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

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8-K - FORM 8-K - M.D.C. HOLDINGS, INC.	mdc20161031_8k.htm

Exhibit 99.1

M.D.C. HOLDINGS, INC.

News Release

M.D.C. HOLDINGS ANNOUNCES 2016 THIRD QUARTER RESULTS

DENVER, COLORADO, Tuesday, November 1, 2016. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended September 30, 2016.

2016 Third Quarter Highlights and Comparisons to 2015 Third Quarter

●

Net income up 78% to $26.4 million, or $0.54 per share from $14.8 million or $0.30 per share

●

Home sale revenues up 27% to $575.7 million from $454.7 million

Average sales price up 6% to $445,300

Homes delivered up 20% to 1,293

●

Selling, general and administrative expenses as a percentage of home sale revenues improved 180 basis points from 12.6% to 10.8%

●

Dollar value of net new orders up 17% to $570.3 million from $489.0 million

Net new orders up 17% to 1,296

●

Ending backlog dollar value up 37% to $1.61 billion from $1.18 billion

Ending backlog units up 33% to 3,448

●

Industry-leading dividend payment continued at $0.25 per share

Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “We are very pleased with our 2016 third quarter results, as our net income increased by 78% year-over-year. Even though our cycle times continued to increase during the quarter based on limited subcontractor availability in many markets, we still increased our home sale revenues by 27% over the prior year, resulting in better leverage of our overhead costs and higher return on equity than a year ago.”

Mr. Mizel concluded, “The 2016 third quarter was our tenth consecutive quarter of year-over-year growth in net new orders, and we achieved our highest third quarter average monthly sales absorption pace in over a decade. Our order results included an increased contribution from our new, more affordable collection of home plans, which are still in the early stages of rollout. With a simpler design, these new plans should ultimately have a positive impact on our overall construction cycle times, which remain a key focus area for the Company as we close out the year.”

M.D.C. HOLDINGS, INC.

Homebuilding

Home sale revenues for the 2016 third quarter increased 27% to $575.7 million, primarily driven by a 20% increase in deliveries, which was mostly the result of a 35% year-over-year increase of our homes in beginning backlog, coupled with a 6% increase in average selling price of homes closed. The increase in average selling price was primarily the result of a mix shift to higher-priced submarkets and, to a lesser extent, price increases implemented in the prior year.

For the 2016 third quarter, our gross margin from home sales declined 90 basis points to 15.5% from the same period in 2015 primarily due to increased land and construction costs in certain of our markets and warranty adjustments totaling $1.8 million that resulted from higher than expected warranty related spending. Gross margin for the 2016 third quarter included $4.7 million of inventory impairments, compared with $4.4 million for the same quarter in the prior year.

Selling, general and administrative (“SG&A”) expenses for the 2016 third quarter were $61.9 million, up $4.5 million from $57.4 million for the same period in 2015. Our SG&A expenses as a percentage of home sale revenue (“SG&A rate”) improved by 180 basis points to 10.8% for the 2016 third quarter from 12.6% in the 2015 third quarter. This decrease in our SG&A rate was primarily the result of a 27% increase in home sale revenues.

The dollar value of net new orders for the 2016 third quarter increased 17% year-over-year to $570.3 million. The improvement was the result of a 17% increase in the number of homes sold, driven primarily by our monthly sales absorption rate being up 15% year-over-year. Our average selling price of net new orders was flat from the same period in the prior year, as price increases were offset by a shift in mix to lower price communities, in part related to the introduction of our more affordable product earlier this year.

Our backlog value at the end of the 2016 third quarter was up 37% year-over-year to $1.61 billion. The improvement was due mostly to a 33% increase in the number of units in backlog, which is primarily the result of (1) an increase in net new order activity over the last twelve months for most of our markets, (2) a higher percentage of our backlog coming from build-to-order sales, which are generally in backlog for a longer period of time and, (3) limited subcontractor availability, which has extended our cycle times in most of our larger markets.

Financial Services

Income before taxes for our financial services operations for the 2016 third quarter was $10.4 million, a $2.1 million increase from $8.3 million in the 2015 third quarter. This improvement was primarily the result of (1) year-over-year increases in the dollar value of loans locked, originated, and sold, and (2) higher gains on loans locked and sold.

M.D.C. HOLDINGS, INC.

About MDC

Since 1972, MDC's subsidiary companies have built and financed the American dream for more than 185,000 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 Diego, Orange County, San Francisco Bay Area, Sacramento, Washington D.C., Baltimore, Orlando, Jacksonville, 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.

M.D.C. HOLDINGS, INC.

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 MDC 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 MDC, 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 MDC’s investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican Mortgage Corporation’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 MDC 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 and natural disasters; (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; (16) changes in energy prices; and (17) other factors over which MDC has little or no control. Additional information about the risks and uncertainties applicable to MDC's business is contained in MDC's Form 10-Q for the quarter ended September 30, 2016, 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. MDC 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: Kevin McCarty

Vice President of Finance and Corporate Controller

1-866-424-3395 / (720) 977-3395

IR@mdch.com

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
	(Dollars in thousands, except per share amounts)
	(Unaudited)
Homebuilding:
Home sale revenues	$	575,722		$	454,740		$	1,541,337		$	1,293,457
Land sale revenues		2,290			906			4,930			1,816
Total home and land sale revenues		578,012			455,646			1,546,267			1,295,273
Home cost of sales		(481,511	)		(375,948	)		(1,287,373	)		(1,079,609	)
Land cost of sales		(2,318	)		(819	)		(4,197	)		(1,944	)
Inventory impairments		(4,700	)		(4,351	)		(6,300	)		(4,701	)
Total cost of sales		(488,529	)		(381,118	)		(1,297,870	)		(1,086,254	)
Gross margin		89,483			74,528			248,397			209,019
Selling, general and administrative expenses		(61,904	)		(57,444	)		(182,621	)		(162,757	)
Interest and other income		1,869			838			5,358			5,412
Other expense		(1,558	)		(350	)		(2,463	)		(2,539	)
Other-than-temporary impairment of marketable securities		(215	)		(2,176	)		(934	)		(2,176	)
Homebuilding pretax income		27,675			15,396			67,737			46,959

Financial Services:
Revenues		17,408			12,841			44,248			34,852
Expenses		(7,955	)		(5,464	)		(21,739	)		(15,830	)
Interest and other income		1,035			885			2,648			2,885
Other-than-temporary impairment of marketable securities		(111	)		-			(111	)		-
Financial services pretax income		10,377			8,262			25,046			21,907

Income before income taxes		38,052			23,658			92,783			68,866
Provision for income taxes		(11,693	)		(8,880	)		(29,948	)		(25,670	)
Net income	$	26,359		$	14,778		$	62,835		$	43,196

Other comprehensive income (loss) related to available for sale securities, net of tax		1,028			(226	)		3,871			722
Comprehensive income	$	27,387		$	14,552		$	66,706		$	43,918

Earnings per share:
Basic	$	0.54		$	0.30		$	1.28		$	0.88
Diluted	$	0.54		$	0.30		$	1.28		$	0.88

Weighted average common shares outstanding
Basic		48,854,412			48,785,973			48,844,613			48,756,265
Diluted		49,009,949			49,070,291			48,855,014			48,982,975

Dividends declared per share	$	0.25		$	0.25		$	0.75		$	0.75

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

	September 30,		December 31,
	2016		2015
ASSETS	(Dollars in thousands, except
	per share amounts)
Homebuilding:	(Unaudited)
Cash and cash equivalents	$	129,278	$	144,342
Marketable securities		57,116		92,387
Restricted cash		4,621		3,750
Trade and other receivables		43,082		23,314
Inventories:
Housing completed or under construction		976,372		747,036
Land and land under development		870,733		1,016,926
Total inventories		1,847,105		1,763,962
Property and equipment, net		28,749		28,226
Deferred tax asset, net		85,128		99,107
Metropolitan district bond securities (related party)		29,132		25,911
Prepaid and other assets		66,195		65,394
Total homebuilding assets		2,290,406		2,246,393
Financial Services:
Cash and cash equivalents		34,180		36,646
Marketable securities		22,105		11,307
Mortgage loans held-for-sale, net		117,989		115,670
Other assets		9,590		5,883
Total financial services assets		183,864		169,506
Total Assets	$	2,474,270	$	2,415,899
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	54,117	$	40,472
Accrued liabilities		122,227		122,886
Revolving credit facility		15,000		15,000
Senior notes, net		841,359		840,524
Total homebuilding liabilities		1,032,703		1,018,882
Financial Services:
Accounts payable and accrued liabilities		56,934		52,114
Mortgage repurchase facility		92,011		88,611
Total financial services liabilities		148,945		140,725
Total Liabilities		1,181,648		1,159,607
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; 49,033,981 and 48,888,424 issued and outstanding at September 30, 2016 and December 31, 2015, respectively		490		489
Additional paid-in-capital		922,132		915,746
Retained earnings		350,414		324,342
Accumulated other comprehensive income		19,586		15,715
Total Stockholders' Equity		1,292,622		1,256,292
Total Liabilities and Stockholders' Equity	$	2,474,270	$	2,415,899

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
	(Dollars in thousands)
	(Unaudited)
Operating Activities:
Net income	$	26,359		$	14,778		$	62,835		$	43,196
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense		473			3,998			6,636			6,589
Depreciation and amortization		1,335			992			3,702			3,084
Inventory impairments		4,700			4,351			6,300			4,701
Other-than-temporary impairment of marketable securities		326			2,176			1,045			2,176
Loss (gain) on sale of marketable securities		(649	)		588			(911	)		126
Amortization of discount / premiums on marketable debt securities, net		-			-			-			100
Deferred income tax expense		3,484			8,515			11,357			24,782
Net changes in assets and liabilities:
Restricted cash		(675	)		144			(871	)		(1,984	)
Trade and other receivables		4,556			(283	)		(21,679	)		(575	)
Mortgage loans held-for-sale		710			11,095			(2,319	)		19,759
Housing completed or under construction		(42,934	)		(48,367	)		(229,739	)		(89,841	)
Land and land under development		18,430			(62,724	)		141,131			(25,805	)
Other assets		(1,598	)		(4,954	)		(4,573	)		(8,072	)
Accounts payable and accrued liabilities		(1,334	)		(1,304	)		18,183			(4,722	)
Net cash provided by (used in) operating activities		13,183			(70,995	)		(8,903	)		(26,486	)

Investing Activities:
Purchases of marketable securities		(12,846	)		(12,207	)		(28,272	)		(46,886	)
Maturities of marketable securities		-			-			-			1,510
Sales of marketable securities		6,108			44,731			56,873			94,910
Purchases of property and equipment		(748	)		(409	)		(3,865	)		(830	)
Net cash provided by (used in) investing activities		(7,486	)		32,115			24,736			48,704

Financing Activities:
Advances (payments) on mortgage repurchase facility, net		(1,286	)		(6,245	)		3,400			(17,067	)
Dividend payments		(12,259	)		(12,221	)		(36,763	)		(36,646	)
Proceeds from exercise of stock options		-			53			-			665
Net cash used in financing activities		(13,545	)		(18,413	)		(33,363	)		(53,048	)

Net decrease in cash and cash equivalents		(7,848	)		(57,293	)		(17,530	)		(30,830	)
Cash and cash equivalents:
Beginning of period		171,306			180,288			180,988			153,825
End of period	$	163,458		$	122,995		$	163,458		$	122,995

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

New Home Deliveries

	Three Months Ended September 30,
	2016						2015						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		221	$	64,314	$	291.0		190	$	54,434	$	286.5		16	%		18	%		2	%
California		195		125,601		644.1		161		84,877		527.2		21	%		48	%		22	%
Nevada		177		59,601		336.7		159		60,258		379.0		11	%		(1	%)		(11	%)
Washington		75		35,072		467.6		75		30,174		402.3		0	%		16	%		16	%
West		668		284,588		426.0		585		229,743		392.7		14	%		24	%		8	%
Colorado		343		169,859		495.2		281		132,916		473.0		22	%		28	%		5	%
Utah		55		20,728		376.9		39		13,460		345.1		41	%		54	%		9	%
Mountain		398		190,587		478.9		320		146,376		457.4		24	%		30	%		5	%
Maryland		61		27,297		447.5		55		26,122		474.9		11	%		4	%		(6	%)
Virginia		78		39,795		510.2		51		25,309		496.3		53	%		57	%		3	%)
Florida		88		33,455		380.2		69		27,190		394.1		28	%		23	%		(4	%)
East		227		100,547		442.9		175		78,621		449.3		30	%		28	%		(1	%)
Total		1,293	$	575,722	$	445.3		1,080	$	454,740	$	421.1		20	%		27	%		6	%

	Nine Months Ended September 30,
	2016						2015						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		582	$	170,352	$	292.7		543	$	160,011	$	294.7		7	%		6	%		(1	%)
California		512		319,116		623.3		486		243,407		500.8		5	%		31	%		24	%)
Nevada		432		149,861		346.9		404		147,788		365.8		7	%		1	%		(5	%)
Washington		234		106,665		455.8		190		73,055		384.5		23	%		46	%		19	%
West		1,760		745,994		423.9		1,623		624,261		384.6		8	%		20	%		10	%
Colorado		945		463,534		490.5		843		392,779		465.9		12	%		18	%		5	%
Utah		145		53,238		367.2		95		33,600		353.7		53	%		58	%		4	%
Mountain		1,090		516,772		474.1		938		426,379		454.6		16	%		21	%		4	%
Maryland		178		84,742		476.1		168		78,980		470.1		6	%		7	%		1	%
Virginia		193		98,572		510.7		170		82,755		486.8		14	%		19	%		5	%
Florida		251		95,257		379.5		216		81,082		375.4		16	%		17	%		1	%
East		622		278,571		447.9		554		242,817		438.3		12	%		15	%		2	%
Total		3,472	$	1,541,337	$	443.9		3,115	$	1,293,457	$	415.2		11	%		19	%		7	%

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Net New Orders

	Three Months Ended September 30,
	2016								2015								% 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		225	$	68,611	$	304.9		2.56		214	$	60,274	$	281.7		2.15		5	%		14	%		8	%		19	%
California		260		154,113		592.7		4.08		184		118,943		646.4		3.07		41	%		30	%		(8	%)		33	%
Nevada		175		59,068		337.5		2.75		110		40,196		365.4		2.99		59	%		47	%		(8	%)		(8	%)
Washington		83		38,400		462.7		2.26		93		40,260		432.9		2.25		(11	%)		(5	%)		7	%		0	%
West		743		320,192		430.9		2.95		601		259,673		432.1		2.53		24	%		23	%		(0	%)		17	%
Colorado		321		147,984		461.0		3.82		273		129,221		473.3		2.39		18	%		15	%		(3	%)		60	%
Utah		35		14,979		428.0		1.41		48		17,282		360.0		2.21		(27	%)		(13	%)		19	%		(36	%)
Mountain		356		162,963		457.8		3.27		321		146,503		456.4		2.36		11	%		11	%		0	%		39	%
Maryland		50		23,125		462.5		1.42		53		26,667		503.2		1.81		(6	%)		(13	%)		(8	%)		(22	%)
Virginia		52		27,270		524.4		2.04		48		22,812		475.3		2.21		8	%		20	%		10	%		(8	%)
Florida		95		36,711		386.4		1.74		86		33,393		388.3		1.98		10	%		10	%		(0	%)		(12	%)
East		197		87,106		442.2		1.71		187		82,872		443.2		1.98		5	%		5	%		(0	%)		(14	%)
Total		1,296	$	570,261	$	440.0		2.72		1,109	$	489,048	$	441.0		2.37		17	%		17	%		(0	%)		15	%

	Nine Months Ended September 30,
	2016								2015								% 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		684	$	209,013	$	305.6		2.52		689	$	195,546	$	283.8		2.20		(1	%)		7	%		8	%		15	%
California		797		479,030		601.0		4.36		696		402,701		578.6		3.79		15	%		19	%		4	%		15	%
Nevada		634		224,168		353.6		3.31		487		185,313		380.5		4.19		30	%		21	%		(7	%)		(21	%)
Washington		325		156,962		483.0		2.82		314		133,197		424.2		2.66		4	%		18	%		14	%		6	%
West		2,440		1,069,173		438.2		3.20		2,186		916,757		419.4		2.99		12	%		17	%		4	%		7	%
Colorado		1,227		585,152		476.9		4.00		1,173		557,372		475.2		3.19		5	%		5	%		0	%		25	%
Utah		178		68,199		383.1		2.47		177		64,426		364.0		2.89		1	%		6	%		5	%		(15	%)
Mountain		1,405		653,351		465.0		3.71		1,350		621,798		460.6		3.15		4	%		5	%		1	%		18	%
Maryland		208		98,703		474.5		1.89		181		89,213		492.9		2.14		15	%		11	%		(4	%)		(12	%)
Virginia		210		110,047		524.0		2.75		163		80,588		494.4		2.11		29	%		37	%		6	%		30	%
Florida		325		136,220		419.1		2.19		303		112,895		372.6		2.34		7	%		21	%		12	%		(6	%)
East		743		344,970		464.3		2.22		647		282,696		436.9		2.22		15	%		22	%		6	%		0	%
Total		4,588	$	2,067,494	$	450.6		3.11		4,183	$	1,821,251	$	435.4		2.88		10	%		14	%		3	%		8	%

* 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

								Average Active Subdivisions							Average Active Subdivisions
	Active Subdivisions							Three Months Ended							Nine Months Ended
	September 30,				%			September 30,				%			September 30,				%
	2016		2015		Change			2016		2015		Change			2016		2015		Change
Arizona		30		31		(3	%)		29		33		(12	%)		30		35		(14	%)
California		21		19		11	%		21		20		5	%		20		20		0	%
Nevada		20		15		33	%		21		12		75	%		21		13		62	%
Washington		14		14		0	%		12		14		(14	%)		13		13		0	%
West		85		79		8	%		83		79		5	%		84		81		4	%
Colorado		28		37		(24	%)		28		38		(26	%)		34		41		(17	%)
Utah		9		8		13	%		8		7		14	%		8		7		14	%
Mountain		37		45		(18	%)		36		45		(20	%)		42		48		(13	%)
Maryland		11		10		10	%		12		10		20	%		12		9		33	%
Virginia		8		8		0	%		9		7		29	%		9		9		0	%
Florida		18		15		20	%		18		15		20	%		17		14		21	%
East		37		33		12	%		39		32		22	%		38		32		19	%
Total		159		157		1	%		158		156		1	%		164		161		2	%

Backlog

	September 30,
	2016						2015						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		423	$	132,929	$	314.3		377	$	109,735	$	291.1		12	%		21	%		8	%
California		627		389,622		621.4		402		253,814		631.4		56	%		54	%		(2	%)
Nevada		397		139,731		352.0		238		94,815		398.4		67	%		47	%		(12	%)
Washington		270		133,367		494.0		179		79,175		442.3		51	%		68	%		12	%
West		1,717		795,649		463.4		1,196		537,539		449.4		44	%		48	%		3	%
Colorado		1,104		530,662		480.7		909		434,371		477.9		21	%		22	%		1	%
Utah		141		53,180		377.2		122		43,551		357.0		16	%		22	%		6	%
Mountain		1,245		583,842		468.9		1,031		477,922		463.6		21	%		22	%		1	%
Maryland		120		56,837		473.6		81		42,999		530.9		48	%		32	%		(11	%)
Virginia		118		64,228		544.3		83		42,494		512.0		42	%		51	%		6	%
Florida		248		111,499		449.6		196		78,900		402.6		27	%		41	%		12	%
East		486		232,564		478.5		360		164,393		456.6		35	%		41	%		5	%
Total		3,448	$	1,612,055	$	467.5		2,587	$	1,179,854	$	456.1		33	%		37	%		2	%

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Homes Completed or Under Construction (WIP lots)

	September 30,				%
	2016		2015		Change
Unsold:
Completed		81		221		(63	%)
Under construction		298		403		(26	%)
Total unsold started homes		379		624		(39	%)
Sold homes under construction or completed		2,626		1,947		35	%
Model homes		293		273		7	%
Total homes completed or under construction		3,298		2,844		16	%

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

	September 30, 2016						September 30, 2015
	Lots Owned		Lots Optioned		Total		Lots Owned		Lots Optioned		Total		Total % Change
Arizona		1,515		269		1,784		1,778		205		1,983		(10	%)
California		1,753		75		1,828		1,726		222		1,948		(6	%)
Nevada		2,051		200		2,251		1,938		439		2,377		(5	%)
Washington		853		-		853		842		37		879		(3	%)
West		6,172		544		6,716		6,284		903		7,187		(7	%)
Colorado		4,051		1,347		5,398		4,208		1,036		5,244		3	%
Utah		380		-		380		496		-		496		(23	%)
Mountain		4,431		1,347		5,778		4,704		1,036		5,740		1	%
Maryland		261		143		404		383		304		687		(41	%)
Virginia		429		15		444		693		163		856		(48	%)
Florida		962		455		1,417		1,014		293		1,307		8	%
East		1,652		613		2,265		2,090		760		2,850		(21	%)
Total		12,255		2,504		14,759		13,078		2,699		15,777		(6	%)

M.D.C. HOLDINGS, INC.

Other Financial Data

Selling, General and Administrative Expense

	Three Months Ended September 30,									Nine Months Ended September 30,
	2016			2015			Change			2016			2015			Change
	(Dollars in thousands)
General and administrative expenses	$	27,758		$	29,694		$	(1,936	)	$	90,638		$	81,984		$	8,654
General and administrative expenses as a percentage of home sale revenues		4.8	%		6.5	%	(170) bps				5.9	%		6.3	%	(40) bps

Marketing expenses	$	15,262		$	12,548		$	2,714		$	41,728		$	37,866		$	3,862
Marketing expenses as a percentage of home sale revenues		2.7	%		2.8	%	(10) bps				2.7	%		2.9	%	(20) bps

Commissions expenses	$	18,884		$	15,202		$	3,682		$	50,255		$	42,907		$	7,348
Commissions expenses as a percentage of home sale revenues		3.3	%		3.3	%	0 bps				3.3	%		3.3	%	0 bps

Total selling, general and administrative expenses	$	61,904		$	57,444		$	4,460		$	182,621		$	162,757		$	19,864
Total selling, general and administrative expenses as a percentage of home sale revenues (SG&A Rate)		10.8	%		12.6	%	(180) bps				11.8	%		12.6	%	(80) bps

Capitalized Interest

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
	(Dollars in thousands)
Homebuilding interest incurred	$	13,187		$	13,265		$	39,511		$	39,821
Less: Interest capitalized		(13,187	)		(13,265	)		(39,511	)		(39,821	)
Homebuilding interest expensed	$	-		$	-		$	-		$	-

Interest capitalized, beginning of period	$	77,150		$	78,857		$	77,541		$	79,231
Plus: Interest capitalized during period		13,187			13,265			39,511			39,821
Less: Previously capitalized interest included in home and land cost of sales		(15,922	)		(12,878	)		(42,637	)		(39,808	)
Interest capitalized, end of period	$	74,415		$	79,244		$	74,415		$	79,244

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M.D.C. HOLDINGS, INC. Reports