debt issuance costs on revolving credit facility, net	4,766		5,241
Other	257		250
Total prepaids and other assets	$	66,721	$	70,007

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Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities

3 Months Ended

Mar. 31, 2023

Accounts Payable and Accrued Liabilities [Abstract]

Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities

Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities

The following table sets forth information relating to homebuilding accrued and other liabilities:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Accrued compensation and related expenses	$	57,040	$	100,653
Customer and escrow deposits	47,191		42,296
Warranty accrual (Note 11)	46,666		46,857
Lease liability (Note 8)	25,426		26,574
Land development and home construction accruals	17,538		20,028
Accrued interest	14,889		30,934
Income taxes payable	49,461		23,880
Construction defect claim reserves (Note 12)	10,322		10,466
Retentions payable	19,417		21,519
Other accrued liabilities	54,217		60,199
Total accrued and other liabilities	$	342,167	$	383,406

A reclassification was made to our prior period financial information, where $21.5 million was reclassed from other accrued liabilities to retentions payable to conform to the current year presentation.

The following table sets forth information relating to financial services accounts payable and accrued liabilities:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Insurance reserves (Note 12)	$	82,815	$	84,108
Accounts payable and other accrued liabilities	18,061		26,428
Total accounts payable and accrued liabilities	$	100,876	$	110,536

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Warranty Accrual

3 Months Ended

Mar. 31, 2023

Product Warranties Disclosures [Abstract]

Warranty Accrual

Warranty Accrual

Our homes are sold with limited third-party warranties and, under our agreement with the issuer of the third-party warranties, we are responsible for performing all of the work for the first two years of the warranty coverage, and paying for certain work required to be performed subsequent to year two. We record accruals for general and structural warranty claims, as well as accruals for known, unusual warranty-related expenditures. Our warranty accrual is recorded based upon historical payment experience in an amount estimated to be adequate to cover expected costs of materials and outside labor during warranty periods. The determination of the warranty accrual rate for closed homes and the evaluation of our warranty accrual balance at period end are based on an internally developed analysis that includes known facts and interpretations of circumstances, including, among other things, our trends in historical warranty payment levels and warranty payments for claims not considered to be normal and recurring.

Our warranty accrual is included in accrued and other liabilities in the homebuilding section of our consolidated balance sheets and adjustments to our warranty accrual are recorded as an increase or reduction to home cost of sales in the homebuilding section of our consolidated statements of operations and comprehensive income.

The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three months ended March 31, 2023 and 2022. The warranty accrual during the three months ended March 31, 2023 decreased compared to an increase during the three months ended March 31, 2022 due to the increase in cash payments and a decrease in the number of home closings. Further, there was a $2.4 million adjustment to increase our warranty accrual during the three months ended March 31, 2022. This adjustment was due to higher general warranty related expenditures.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Balance at beginning of period	$	46,857	$	37,491
Expense provisions	5,635		5,832
Cash payments	(5,826)		(4,817)
Adjustments	—		2,440
Balance at end of period	$	46,666	$	40,946

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Insurance and Construction Defect Claim Reserves

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Insurance and Construction Defect Claim Reserves

Insurance and Construction Defect Claim Reserves

The establishment of reserves for estimated losses associated with insurance policies issued by Allegiant and re-insurance agreements issued by StarAmerican are based on actuarial studies that include known facts and interpretations of circumstances, including our experience with similar cases and historical trends involving claim payment patterns, pending levels of unpaid claims, product mix or concentration, claim severity, frequency patterns, and changing regulatory and legal environments. It is possible that changes in the insurance payment experience used in estimating our ultimate insurance losses could have a material impact on our insurance reserves.

The establishment of reserves for estimated losses to be incurred by our homebuilding subsidiaries associated with: (1) the self-insured retention (“SIR”) portion of construction defect claims that are expected to be covered under insurance policies with Allegiant and (2) the entire cost of any construction defect claims that are not expected to be covered by insurance policies with Allegiant, are based on third party actuarial studies that include known facts similar to those for our insurance reserves. It is possible that changes in the payment experience used in estimating our ultimate losses for construction defect claims could have a material impact on our reserves.

The table set forth below summarizes our insurance and construction defect claim reserves activity for the three months ended March 31, 2023 and 2022. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Balance at beginning of period	$	94,574	$	82,187
Expense provisions	3,789		4,432
Cash payments, net of recoveries	(5,226)		(2,195)
Balance at end of period	$	93,137	$	84,424

In the ordinary course of business, we make payments from our insurance and construction defect claim reserves to settle litigation claims arising from our homebuilding activities. These payments are irregular in both their timing and their magnitude. As a result, the cash payments, net of recoveries shown for the three months ended March 31, 2023 and 2022 are not necessarily indicative of what future cash payments will be for subsequent periods.

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Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesOur overall effective income tax rates were 25.9% and 26.5% for the three months ended March 31, 2023 and 2022, respectively, resulting in income tax expense of $28.3 million and $53.5 million for the same periods, respectively. The year-over-year decrease in our effective tax rate for the three months ended March 31, 2023 was primarily due to energy tax credits benefiting 2023, which had not been extended into 2022 as of March 31, 2022. This decrease was partially offset by the tax impact of non-deductible executive compensation under Internal Revenue Code Section 162(m).

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Senior Notes

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Senior Notes

Senior Notes

The carrying values of our senior notes as of March 31, 2023 and December 31, 2022, net of any unamortized debt issuance costs or discount, were as follows:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
3.850% Senior Notes due January 2030, net	$	298,012	$	297,949
2.500% Senior Notes due January 2031, net	347,486		347,413
6.000% Senior Notes due January 2043, net	491,176		491,120
3.966% Senior Notes due August 2061, net	346,105		346,094
Total	$	1,482,779	$	1,482,576

Our senior notes are not secured and, while the senior note indentures contain some restrictions on secured debt and other transactions, they do not contain financial covenants. Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by most of our homebuilding segment subsidiaries.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The following table sets forth share-based award expense activity for the three months ended March 31, 2023 and 2022, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections, respectively, of our consolidated statements of operations and comprehensive income:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Stock option grants expense	$	157	$	587
Restricted stock awards expense	3,562		2,587
Performance share units expense	1,779		11,708
Total stock-based compensation	$	5,498	$	14,882

Additional detail on the performance share units ("PSUs") expense is included below:

2020 PSU Grants. The 2020 PSU awards vested on February 3, 2023. For the three months ended March 31, 2022, the Company recorded share-based award expense of $2.5 million related to these awards.

2021 PSU Grants. As of March 31, 2023, the Company recorded the required share-based award expense related to the awards of $1.8 million for the three months ended March 31, 2023, based on its assessment of the probability for achievement of the performance targets. For the three months ended March 31, 2022, the Company recorded share-based award expense of $9.3 million related to these awards.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesSurety Bonds and Letters of Credit. We are required to obtain surety bonds and letters of credit in support of our obligations for land development and subdivision improvements, homeowner association dues, warranty work, contractor license fees and earnest money deposits. At March 31, 2023, we had outstanding surety bonds and letters of credit totaling $359.1 million and $116.0 million, respectively, including $68.9 million in letters of credit issued by HomeAmerican. The estimated cost to complete obligations related to these bonds and letters of credit were approximately $157.3 million and $75.1 million, respectively. All letters of credit as of March 31, 2023, excluding those issued by HomeAmerican, were issued under our unsecured revolving credit facility (see Note 18 for further discussion of the revolving credit facility). We expect that the obligations secured by these performance bonds and letters of credit generally will be performed in the ordinary course of

business and in accordance with the applicable contractual terms. To the extent that the obligations are performed, the related performance bonds and letters of credit should be released and we should not have any continuing obligations. However, in the event any such performance bonds or letters of credit are called, our indemnity obligations could require us to reimburse the issuer of the performance bond or letter of credit.

We have made no material guarantees with respect to third-party obligations.

Litigation. Due to the nature of the homebuilding business, we have been named as defendants in various claims, complaints and other legal actions arising in the ordinary course of business, including product liability claims and claims associated with the sale and financing of homes. In the opinion of management, the outcome of these ordinary course matters will not have a material adverse effect upon our financial condition, results of operations or cash flows.

Lot Option Contracts. In the ordinary course of business, we enter into lot option purchase contracts (“Option Contracts”), generally through a deposit of cash or a letter of credit, for the right to purchase land or lots at a future point in time with predetermined terms. The use of such land option and other contracts generally allow us to reduce the risks associated with direct land ownership and development, reduces our capital and financial commitments, and minimizes the amount of land inventories on our consolidated balance sheets. In certain cases, these contracts will be settled shortly following the end of the period. Our obligation with respect to Option Contracts is generally limited to forfeiture of the related deposits. At March 31, 2023, we had cash deposits, capitalized costs and letters of credit totaling $19.2 million, $2.6 million and $2.2 million, respectively, at risk associated with the option to purchase 2,951 lots.

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Derivative and Financial Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative and Financial Instruments

Derivative and Financial Instruments

In the normal course of business, we enter into interest rate lock commitments ("IRLCs") with borrowers who have applied for loan funding and meet defined credit and underwriting criteria. Since we can terminate IRLCs if the borrower does not comply with the terms of the contract, and some IRLCs may expire without being utilized, these IRLCs do not necessarily represent future cash requirements.

Market risk arises if interest rates move adversely between the time we originate a mortgage loan or we enter into an IRLC and the date the loan is committed or sold to an investor. We mitigate our exposure to interest rate market risk relating to mortgage loans held-for-sale and IRLCs using: (1) forward sales of mortgage-backed securities, which are commitments to sell a specified financial instrument at a specified future date for a specified price, (2) mandatory delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price within a specified time period, and (3) best-effort delivery forward loan sale commitments, which are obligations of an investor to buy loans at a specified price subject to the underlying mortgage loans being funded and closed. The best-effort delivery forward loan sale commitments do not meet the definition of a derivative financial instrument in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). We have elected the fair value option for the best-effort delivery forward loan sale commitments in accordance with ASC Topic 825, Financial Instruments ("ASC 825").

Forward sales of mortgage-backed securities are the predominant derivative and financial instruments we use to minimize market risk during the period from the time we extend an interest rate lock to a loan applicant until the time the loan is committed under a best-effort or mandatory delivery forward loan sale commitment.

The following table sets forth the notional amounts and fair value measurement of our derivative and financial instruments at March 31, 2023 and December 31, 2022:

	March 31, 2023								December 31, 2022
	Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net		Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net
	(Dollars in thousands)								(Dollars in thousands)
Interest rate lock commitments	$	391,487	$	3,504	$	822	$	2,682	$	394,004	$	1,566	$	3,244	$	(1,678)
Forward sales of mortgage-backed securities	362,500		1,258		3,607		(2,349)		323,000		580		5,849		(5,269)
Mandatory delivery forward loan sale commitments	106,607		102		183		(81)		105,060		794		3		791
Best-effort delivery forward loan sale commitments	11,237		77		74		3		139,972		2,161		185		1,976

For the three months ended March 31, 2023 and March 31, 2022, we recorded net gains (loss) on these derivative and financial instruments measured on a recurring basis of $(3.8) million and $17.5 million, respectively, in revenues in the financial services section of our consolidated statements of operations and comprehensive income. There are no credit-risk-related contingent features within our derivative agreements, and counterparty risk is considered minimal.

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Lines of Credit

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Lines of Credit

Lines of Credit

Revolving Credit Facility. We have an unsecured revolving credit agreement (“Revolving Credit Facility”) with a group of lenders which may be used for general corporate purposes. This agreement was amended on December 28, 2020 to (1) increase the aggregate commitment from $1.0 billion to $1.2 billion (the “Commitment”), (2) extend the Revolving Credit Facility maturity of $1.125 billion of the Commitments to December 18, 2025 with the remaining Commitment continuing to terminate on December 18, 2023 and (3) provide that the aggregate amount of the commitments may increase to an amount not to exceed $1.7 billion upon our request, subject to receipt of additional commitments from existing or additional lenders and, in the case of additional lenders, the consent of the co-administrative agents.

Effective April 11, 2023, the Revolving Credit Facility was amended to transition from a eurocurrency based interest rate to an interest rate based on the Secured Overnight Financing Rate ("SOFR"). As defined in the Revolving Credit Facility, interest rates on base rate borrowings are equal to the highest of (1) 0.0%, (2) a prime rate, (3) a federal funds effective rate plus 0.50%, and (4) the one month term SOFR screen rate plus the SOFR adjustment plus 1.00% and, in each case, plus a margin that is determined based on our credit ratings and leverage ratio. Interest rates on SOFR borrowings are equal to the greater of (1) 0.0% and (2) the sum of the term SOFR screen rate for such interest period plus the SOFR adjustment, plus a margin that is determined based on our credit ratings and leverage ratio. At any time at which our leverage ratio, as of the last day of the most recent calendar quarter, exceeds 55%, the aggregate principal amount of all consolidated senior debt borrowings outstanding may not exceed the borrowing base. There is no borrowing base requirement if our leverage ratio, as of the last day of the most recent calendar quarter, is 55% or less.

The Revolving Credit Facility is fully and unconditionally guaranteed, jointly and severally, by most of our homebuilding segment subsidiaries. The facility contains various representations, warranties and covenants that we believe are customary for agreements of this type. The financial covenants include a consolidated tangible net worth test and a leverage test, along with a consolidated tangible net worth covenant, all as defined in the Revolving Credit Facility. A failure to satisfy the foregoing tests does not constitute an event of default, but can trigger a “term-out” of the facility. A breach of the consolidated tangible net worth covenant (but not the consolidated tangible net worth test) or a violation of anti-corruption or sanctions laws would result in an event of default.

The Revolving Credit Facility is subject to acceleration upon certain specified events of default, including breach of the consolidated tangible net worth covenant, a violation of anti-corruption or sanctions laws, failure to make timely payments, breaches of certain representations or covenants, failure to pay other material indebtedness, or another person becoming beneficial owner of 50% or more of our outstanding common stock. We believe we were in compliance with the representations, warranties and covenants included in the Revolving Credit Facility as of March 31, 2023.

We incur costs associated with unused commitment fees pursuant to the terms of the Revolving Credit Facility. At March 31, 2023 and December 31, 2022, there were $47.1 million and $48.3 million, respectively, in letters of credit outstanding, which reduced the amounts available to be borrowed under the Revolving Credit Facility. At March 31, 2023 and December 31, 2022, we had $10.0 million and $10.0 million, respectively, outstanding under the Revolving Credit Facility. As of March 31, 2023, availability under the Revolving Credit Facility was approximately $1.14 billion.

Mortgage Repurchase Facility. HomeAmerican has a Master Repurchase Agreement (the “Mortgage Repurchase Facility”) with U.S. Bank National Association (“USBNA”). The Mortgage Repurchase Facility provides liquidity to HomeAmerican by providing for the sale of up to an aggregate of $75 million (subject to increase by up to $75 million under certain conditions) of eligible mortgage loans to USBNA with an agreement by HomeAmerican to repurchase the mortgage loans at a future date. Until such mortgage loans are transferred back to HomeAmerican, the documents relating to such loans are held by USBNA, as custodian, pursuant to the Custody Agreement (“Custody Agreement”), dated as of November 12, 2008, by and between HomeAmerican and USBNA. In the event that an eligible mortgage loan becomes ineligible, as defined under the Mortgage Repurchase Facility, HomeAmerican may be required to repurchase the ineligible mortgage loan immediately. The Mortgage Repurchase Facility was amended on September 24, 2020, March 25, 2021, May 20, 2021, December 21, 2021 and May 19, 2022 to adjust the commitments to purchase for specific time periods. The total capacity of the facility at March 31, 2023 was $230 million. The May 19, 2022 amendment extended the termination date of the Repurchase Agreement to May 18, 2023. We are currently in negotiations to extend the Mortgage Repurchase Facility.

At March 31, 2023 and December 31, 2022, HomeAmerican had $130.5 million and $175.8 million, respectively, of mortgage loans that HomeAmerican was obligated to repurchase under the Mortgage Repurchase Facility. Mortgage loans that HomeAmerican is obligated to repurchase under the Mortgage Repurchase Facility are accounted for as a debt financing arrangement and are reported as mortgage repurchase facility in the consolidated balance sheets. Pricing under the Mortgage Repurchase Facility is based on the SOFR.

The Mortgage Repurchase Facility contains various representations, warranties and affirmative and negative covenants that we believe are customary for agreements of this type. The negative covenants include, among others, (i) a minimum Adjusted Tangible Net Worth requirement, (ii) a maximum Adjusted Tangible Net Worth ratio, (iii) a minimum adjusted net income requirement, and (iv) a minimum Liquidity requirement. The foregoing capitalized terms are defined in the Mortgage Repurchase Facility. We believe HomeAmerican was in compliance with the representations, warranties and covenants included in the Mortgage Repurchase Facility as of March 31, 2023.

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Related Party Transactions	3 Months Ended
	Mar. 31, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Related Party TransactionsThe Company has a sublease agreement with CVentures, Inc. Larry A. Mizel, the Executive Chairman of the Company, is the President of CVentures, Inc. The sublease is for office space that CVentures, Inc. has continuously leased from the Company as disclosed in the Form 8-K filed July 27, 2005 and the Form 8-K filed March 28, 2006. The current sublease term commenced November 1, 2016 and will continue through October 31, 2026. The sublease agreement is for approximately 5,437 rentable square feet at a base rent that increases over the term from $26.50 to $31.67 per rentable square foot per year. The sublease rent is an allocation of the rent under the master lease agreement based on the sublease square footage.

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Supplemental Guarantor Information

3 Months Ended

Mar. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Supplemental Guarantor Information

Supplemental Guarantor Information

Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by the following subsidiaries (collectively, the "Guarantor Subsidiaries"), which are 100%-owned subsidiaries of the Company:

•M.D.C. Land Corporation

•RAH of Florida, Inc.

•Richmond American Construction, Inc.

•Richmond American Construction NM, Inc.

•Richmond American Homes of Arizona, Inc.

•Richmond American Homes of Colorado, Inc.

•Richmond American Homes of Florida, LP

•Richmond American Homes of Idaho, Inc.

•Richmond American Homes of Maryland, Inc.

•Richmond American Homes of Nevada, Inc.

•Richmond American Homes of New Mexico, Inc.

•Richmond American Homes of Oregon, Inc.

•Richmond American Homes of Pennsylvania, Inc.

•Richmond American Homes of Tennessee, Inc.

•Richmond American Homes of Texas, Inc.

•Richmond American Homes of Utah, Inc.

•Richmond American Homes of Virginia, Inc.

•Richmond American Homes of Washington, Inc.

The senior note indentures do not provide for a suspension of the guarantees. Other than for the senior notes due 2061, the senior note indentures, provide that any Guarantor may be released from its guarantee so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (3) the Guarantors released from their guarantees in any year-end period comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (4) such release would not have a material adverse effect on the homebuilding business of the Company and its subsidiaries and (5) the Guarantor is released from its guarantee(s) under all Specified Indebtedness (other than by reason of payment under its guarantee of Specified Indebtedness). The indenture for the senior notes due 2061 provides that, if a Guarantor is released under its guarantees of our credit facilities or other publicly traded debt securities, the Guarantor will also be released under its guarantee of the senior notes due 2061. Upon delivery of an officers’ certificate and an opinion of counsel stating that all conditions precedent provided for in the indenture relating to such transactions have been complied with and the release is authorized, the guarantee will be automatically and unconditionally released. “Specified Indebtedness” means indebtedness under the senior notes, the Company’s Indenture dated as of December 3, 2002, the Revolving Credit Facility, and any refinancing, extension, renewal or replacement of any of the foregoing.

As the combined assets, liabilities and results of operations of M.D.C. Holdings, Inc. and the Guarantor Subsidiaries (the “Obligor Group”) are not materially different from those in the homebuilding section of our consolidated balance sheets and consolidated statements of operations and comprehensive income, separate summarized financial information of the Obligor Group has not been included. As of March 31, 2023 and December 31, 2022, amounts due to non-guarantor subsidiaries from the Obligor Group totaled $46.7 million and $29.7 million, respectively.

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]

Schedule of Reconciliation of Revenue from Segments to Consolidated

The following table summarizes revenues for our homebuilding and financial services operations:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding
West	$	577,933	$	707,311
Mountain	301,155		335,128
East	140,928		198,081
Total homebuilding revenues	$	1,020,016	$	1,240,520
Financial Services
Mortgage operations	$	18,419	$	17,601
Other	11,067		11,530
Total financial services revenues	$	29,486	$	29,131

Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table summarizes pretax income for our homebuilding and financial services operations:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding
West	$	43,200	$	130,526
Mountain	25,036		50,506
East	15,309		31,394
Corporate	7,454		(23,927)
Total homebuilding pretax income	$	90,999	$	188,499
Financial Services
Mortgage operations	$	9,726	$	7,433
Other	8,244		5,950
Total financial services pretax income	$	17,970	$	13,383
Total pretax income	$	108,969	$	201,882

Schedule of Reconciliation of Assets from Segment to Consolidated

The following table summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment primarily include our cash and cash equivalents, marketable securities and deferred tax assets. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Homebuilding assets
West	$	2,098,329	$	2,275,144
Mountain	898,227		1,005,622
East	407,046		427,926
Corporate	1,574,847		1,249,370
Total homebuilding assets	$	4,978,449	$	4,958,062
Financial services assets
Mortgage operations	$	198,938	$	267,309
Other	138,434		137,901
Total financial services assets	$	337,372	$	405,210
Total assets	$	5,315,821	$	5,363,272

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

To calculate diluted EPS, basic EPS is adjusted to include the effect of potentially dilutive stock options outstanding and contingently issuable equity awards. The table below shows our basic and diluted EPS calculations.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	80,700	$	148,421
Less: distributed earnings allocated to participating securities	(216)		(194)
Less: undistributed earnings allocated to participating securities	(230)		(562)
Net income attributable to common stockholders (numerator for basic earnings per share)	80,254		147,665
Add back: undistributed earnings allocated to participating securities	230		562
Less: undistributed earnings reallocated to participating securities	(226)		(546)
Numerator for diluted earnings per share under two-class method	$	80,258	$	147,681
Denominator
Weighted-average common shares outstanding	72,647,659		70,766,146
Add: dilutive effect of stock options	1,355,303		1,998,156
Add: dilutive effect of contingently issuable equity awards	19,027		174,112
Denominator for diluted earnings per share under two-class method	74,021,989		72,938,414
Basic Earnings Per Common Share	$	1.10	$	2.09
Diluted Earnings Per Common Share	$	1.08	$	2.02

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets Measured on Recurring Basis

The following table sets forth the fair values and methods used for measuring the fair values of financial instruments on a recurring basis, except those for which the carrying values approximate fair values:

		Fair Value
Financial Instrument	Hierarchy	March 31, 2023		December 31, 2022
		(Dollars in thousands)
Marketable securities
Debt securities (available-for-sale)	Level 1	$	809,377	$	561,100
Mortgage loans held-for-sale, net	Level 2	$	166,252	$	229,513

Schedule of Fair Value of Senior Notes

The estimated values of the senior notes in the following table are based on Level 2 inputs, which primarily reflect estimated prices for our senior notes that were provided by multiple sources.

	March 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in thousands)
$300 million 3.850% Senior Notes due January 2030, net	$	298,012	$	256,148	$	297,949	$	246,236
$350 million 2.500% Senior Notes due January 2031, net	347,486		272,690		347,413		255,374
$500 million 6.000% Senior Notes due January 2043, net	491,176		432,430		491,120		414,017
$350 million 3.966% Senior Notes due August 2061, net	346,105		205,959		346,094		204,014
Total	$	1,482,779	$	1,167,227	$	1,482,576	$	1,119,641

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Inventories (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory

The following table sets forth, by reportable segment, information relating to our homebuilding inventories:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Housing completed or under construction:
West	$	954,131	$	1,026,880
Mountain	455,785		511,092
East	176,035		184,089
Subtotal	1,585,951		1,722,061
Land and land under development:
West	1,065,767		1,145,119
Mountain	405,725		433,893
East	200,332		214,706
Subtotal	1,671,824		1,793,718
Total inventories	$	3,257,775	$	3,515,779

Schedule of Inventory Impairments

Inventory impairments recognized by segment for the three months ended March 31, 2023 and 2022 are shown in the table below.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Housing Completed or Under Construction:
West	$	—	$	660
Mountain	664		—
East	—		—
Subtotal	664		660
Land and Land Under Development:
West	—		—
Mountain	7,136		—
East	—		—
Subtotal	7,136		—
Total Inventory Impairments	$	7,800	$	660

Schedule of Quantitative Data for Fair Value of the Impaired Inventory

The table below provides quantitative data, for the periods presented, where applicable, used in determining the fair value of the impaired inventory.

	Impairment Data					Quantitative Data
Three Months Ended	Number of Subdivisions Impaired	Inventory Impairments		Fair Value of Inventory After Impairments		Discount Rate
	(Dollars in thousands)
March 31, 2023	1	$	7,800	$	13,016	18%
Total		$	7,800
March 31, 2022	1	$	660	$	1,728		N/A
Total		$	660

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Capitalization of Interest (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Capitalization of Interest

For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Homebuilding interest incurred	$	17,454	$	17,258
Less: Interest capitalized	(17,454)		(17,258)
Homebuilding interest expensed	$	—	$	—
Interest capitalized, beginning of period	$	59,921	$	58,054
Plus: Interest capitalized during period	17,454		17,258
Less: Previously capitalized interest included in home cost of sales	(16,065)		(14,844)
Interest capitalized, end of period	$	61,310	$	60,468

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Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Lease, Cost

Components of operating lease expense were as follows:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Operating lease cost 1	$	2,156	$	2,131
Less: Sublease income	(144)		(83)
Net lease cost	$	2,012	$	2,048

1Includes variable lease costs, which are immaterial.

Schedule of Lease Cash Flow Information

Supplemental cash flow information related to leases was as follows:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,061	$	2,022
Leased assets obtained in exchange for new operating lease liabilities	$	1,646	$	3,748

Schedule of Lease Terms and Discount Rates

Weighted-average remaining lease term and discount rate for operating leases were as follows:

	March 31, 2023		March 31, 2022
Weighted-average remaining lease term (in years)	3.8		4.5
Weighted-average discount rate	5.5	%	5.5	%

Schedule of Lessee, Operating Lease, Liability, Maturity

Maturities of operating lease liabilities were as follows:

	Year Ended December 31,
	(Dollars in thousands)
2023 (excluding the three months ended March 31, 2023)	$	5,148
2024	7,706
2025	7,621
2026	6,353
2027	1,133
Thereafter	552
Total operating lease payments 1	$	28,513
Less: Effects of discounting	2,842
Present value of operating lease liabilities 2	$	25,671

_______________________________________________________________

1Operating lease payments exclude $1.2 million of legally binding lease payments for leases signed but not yet commenced.

2Homebuilding and financial services operating lease liabilities of $25.4 million and $0.2 million, respectively, are included as a component of accrued and other liabilities and accounts payable and accrued liabilities, respectively, in the homebuilding and financial services sections of our consolidated balance sheet at March 31, 2023.

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Homebuilding Prepaids and Other Assets (Tables)

3 Months Ended

Mar. 31, 2023

Prepaid Expense and Other Assets [Abstract]

Schedule of Other Assets

The following table sets forth the components of homebuilding prepaids and other assets:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Land option deposits	$	20,058	$	19,539
Operating lease right-of-use asset (Note 8)	24,559		25,636
Prepaids	11,073		13,333
Goodwill	6,008		6,008
Deferred debt issuance costs on revolving credit facility, net	4,766		5,241
Other	257		250
Total prepaids and other assets	$	66,721	$	70,007

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Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Accounts Payable and Accrued Liabilities [Abstract]

Schedule of Accrued Liabilities

The following table sets forth information relating to homebuilding accrued and other liabilities:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Accrued compensation and related expenses	$	57,040	$	100,653
Customer and escrow deposits	47,191		42,296
Warranty accrual (Note 11)	46,666		46,857
Lease liability (Note 8)	25,426		26,574
Land development and home construction accruals	17,538		20,028
Accrued interest	14,889		30,934
Income taxes payable	49,461		23,880
Construction defect claim reserves (Note 12)	10,322		10,466
Retentions payable	19,417		21,519
Other accrued liabilities	54,217		60,199
Total accrued and other liabilities	$	342,167	$	383,406

Schedule of Accounts Payable and Accrued Liabilities

The following table sets forth information relating to financial services accounts payable and accrued liabilities:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
Insurance reserves (Note 12)	$	82,815	$	84,108
Accounts payable and other accrued liabilities	18,061		26,428
Total accounts payable and accrued liabilities	$	100,876	$	110,536

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Warranty Accrual (Tables)

3 Months Ended

Mar. 31, 2023

Product Warranties Disclosures [Abstract]

Schedule of Product Warranty Liability

The table set forth below summarizes accrual, adjustment and payment activity related to our warranty accrual for the three months ended March 31, 2023 and 2022. The warranty accrual during the three months ended March 31, 2023 decreased compared to an increase during the three months ended March 31, 2022 due to the increase in cash payments and a decrease in the number of home closings. Further, there was a $2.4 million adjustment to increase our warranty accrual during the three months ended March 31, 2022. This adjustment was due to higher general warranty related expenditures.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Balance at beginning of period	$	46,857	$	37,491
Expense provisions	5,635		5,832
Cash payments	(5,826)		(4,817)
Adjustments	—		2,440
Balance at end of period	$	46,666	$	40,946

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Insurance and Construction Defect Claim Reserves (Tables)

3 Months Ended

Mar. 31, 2023

Insurance [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The table set forth below summarizes our insurance and construction defect claim reserves activity for the three months ended March 31, 2023 and 2022. These reserves are included as a component of accounts payable and accrued liabilities and accrued and other liabilities in the financial services and homebuilding sections, respectively, of the consolidated balance sheets.

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Balance at beginning of period	$	94,574	$	82,187
Expense provisions	3,789		4,432
Cash payments, net of recoveries	(5,226)		(2,195)
Balance at end of period	$	93,137	$	84,424

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Senior Notes (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Debt

The carrying values of our senior notes as of March 31, 2023 and December 31, 2022, net of any unamortized debt issuance costs or discount, were as follows:

	March 31, 2023		December 31, 2022
	(Dollars in thousands)
3.850% Senior Notes due January 2030, net	$	298,012	$	297,949
2.500% Senior Notes due January 2031, net	347,486		347,413
6.000% Senior Notes due January 2043, net	491,176		491,120
3.966% Senior Notes due August 2061, net	346,105		346,094
Total	$	1,482,779	$	1,482,576

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-based Payment Arrangement, Activity

The following table sets forth share-based award expense activity for the three months ended March 31, 2023 and 2022, which is included as a component of selling, general and administrative expenses and expenses in the homebuilding and financial services sections, respectively, of our consolidated statements of operations and comprehensive income:

	Three Months Ended March 31,
	2023		2022
	(Dollars in thousands)
Stock option grants expense	$	157	$	587
Restricted stock awards expense	3,562		2,587
Performance share units expense	1,779		11,708
Total stock-based compensation	$	5,498	$	14,882

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Derivative and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Gain (Loss) on Derivative and Financial Instruments

The following table sets forth the notional amounts and fair value measurement of our derivative and financial instruments at March 31, 2023 and December 31, 2022:

	March 31, 2023								December 31, 2022
	Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net		Notional Value		Derivative Assets		Derivative Liabilities		Derivatives, Net
	(Dollars in thousands)								(Dollars in thousands)
Interest rate lock commitments	$	391,487	$	3,504	$	822	$	2,682	$	394,004	$	1,566	$	3,244	$	(1,678)
Forward sales of mortgage-backed securities	362,500		1,258		3,607		(2,349)		323,000		580		5,849		(5,269)
Mandatory delivery forward loan sale commitments	106,607		102		183		(81)		105,060		794		3		791
Best-effort delivery forward loan sale commitments	11,237		77		74		3		139,972		2,161		185		1,976

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Segment Reporting - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 segment
Other
Segment Reporting Information [Line Items]
Number of reportable segments	1

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Segment Reporting - Schedule of Reconciliation of Revenue From Segments to Consolidated (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Homebuilding
Segment Reporting Information [Line Items]
Total financial services revenues	$ 1,020,016	$ 1,240,520
Homebuilding | West
Segment Reporting Information [Line Items]
Total financial services revenues	577,933	707,311
Homebuilding | Mountain
Segment Reporting Information [Line Items]
Total financial services revenues	301,155	335,128
Homebuilding | East
Segment Reporting Information [Line Items]
Total financial services revenues	140,928	198,081
Financial Services
Segment Reporting Information [Line Items]
Total financial services revenues	29,486	29,131
Financial Services | West
Segment Reporting Information [Line Items]
Total financial services revenues	29,486	29,131
Financial Services | Mortgage operations
Segment Reporting Information [Line Items]
Total financial services revenues	18,419	17,601
Financial Services | Other
Segment Reporting Information [Line Items]
Total financial services revenues	$ 11,067	$ 11,530

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Segment Reporting - Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Total pretax income	$ 108,969	$ 201,882
Homebuilding
Segment Reporting Information [Line Items]
Total financial services pretax income	90,999	188,499
Total pretax income	90,999	188,499
Financial Services
Segment Reporting Information [Line Items]
Total financial services pretax income	17,970	13,383
Total pretax income	17,970	13,383
Operating Segments | Homebuilding | West
Segment Reporting Information [Line Items]
Total financial services pretax income	43,200	130,526
Operating Segments | Homebuilding | Mountain
Segment Reporting Information [Line Items]
Total financial services pretax income	25,036	50,506
Operating Segments | Homebuilding | East
Segment Reporting Information [Line Items]
Total financial services pretax income	15,309	31,394
Operating Segments | Financial Services | Mortgage operations
Segment Reporting Information [Line Items]
Total financial services pretax income	9,726	7,433
Operating Segments | Financial Services | Other
Segment Reporting Information [Line Items]
Total financial services pretax income	8,244	5,950
Corporate | Homebuilding
Segment Reporting Information [Line Items]
Total financial services pretax income	$ 7,454	$ (23,927)

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Segment Reporting - Total Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Total Assets	$ 5,315,821	$ 5,363,272
Homebuilding assets
Segment Reporting Information [Line Items]
Total Assets	4,978,449	4,958,062
Financial services assets
Segment Reporting Information [Line Items]
Total Assets	337,372	405,210
Operating Segments | Homebuilding assets | West
Segment Reporting Information [Line Items]
Total Assets	2,098,329	2,275,144
Operating Segments | Homebuilding assets | Mountain
Segment Reporting Information [Line Items]
Total Assets	898,227	1,005,622
Operating Segments | Homebuilding assets | East
Segment Reporting Information [Line Items]
Total Assets	407,046	427,926
Operating Segments | Financial services assets | Mortgage operations
Segment Reporting Information [Line Items]
Total Assets	198,938	267,309
Operating Segments | Financial services assets | Other
Segment Reporting Information [Line Items]
Total Assets	138,434	137,901
Corporate | Homebuilding assets
Segment Reporting Information [Line Items]
Total Assets	$ 1,574,847	$ 1,249,370

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Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income	$ 80,700	$ 148,421
Less: distributed earnings allocated to participating securities	(216)	(194)
Less: undistributed earnings allocated to participating securities	(230)	(562)
Net income attributable to common stockholders (numerator for basic earnings per share)	80,254	147,665
Add back: undistributed earnings allocated to participating securities	230	562
Less: undistributed earnings reallocated to participating securities	(226)	(546)
Numerator for diluted earnings per share under two-class method	$ 80,258	$ 147,681
Weighted-average common shares outstanding (in shares)	72,647,659	70,766,146
Denominator for diluted earnings per share under two-class method	74,021,989	72,938,414
Basic Earnings Per Common Share (in dollars per share)	$ 1.10	$ 2.09
Diluted Earnings Per Common Share (in dollars per share)	$ 1.08	$ 2.02
Share-Based Payment Arrangement, Option
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average common shares outstanding, dilutive effect of stock options and contingently issuable equity awards (in shares)	1,355,303	1,998,156
Performance Shares
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average common shares outstanding, dilutive effect of stock options and contingently issuable equity awards (in shares)	19,027	174,112

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Earnings Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	15,000	15,000

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Fair Value Measurements - Schedule of Fair Value, Assets Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities (available-for-sale)	$ 809,377	$ 561,100
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held-for-sale, net	$ 166,252	$ 229,513

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Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
loss on sale of mortgage loans	$ (2.3)	$ (5.0)
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short term borrowings maturity period	30 days
Fair Value, Inputs, Level 2 | Under Commitment to Sell
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held-for-sale, net	$ 111.3		$ 142.9
Fair Value, Inputs, Level 2 | Not Under Commitment to Sell
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans held-for-sale, net	$ 55.0		$ 86.6

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Fair Value Measurements - Schedule of Fair Value of Senior Notes (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	$ 1,482,779,000	$ 1,482,576,000
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	1,167,227,000	1,119,641,000
Carrying Amount	1,482,779,000	1,482,576,000
Senior Notes 3.850% Due January 2030 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	298,012,000	297,949,000
Senior Notes 3.850% Due January 2030 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	256,148,000	246,236,000
Senior Notes 3.850% Due January 2030
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument, face amount	$ 300,000,000
Interest rate, stated percentage	3.85%
Carrying Amount	$ 298,012,000	297,949,000
Senior Notes 2.500% Due January 2031 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	347,486,000	347,413,000
Senior Notes 2.500% Due January 2031 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	272,690,000	255,374,000
Senior Notes 2.500% Due January 2031
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument, face amount	$ 350,000,000
Interest rate, stated percentage	2.50%
Carrying Amount	$ 347,486,000	347,413,000
Senior Notes 6.000 % Due January 2043 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	491,176,000	491,120,000
Senior Notes 6.000 % Due January 2043 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	432,430,000	414,017,000
Senior Notes 6.000 % Due January 2043
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument, face amount	$ 500,000,000
Interest rate, stated percentage	6.00%
Carrying Amount	$ 491,176,000	491,120,000
Senior Notes 3.966% Due August 2061 | Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying Amount	346,105,000	346,094,000
Senior Notes 3.966% Due August 2061 | Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	205,959,000	204,014,000
Senior Notes 3.966% Due August 2061
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt instrument, face amount	$ 350,000,000
Interest rate, stated percentage	3.966%
Carrying Amount	$ 346,105,000	$ 346,094,000

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Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Inventory [Line Items]
Housing completed or under construction	$ 1,585,951	$ 1,722,061
Land and land under development	1,671,824	1,793,718
Total inventories	3,257,775	3,515,779
Homebuilding:
Inventory [Line Items]
Housing completed or under construction	1,585,951	1,722,061
Land and land under development	1,671,824	1,793,718
Total inventories	3,257,775	3,515,779
Homebuilding: | West
Inventory [Line Items]
Housing completed or under construction	954,131	1,026,880
Land and land under development	1,065,767	1,145,119
Homebuilding: | Mountain
Inventory [Line Items]
Housing completed or under construction	455,785	511,092
Land and land under development	405,725	433,893
Homebuilding: | East
Inventory [Line Items]
Housing completed or under construction	176,035	184,089
Land and land under development	$ 200,332	$ 214,706

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Inventories - Schedule of Inventory Impairments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Inventory [Line Items]
Inventory Impairments	$ 7,800	$ 660
Homebuilding:
Inventory [Line Items]
Inventory Impairments	7,800	660
Homebuilding: | Housing completed or under construction
Inventory [Line Items]
Inventory Impairments	664	660
Homebuilding: | Land and land under development
Inventory [Line Items]
Inventory Impairments	7,136	0
Homebuilding: | West | Housing completed or under construction
Inventory [Line Items]
Inventory Impairments	0	660
Homebuilding: | West | Land and land under development
Inventory [Line Items]
Inventory Impairments	0	0
Homebuilding: | Mountain | Housing completed or under construction
Inventory [Line Items]
Inventory Impairments	664	0
Homebuilding: | Mountain | Land and land under development
Inventory [Line Items]
Inventory Impairments	7,136	0
Homebuilding: | East | Housing completed or under construction
Inventory [Line Items]
Inventory Impairments	0	0
Homebuilding: | East | Land and land under development
Inventory [Line Items]
Inventory Impairments	$ 0	$ 0

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Inventories - Fair Value of Impaired Inventory (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) lot	Mar. 31, 2022 USD ($) subdivision
Inventory Disclosure [Abstract]
Number of Subdivisions Impaired	1	1
Inventory Impairments	$ 7,800	$ 660
Fair Value of Inventory After Impairments	$ 13,016	$ 1,728
Discount Rate	18.00%

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Capitalization of Interest - Schedule of Capitalization of Interest (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt Disclosure [Abstract]
Homebuilding interest incurred	$ 17,454	$ 17,258
Less: Interest capitalized	(17,454)	(17,258)
Homebuilding interest expensed	0	0
Real Estate Inventory, Capitalized Interest Costs [Roll Forward]
Interest capitalized, beginning of period	59,921	58,054
Plus: Interest capitalized during period	17,454	17,258
Less: Previously capitalized interest included in home cost of sales	(16,065)	(14,844)
Interest capitalized, end of period	$ 61,310	$ 60,468

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Leases - Narrative (Details)	Mar. 31, 2023
Company Headquarters
Lessee, Lease, Description [Line Items]
Term of contract	10 years
Renewal term	10 years
Minimum
Lessee, Lease, Description [Line Items]
Term of contract	3 years
Maximum
Lessee, Lease, Description [Line Items]
Term of contract	5 years

XML

Leases - Schedule of Lease, Cost (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Operating lease cost	$ 2,156	$ 2,131
Less: Sublease income	(144)	(83)
Net lease cost	$ 2,012	$ 2,048

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Leases - Schedule of Lease Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 2,061	$ 2,022
Leased assets obtained in exchange for new operating lease liabilities	$ 1,646	$ 3,748

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Leases - Schedule of Lease Terms and Discount Rates (Details)	Mar. 31, 2023	Mar. 31, 2022
Leases [Abstract]
Weighted-average remaining lease term (in years)	3 years 9 months 18 days	4 years 6 months
Weighted-average discount rate	5.50%	5.50%

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Leases - Schedule of Lessee, Operating Lease, Liability, Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Lessee, Lease, Description [Line Items]
2022 (excluding the nine months ended September 30, 2022)		$ 5,148
2024		7,706
2025		7,621
2026		6,353
2027		1,133
Thereafter		552
Total operating lease payments		28,513
Less: Effects of discounting		2,842
Present value of operating lease liabilities		25,671
Operating lease liability, leases not yet commenced	$ 1,200
Homebuilding:
Lessee, Lease, Description [Line Items]
Present value of operating lease liabilities	25,426	$ 26,574
Financial Services:
Lessee, Lease, Description [Line Items]
Present value of operating lease liabilities	$ 200

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Homebuilding Prepaids and Other Assets - Schedule of Other Assets (Details) - Homebuilding: - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Schedule of Prepaid Expenses and Other Assets [Line Items]
Land option deposits	$ 20,058	$ 19,539
Operating lease right-of-use asset	24,559	25,636
Prepaids	11,073	13,333
Goodwill	6,008	6,008
Deferred debt issuance costs on revolving credit facility, net	4,766	5,241
Other	257	250
Total prepaids and other assets	$ 66,721	$ 70,007

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Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Warranty accrual	$ 46,666	$ 46,857	$ 40,946	$ 37,491
Lease liability		25,671
Retentions payable	21,500
Homebuilding:
Segment Reporting Information [Line Items]
Accrued compensation and related expenses	57,040	100,653
Customer and escrow deposits	47,191	42,296
Warranty accrual	46,666	46,857
Lease liability	25,426	26,574
Land development and home construction accruals	17,538	20,028
Accrued interest	14,889	30,934
Income taxes payable	49,461	23,880
Construction defect claim reserves	10,322	10,466
Retentions payable	19,417	21,519
Other accrued liabilities	54,217	60,199
Total accrued and other liabilities	$ 342,167	$ 383,406

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Homebuilding Accrued and Other Liabilities and Financial Services Accounts Payable and Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Insurance reserves	$ 93,137	$ 94,574	$ 84,424	$ 82,187
Financial Services:
Segment Reporting Information [Line Items]
Insurance reserves	82,815	84,108
Accounts payable and other accrued liabilities	18,061	26,428
Total accounts payable and accrued liabilities	$ 100,876	$ 110,536

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Warranty Accrual - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Product Warranty Liability [Line Items]
Period responsible for performing all warranty work (in years)	2 years
Adjustment to increase warranty accrual	$ 0	$ 2,440
Minimum
Product Warranty Liability [Line Items]
Period responsible for paying for substantially all warranty work required (in years)	2 years

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Warranty Accrual - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Balance at beginning of period	$ 46,857	$ 37,491
Expense provisions	5,635	5,832
Cash payments	(5,826)	(4,817)
Adjustments	0	2,440
Balance at end of period	$ 46,666	$ 40,946

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Insurance and Construction Defect Claim Reserves - Schedule of Liability for Unpaid Claims and Claims Adjustment Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Movement in Liability for Future Policy Benefits [Roll Forward]
Balance at beginning of period	$ 94,574	$ 82,187
Expense provisions	3,789	4,432
Cash payments, net of recoveries	(5,226)	(2,195)
Balance at end of period	$ 93,137	$ 84,424

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	25.90%	26.50%
Income tax expense	$ 28,269	$ 53,461

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Senior Notes - Schedule of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Carrying Amount	$ 1,482,779	$ 1,482,576
Senior Notes 3.850% Due January 2030
Debt Instrument [Line Items]
Interest rate, stated percentage	3.85%
Carrying Amount	$ 298,012	297,949
Senior Notes 2.500% Due January 2031
Debt Instrument [Line Items]
Interest rate, stated percentage	2.50%
Carrying Amount	$ 347,486	347,413
Senior Notes 6.000 % Due January 2043
Debt Instrument [Line Items]
Interest rate, stated percentage	6.00%
Carrying Amount	$ 491,176	491,120
Senior Notes 3.966% Due August 2061
Debt Instrument [Line Items]
Interest rate, stated percentage	3.966%
Carrying Amount	$ 346,105	$ 346,094

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Stock-Based Compensation - Schedule of Share-based Payment Arrangement, Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	$ 5,498	$ 14,882
Stock option grants expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	157	587
Restricted stock awards expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	3,562	2,587
Performance share units expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	$ 1,779	$ 11,708

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	$ 5,498	$ 14,882
Performance share units expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	1,779	11,708
Performance share units expense | Equity Incentive Plan 2011 | Granted in 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense		2,500
Performance share units expense | Equity Incentive Plan 2011 | Granted in 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based payment arrangement, expense	$ 1,800	$ 9,300

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Commitments and Contingencies (Details) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) lot
Loss Contingencies [Line Items]
Surety bonds, outstanding, amount	$ 359.1
Letters of credit outstanding, amount	116.0
Estimated cost related to letters of credit	157.3
Estimated cost related to bonds	$ 75.1
Number of lots | lot	2,951
Option Contracts
Loss Contingencies [Line Items]
Letters of credit outstanding, amount	$ 2.2
Deposits	19.2
Capitalized costs	2.6
HomeAmerican
Loss Contingencies [Line Items]
Surety bonds, outstanding, amount	$ 68.9

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Derivative and Financial Instruments - Schedule of Gain (Loss) on Derivative and Financial Instruments (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Interest rate lock commitments
Derivatives, Fair Value [Line Items]
Notional Value	$ 391,487,000	$ 394,004,000
Derivative Assets	3,504,000	1,566,000
Derivative Liabilities	822,000	3,244,000
Derivatives, Net	2,682,000	(1,678,000)
Forward sales of mortgage-backed securities
Derivatives, Fair Value [Line Items]
Notional Value	362,500,000	323,000,000
Derivative Assets	1,258,000	580,000
Derivative Liabilities	3,607,000	5,849,000
Derivatives, Net	(2,349,000)	(5,269,000)
Mandatory delivery forward loan sale commitments
Derivatives, Fair Value [Line Items]
Notional Value	106,607,000	105,060,000
Derivative Assets	102,000	794,000
Derivative Liabilities	183,000	3,000
Derivatives, Net	(81,000)	791,000
Best-effort delivery forward loan sale commitments
Derivatives, Fair Value [Line Items]
Notional Value	11,237,000	139,972,000
Derivative Assets	77,000	2,161,000
Derivative Liabilities	74,000	185,000
Derivatives, Net	$ 3,000	$ 1,976,000

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Derivative and Financial Instruments - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Net gains (losses) on derivative and financial instruments	$ (3.8)	$ 17.5

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Lines of Credit (Details) - USD ($)	Apr. 11, 2023	Mar. 31, 2023	Dec. 31, 2022	May 19, 2022	Dec. 28, 2020	Dec. 27, 2020
Line of Credit Facility [Line Items]
Letters of credit outstanding, amount		$ 116,000,000
Financial Services:
Line of Credit Facility [Line Items]
Warehouse agreement borrowings		$ 130,527,000	$ 175,752,000
Maximum | Subsequent Event
Line of Credit Facility [Line Items]
Borrowing base required leverage ratio	55.00%
Revolving Credit Facility
Line of Credit Facility [Line Items]
Maximum borrowing capacity					$ 1,200,000,000	$ 1,000,000,000
Line of credit facility, outstanding, extended maturity amount					1,125,000,000
Potential maximum borrowing capacity, subject to additional commitments					$ 1,700,000,000
Minimum common stock outstanding ownership, percentage		50.00%
Letters of credit outstanding, amount		$ 47,100,000	48,300,000
Revolving credit facility		10,000,000	$ 10,000,000
Remaining borrowing capacity		1,140,000,000
Revolving Credit Facility | Subsequent Event
Line of Credit Facility [Line Items]
Stated interest rate (percent)	0.00%
Maximum leverage ratio	55.00%
Revolving Credit Facility | Fed Funds Effective Rate Overnight Index Swap Rate | Subsequent Event
Line of Credit Facility [Line Items]
Basis spread on variable rate	0.50%
Revolving Credit Facility | Specified Eurocurrency Rate | Subsequent Event
Line of Credit Facility [Line Items]
Basis spread on variable rate	1.00%
Mortgage Repurchase Facility | Warehouse Agreement Borrowings
Line of Credit Facility [Line Items]
Maximum borrowing capacity				$ 75,000,000
Maximum increase to borrowing capacity		$ 230,000,000		$ 75,000,000

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Related Party Transactions (Details) - CVentures, Inc.	Oct. 31, 2026 $ / ft²	Nov. 01, 2016 ft² $ / ft²
Related Party Transaction [Line Items]
Area of real estate property | ft²		5,437
Minimum
Related Party Transaction [Line Items]
Yearly rental rate per rentable square foot		26.50
Maximum | Forecast
Related Party Transaction [Line Items]
Yearly rental rate per rentable square foot	31.67

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Supplemental Guarantor Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Guarantor Obligations [Line Items]
Maximum percentage of consolidated net worth of guarantor for suspension of guarantee	5.00%
Maximum aggregate percentage of consolidated net worth of all guarantors for suspension of guarantee	10.00%
Maximum aggregate percentage of consolidated net worth of all guarantors for suspension of guarantee to permit cure of default	15.00%
Non-Guarantor Subsidiaries
Guarantor Obligations [Line Items]
Due to non-guarantor subsidiaries	$ 46.7	$ 29.7
All Guarantor Subsidiaries
Guarantor Obligations [Line Items]
Ownership interest	100.00%