M.D.C. (MDC) 8-K M.D.C. Holdings Announces Second Quarter 2010 Results

Exhibit 99.1

NEWS BULLETIN

M.D.C. HOLDINGS, INC.

FOR IMMEDIATE RELEASE

FRIDAY, JULY 30, 2010

Contact:	Robert N. Martin
	Investor Relations (720) 977-3431 bob.martin@mdch.com

M.D.C. HOLDINGS ANNOUNCES SECOND QUARTER 2010 RESULTS

• Closings increased 71% to 1,135 homes

• Net orders increased 4% to 1,015 homes

• Loss per share improved to $0.08 vs. loss of $0.64 in Q2 2009

• Secured control of 2,160 lots; 36 new communities

• Backlog increased 18% to 1,114 homes at 6/30/10

DENVER, Friday, July 30, 2010—M.D.C. Holdings, Inc. (NYSE: MDC) today reported a net loss for the 2010 second quarter of $3.7 million, or $0.08 per share, compared with a net loss for the 2009 second quarter of $29.6 million, or $0.64 per share. The improvement in operating results was driven primarily by an increase in home closings.

For the six months ended June 30, 2010, net loss was $24.6 million, or $0.53 per diluted share, compared with a net loss for the six months ended June 30, 2009 of $70.4 million, or $1.52 per diluted share.

Management Comments

Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “During the second quarter, we successfully executed a strategy designed to capture homebuyer demand in advance of the expiration of the federal homebuyer tax credit, resulting in an increase in our home orders year-over-year for the fifth consecutive quarter. In addition, we are pleased to report strong top-line growth, with revenues up 67% year-over-year on the strength of a 71% increase in home closings.”

1

Mizel continued, “Over the past twelve months, we have secured control of 157 new communities across the country, including 36 in the second quarter alone. These subdivisions provide us with a strong platform for future growth. However, our outlook remains cautious given the industry-wide slowdown in new home orders in the second quarter immediately following the expiration of the federal homebuyer tax credit and the uncertainty surrounding overall economic conditions.”

Mizel concluded, “With more than $1.6 billion in cash and investments at the end of the quarter, we are well-positioned to adapt to changing industry conditions. Even if homebuilding activity remains subdued, we will continue to focus our attention on long-term shareowner value through the pursuit and implementation of improvements to our business processes that will enhance our performance in the future.”

Highlights

Home closings for the second quarter ended June 30, 2010 improved to 1,135 homes with an average selling price of $274,300, compared with home closings of 665 units with an average selling price of $279,000 during the same period in 2009. The improvement in closings is attributable to a beginning backlog of 1,234 units compared to 629 units in backlog to begin the second quarter of 2009. Total revenue for the second quarter of 2010 was $326.3 million, compared with revenue of $195.3 million for the same period in 2009. The increase in revenue was primarily driven by a 71% increase in home closings, partially offset by the 2% year-over-year decrease in average selling price.

Net orders for the second quarter ended June 30, 2010 improved to 1,015 homes with an estimated sales value of $281 million, compared with net orders for 977 homes with an estimated sales value of $289 million during the same period in 2009. The improvement in net orders is attributable to a 25% increase in the average rate of sales per active community, partially offset by a 17% decline in the average number of active communities. During the second quarter of 2010, the Company’s cancellation rate increased to 25% compared with 20% during the same period in 2009. We ended the 2010 second quarter with 1,114 homes under contract with an estimated sales value of $351 million, compared with a backlog of 941 homes with an estimated sales value of $295 million at June 30, 2009.

Home gross margin in the 2010 second quarter was 18.1%, virtually unchanged as compared with 18.0% in the 2009 second quarter. However, excluding interest expense and warranty adjustments, home gross margin increased to 20.2% in the second quarter of 2010 as compared with 16.8% in the second quarter of 2009. The improvement was primarily the result of an increase in net option revenue, relative to home sales revenue, combined with a reduction in construction costs relative to home sales revenue. Both the increase in average upgrade revenue and the decrease in construction costs were driven by the Company’s efforts to build smaller, more efficient homes that can be personalized based on homebuyer preference. These improvements partially were offset by an increase in land costs relative to home sales revenue from 12.3% in the 2009 second quarter to 20.6% in the 2010 second quarter.

2

SG&A increased to $67.7 million for the quarter ended June 30, 2010, compared with $52.7 million for the same period in the prior year. The increase was driven primarily by an $8.2 million increase in marketing and commissions costs directly related to the increased closings, combined with a $6.8 million increase in general and administrative costs associated with increased salaries and benefits. No asset impairments were incurred during the quarter, compared with $1.2 million incurred in the second quarter of 2009.

About MDC

Since 1972, MDC’s subsidiary companies have built and financed the American dream for more than 160,000 families. 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 divisions across the country, including Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, California, Northern Virginia, Maryland, Philadelphia/Delaware Valley and Jacksonville. 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, and land and home values; (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) the relative stability of debt and equity markets; (6) competition; (7) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (8) the availability and cost of performance bonds and insurance covering risks associated with our business; (9) shortages and the cost of labor; (10) weather related slowdowns; (11) slow growth initiatives; (12) building moratoria; (13) governmental regulation, including the interpretation of tax, labor and environmental laws; (14) changes in consumer confidence and preferences; (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, 2010, 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 presentations should be consulted.

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M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Revenue
Home sales revenue	$	311,276		$	185,554		$	452,219		$	352,536
Land sales revenue		5,699			1,954			5,714			4,572
Other revenue		9,355			7,758			15,475			14,090
Total Revenue		326,330			195,266			473,408			371,198
Costs and Expenses
Home cost of sales		255,062			152,118			364,452			293,443
Land cost of sales		4,974			1,500			5,165			2,841
Asset impairments, net		—			1,243			—			15,812
Marketing expenses		11,475			7,930			18,535			16,762
Commission expenses		11,611			6,953			16,740			13,311
General and administrative expenses		44,588			37,800			84,791			76,181
Other operating expenses		529			292			1,020			557
Related party expenses		—			4			9			9
Total Operating Costs and Expenses		328,239			207,840			490,712			418,916
Loss from Operations		(1,909	)		(12,574	)		(17,304	)		(47,718	)
Other income (expense)
Interest income		7,541			2,968			11,969			7,039
Interest expense		(9,436	)		(9,838	)		(19,810	)		(19,578	)
Other income		105			381			204			121
Loss Before Taxes		(3,699	)		(19,063	)		(24,941	)		(60,136	)
Benefit from (provision for) income taxes, net		15			(10,519	)		384			(10,299	)
NET LOSS	$	(3,684	)	$	(29,582	)	$	(24,557	)	$	(70,435	)
LOSS PER SHARE
Basic	$	(0.08	)	$	(0.64	)	$	(0.53	)	$	(1.52	)
Diluted	$	(0.08	)	$	(0.64	)	$	(0.53	)	$	(1.52	)
DIVIDENDS DECLARED PER SHARE	$	0.25		$	0.25		$	0.50		$	0.50

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M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

	June 30, 2010			December 31, 2009
Assets
Cash and cash equivalents	$	692,132		$	1,234,252
Marketable securities		941,403			327,944
Restricted cash		713			476
Receivables
Home sales receivables		34,096			10,056
Income taxes receivable		641			145,144
Other receivables		17,412			5,844
Mortgage loans held-for-sale, net		112,065			62,315
Inventories, net
Housing completed or under construction		382,971			260,324
Land and land under development		370,352			262,860
Property and equipment, net		41,188			38,421
Deferred tax asset, net of valuation allowance of $217,455 and $208,144 at June 30, 2010 and December 31, 2009, respectively		—			—
Related party assets		7,856			7,856
Prepaid expenses and other assets, net		80,369			73,816
Total Assets	$	2,681,198		$	2,429,308
Liabilities
Accounts payable	$	51,888		$	36,087
Accrued liabilities		289,614			291,969
Related party liabilities		86			1,000
Mortgage repurchase facility		65,305			29,115
Senior notes, net		1,242,325			997,991
Total Liabilities		1,649,218			1,356,162
Commitments and Contingencies		—			—
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; 47,194,000 and 47,138,000 issued and outstanding, respectively, at June 30, 2010 and 47,070,000 and 47,017,000 issued and outstanding, respectively, at December 31, 2009		472			471
Additional paid-in-capital		810,929			802,675
Retained earnings		222,532			270,659
Accumulated other comprehensive loss		(1,294	)		—
Treasury stock, at cost; 56,000 and 53,000 shares at June 30, 2010 and December 31, 2009, respectively		(659	)		(659	)
Total Stockholders’ Equity		1,031,980			1,073,146
Total Liabilities and Stockholders' Equity	$	2,681,198		$	2,429,308

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M.D.C. HOLDINGS, INC.

Information on Segments

(Dollars in thousands)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
REVENUE
Homebuilding
West	$	123,193		$	81,758		$	180,330		$	156,440
Mountain		110,112			57,658			156,794			101,775
East		72,657			39,479			104,162			79,971
Other Homebuilding		16,757			13,117			25,793			26,800
Total Homebuilding		322,719			192,012			467,079			364,986
Financial Services and Other		9,143			7,006			14,764			12,569
Corporate		—			—			—			50
Inter-company adjustments		(5,532	)		(3,752	)		(8,435	)		(6,407	)
Consolidated	$	326,330		$	195,266		$	473,408		$	371,198
(LOSS) INCOME BEFORE INCOME TAXES
Homebuilding
West	$	6,357		$	10,075		$	8,711		$	(228	)
Mountain		4,962			(2,308	)		6,132			(7,119	)
East		1,455			(4,626	)		(64	)		(6,997	)
Other Homebuilding		295			(677	)		(224	)		(1,508	)
Total Homebuilding		13,069			2,464			14,555			(15,852	)
Financial Services and Other		4,089			2,615			5,935			4,236
Corporate		(20,857	)		(24,142	)		(45,431	)		(48,520	)
Consolidated	$	(3,699	)	$	(19,063	)	$	(24,941	)	$	(60,136	)
INVENTORY IMPAIRMENTS
West	$	—		$	(557	)	$	—		$	12,510
Mountain		—			—			—			254
East		—			1,725			—			2,475
Other Homebuilding		—			—			—			284
Consolidated	$	—		$	1,168		$	—		$	15,523
	June 30, 2010			December 31, 2009
TOTAL ASSETS
Homebuilding
West	$	300,848		$	190,204
Mountain		328,696			237,702
East		170,525			112,964
Other Homebuilding		36,457			26,778
Total Homebuilding		836,526			567,648
Financial Services and Other		183,478			133,957
Corporate		1,663,851			1,773,660
Inter-company adjustments		(2,657	)		(45,957	)
Consolidated	$	2,681,198		$	2,429,308

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M.D.C. HOLDINGS, INC.

Selected Financial Data

(Dollars in thousands)

(Unaudited)

	Three Months Ended June 30,						Change					Six Months Ended June 30,						Change
	2010			2009			Amount			%		2010			2009			Amount			%
SELECTED FINANCIAL DATA
General and Administrative Expenses
Homebuilding	$	20,489		$	15,906		$	4,583		29	%	$	38,215		$	31,685		$	6,530		21	%
Financial Services and Other		5,658			4,845		$	813		17	%		9,746			9,343		$	403		4	%
Corporate (1)		18,441			17,053		$	1,388		8	%		36,839			35,162		$	1,677		5	%
Total	$	44,588		$	37,804		$	6,784		18	%	$	84,800		$	76,190		$	8,610		11	%
SG&A as a % of Home Sales Revenue
Homebuilding Segments		14.0	%		16.6	%		-2.6	%				16.3	%		17.5	%		-1.2	%
Corporate Segment (1)		5.9	%		9.2	%		-3.3	%				8.1	%		10.0	%		-1.9	%
Depreciation and Amortization(2)	$	5,169		$	2,831		$	2,338		83	%	$	8,101		$	6,724		$	1,377		20	%
Home Gross Margins (3)		18.1	%		18.0	%		0.1	%				19.4	%		16.8	%		2.6	%
Interest in Home Cost of Sales as a % of Home Sales Revenue		-2.6	%		-4.7	%		2.1	%				-2.5	%		-4.7	%		2.2	%
Cash Provided by (Used in)
Operating Activities	$	(190,450	)	$	12,325		$	(202,775	)			$	(178,934	)	$	251,818		$	(430,752	)
Investing Activities	$	(116,380	)	$	(48,747	)	$	(67,633	)			$	(618,147	)	$	33,943		$	(652,090	)
Financing Activities	$	48,823		$	11,616		$	37,207				$	254,961		$	(30,664	)	$	285,625
Corporate and Homebuilding Interest
Interest capitalized, beginning of period	$	31,773		$	36,050		$	(4,277	)	-12	%	$	28,339		$	39,239		$	(10,900	)	-28	%
Interest capitalized, net of interest expense	$	8,849		$	4,700		$	4,149		88	%	$	15,485		$	9,544		$	5,941		62	%
Previously capitalized interest included in home cost of sales	$	(8,202	)	$	(8,661	)	$	459		-5	%	$	(11,404	)	$	(16,694	)	$	5,290		-32	%
Interest capitalized, end of period	$	32,420		$	32,089		$	331		1	%	$	32,420		$	32,089		$	331		1	%

⁽¹⁾ Includes related party expenses.

⁽²⁾ Includes depreciation and amortization of long-lived assets and amortization of deferred marketing costs.

⁽³⁾ Home sales revenue less home cost of sales (excluding commissions, amortization of deferred marketing, project cost write offs and asset impairments) as a percent of home sales revenue. During the three months ended June 30, 2010 and June 30, 2009, we closed homes on lots for which we had previously recorded $50.7 million and $47.4 million, respectively, of asset impairments. During the six months ended June 30, 2010 and June 30, 2009, we closed homes on lots for which we had previously recorded $81.7 million and $90.6 million, respectively, of asset impairments.

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M.D.C. HOLDINGS, INC.

Selected Financial Data

(Dollars in thousands)

(Unaudited)

	Three Months Ended June 30,						Change					Six Months Ended June 30,						Change
	2010			2009			Amount			%		2010			2009			Amount			%
HOMEAMERICAN OPERATING ACTIVITIES
Principal amount of mortgage loans originated	$	240,693		$	142,191		$	98,502		69	%	$	348,783		$	268,698		$	80,085		30	%
Principal amount of mortgage loans brokered	$	882		$	6,030		$	(5,148	)	-85	%	$	3,738		$	18,995		$	(15,257	)	-80	%
Capture Rate		87	%		82	%		5	%				86	%		80	%		6	%
Including brokered loans		88	%		85	%		3	%				87	%		85	%		2	%
Mortgage products (% of mortgage loans originated)
Fixed rate		97	%		100	%		-3	%				96	%		100	%		-4	%
Adjustable rate—other		3	%		0	%		3	%				4	%		0	%		4	%
Prime loans(4)		26	%		27	%		-1	%				25	%		34	%		-9	%
Government loans(5)		74	%		73	%		1	%				75	%		66	%		9	%

⁽⁴⁾ Prime loans generally are defined as loans with Fair, Isaac and Company (“FICO”) scores greater than 620 and that comply with the documentation standards of the government sponsored enterprise guidelines.

⁽⁵⁾ Government loans are loans either insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs.

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M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

(Dollars in thousands)

(Unaudited)

	June 30, 2010	December 31, 2009	June 30, 2009
HOMES COMPLETED OR UNDER CONSTRUCTION
Unsold Home Under Construction—Final	47	41	82
Unsold Home Under Construction—Frame	720	389	248
Unsold Home Under Construction—Foundation	124	109	122
Total Unsold Homes Under Construction	891	539	452
Sold Homes Under Construction	865	570	664
Model Homes	226	212	246
Homes Completed or Under Construction	1,982	1,321	1,362
LOTS OWNED (excluding homes completed or under construction)
Arizona	1,165	1,075	1,247
California	1,130	581	618
Nevada	681	966	936
West	2,976	2,622	2,801
Colorado	2,893	2,514	2,541
Utah	569	545	568
Mountain	3,462	3,059	3,109
Delaware Valley	55	82	101
Maryland	144	100	169
Virginia	371	241	210
East	570	423	480
Florida	184	138	213
Illinois	134	141	141
Other Homebuilding	318	279	354
Total	7,326	6,383	6,744

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M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

(Dollars in thousands)

(Unaudited)

	June 30, 2010		December 31, 2009		June 30, 2009
LOTS CONTROLLED UNDER OPTION
Arizona		499		328		416
California		152		113		145
Nevada		570		222		95
West		1,221		663		656
Colorado		644		537		157
Utah		156		117		12
Mountain		800		654		169
Delaware Valley		—		—		—
Maryland		655		575		409
Virginia		272		192		251
East		927		767		660
Florida		658		500		486
Illinois		—		—		—
Other Homebuilding		658		500		486
Total		3,606		2,584		1,971
NON-REFUNDABLE OPTION DEPOSITS
Cash	$	7,933	$	7,654	$	5,295
Letters of Credit		2,727		2,134		3,383
Total Non-Refundable Option Deposits	$	10,660	$	9,788	$	8,678

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M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

(Dollars in thousands)

(Unaudited)

		Three Months Ended June 30,				Change					Six Months Ended June 30,				Change
		2010		2009		Amount			%		2010		2009		Amount			%
HOMES CLOSED (UNITS)
Arizona			242		181		61		34	%		350		353		(3	)	-1	%
California			68		52		16		31	%		114		111		3		3	%
Nevada			221		114		107		94	%		319		188		131		70	%
West			531		347		184		53	%		783		652		131		20	%
Colorado			230		113		117		104	%		338		204		134		66	%
Utah			147		56		91		163	%		199		96		103		107	%
Mountain			377		169		208		123	%		537		300		237		79	%
Delaware Valley			12		11		1		9	%		16		30		(14	)	-47	%
Maryland			75		39		36		92	%		101		65		36		55	%
Virginia			68		45		23		51	%		108		86		22		26	%
East			155		95		60		63	%		225		181		44		24	%
Florida			72		44		28		64	%		113		93		20		22	%
Illinois			—		10		(10	)	-100	%		—		19		(19	)	-100	%
Other Homebuilding			72		54		18		33	%		113		112		1		1	%
Total			1,135		665		470		71	%		1,658		1,245		413		33	%
AVERAGE SELLING PRICES PER HOME CLOSED
Arizona		$	190.7	$	197.9	$	(7.2	)	-4	%	$	194.7	$	195.3	$	(0.6	)	0	%
California			444.7		414.0		30.7		7	%		407.3		405.6		1.7		0	%
Colorado			303.0		341.7		(38.7	)	-11	%		302.0		346.4		(44.4	)	-13	%
Delaware Valley			377.1		393.6		(16.5	)	-4	%		366.4		413.4		(47.0	)	-11	%
Florida			227.3		227.1		0.2		0	%		224.8		223.0		1.8		1	%
Illinois			—		312.1		N/A		N/A			—		316.0		N/A		N/A
Maryland			476.2		381.7		94.5		25	%		462.9		405.2		57.7		14	%
Nevada			187.2		210.3		(23.1	)	-11	%		187.8		207.4		(19.6	)	-9	%
Utah			274.7		301.5		(26.8	)	-9	%		274.4		300.3		(25.9	)	-9	%
Virginia			476.2		451.3		24.9		6	%		476.8		478.5		(1.7	)	0	%
Company Average	��	$	274.3	$	279.0	$	(4.7	)	-2	%	$	272.7	$	283.2	$	(10.5	)	-4	%

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M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

(Dollars in thousands)

(Unaudited)

	Three Months Ended June 30,						Change					Six Months Ended June 30,						Change
	2010			2009			Amount			%		2010			2009			Amount			%
ORDERS FOR HOMES, NET (UNITS)
Arizona		184			214			(30	)	-14	%		352			372			(20	)	-5	%
California		109			112			(3	)	-3	%		135			187			(52	)	-28	%
Nevada		195			153			42		27	%		365			248			117		47	%
West		488			479			9		2	%		852			807			45		6	%
Colorado		232			206			26		13	%		502			340			162		48	%
Utah		110			86			24		28	%		235			127			108		85	%
Mountain		342			292			50		17	%		737			467			270		58	%
Delaware Valley		2			19			(17	)	-89	%		16			33			(17	)	-52	%
Maryland		60			54			6		11	%		93			91			2		2	%
Virginia		76			61			15		25	%		142			117			25		21	%
East		138			134			4		3	%		251			241			10		4	%
Florida		47			64			(17	)	-27	%		106			122			(16	)	-13	%
Illinois		—			8			(8	)	-100	%		—			16			(16	)	-100	%
Other Homebuilding		47			72			(25	)	-35	%		106			138			(32	)	-23	%
Total		1,015			977			38		4	%		1,946			1,653			293		18	%
Estimated Value of Orders for Homes, net	$	281,000		$	289,000		$	(8,000	)	-3	%	$	539,000		$	480,000		$	59,000		12	%
Estimated Average Selling Price of Orders for Homes, net	$	276.8		$	295.8		$	(19.0	)	-6	%	$	277.0		$	290.4		$	(13.4	)	-5	%
Cancellation Rate(6)		25	%		20	%		5	%				24	%		22	%		2	%

⁽⁶⁾ We define “Cancellation Rate” as the approximate number of cancelled home order contracts during a reporting period as a percent of total home orders received during such reporting period.

12

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

(Dollars in thousands)

(Unaudited)

	June 30, 2010		December 31, 2009		June 30, 2009
BACKLOG (UNITS)
Arizona		105		103		177
California		97		76		125
Nevada		134		88		113
West		336		267		415
Colorado		371		207		208
Utah		130		94		73
Mountain		501		301		281
Delaware Valley		23		23		30
Maryland		95		103		84
Virginia		107		73		67
East		225		199		181
Florida		52		59		64
Illinois		—		—		—
Other Homebuilding		52		59		64
Total		1,114		826		941
Backlog Estimated Sales Value	$	351,000	$	265,000	$	295,000
Estimated Average Selling Price of Homes in Backlog	$	315.1	$	320.8	$	313.5
ACTIVE SUBDIVISIONS
Arizona		26		28		27
California		6		3		10
Nevada		15		18		19
West		47		49		56
Colorado		41		42		43
Utah		18		16		18
Mountain		59		58		61
Delaware Valley		1		1		1
Maryland		9		8		9
Virginia		9		7		7
East		19		16		17
Florida		9		10		8
Illinois		—		—		—
Other Homebuilding		9		10		8
Total		134		133		142
Average for quarter ended		133		134		160

13

M.D.C. HOLDINGS, INC.

Reconciliation of Non-GAAP Financial Measure

(Dollars in thousands)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Home Sales Revenue—As reported	$	311,276		$	185,554		$	452,219		$	352,536
Home Cost of Sales—As reported	$	255,062		$	152,118		$	364,452		$	293,443
Warranty Adjustments		(1,677	)		(10,904	)		(5,606	)		(14,547	)
Interest in Cost of Sales		8,202			8,661			11,404			16,694
Home Cost of Sales—Excluding Warranty Adjustments and Interest	$	248,537		$	154,361		$	358,654		$	307,990
Home Gross Margins—Excluding Warranty Adjustments and Interest(7)		20.2	%		16.8	%		20.7	%		12.6	%

⁽⁷⁾ Home Gross Margins excluding the impact of warranty adjustments and interest in cost of sales is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact that warranty adjustments and interest have on our Home Gross Margins.

14