Exhibit 12
M.D.C. HOLDINGS, INC.
RATIO OF (LOSS) EARNINGS TO FIXED CHARGES
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Nine Months Ended
September 30, | | | Three Months Ended
September 30, | | | Year Ended December 31, | |
| (dollars in 000’s) | | 2010 | | | 2009 | | | 2010 | | | 2009 | | | 2009 | | | 2008 | | | 2007 | | | 2006 | | | 2005 | |
Earnings (Loss) | | $ | 13,562 | | | $ | (30,279 | ) | | $ | 5,099 | | | $ | (10,449 | ) | | $ | (28,481 | ) | | $ | (299,317 | ) | | $ | (688,767 | ) | | $ | 405,396 | | | $ | 858,443 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed Charges | | $ | 56,967 | | | $ | 52,193 | | | $ | 19,482 | | | $ | 19,037 | | | $ | 67,954 | | | $ | 68,570 | | | $ | 70,529 | | | $ | 80,915 | | | $ | 67,459 | |
Earnings (Loss) to Fixed Charges | | $ | 0.24 | | | $ | (0.58 | ) | | $ | 0.26 | | | $ | (0.55 | ) | | $ | (0.42 | ) | | $ | (4.37 | ) | | $ | (9.77 | ) | | $ | 5.01 | | | $ | 12.73 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Loss) Earnings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Loss) Income before income taxes | | $ | (35,535 | ) | | $ | (91,954 | ) | | $ | (10,594 | ) | | $ | (31,818 | ) | | $ | (107,335 | ) | | $ | (382,135 | ) | | $ | (756,464 | ) | | $ | 333,137 | | | $ | 808,763 | |
Add: Fixed Charges | | | 56,967 | | | | 52,193 | | | | 19,482 | | | | 19,037 | | | | 67,954 | | | | 68,570 | | | | 70,529 | | | | 80,915 | | | | 67,459 | |
Less: Capitalized Interest | | | (24,855 | ) | | | (14,354 | ) | | | (9,370 | ) | | | (4,810 | ) | | | (19,810 | ) | | | (39,852 | ) | | | (57,791 | ) | | | (58,141 | ) | | | (51,872 | ) |
Add: Amortization of Previously Capitalized Interest | | | 16,985 | | | | 23,836 | | | | 5,581 | | | | 7,142 | | | | 30,710 | | | | 54,100 | | | | 54,959 | | | | 49,485 | | | | 34,093 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Earnings (Loss) | | $ | 13,562 | | | $ | (30,279 | ) | | $ | 5,099 | | | $ | (10,449 | ) | | $ | (28,481 | ) | | $ | (299,317 | ) | | $ | (688,767 | ) | | $ | 405,396 | | | $ | 858,443 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed Charges: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Homebuilding and corporate interest expense | | $ | 28,421 | | | $ | 29,076 | | | $ | 8,817 | | | $ | 9,672 | | | $ | 38,131 | | | $ | 17,989 | | | $ | — | | | $ | — | | | $ | — | |
Mortgage lending interest expense | | | 389 | | | | 262 | | | | 183 | | | | 88 | | | | 451 | | | | 329 | | | | 1,581 | | | | 8,816 | | | | 3,850 | |
Interest component of rent expense | | | 2,187 | | | | 2,467 | | | | 688 | | | | 772 | | | | 3,257 | | | | 4,362 | | | | 7,109 | | | | 9,852 | | | | 7,369 | |
Amortization and expensing of debt expenses | | | 1,115 | | | | 6,034 | | | | 424 | | | | 3,695 | | | | 6,305 | | | | 6,038 | | | | 4,048 | | | | 4,106 | | | | 4,368 | |
Capitalized interest | | | 24,855 | | | | 14,354 | | | | 9,370 | | | | 4,810 | | | | 19,810 | | | | 39,852 | | | | 57,791 | | | | 58,141 | | | | 51,872 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Fixed Charges | | $ | 56,967 | | | $ | 52,193 | | | $ | 19,482 | | | $ | 19,037 | | | $ | 67,954 | | | $ | 68,570 | | | $ | 70,529 | | | $ | 80,915 | | | $ | 67,459 | |
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In computing the ratio of earnings to fixed charges, fixed charges consist of homebuilding and corporate interest expense, mortgage lending interest expense, interest component of rent expense, amortization and expensing of debt expenses and capitalized interest. Earnings are computed by adding fixed charges (except capitalized interest) and amortization of previously capitalized interest during the period to (loss) earnings before income taxes. For the three and nine months ended September 30, 2009, the Company generated losses which exceeded fixed charges of $19.0 million and $52.2 million, respectively. For the years ended December 31, 2009, 2008 and 2007, the Company generated losses which exceeded fixed charges of $68.0 million, $68.6 million and $70.5 million, respectively.
