M.D.C. HOLDINGS, INC. - FORM 8-K - EX-99.1

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8-K - FORM 8-K - M.D.C. HOLDINGS, INC.	d574694d8k.htm

Exhibit 99.1

News Release

M.D.C. HOLDINGS ANNOUNCES 2013 SECOND QUARTER RESULTS

DENVER, COLORADO, Tuesday, July 30, 2013. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended June 30, 2013.

2013 Second Quarter Highlights and Comparisons to 2012 Second Quarter

•

Net income of $224.9 million, or $4.56 per diluted share vs. net income of $10.6 million, or $0.22 per diluted share

•

Net income included a $187.6 million, or $3.80 per diluted share, tax benefit related to the reversal of a substantial portion of the deferred tax asset valuation allowance

•

Excluding the impact of the reversal of the deferred tax asset valuation allowance, net income was $37.3 million*, or $0.76* per diluted share

•

Pretax income of $38.0 million, up 292% from $9.7 million

•

Homebuilding pretax income of $29.8 million vs. $3.0 million

•

Home sale revenues of $400.3 million, up 56%

•

Homes delivered of 1,183, up 37%

•

Average selling price of $338,400, up 14%

•

Gross margin from home sales of 18.1% vs. 14.2%, a 390 basis point increase

•

70 basis point improvement vs. 17.4% in 2013 first quarter

•

SG&A expenses as a percentage of home sale revenues of 13.0% vs. 15.3%, a 230 basis point improvement

•

Monthly net home order absorption pace of 3.2 homes per active community, up 23%

•

Net new orders of 1,351 homes, down 4%; dollar value up 12% to $485.5 million

•

Backlog dollar value of $784.2 million, up 19%; units up 3% to 2,095 homes

•

Acquired 2,776 lots in 69 communities, including 32 new communities

•

Total land acquisition spend of $185.1 million

Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “I am pleased to announce a second quarter profit of $4.56 per diluted share, our sixth consecutive quarterly operating profit, with net income improving by $214.3 million over the prior year. Our favorable results were significantly impacted by a $187.6 million tax benefit related to the reversal of a portion of our deferred tax asset valuation allowance, stemming from our return to consistent profitability and an improving housing market. Additionally, our homebuilding results again improved significantly, as volume and gross margin gains drove both year-over-year and sequential improvements in our homebuilding pretax operating margin to 7.4%.”

Mr. Mizel continued, “During the second quarter of 2013, the pace of our new home sales remained strong. Our monthly absorption rate of 3.2 net new home orders per active community was up 23% year-over-year and at our highest level since 2006, even as we increased prices in most of our subdivisions to regulate the pace of sales and maximize profitability. And although interest rates rose significantly toward the end of the quarter, we believe that the impact of increasing interest rates on new homes sales can be offset by the positive influence of other factors impacting new home demand, including low existing home inventories, attractive levels of overall affordability, and continued improvements in employment levels and consumer confidence.”

Mr. Mizel concluded, “Our active community count steadied in the second quarter, increasing slightly after five consecutive sequential quarterly declines. We continue to believe that we are poised to increase our active community count by at least 10% from current levels by the end of the year. Our confidence in achieving this goal is rooted in the success we have experienced in acquiring new land over the past year. During the 2013 second quarter alone, we purchased approximately 2,800 lots, our highest level of land acquisition activity since 2006. We ended the quarter with more than 14,700 lots controlled, an increase of 16% from the end of the 2013 first quarter and 44% year-over-year. We believe that we control enough lots to drive meaningful gains in both net orders and closings volume for 2014, provided that market conditions remain favorable for the industry.”

Homebuilding

Home sale revenues for the 2013 second quarter increased 56% to $400.3 million compared to $256.5 million for the prior year period. The increase in revenues resulted from a 37% increase in homes delivered to 1,183 homes as compared to 861 in the prior year and a 14% increase in the Company’s average selling price to $338,400. The increase in average selling price was largely due to price appreciation and lower incentives in many of our markets.

Gross margin from home sales for the 2013 second quarter increased to 18.1% from 14.2% for the year-earlier period. On a sequential basis, our 2013 second quarter gross margin from home sales was up 70 basis points as compared to 17.4% for the 2013 first quarter. The increase was attributable to the Company’s continued focus on increasing pricing and decreasing incentives as its markets improved since the start of 2012.

SG&A expenses as a percentage of home sales revenues decreased by 230 basis points to 13.0% for the 2013 second quarter versus 15.3% for the same period in 2012. The improvement was the result of operating leverage created by the Company’s 56% year-over-year increase in home sale revenues, which far outpaced a year-over-year increase in the Company’s absolute level of SG&A expenses, and was slightly offset by a year-over-year increase in legal expenses driven by various significant legal recoveries in the 2012 second quarter which did not recur in the 2013 second quarter.

Net new orders for the 2013 second quarter decreased 4% to 1,351 homes, compared to 1,402 homes during the same period in 2012, largely due to a 21% decrease in the Company’s active average community count. However, the Company’s monthly sales absorption rate for the 2013 second quarter rose 23% to 3.2 per community, compared to 2.6 per community for the 2012 second quarter and 3.0 for the 2013 first quarter. The Company’s cancellation rate for the 2013 second quarter was 19% versus 20% in the prior year second quarter and 18% in the 2013 first quarter.

The Company ended the 2013 second quarter with 2,095 homes in backlog, with an estimated sales value of $784.2 million, compared with a backlog of 2,028 homes with an estimated sales value of $657.5 million at June 30, 2012, a 19% increase in dollar value.

At June 30, 2013, the Company had 140 active subdivisions, which was up slightly from 139 at March 31, 2013, and represented a reversal of its previous trend of sequential quarterly decreases in community count. In addition, as a result of the significant increase in our land acquisition activity in the latter half of 2012 and the first half of 2013, the Company’s lots owned and under option increased by 44% year-over-year and 16% since March 31, 2013 to more than 14,700 lots.

The Company believes that these significant increases in lots owned and under option will further increase its active community count during the second half of 2013.

Financial Services

Income before taxes from our financial services operations for the 2013 second quarter was $8.2 million, compared to $6.7 million for the 2012 second quarter. The increase in pretax income primarily reflected a $1.1 million increase in our mortgage operations pretax income to $6.9 million for the 2013 second quarter, compared to $5.8 million in the 2012 second quarter. The improvement in our mortgage profitability was driven primarily by year-over-year increases in the volume of loans locked and originated due to increases in new home deliveries from our homebuilding operations.

Income Taxes

During the 2013 second quarter, we realized a $187.6 million income tax benefit related to the reversal of a substantial portion of the Company’s deferred tax asset valuation allowance. Our remaining deferred tax asset valuation allowance at June 30, 2013 was $39.7 million and related to (1) the remaining interim periods of 2013 during which a portion of the remaining valuation allowance will be reversed as pretax income is realized as required by U.S. GAAP and (2) various state net operating loss carryforwards where realization is more uncertain at this time due to the more limited carryforward periods that exist in certain states.

About MDC

Since 1972, MDC’s subsidiary companies have built and financed the American dream for more than 170,000 homebuyers. MDC’s commitment to customer satisfaction, quality and value is reflected in each home its subsidiaries build. MDC is one of the largest homebuilders in the United States. Its subsidiaries have homebuilding operations across the country, including the metropolitan areas of Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, Riverside-San Bernardino, Los Angeles, San Francisco Bay Area, Washington D.C., Baltimore, Philadelphia, Jacksonville, Orlando, South Florida and Seattle. The Company’s subsidiaries also provide mortgage financing, insurance and title services, primarily for Richmond American homebuyers, through HomeAmerican Mortgage Corporation, American Home Insurance Agency, Inc. and American Home Title and Escrow Company, respectively. M.D.C. Holdings, Inc. is traded on the New York Stock Exchange under the symbol “MDC.” For more information, visit www.mdcholdings.com.

Forward-Looking Statements

Certain statements in this release, including statements regarding our business, financial condition, results of operation, cash flows, strategies and prospects, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking 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 any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic conditions, including changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by the Company, including cancellation rates, net home orders, home gross margins, land and home values and subdivision counts; (3) changes in interest rates, mortgage lending programs and the availability of credit; (4) changes in

the market value of the Company’s investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican’s sale of mortgage loans (6) the relative stability of debt and equity markets; (7) competition; (8) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (9) the availability and cost of performance bonds and insurance covering risks associated with our business; (10) shortages and the cost of labor; (11) weather related slowdowns; (12) slow growth initiatives; (13) building moratoria; (14) governmental regulation, including the interpretation of tax, labor and environmental laws; (15) terrorist acts and other acts of war; and (16) other factors over which the Company has little or no control. Additional information about the risks and uncertainties applicable to the Company’s business is contained in the Company’s Form 10-Q for the quarter ended June 30, 2013, which is scheduled to be filed with the Securities and Exchange Commission today. All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. The Company undertakes no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or webcasts should be consulted.


Contact:		Robert N. Martin
		Vice President of Finance and Corporate Controller
		(720) 977-3431
		bob.martin@mdch.com

*	Please see “Reconciliation of Non-GAAP Financial Measures” on page 12.

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands, except per share amounts)
	(Unaudited)
Homebuilding:
Home sale revenues	$	400,327		$	256,532		$	732,075		$	441,210
Land sale revenues		1,807			1,815			1,807			3,405

Total home sale and land revenues		402,134			258,347			733,882			444,615

Home cost of sales		(327,927	)		(220,220	)		(602,003	)		(378,874	)
Land cost of sales		(1,435	)		(1,718	)		(1,435	)		(3,208	)

Total cost of sales		(329,362	)		(221,938	)		(603,438	)		(382,082	)

Gross margin		72,772			36,409			130,444			62,533

Selling, general and administrative expenses		(51,908	)		(39,223	)		(100,109	)		(73,347	)
Interest income		8,504			5,373			14,686			11,286
Interest expense		(909	)		—			(1,726	)		(808	)
Other income (expense)		1,330			418			1,341			576

Homebuilding pretax income		29,789			2,977			44,636			240

Financial Services:
Revenues		13,884			10,587			26,390			18,306
Expenses		(6,581	)		(4,640	)		(12,223	)		(8,305	)
Interest and other income		920			731			1,795			1,539

Financial services pretax income		8,223			6,678			15,962			11,540

Income before income taxes		38,012			9,655			60,598			11,780
Benefit from income taxes		186,897			983			186,827			1,123

Net income	$	224,909		$	10,638		$	247,425		$	12,903

Other comprehensive income (loss):
Unrealized gain (loss) related to available-for-sale securities, net of tax		(1,995	)		(698	)		540			5,850

Comprehensive income	$	222,914		$	9,940		$	247,965		$	18,753

Earnings per share:
Basic	$	4.60		$	0.22		$	5.07		$	0.27
Diluted	$	4.56		$	0.22		$	5.02		$	0.27
Weighted average common shares outstanding:
Basic		48,447,005			47,398,088			48,410,486			47,367,051
Diluted		48,914,984			47,516,258			48,916,988			47,462,544
Dividends declared per share	$	—		$	0.25		$	—		$	0.50

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets


	June 30, 2013		December 31, 2012
	(Dollars in thousands, except per share amounts)
	(Unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents	$	208,883	$	129,535
Marketable securities		610,404		519,465
Restricted cash		2,679		1,859
Trade and other receivables		36,676		28,163
Inventories:
Housing completed or under construction		569,218		512,949
Land and land under development		628,282		489,572

Total inventories		1,197,500		1,002,521
Property and equipment, net		32,184		33,125
Deferred tax asset, net of valuation allowance of $39,697 and $248,306 at June 30, 2013 and December 31, 2012, respectively		184,221		—
Other assets		61,103		44,777

Total homebuilding assets		2,333,650		1,759,445
Financial Services:
Cash and cash equivalents		40,535		30,560
Marketable securities		24,037		32,473
Mortgage loans held-for-sale, net		92,463		119,953
Other assets		5,857		3,010

Total financial services assets		162,892		185,996

Total Assets	$	2,496,542	$	1,945,441

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	22,267	$	73,055
Accrued liabilities		137,209		118,456
Senior notes, net		1,095,225		744,842

Total homebuilding liabilities		1,254,701		936,353
Financial Services:
Accounts payable and accrued liabilities		53,798		51,864
Mortgage repurchase facility		48,848		76,327

Total financial services liabilities		102,646		128,191

Total Liabilities		1,357,347		1,064,544
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; 48,869,726 and 48,698,757 issued and outstanding at June 30, 2013 and December 31, 2012, respectively		489		487
Additional paid-in-capital		907,192		896,861
Retained earnings (accumulated deficit)		226,136		(21,289	)
Accumulated other comprehensive income		5,378		4,838

Total Stockholders’ Equity		1,139,195		880,897

Total Liabilities and Stockholders’ Equity	$	2,496,542	$	1,945,441

M.D.C. HOLDINGS, INC.

Consolidated Statements of Cash Flows


	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands)
	(Unaudited)
Operating Activities:
Net income	$	224,909		$	10,638		$	247,425		$	12,903
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense		1,838			5,110			5,214			7,721
Depreciation and amortization		994			1,349			2,072			2,656
Write-offs of land option deposits		273			229			499			311
Amortization of discount (premiums) on marketable debt securities		804			1			1,423			(151	)
Deferred income tax benefit		(187,643	)		—			(187,643	)		—
Net changes in assets and liabilities:
Restricted cash		(153	)		(1,180	)		(820	)		(1,593	)
Trade and other receivables		(4,596	)		(7,283	)		(8,566	)		(18,345	)
Mortgage loans held-for-sale		(6,034	)		(10,697	)		27,490			12,648
Housing completed or under construction		(47,469	)		(90,512	)		(56,087	)		(136,387	)
Land and land under development		(93,739	)		74,048			(138,509	)		91,048
Other assets		(1,687	)		562			(8,383	)		3,956
Accounts payable and accrued liabilities		21,678			20,958			(30,358	)		9,643

Net cash used in operating activities		(90,825	)		3,223			(146,243	)		(15,590	)

Investing Activities:
Purchase of marketable securities		(161,284	)		(107,178	)		(312,095	)		(292,788	)
Maturity of marketable securities		87,015			106,000			87,015			106,000
Sale of marketable securities		92,399			43,680			137,067			225,701
Purchase of property and equipment		(72	)		(304	)		(998	)		(668	)

Net cash used in investing activities		18,058			42,198			(89,011	)		38,245

Financing Activities:
Payments on mortgage repurchase facility		(55,790	)		(36,784	)		(135,559	)		(90,409	)
Advances on mortgage repurchase facility		63,170			43,604			108,080			74,367
Dividend payments		—			(11,996	)		—			(23,990	)
Proceeds from issuance of senior notes		99,125			—			346,938			—
Proceeds from exercise of stock options		—			140			5,118			140

Net cash provided by (used in) financing activities		106,505			(5,036	)		324,577			(39,892	)

Net increase (decrease) in cash and cash equivalents		33,738			40,385			89,323			(17,237	)
Cash and cash equivalents:
Beginning of period		215,680			285,739			160,095			343,361

End of period	$	249,418		$	326,124		$	249,418		$	326,124

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

New Home Deliveries:


	Three Months Ended June 30,
	2013						2012						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price
	(Dollars in thousands)
Arizona		130	$	30,472	$	234.4		127	$	27,086	$	213.3		2%		13%		10%
California		167		61,199		366.5		133		43,195		324.8		26%		42%		13%
Nevada		161		41,850		259.9		155		28,460		183.6		4%		47%		42%
Washington		98		30,992		316.2		59		17,170		291.0		66%		81%		9%

West		556		164,513		295.9		474		115,911		244.5		17%		42%		21%

Colorado		309		113,320		366.7		185		66,254		358.1		67%		71%		2%
Utah		59		18,643		316.0		46		13,142		285.7		28%		42%		11%

Mountain		368		131,963		358.6		231		79,396		343.7		59%		66%		4%

Maryland		83		35,407		426.6		47		19,777		420.8		77%		79%		1%
Virginia		95		47,350		498.4		70		32,171		459.6		36%		47%		8%
Florida		81		21,094		260.4		37		8,726		235.8		119%		142%		10%
Illinois		—		—		—		2		551		275.5		N/M		N/M		N/M

East		259		103,851		401.0		156		61,225		392.5		66%		70%		2%

Total		1,183	$	400,327	$	338.4		861	$	256,532	$	297.9		37%		56%		14%


	Six Months Ended June 30,
	2013						2012						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price
	(Dollars in thousands)
Arizona		270	$	63,633	$	235.7		215	$	45,043	$	209.5		26%		41%		12%
California		313		110,788		354.0		188		61,188		325.5		66%		81%		9%
Nevada		294		74,595		253.7		261		50,056		191.8		13%		49%		32%
Washington		159		50,476		317.5		103		29,166		283.2		54%		73%		12%

West		1,036		299,492		289.1		767		185,453		241.8		35%		61%		20%

Colorado		613		226,808		370.0		310		111,217		358.8		98%		104%		3%
Utah		126		38,532		305.8		98		27,242		278.0		29%		41%		10%

Mountain		739		265,340		359.1		408		138,459		339.4		81%		92%		6%

Maryland		137		57,111		416.9		91		38,571		423.9		51%		48%		-2%
Virginia		158		76,469		484.0		129		58,326		452.1		22%		31%		7%
Florida		131		33,663		257.0		83		19,850		239.2		58%		70%		7%
Illinois		—		—		—		2		551		275.5		N/M		N/M		N/M

East		426		167,243		392.6		305		117,298		384.6		40%		43%		2%

Total		2,201	$	732,075	$	332.6		1,480	$	441,210	$	298.1		49%		66%		12%

N/M - Not meaningful

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Net New Orders:


	Three Months Ended June 30,
	2013								2012								% 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)
Arizona		196	$	48,825	$	249.1		3.84		246	$	55,544	$	225.8		4.10		-20%		-12%		10%		-6%
California		196		79,196		404.1		5.23		217		74,876		345.1		3.71		-10%		6%		17%		41%
Nevada		152		49,085		322.9		4.94		225		48,926		217.4		3.90		-32%		0%		49%		27%
Washington		94		31,016		330.0		2.72		69		19,346		280.4		2.19		36%		60%		18%		24%

West		638		208,122		326.2		4.15		757		198,692		262.5		3.64		-16%		5%		24%		14%

Colorado		381		143,754		377.3		3.30		311		108,045		347.4		2.19		23%		33%		9%		51%
Utah		44		14,582		331.4		2.10		69		19,945		289.1		1.39		-36%		-27%		15%		51%

Mountain		425		158,336		372.6		3.11		380		127,990		336.8		1.99		12%		24%		11%		56%

Maryland		112		53,091		474.0		1.84		113		46,677		413.1		1.96		-1%		14%		15%		-6%
Virginia		90		43,830		487.0		2.50		98		48,168		491.5		2.29		-8%		-9%		-1%		9%
Florida		86		22,080		256.7		2.25		53		12,842		242.3		1.28		62%		72%		6%		76%
Illinois		—		—		—		—		1		315		315.0		N/M		N/M		N/M		N/M		N/M

East		288		119,001		413.2		2.13		265		108,002		407.6		1.87		9%		10%		1%		14%

Total		1,351	$	485,459	$	359.3		3.18		1,402	$	434,684	$	310.0		2.59		-4%		12%		16%		23%


	Six Months Ended June 30,
	2013								2012								% 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)
Arizona		323	$	79,760	$	246.9		3.36		433	$	96,737	$	223.4		3.35		-25%		-18%		11%		0%
California		360		140,358		389.9		4.77		338		117,611		348.0		3.06		7%		19%		12%		56%
Nevada		322		95,267		295.9		4.94		391		83,748		214.2		3.31		-18%		14%		38%		49%
Washington		187		59,942		320.5		2.91		145		42,042		289.9		2.38		29%		43%		11%		22%

West		1,192		375,327		314.9		3.96		1,307		340,138		260.2		3.12		-9%		10%		21%		27%

Colorado		799		291,343		364.6		3.40		546		192,192		352.0		1.93		46%		52%		4%		76%
Utah		109		35,179		322.7		1.99		137		38,938		284.2		1.26		-20%		-10%		14%		58%

Mountain		908		326,522		359.6		3.13		683		231,130		338.4		1.74		33%		41%		6%		80%

Maryland		202		91,526		453.1		1.76		196		81,825		417.5		1.80		3%		12%		9%		-2%
Virginia		183		92,714		506.6		2.51		188		92,227		490.6		2.13		-3%		1%		3%		18%
Florida		166		42,626		256.8		2.11		89		21,778		244.7		1.00		87%		96%		5%		111%
Illinois		—		—		—		—		2		550		275.0		N/M		N/M		N/M		N/M		N/M

East		551		226,866		411.7		2.07		475		196,380		413.4		1.66		16%		16%		0%		25%

Total		2,651	$	928,715	$	350.3		3.09		2,465	$	767,648	$	311.4		2.25		8%		21%		12%		37%

N/M - Not meaningful

*	Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Active Subdivisions:


	June 30,
	2013		2012		% Change
Arizona		19		17		12	%
California		11		19		-42	%
Nevada		13		19		-32	%
Washington		12		11		9	%

West		55		66		-17	%

Colorado		38		47		-19	%
Utah		4		17		-76	%

Mountain		42		64		-34	%

Maryland		20		19		5	%
Virginia		11		12		-8	%
Florida		12		12		0	%

East		43		43		0	%

Total		140		173		-19	%

Average for quarter ended		142		180		-21	%

Average for six months ended		143		183		-22	%

Backlog:


	June 30,
	2013						2012						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		203	$	50,836	$	250.4		346	$	76,564	$	221.3		-41	%		-34	%		13	%
California		276		107,950		391.1		268		92,161		343.9		3	%		17	%		14	%
Nevada		232		71,488		308.1		286		63,283		221.3		-19	%		13	%		39	%
Washington		107		36,118		337.6		96		30,438		317.1		11	%		19	%		6	%

West		818		266,392		325.7		996		262,446		263.5		-18	%		2	%		24	%

Colorado		656		246,797		376.2		469		171,862		366.4		40	%		44	%		3	%
Utah		64		21,576		337.1		107		30,116		281.5		-40	%		-28	%		20	%

Mountain		720		268,373		372.7		576		201,978		350.7		25	%		33	%		6	%

Maryland		248		113,824		459.0		218		90,570		415.5		14	%		26	%		10	%
Virginia		210		109,180		519.9		162		82,723		510.6		30	%		32	%		2	%
Florida		99		26,470		267.4		76		19,734		259.7		30	%		34	%		3	%

East		557		249,474		447.9		456		193,027		423.3		22	%		29	%		6	%

Total		2,095	$	784,239	$	374.3		2,028	$	657,451	$	324.2		3	%		19	%		15	%

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Homes Completed or Under Construction (WIP lots):


	June 30,				% Change
	2013		2012		% Change
Unsold:
Completed		185		138		34	%
Under construction		628		479		31	%

Total unsold started homes		813		617		32	%

Sold homes under construction or completed		1,652		1,392		19	%
Model homes		207		221		-6	%

Total homes completed or under construction		2,672		2,230		20	%

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


	June 30, 2013						June 30, 2012						Total % Change
	Lots Owned		Lots Optioned		Total		Lots Owned		Lots Optioned		Total		Total % Change
Arizona		2,707		239		2,946		774		108		882		234	%
California		971		—		971		1,196		—		1,196		-19	%
Nevada		1,573		136		1,709		966		27		993		72	%
Washington		477		141		618		397		161		558		11	%

West		5,728		516		6,244		3,333		296		3,629		72	%

Colorado		4,174		1,079		5,253		3,236		584		3,820		38	%
Utah		468		—		468		492		13		505		-7	%

Mountain		4,642		1,079		5,721		3,728		597		4,325		32	%

Maryland		551		358		909		607		399		1,006		-10	%
Virginia		491		284		775		596		121		717		8	%
Florida		648		424		1,072		285		133		418		156	%
Illinois		—		—		—		123		—		123		N/M

East		1,690		1,066		2,756		1,611		653		2,264		22	%

Total		12,060		2,661		14,721		8,672		1,546		10,218		44	%

N/M - Not meaningful

M.D.C. HOLDINGS, INC.

Reconciliation of Non-GAAP Financial Measures

Net income excluding the impact of the reversal of the deferred tax asset per diluted share is a non-GAAP financial measure. We believe this information is meaningful as it more clearly reflects the Company’s current operating results and facilitates the investors ability to compare our financial results to those of our peer group and to our prior financial performance by excluding items which otherwise would distort the comparison. Net income excluding the impact of the reversal of the deferred tax asset valuation allowance per basic and diluted share for the three and six months ended June 30, 2013 is calculated as follows:


	Three Months Ended June 30, 2013			Six Months Ended June 30, 2013
	(Dollars in thousands, except per share amounts)
Numerator
Net income	$	224,909		$	247,425
Less: deferred tax asset valuation allowance reversal		(187,643	)		(187,643	)

Adjusted net income		37,266			59,782
Less: distributed earnings allocated to participating securities		—			—
Less: undistributed earnings allocated to participating securities		(309	)		(504	)

Net income attributable to common stockholders (numerator for basic earnings per share)		36,957			59,278

Add back: undistributed earnings allocated to participating securities		309			504
Less: undistributed earnings reallocated to participating securities		(306	)		(499	)

Numerator for diluted earnings per share	$	36,960		$	59,283

Denominator
Weighted-average common shares outstanding		48,447,005			48,410,486
Add: dilutive effect of stock options		467,979			506,502

Denominator for diluted earnings per share under two class method		48,914,984			48,916,988

Basic earnings per common share excluding impact of reversal of deferred tax asset valuation allowance	$	0.76		$	1.22
Diluted earnings per common share excluding impact of reversal of deferred tax asset valuation allowance	$	0.76		$	1.21

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M.D.C. HOLDINGS, INC. Reports