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8-K - 8-K - RYLAND GROUP INCa12-3568_18k.htm

Exhibit 99

 

 

 

 

 

 

 

 

News Release

 

 

The Ryland Group, Inc.

  www.ryland.com

 

 

 

 

FOR IMMEDIATE RELEASE

 

CONTACT:

Drew Mackintosh, VP, Investor Relations and

 

 

 

Corporate Communications  (805) 367-3722

 

 

RYLAND REPORTS RESULTS FOR THE FOURTH QUARTER OF 2011

 

WESTLAKE VILLAGE, Calif. (January 26, 2012) — The Ryland Group, Inc. (NYSE: RYL), today announced results for its quarter ended December 31, 2011.  Items of note included:

·                  Net income from continuing operations totaled $1.3 million, or $0.03 per diluted share, for the quarter ended December 31, 2011, which included pretax charges of $1.1 million, or $0.03 per diluted share, related to inventory and other valuation adjustments and write-offs;

·                  New orders increased 23.8 percent to 910 units for the fourth quarter of 2011 from 735 units for the fourth quarter of 2010;

·                  Closings rose 16.4 percent to 986 units for the quarter ended December 31, 2011, compared to 847 units for the same period in the prior year;

·                  Backlog increased 31.4 percent to 1,481 units at December 31, 2011, from 1,127 units at December 31, 2010;

·                  Active communities increased to 211 communities at December 31, 2011, from 193 communities at December 31, 2010;

·                  Revenues totaled $261.8 million for the quarter ended December 31, 2011, representing a 21.7 percent increase from the quarter ended December 31, 2010;

·                  Average closing price increased to $255,000 for the quarter ended December 31, 2011, from $246,000 for the same period in 2010;

·                  Housing gross profit margin was 16.3 percent, excluding inventory and other valuation adjustments, for the fourth quarter of  2011, compared to 14.6 percent for the fourth quarter of 2010.  Including inventory and other valuation adjustments, housing gross profit margin was 16.0 percent for the fourth quarter of 2011, compared to 8.7 percent for the same period in 2010;

·                  Selling, general and administrative and corporate expense totaled 14.3 percent of homebuilding revenues for the fourth quarter of 2011, compared to 15.7 percent for the fourth quarter of 2010;

·                  Cash, cash equivalents and marketable securities totaled $563.2 million at December 31, 2011; and

·                  Net debt-to-capital ratio was 36.7 percent at December 31, 2011, compared to 22.0 percent at December 31, 2010.  (Net debt-to-capital ratio is calculated as debt, net of cash, cash equivalents and marketable securities, divided by the sum of debt and total stockholders’ equity, net of cash, cash equivalents and marketable securities.)

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RYLAND FOURTH-QUARTER RESULTS

 

RESULTS FOR THE FOURTH QUARTER OF 2011

For the quarter ended December 31, 2011, the Company reported net income of $1.3 million, or $0.03 per diluted share, compared to a net loss of $16.8 million, or $0.38 per diluted share, for the same period in 2010.  Pretax charges that related to inventory and other valuation adjustments and write-offs totaled $1.1 million, or $0.03 per diluted share, and $12.6 million, or $0.29 per diluted share, for the quarters ended December 31, 2011 and 2010, respectively.  Additionally, the Company had pretax charges related to debt repurchases that totaled $274,000 for the quarter ended December 31, 2011.

The homebuilding segments reported pretax earnings of $7.0 million for the fourth quarter of 2011, compared to a pretax loss of $14.8 million for the same period in 2010.  This increase was primarily due to higher closing volume; lower inventory and other valuation adjustments and write-offs; a decline in interest expense; and a reduced selling, general and administrative expense ratio.

Homebuilding revenues increased 21.9 percent to $254.9 million for the fourth quarter of 2011, compared to $209.0 million for the same period in 2010.  This rise in homebuilding revenues was primarily attributable to a 16.4 percent increase in closings that totaled 986 units for the quarter ended December 31, 2011, compared to 847 units for the same period in the prior year.  For the quarter ended December 31, 2011, the average closing price of a home increased 3.7 percent to $255,000 from $246,000 for the same period in 2010.  Homebuilding revenues for the fourth quarter of 2011 included $3.1 million from land sales, which resulted in pretax earnings of $228,000, compared to homebuilding revenues for the fourth quarter of 2010 that included $412,000 from land sales, which resulted in pretax earnings of $120,000.

New orders of 910 units for the quarter ended December 31, 2011, represented a 23.8 percent increase, compared to new orders of 735 units for the same period in 2010.  The Company had an average monthly sales absorption rate of 1.4 homes per community for the quarter ended December 31, 2011, versus 1.3 homes per community for the quarter ended December 31, 2010.  For the fourth quarter of 2011, new order dollars increased 31.6 percent to $234.0 million from $177.8 million for the fourth quarter of 2010.  At December 31, 2011, backlog increased 31.4 percent to 1,481 units from 1,127 units at December 31, 2010.  At December 31, 2011, the dollar value of the Company’s backlog was $381.8 million, reflecting a 34.0 percent increase from December 31, 2010.

Housing gross profit margin was 16.3 percent, excluding inventory and other valuation adjustments, for the quarter ended December 31, 2011, compared to 14.6 percent for the quarter ended December 31, 2010.  Including inventory and other valuation adjustments, housing gross profit margin was 16.0 percent for the fourth quarter of 2011, compared to 8.7 percent for the fourth quarter of 2010.  This improvement in housing gross profit margin for the quarter ended December 31, 2011, compared to the quarter ended December 31, 2010, was primarily attributable to a decline in land and direct construction costs; lower inventory and other valuation adjustments and write-offs; and a higher leverage of direct overhead expense due to an increase in the

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RYLAND FOURTH-QUARTER RESULTS

 

number of homes delivered.  Sales incentives and price concessions totaled 10.8 percent for the fourth quarter of 2011, compared to 11.6 percent for the same period in 2010.

Selling, general and administrative expense totaled 11.5 percent of homebuilding revenues for the fourth quarter of 2011, compared to 13.1 percent for the fourth quarter of 2010.  This decrease in the selling, general and administrative expense ratio was primarily attributable to higher leverage that resulted from an increase in revenues, as well as to cost-saving initiatives, which were partially offset by $528,000 in severance and other one-time expenditures.  The homebuilding segments recorded $3.9 million of interest expense during the fourth quarter of 2011, compared to $5.7 million of interest expense during the fourth quarter of 2010.  This decrease in interest expense from the fourth quarter of 2010 was primarily due to the capitalization of a greater amount of interest incurred during the fourth quarter of 2011, which resulted from a higher level of inventory under development, and to lower debt outstanding.

Corporate expense totaled $7.0 million for the quarter ended December 31, 2011, compared to $5.4 million for the same period in 2010.  This increase was due, in part, to higher severance charges and fluctuations in the Company’s stock price that impacted compensation expense.

During the fourth quarter of 2011, the Company used $36.7 million of cash for operating activities, used $10.3 million of cash for investing activities and provided $52.0 million of cash from financing activities.

For the quarter ended December 31, 2011, the financial services segment reported pretax earnings of $437,000, compared to pretax earnings of $1.7 million for the same period in 2010.  This decrease was primarily attributable to lower income related to the Company’s insurance captive, partially offset by increased origination income due to a 3.8 percent rise in volume and by higher title income.

The Company’s net loss from discontinued operations totaled $451,000, or $0.01 per diluted share, for the quarter ended December 31, 2011, compared to a net loss of $2.3 million, or $0.05 per diluted share, for the same period in 2010.

 

ANNUAL RESULTS FOR 2011

For the year ended December 31, 2011, the Company’s net loss totaled $29.9 million, or $0.67 per diluted share, compared to a net loss of $80.7 million, or $1.83 per diluted share, for the year ended December 31, 2010.  Pretax charges that related to inventory and other valuation adjustments and write-offs totaled $17.3 million, or $0.39 per diluted share, and $41.9 million, or $0.95 per diluted share, for the years ended December 31, 2011 and 2010, respectively.  Additionally, the Company had pretax charges related to debt repurchases that totaled $1.6 million and $19.3 million for the years ended December 31, 2011 and 2010, respectively.

The homebuilding segments reported a pretax loss of $16.8 million for the twelve months of 2011, compared to a pretax loss of $42.7 million for the twelve months of 2010.  This decrease in loss was primarily due to lower inventory and other valuation adjustments and write-offs and to a decline in interest expense, partially offset by reduced closing volume and a higher selling, general and administrative expense ratio.

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RYLAND FOURTH-QUARTER RESULTS

 

Homebuilding revenues fell 11.1 percent to $862.6 million for the twelve months of 2011, compared to $969.8 million for the twelve months of 2010.  This decrease in homebuilding revenues was primarily attributable to a 13.4 percent decline in closings that totaled 3,413 units for the year ended December 31, 2011, compared to 3,939 units for the year ended December 31, 2010.  For the twelve months of 2011, the average closing price of a home increased 2.4 percent to $251,000 from $245,000 for the same period in 2010.  Homebuilding revenues for both the years ended December 31, 2011 and 2010, included $5.4 million from land sales, which resulted in pretax earnings of $426,000 and $900,000, respectively.

Housing gross profit margin was 15.6 percent, excluding inventory and other valuation adjustments, for the year ended December 31, 2011, compared to 14.9 percent for the year ended December 31, 2010.  Including inventory and other valuation adjustments, housing gross profit margin was 14.6 percent for the twelve months of 2011, compared to 11.4 percent for the twelve months of 2010.  This improvement in housing gross profit margin for the year ended December 31, 2011, compared to the year ended December 31, 2010, was primarily attributable to lower inventory and other valuation adjustments and write-offs; reduced direct construction and land costs; and the recovery of Chinese drywall warranty costs from third parties, partially offset by lower leverage of direct overhead expense due to a decrease in the number of homes delivered.  Sales incentives and price concessions totaled 11.2 percent for the twelve months of 2011, compared to 11.3 percent for the twelve months of 2010.

Selling, general and administrative expense totaled 13.4 percent of homebuilding revenues for the twelve months of 2011, compared to 12.9 percent for the twelve months of 2010.  This increase in the selling, general and administrative expense ratio for the twelve months of 2011, compared to the twelve months of 2010, was primarily attributable to lower leverage that resulted from a decline in revenues and to severance charges, partially offset by cost-saving initiatives.  Selling, general and administrative expense dollars for the year ended December 31, 2011, decreased $9.1 million from the year ended December 31, 2010.  The homebuilding segments recorded $18.3 million of interest expense during the twelve months of 2011, compared to $24.4 million of interest expense during the twelve months of 2010.  This decrease in interest expense from the twelve months of 2010 was primarily due to the capitalization of a greater amount of interest incurred during the twelve months of 2011, which resulted from a higher level of inventory under development, and to lower debt outstanding.

Corporate expense totaled $23.9 million for the year ended December 31, 2011, compared to $25.1 million for the year ended December 31, 2010.  This decrease in corporate expense for the twelve months of 2011, compared to the twelve months of 2010, was primarily due to lower operating expenses, partially offset by higher severance charges.

For the year ended December 31, 2011, the financial services segment reported pretax earnings of $5.7 million, compared to pretax earnings of $845,000 for the year ended December 31, 2010.  This improvement was primarily attributable to decreases in loan indemnification expense and overhead costs, partially offset by

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Page 5

RYLAND FOURTH-QUARTER RESULTS

 

lower origination income due to a 19.1 percent decline in volume and by lower income related to the Company’s insurance captive.

The Company’s net loss from discontinued operations totaled $20.9 million, or $0.47 per diluted share, for the year ended December 31, 2011, compared to a net loss of $4.4 million, or $0.10 per diluted share, for the year ended December 31, 2010.  Pretax charges that related to inventory and other valuation adjustments and write-offs for the twelve months of 2011 and 2010 totaled $16.0 million, or $0.36 per diluted share, and $2.1 million, or $0.05 per diluted share, respectively, for discontinued operations.

 

OVERALL EFFECTIVE TAX RATE

The Company had an overall effective income tax benefit rate of 5.3 percent for the year ended December 31, 2011, compared to an overall effective income tax rate of 0.2 percent for the year ended December 31, 2010.  For the years ended December 31, 2011 and 2010, the Company recorded net valuation allowances against its deferred taxes assets of $16.6 million and $32.7 million, respectively.  As of December 31, 2011, the balance of the Company’s deferred tax valuation allowance was $270.5 million.

 

FINANCIAL SERVICES CREDIT FACILITY

In December 2011, Ryland Mortgage Company and its subsidiaries and RMC Mortgage Corporation (collectively referred to as “RMC”) entered into a $50.0 million warehouse line of credit with JPMorgan Chase Bank, N.A.  This facility is used to fund, and is secured by, mortgages originated by RMC, pending the sale of those mortgages by RMC.  This facility will expire in December 2012.  As of December 31, 2011, the balance on this credit facility was $49.9 million.

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Page 6

RYLAND FOURTH-QUARTER RESULTS

 

Headquartered in Southern California, Ryland is one of the nation’s largest homebuilders and a leading mortgage-finance company.  Since its founding in 1967, Ryland has built more than 295,000 homes and financed more than 245,000 mortgages.  The Company currently operates in 13 states across the country and is listed on the New York Stock Exchange under the symbol “RYL.”  For more information, please visit www.ryland.com.

 

Note:  Certain statements in this press release may be regarded as “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and may qualify for the safe harbor provided for in Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent the Company’s expectations and beliefs concerning future events, and no assurance can be given that the future results described in this press release will be achieved. These forward-looking statements can generally be identified by the use of statements that include words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “likely,” “may,” “plan,” “project,” “should,” “target,” “will” or other similar words or phrases. All forward-looking statements contained herein are based upon information available to the Company on the date of this press release. Except as may be required under applicable law, the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

 

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. The factors and assumptions upon which any forward-looking statements herein are based are subject to risks and uncertainties which include, among others:

 

·                  economic changes nationally or in the Company’s local markets, including volatility and increases in interest rates, the impact of, and changes in, government stimulus, tax and deficit reduction programs, inflation, changes in consumer demand and confidence levels and the state of the market for homes in general;

·                  changes and developments in the mortgage lending market, including revisions to underwriting standards for borrowers and lender requirements for originating and holding mortgages, changes in government support of and participation in such market, and delays or changes in terms and conditions for the sale of mortgages originated by the Company;

·                  the availability and cost of land and the future value of land held or under development;

·     increased land development costs on projects under development;

·     shortages of skilled labor or raw materials used in the production of homes;

·     increased prices for labor, land and materials used in the production of homes;

·     increased competition, including continued competition and price pressure from distressed home sales;

·     failure to anticipate or react to changing consumer preferences in home design;

·                  increased costs and delays in land development or home construction resulting from adverse weather conditions or other factors;

·                  potential delays or increased costs in obtaining necessary permits as a result of changes to laws, regulations or governmental policies (including those that affect zoning, density, building standards, the environment and the residential mortgage industry);

·                  delays in obtaining approvals from applicable regulatory agencies and others in connection with the Company’s communities and land activities;

·     changes in the Company’s effective tax rate and assumptions and valuations related to its tax accounts;

·     the risk factors set forth in the Company’s most recent Annual Report on Form 10-K; and

·     other factors over which the Company has little or no control.

 

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Five financial-statement pages to follow.

 



 

THE RYLAND GROUP, INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except share data)

 

 

 

Three months ended December 31,

 

 

Twelve months ended December 31,

 

 

 

2011

 

2010

 

 

2011

 

2010

 

REVENUES

 

 

 

 

 

 

 

 

 

 

Homebuilding

 

   $

254,912

 

   $

209,043

 

 

   $

862,604

 

   $

969,818

 

Financial services

 

6,840

 

6,027

 

 

28,129

 

32,134

 

TOTAL REVENUES

 

261,752

 

215,070

 

 

890,733

 

1,001,952

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

214,922

 

186,804

 

 

744,138

 

859,386

 

(Income) loss from unconsolidated joint ventures

 

(326

)

3,923

 

 

976

 

3,705

 

Selling, general and administrative

 

29,413

 

27,405

 

 

115,955

 

125,021

 

Financial services

 

6,403

 

4,359

 

 

22,390

 

31,289

 

Corporate

 

6,970

 

5,350

 

 

23,932

 

25,125

 

Interest

 

3,874

 

5,720

 

 

18,348

 

24,389

 

TOTAL EXPENSES

 

261,256

 

233,561

 

 

925,739

 

1,068,915

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (LOSS)

 

 

 

 

 

 

 

 

 

 

Gain from marketable securities, net

 

592

 

1,476

 

 

3,882

 

5,774

 

Loss related to early retirement of debt, net

 

(274

)

-

 

 

(1,608

)

(19,308

)

TOTAL OTHER INCOME (LOSS)

 

318

 

1,476

 

 

2,274

 

(13,534

)

Income (loss) from continuing operations before taxes

 

814

 

(17,015

)

 

(32,732

)

(80,497

)

Tax (benefit) expense

 

(449

)

(225

)

 

(2,865

)

195

 

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

 

1,263

 

(16,790

)

 

(29,867

)

(80,692

)

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

(451

)

(2,349

)

 

(20,883

)

(4,447

)

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

   $

812

 

   $

(19,139

)

 

   $

(50,750

)

   $

(85,139

)

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

   $

0.03

 

   $

(0.38

)

 

   $

(0.67

)

   $

(1.83

)

Discontinued operations

 

(0.01

)

(0.05

)

 

(0.47

)

(0.10

)

Total

 

0.02

 

(0.43

)

 

(1.14

)

(1.93

)

Diluted

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

0.03

 

(0.38

)

 

(0.67

)

(1.83

)

Discontinued operations

 

(0.01

)

(0.05

)

 

(0.47

)

(0.10

)

Total

 

   $

0.02

 

   $

(0.43

)

 

   $

(1.14

)

   $

(1.93

)

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES

 

 

 

 

 

 

 

 

 

 

OUTSTANDING

 

 

 

 

 

 

 

 

 

 

Basic

 

44,410,279

 

44,150,493

 

 

44,357,470

 

44,050,013

 

Diluted

 

45,074,734

 

44,150,493

 

 

44,357,470

 

44,050,013

 

 



 

THE RYLAND GROUP, INC. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

December 31,

 

 

2011

 

2010

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

 

 

 

 

Cash and cash equivalents

 

   $

159,363

 

   $

226,608

 

Restricted cash

 

56,799

 

74,788

 

Marketable securities, available-for-sale

 

347,016

 

437,795

 

Total cash, cash equivalents and marketable securities

 

563,178

 

739,191

 

Housing inventories

 

 

 

 

 

Homes under construction

 

319,476

 

260,505

 

Land under development and improved lots

 

413,569

 

374,695

 

Inventory held-for-sale

 

11,015

 

28,725

 

Consolidated inventory not owned

 

51,400

 

88,289

 

Total housing inventories

 

795,460

 

752,214

 

Property, plant and equipment

 

19,920

 

18,753

 

Other

 

165,262

 

91,881

 

Assets of discontinued operations

 

35,324

 

50,664

 

TOTAL ASSETS

 

1,579,144

 

1,652,703

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Accounts payable

 

74,327

 

61,309

 

Accrued and other liabilities

 

140,930

 

145,592

 

Financial services credit facility

 

49,933

 

-

 

Debt

 

823,827

 

879,789

 

Liabilities of discontinued operations

 

6,217

 

4,351

 

TOTAL LIABILITIES

 

1,095,234

 

1,091,041

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Preferred stock, $1.00 par value:

 

 

 

 

 

Authorized—10,000 shares Series A Junior

 

 

 

 

 

Participating Preferred, none outstanding

 

-

 

-

 

Common stock, $1.00 par value:

 

 

 

 

 

Authorized—199,990,000 shares

 

 

 

 

 

Issued—44,413,594 shares at December 31, 2011

 

 

 

 

 

(44,187,956 shares at December 31, 2010)

 

44,414

 

44,188

 

Retained earnings

 

405,109

 

453,801

 

Accumulated other comprehensive income

 

164

 

1,867

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

 

 

 

FOR THE RYLAND GROUP, INC.

 

449,687

 

499,856

 

NONCONTROLLING INTEREST

 

34,223

 

61,806

 

TOTAL EQUITY

 

483,910

 

561,662

 

TOTAL LIABILITIES AND EQUITY

 

   $

1,579,144

 

   $

1,652,703

 

 



 

THE RYLAND GROUP, INC. and Subsidiaries

SEGMENT INFORMATION

 

 

 

Three months ended December 31,

 

 

Twelve months ended December 31,

 

 

 

2011

 

2010

 

 

2011

 

2010

 

EARNINGS (LOSS) BEFORE TAXES (in thousands)

 

 

 

 

 

 

 

 

 

 

Homebuilding

 

 

 

 

 

 

 

 

 

 

North

 

  $

557

 

  $

(3,315

)

 

  $

(9,054

)

  $

(15,842

)

Southeast

 

1,874

 

(6,879

)

 

(11,676

)

(16,446

)

Texas

 

3,987

 

756

 

 

9,243

 

(2,492

)

West

 

611

 

(5,371

)

 

(5,326

)

(7,903

)

Financial services

 

437

 

1,668

 

 

5,739

 

845

 

Corporate and unallocated

 

(6,652

)

(3,874

)

 

(21,658

)

(38,659

)

Discontinued operations

 

(451

)

(2,349

)

 

(20,883

)

(4,447

)

Total

 

  $

363

 

  $

(19,364

)

 

  $

(53,615

)

  $

(84,944

)

NEW ORDERS

 

 

 

 

 

 

 

 

 

 

Units

 

 

 

 

 

 

 

 

 

 

North

 

254

 

214

 

 

1,190

 

1,097

 

Southeast

 

299

 

199

 

 

1,172

 

1,035

 

Texas

 

275

 

262

 

 

1,077

 

932

 

West

 

82

 

60

 

 

328

 

364

 

Discontinued operations

 

5

 

41

 

 

187

 

272

 

Total

 

915

 

776

 

 

3,954

 

3,700

 

Dollars (in millions)

 

 

 

 

 

 

 

 

 

 

North

 

  $

73

 

  $

57

 

 

  $

326

 

  $

289

 

Southeast

 

66

 

43

 

 

253

 

224

 

Texas

 

68

 

62

 

 

272

 

231

 

West

 

27

 

16

 

 

103

 

90

 

Discontinued operations

 

2

 

8

 

 

39

 

55

 

Total

 

  $

236

 

  $

186

 

 

  $

993

 

  $

889

 

CLOSINGS

 

 

 

 

 

 

 

 

 

 

Units

 

 

 

 

 

 

 

 

 

 

North

 

306

 

317

 

 

1,107

 

1,280

 

Southeast

 

298

 

239

 

 

988

 

1,154

 

Texas

 

289

 

214

 

 

1,044

 

974

 

West

 

93

 

77

 

 

274

 

531

 

Discontinued operations

 

54

 

62

 

 

214

 

306

 

Total

 

1,040

 

909

 

 

3,627

 

4,245

 

Average closing price (in thousands)

 

 

 

 

 

 

 

 

 

 

North

 

  $

274

 

  $

263

 

 

  $

271

 

  $

266

 

Southeast

 

220

 

214

 

 

218

 

225

 

Texas

 

257

 

248

 

 

251

 

249

 

West

 

304

 

270

 

 

293

 

231

 

Discontinued operations

 

229

 

194

 

 

208

 

202

 

Total

 

  $

254

 

  $

243

 

 

  $

249

 

  $

242

 

OUTSTANDING CONTRACTS

 

 

 

 

 

 

December 31,

 

Units

 

 

 

 

 

 

2011

 

2010

 

North

 

 

 

 

 

 

420

 

337

 

Southeast

 

 

 

 

 

 

521

 

337

 

Texas

 

 

 

 

 

 

433

 

400

 

West

 

 

 

 

 

 

107

 

53

 

Discontinued operations

 

 

 

 

 

 

33

 

60

 

Total

 

 

 

 

 

 

1,514

 

1,187

 

Dollars (in millions)

 

 

 

 

 

 

 

 

 

 

North

 

 

 

 

 

 

  $

121

 

  $

95

 

Southeast

 

 

 

 

 

 

111

 

74

 

Texas

 

 

 

 

 

 

112

 

101

 

West

 

 

 

 

 

 

38

 

15

 

Discontinued operations

 

 

 

 

 

 

7

 

12

 

Total

 

 

 

 

 

 

  $

389

 

  $

297

 

Average price (in thousands)

 

 

 

 

 

 

 

 

 

 

North

 

 

 

 

 

 

  $

288

 

  $

283

 

Southeast

 

 

 

 

 

 

214

 

219

 

Texas

 

 

 

 

 

 

258

 

252

 

West

 

 

 

 

 

 

353

 

285

 

Discontinued operations

 

 

 

 

 

 

220

 

207

 

Total

 

 

 

 

 

 

  $

257

 

  $

251

 

 



 

THE RYLAND GROUP, INC. and Subsidiaries

FINANCIAL SERVICES SUPPLEMENTAL INFORMATION

(in thousands, except origination data)

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

RESULTS OF OPERATIONS

 

2011

 

2010

 

2011

 

2010

 

REVENUES

 

 

 

 

 

 

 

 

 

Income from origination and sale of mortgage loans, net

 

  $

4,287

 

  $

4,241

 

  $

19,873

 

$

23,933

 

Title, escrow and insurance

 

1,882

 

1,677

 

7,097

 

7,700

 

Interest and other

 

671

 

109

 

1,159

 

501

 

TOTAL REVENUES

 

6,840

 

6,027

 

28,129

 

32,134

 

EXPENSES

 

6,403

 

4,359

 

22,390

 

31,289

 

PRETAX EARNINGS

 

  $

437

 

  $

1,668

 

  $

5,739

 

$

845

 

 

 

 

 

 

 

 

 

 

 

OPERATIONAL DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail operations:

 

 

 

 

 

 

 

 

 

Originations (units)

 

711

 

689

 

2,556

 

3,183

 

Ryland Homes originations as a

 

 

 

 

 

 

 

 

 

percentage of total originations

 

99.9

%

100.0

%

100.0

%

99.9

%

Ryland Homes origination capture rate

 

73.0

%

81.4

%

75.7

%

81.2

%

 

OTHER CONSOLIDATED SUPPLEMENTAL INFORMATION

(in thousands)

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

 

2011

 

2010

 

2011

 

2010

 

Interest incurred

 

  $

14,066

 

  $

14,344

 

  $

56,635

 

  $

55,615

 

Interest capitalized during the period

 

9,940

 

8,623

 

38,032

 

31,221

 

Amortization of capitalized interest included in cost of sales

 

10,010

 

7,866

 

32,068

 

40,791

 

Depreciation and amortization

 

2,833

 

3,620

 

11,312

 

16,399

 

 



 

THE RYLAND GROUP, INC. and Subsidiaries

NON-GAAP FINANCIAL DISCLOSURE RECONCILIATION

(in thousands)

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

 

2011

 

2010

 

2011

 

2010

 

HOUSING GROSS MARGINS

 

 

 

 

 

 

 

 

 

HOUSING REVENUES

 

  $

251,798

 

  $

208,631

 

  $

857,180

 

$

964,419

 

 

 

 

 

 

 

 

 

 

 

HOUSING COST OF SALES

 

 

 

 

 

 

 

 

 

Cost of sales

 

210,695

 

178,213

 

723,791

 

820,630

 

Inventory valuation adjustments and write-offs

 

909

 

12,167

 

8,336

 

33,399

 

TOTAL HOUSING COST OF SALES

 

211,604

 

190,380

 

732,127

 

854,029

 

 

 

 

 

 

 

 

 

 

 

GROSS MARGINS

 

  $

40,194

 

  $

18,251

 

  $

125,053

 

$

110,390

 

GROSS MARGIN PERCENTAGE

 

16.0

%

8.7

%

14.6

%

11.4

%

 

 

 

 

 

 

 

 

 

 

GROSS MARGINS, excluding inventory valuation adjustments and write-offs

 

  $

41,103

 

  $

30,418

 

  $

133,389

 

$

143,789

 

GROSS MARGIN PERCENTAGE, excluding inventory valuation adjustments and write-offs

 

16.3

%

14.6

%

15.6

%

14.9

%

 

 

Gross margins on home sales, excluding inventory valuation adjustments, is a non-GAAP financial measure and is defined by the Company as revenue from home sales less costs of homes sold, excluding the Company’s inventory valuation adjustments recorded during the period. Management finds this to be a useful measure in evaluating the Company’s performance because it discloses the profit the Company generates on homes it actually delivered during the period, as the inventory valuation adjustments relate, in part, to inventory that was not delivered during the period.  It assists the Company’s management in making strategic decisions regarding its construction pace, product mix and product pricing based upon the profitability it generated on homes the Company currently delivers or sells.  The Company believes investors will also find gross margins on home sales, excluding inventory valuation adjustments, to be important and useful because it discloses a profitability measure that can be compared to a prior period without regard to the variability of inventory valuation adjustments. In addition, to the extent that the Company’s competitors provide similar information, disclosure of its gross margins on home sales, excluding inventory valuation adjustments, helps readers of the Company’s financial statements compare profits to its competitors with regard to the homes they deliver in the same period.  In addition, because gross margins on home sales is a financial measure that is not calculated in accordance with GAAP, it may not be completely comparable to similarly titled measures of the Company’s competitors due to potential differences in methods of calculation and charges being excluded.