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.	mdc20170728_8k.htm

Exhibit 99.1

M.D.C. HOLDINGS, INC.

News Release

M.D.C. HOLDINGS ANNOUNCES 2017 SECOND QUARTER RESULTS

DENVER, COLORADO, Tuesday, August 1, 2017. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended June 30, 2017.

2017 Second Quarter Highlights and Comparisons to 2016 Second Quarter

●

Net income up 26% to $33.9 million, or $0.64 per diluted share, from $26.9 million or $0.52 per diluted share*

●

Home sale revenues up 13% to $647.6 million from $571.2 million

●

Selling, general and administrative expenses as a percentage of home sale revenues (“SG&A rate”) improved 40 basis points from 11.3% to 10.9%

●

Dollar value of net new orders of $710.6 million versus $722.5 million

Monthly sales absorption pace of 3.41 improved 2%

●

Ending backlog dollar value up 4% to $1.68 billion from $1.61 billion

●

Approved 3,342 lots for purchase in 44 communities

●

Last twelve months return on equity improved 340 basis points to 9.3%

*Per share amount for 2016 second quarter has been adjusted for the 5% stock dividend declared and paid in the 2016 fourth quarter.

Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “We are pleased to announce our 2017 second quarter results, highlighted by a 26% year-over-year increase in our net income. For the second consecutive quarter, we realized a year-over-year improvement in our backlog conversion rate, which helped to drive a double-digit increase in home sale revenues and improved operating leverage. The improved backlog conversion rate was achieved based on stabilizing build-to-order construction cycle times, which decreased sequentially for the first time in almost two years.”

Mr. Mizel continued, “Income for both our homebuilding and financial services operations increased for the 2017 second quarter, driving a seventh consecutive quarter of improvement to our last twelve months return on equity, which expanded by 340 basis points year-over-year. We achieved this improvement without losing focus on the balance sheet, which features a unique combination of low leverage, carefully managed exposure to homebuilding assets, and liquidity of nearly $1.0 billion.”

Mr. Mizel concluded, “With our returns rising, we have focused increasingly on sourcing new communities to drive future growth for our core homebuilding business. In the second quarter alone, we approved more than 3,300 lots for acquisition, far exceeding the activity for any other quarter in the past three years. Our acquisition activities have maintained a focus on affordability, given the success of our more affordable Seasons^TM product line, which is now selling in four states and accounted for just over 10% of total net new orders in the quarter. Overall, our outlook for the homebuilding industry remains positive, supported by a solid macroeconomic environment and favorable dynamics in the balance between housing supply and demand.”

Homebuilding

Home sale revenues for the 2017 second quarter increased 13% to $647.6 million, primarily driven by an 11% increase in deliveries, which was mostly the result of an 8% year-over-year increase in our homes in beginning backlog coupled with a 100 basis point improvement in our backlog conversion rate.

For the 2017 second quarter, our gross margin from home sales percentage was 16.8%, a 40 basis point improvement from 16.4% in the prior year period. Our 2016 second quarter included $1.6 million, or 30 basis points, of inventory impairments while our 2017 second quarter included no such inventory impairments.

Selling, general and administrative expenses for the 2017 second quarter were $70.7 million, up $6.3 million from $64.4 million for the same period in 2016 primarily due to increased compensation-related expenses driven by higher average headcount. Our SG&A rate improved by 40 basis points to 10.9% for the 2017 second quarter from 11.3% in the 2016 second quarter. This decrease in our SG&A rate was primarily the result of an increased ability to leverage our fixed overhead as a result of our increase in home sale revenues.

The dollar value of net new orders for the 2017 second quarter decreased 2% year-over-year to $710.6 million, as a 4% decline in our average active community count was partly offset by a 2% increase in our monthly sales absorption pace.

Our backlog value at the end of the 2017 second quarter was up 4% year-over-year to $1.68 billion. The improvement was due to both a 2% increase in the number of units in backlog and a 2% increase in the average selling price. The increase in the number of units in backlog was driven by strong sales activity during the past twelve months. Price increases implemented in the past twelve months drove the increase in average selling price, but the price increases were slightly offset by the lower selling price of our more affordable homes.

Financial Services

Income before taxes for our financial services operations for the 2017 second quarter was $11.7 million, a $2.7 million increase from $9.1 million in the 2016 second quarter. This improvement was due to increased profitability in our mortgage operations segment as a 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 originated. In addition, we realized higher income before taxes from our other financial services subsidiaries as a result of the increase in new home deliveries.

Income Taxes

For the three months ended June 30, 2017 and 2016, we had effective income tax rates of 34.7% and 33.5%, respectively. The year-over-year increase in our effective tax rate was primarily the result of our estimate of the full year effective tax rate for 2016 including an estimate for energy credits whereas our estimate for the 2017 full year includes no such energy credit as the credit has not been approved by the U.S. Congress.

About MDC

M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding subsidiaries, which operate under the name Richmond American Homes, have built and financed the American Dream for more than 190,000 homebuyers since 1977. 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, Northern Colorado, 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. MDC'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. MDC’s stock 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 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 June 30, 2017, 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						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
	(Dollars in thousands, except per share amounts)
	(Unaudited)
Homebuilding:
Home sale revenues	$	647,620		$	571,195		$	1,211,099		$	965,615
Land sale revenues		1,351			316			1,598			2,640
Total home and land sale revenues		648,971			571,511			1,212,697			968,255
Home cost of sales		(539,077	)		(475,836	)		(1,008,019	)		(805,862	)
Land cost of sales		(1,202	)		(216	)		(1,413	)		(1,879	)
Inventory impairments		-			(1,600	)		(4,850	)		(1,600	)
Total cost of sales		(540,279	)		(477,652	)		(1,014,282	)		(809,341	)
Gross margin		108,692			93,859			198,415			158,914
Selling, general and administrative expenses		(70,709	)		(64,440	)		(137,007	)		(120,717	)
Interest and other income		2,847			2,553			5,174			3,489
Other expense		(666	)		(278	)		(1,017	)		(905	)
Other-than-temporary impairment of marketable securities		(1	)		(288	)		(51	)		(719	)
Homebuilding pretax income		40,163			31,406			65,514			40,062

Financial Services:
Revenues		19,073			15,823			37,052			26,840
Expenses		(8,500	)		(7,543	)		(16,398	)		(13,784	)
Interest and other income		1,238			772			2,217			1,613
Other-than-temporary impairment of marketable securities		(80	)		-			(131	)		-
Financial services pretax income		11,731			9,052			22,740			14,669

Income before income taxes		51,894			40,458			88,254			54,731
Provision for income taxes		(18,023	)		(13,545	)		(32,134	)		(18,255	)
Net income	$	33,871		$	26,913		$	56,120		$	36,476

Other comprehensive income related to available for sale securities, net of tax		1,944			895			3,930			2,843
Comprehensive income	$	35,815		$	27,808		$	60,050		$	39,319

Earnings per share:
Basic	$	0.65		$	0.52		$	1.09		$	0.71
Diluted	$	0.64		$	0.52		$	1.07		$	0.71

Weighted average common shares outstanding
Basic		51,514,309			51,293,917			51,428,079			51,281,643
Diluted		52,444,123			51,304,829			52,065,968			51,291,359

Dividends declared per share	$	0.25		$	0.24		$	0.50		$	0.48

M.D.C HOLDINGS, INC.

Consolidated Balance Sheets

	June 30,		December 31,
	2017		2016
ASSETS	(Dollars in thousands, except
	per share amounts)
	(Unaudited)
Homebuilding:
Cash and cash equivalents	$	314,814	$	259,087
Marketable securities		65,268		59,770
Restricted cash		5,027		3,778
Trade and other receivables		37,747		42,492
Inventories:
Housing completed or under construction		909,911		874,199
Land and land under development		846,825		884,615
Total inventories		1,756,736		1,758,814
Property and equipment, net		27,194		28,041
Deferred tax asset, net		62,446		74,888
Metropolitan district bond securities (related party)		31,864		30,162
Prepaid and other assets		67,009		60,463
Total homebuilding assets		2,368,105		2,317,495
Financial Services:
Cash and cash equivalents		23,162		23,822
Marketable securities		38,666		36,436
Mortgage loans held-for-sale, net		95,283		138,774
Other assets		11,195		12,062
Total financial services assets		168,306		211,094
Total Assets	$	2,536,411	$	2,528,589
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	48,327	$	42,088
Accrued liabilities		148,199		144,566
Revolving credit facility		15,000		15,000
Senior notes, net		842,232		841,646
Total homebuilding liabilities		1,053,758		1,043,300
Financial Services:
Accounts payable and accrued liabilities		49,873		50,734
Mortgage repurchase facility		69,127		114,485
Total financial services liabilities		119,000		165,219
Total Liabilities		1,172,758		1,208,519
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; 51,862,230 and 51,485,090 issued and outstanding at June 30, 2017 and December 31, 2016, respectively		519		515
Additional paid-in-capital		992,870		983,532
Retained earnings		344,263		313,952
Accumulated other comprehensive income		26,001		22,071
Total Stockholders' Equity		1,363,653		1,320,070
Total Liabilities and Stockholders' Equity	$	2,536,411	$	2,528,589

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
	(Dollars in thousands)
	(Unaudited)
Operating Activities:
Net income	$	33,871		$	26,913		$	56,120		$	36,476
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense		1,443			3,176			2,038			6,163
Depreciation and amortization		1,376			1,294			2,704			2,367
Inventory impairments		-			1,600			4,850			1,600
Other-than-temporary impairment of marketable securities		81			288			182			719
Gain on sale of marketable securities		(1,197	)		(1,177	)		(1,758	)		(262	)
Deferred income tax expense		6,813			6,085			10,033			7,873
Net changes in assets and liabilities:
Restricted cash		(798	)		(597	)		(1,249	)		(196	)
Trade and other receivables		(1,907	)		(10,984	)		5,419			(26,235	)
Mortgage loans held-for-sale		2,090			(36,506	)		43,491			(3,029	)
Housing completed or under construction		(18,841	)		(71,448	)		(39,707	)		(186,805	)
Land and land under development		8,491			54,390			37,521			122,701
Prepaid expenses and other assets		(5,195	)		(3,886	)		(7,602	)		(2,975	)
Accounts payable and accrued liabilities		774			23,751			8,845			19,517
Net cash provided by (used in) operating activities		27,001			(7,101	)		120,887			(22,086	)

Investing Activities:
Purchases of marketable securities		(6,682	)		(9,944	)		(12,043	)		(15,426	)
Sales of marketable securities		6,467			30,165			11,450			50,765
Purchases of property and equipment		(242	)		(1,173	)		(1,364	)		(3,117	)
Net cash provided by (used in) investing activities		(457	)		19,048			(1,957	)		32,222

Financing Activities:
Advances (payments) on mortgage repurchase facility, net		(1,415	)		33,076			(45,358	)		4,686
Dividend payments		(12,912	)		(12,252	)		(25,809	)		(24,504	)
Proceeds from exercise of stock options		5,697			-			7,304			-
Net cash used in financing activities		(8,630	)		20,824			(63,863	)		(19,818	)

Net increase (decrease) in cash and cash equivalents		17,914			32,771			55,067			(9,682	)
Cash and cash equivalents:
Beginning of period		320,062			138,535			282,909			180,988
End of period	$	337,976		$	171,306		$	337,976		$	171,306

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

New Home Deliveries

	Three Months Ended June 30,
	2017						2016						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		212	$	68,943	$	325.2		201	$	60,976	$	303.4		5	%		13	%		7	%
California		210		131,746		627.4		192		117,985		614.5		9	%		12	%		2	%
Nevada		215		75,687		352.0		148		51,834		350.2		45	%		46	%		1	%
Washington		91		47,382		520.7		85		39,236		461.6		7	%		21	%		13	%
West		728		323,758		444.7		626		270,031		431.4		16	%		20	%		3	%
Colorado		414		203,141		490.7		353		172,100		487.5		17	%		18	%		1	%
Utah		48		19,864		413.8		51		17,935		351.7		(6	)%		11	%		18	%
Mountain		462		223,005		482.7		404		190,035		470.4		14	%		17	%		3	%
Maryland		64		27,760		433.8		83		41,639		501.7		(23	)%		(33	)%		(14	)%
Virginia		53		32,365		610.7		75		38,623		515.0		(29	)%		(16	)%		19	%
Florida		105		40,732		387.9		84		30,867		367.5		25	%		32	%		6	%
East		222		100,857		454.3		242		111,129		459.2		(8	)%		(9	)%		(1	)%
Total		1,412	$	647,620	$	458.7		1,272	$	571,195	$	449.1		11	%		13	%		2	%

	Six Months Ended June 30,
	2017						2016						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		400	$	124,619	$	311.5		361	$	106,038	$	293.7		11	%		18	%		6	%
California		439		268,229		611.0		317		193,515		610.5		38	%		39	%		0	%
Nevada		402		141,820		352.8		255		90,260		354.0		58	%		57	%		(0	)%
Washington		192		98,170		511.3		159		71,593		450.3		21	%		37	%		14	%
West		1,433		632,838		441.6		1,092		461,406		422.5		31	%		37	%		5	%
Colorado		750		363,328		484.4		602		293,675		487.8		25	%		24	%		(1	)%
Utah		81		32,568		402.1		90		32,510		361.2		(10	)%		0	%		11	%
Mountain		831		395,896		476.4		692		326,185		471.4		20	%		21	%		1	%
Maryland		99		44,363		448.1		117		57,445		491.0		(15	)%		(23	)%		(9	)%
Virginia		103		58,894		571.8		115		58,777		511.1		(10	)%		0	%		12	%
Florida		202		79,108		391.6		163		61,802		379.2		24	%		28	%		3	%
East		404		182,365		451.4		395		178,024		450.7		2	%		2	%		0	%
Total		2,668	$	1,211,099	$	453.9		2,179	$	965,615	$	443.1		22	%		25	%		2	%

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Net New Orders

	Three Months Ended June 30,
	2017								2016								% 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		230	$	75,049	$	326.3		2.89		236	$	70,699	$	299.6		2.62		(3	)%		6	%		9	%		10	%
California		234		143,208		612.0		4.59		308		177,934		577.7		5.33		(24	)%		(20	)%		6	%		(14	)%
Nevada		267		92,407		346.1		4.45		230		80,263		349.0		3.48		16	%		15	%		(1	)%		28	%
Washington		127		68,876		542.3		4.34		118		55,934		474.0		3.42		8	%		23	%		14	%		27	%
West		858		379,540		442.4		3.90		892		384,830		431.4		3.59		(4	)%		(1	)%		3	%		9	%
Colorado		458		215,472		470.5		3.59		413		192,543		466.2		4.02		11	%		12	%		1	%		(11	)%
Utah		67		29,046		433.5		3.19		77		28,057		364.4		3.21		(13	)%		4	%		19	%		(1	)%
Mountain		525		244,518		465.7		3.54		490		220,600		450.2		3.87		7	%		11	%		3	%		(9	)%
Maryland		32		14,819		463.1		1.19		69		31,918		462.6		1.67		(54	)%		(54	)%		0	%		(29	)%
Virginia		63		32,790		520.5		4.20		73		36,892		505.4		2.95		(14	)%		(11	)%		3	%		42	%
Florida		120		38,940		324.5		2.05		122		48,236		395.4		2.32		(2	)%		(19	)%		(18	)%		(12	)%
East		215		86,549		402.6		2.14		264		117,046		443.4		2.23		(19	)%		(26	)%		(9	)%		(4	)%
Total		1,598	$	710,607	$	444.7		3.41		1,646	$	722,476	$	438.9		3.34		(3	)%		(2	)%		1	%		2	%

	Six Months Ended June 30,
	2017								2016								% 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		446	$	143,119	$	320.9		2.86		459	$	139,785	$	304.5		2.49		(3	)%		2	%		5	%		15	%
California		477		298,621		626.0		4.31		537		321,162		598.1		4.54		(11	)%		(7	)%		5	%		(5	)%
Nevada		562		192,898		343.2		4.65		459		160,074		348.7		3.57		22	%		21	%		(2	)%		30	%
Washington		266		144,368		542.7		4.14		242		116,073		479.6		3.17		10	%		24	%		13	%		31	%
West		1,751		779,006		444.9		3.88		1,697		737,094		434.4		3.34		3	%		6	%		2	%		16	%
Colorado		959		456,162		475.7		3.93		906		428,747		473.2		4.11		6	%		6	%		1	%		(4	)%
Utah		123		52,616		427.8		2.52		143		52,629		368.0		3.03		(14	)%		(0	)%		16	%		(17	)%
Mountain		1,082		508,778		470.2		3.69		1,049		481,376		458.9		3.92		3	%		6	%		2	%		(6	)%
Maryland		83		37,189		448.1		1.49		158		74,068		468.8		2.09		(47	)%		(50	)%		(4	)%		(29	)%
Virginia		127		67,229		529.4		3.61		158		81,036		512.9		3.07		(20	)%		(17	)%		3	%		18	%
Florida		251		91,117		363.0		2.20		230		96,279		418.6		2.42		9	%		(5	)%		(13	)%		(9	)%
East		461		195,535		424.2		2.25		546		251,383		460.4		2.46		(16	)%		(22	)%		(8	)%		(9	)%
Total		3,294	$	1,483,319	$	450.3		3.47		3,292	$	1,469,853	$	446.5		3.30		0	%		1	%		1	%		5	%

* 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							Six Months Ended
	June 30,				%			June 30,				%			June 30,				%
	2017		2016		Change			2017		2016		Change			2017		2016		Change
Arizona		26		30		(13	)%		27		30		(10	)%		26		31		(16	)%
California		17		20		(15	)%		17		19		(11	)%		18		20		(10	)%
Nevada		18		22		(18	)%		20		22		(9	)%		20		21		(5	)%
Washington		9		10		(10	)%		10		12		(17	)%		11		13		(15	)%
West		70		82		(15	)%		74		83		(11	)%		75		85		(12	)%
Colorado		44		28		57	%		43		34		26	%		41		37		11	%
Utah		6		8		(25	)%		7		8		(13	)%		8		8		0	%
Mountain		50		36		39	%		50		42		19	%		49		45		9	%
Maryland		9		13		(31	)%		9		14		(36	)%		9		13		(31	)%
Virginia		5		9		(44	)%		5		8		(38	)%		6		9		(33	)%
Florida		19		19		0	%		20		18		11	%		19		16		19	%
East		33		41		(20	)%		34		40		(15	)%		34		38		(11	)%
Total		153		159		(4	)%		158		165		(4	)%		158		168		(6	)%

Backlog

	At June 30,
	2017						2016						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		368	$	125,097	$	339.9		419	$	129,591	$	309.3		(12	)%		(3	)%		10	%
California		519		347,822		670.2		562		360,450		641.4		(8	)%		(4	)%		4	%
Nevada		467		160,349		343.4		399		138,604		347.4		17	%		16	%		(1	)%
Washington		311		169,045		543.6		262		127,968		488.4		19	%		32	%		11	%
West		1,665		802,313		481.9		1,642		756,613		460.8		1	%		6	%		5	%
Colorado		1,173		571,956		487.6		1,126		546,356		485.2		4	%		5	%		0	%
Utah		146		62,225		426.2		161		59,133		367.3		(9	)%		5	%		16	%
Mountain		1,319		634,181		480.8		1,287		605,489		470.5		2	%		5	%		2	%
Maryland		76		38,329		504.3		131		61,623		470.4		(42	)%		(38	)%		7	%
Virginia		135		70,384		521.4		144		76,278		529.7		(6	)%		(8	)%		(2	)%
Florida		315		132,628		421.0		241		107,679		446.8		31	%		23	%		(6	)%
East		526		241,341		458.8		516		245,580		475.9		2	%		(2	)%		(4	)%
Total		3,510	$	1,677,835	$	478.0		3,445	$	1,607,682	$	466.7		2	%		4	%		2	%

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Homes Completed or Under Construction (WIP lots)

	June 30,				%
	2017		2016		Change
Unsold:
Completed		77		100		(23	)%
Under construction		153		263		(42	)%
Total unsold started homes		230		363		(37	)%
Sold homes under construction or completed		2,547		2,535		0	%
Model homes under construction or completed		316		289		9	%
Total homes completed or under construction		3,093		3,187		(3	)%

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

	June 30, 2017						June 30, 2016
	Lots Owned		Lots Optioned		Total		Lots Owned		Lots Optioned		Total		Total % Change
Arizona		1,794		553		2,347		1,565		259		1,824		29	%
California		1,491		502		1,993		1,834		79		1,913		4	%
Nevada		1,709		907		2,616		2,087		67		2,154		21	%
Washington		671		49		720		816		35		851		(15	)%
West		5,665		2,011		7,676		6,302		440		6,742		14	%
Colorado		4,684		1,934		6,618		3,937		1,423		5,360		23	%
Utah		302		123		425		424		-		424		0	%
Mountain		4,986		2,057		7,043		4,361		1,423		5,784		22	%
Maryland		142		69		211		297		168		465		(55	)%
Virginia		283		37		320		498		107		605		(47	)%
Florida		928		916		1,844		1,038		512		1,550		19	%
East		1,353		1,022		2,375		1,833		787		2,620		(9	)%
Total		12,004		5,090		17,094		12,496		2,650		15,146		13	%

M.D.C. HOLDINGS, INC.

Other Financial Data

Selling, General and Administrative Expense

	Three Months Ended June 30,								Six Months Ended June 30,
	2017			2016			Change		2017			2016			Change
	(Dollars in thousands)
General and administrative expenses	$	32,292		$	31,414		$	878	$	64,661		$	62,880		$	1,781
General and administrative expense as a percentage of home sale revenues		5.0	%		5.5	%	(50) bps			5.3	%		6.5	%	(120) bps

Marketing expenses	$	16,976		$	14,433		$	2,543	$	32,100		$	26,466		$	5,634
Marketing expenses as a percentage of home sale revenues		2.6	%		2.5	%	10 bps			2.7	%		2.7	%	0 bps

Commissions expenses	$	21,441		$	18,593		$	2,848	$	40,246		$	31,371		$	8,875
Commissions expenses as a percentage of home sale revenues		3.3	%		3.3	%	0 bps			3.3	%		3.2	%	10 bps

Total selling, general and administrative expenses	$	70,709		$	64,440		$	6,269	$	137,007		$	120,717		$	16,290
Total selling, general and administrative expenses as a percentage of home sale revenues		10.9	%		11.3	%	(40) bps			11.3	%		12.5	%	(120) bps

Capitalized Interest

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
	(Dollars in thousands)
Homebuilding interest incurred	$	13,194		$	13,106		$	26,382		$	26,324
Less: Interest capitalized		(13,194	)		(13,106	)		(26,382	)		(26,324	)
Homebuilding interest expensed	$	-		$	-		$	-		$	-

Interest capitalized, beginning of period	$	66,076		$	79,783		$	68,085		$	77,541
Plus: Interest capitalized during period		13,194			13,106			26,382			26,324
Less: Previously capitalized interest included in home and land cost of sales		(17,179	)		(15,739	)		(32,376	)		(26,715	)
Interest capitalized, end of period	$	62,091		$	77,150		$	62,091		$	77,150

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M.D.C. HOLDINGS, INC. Reports