M.D.C. (MDC) 8-K M.D.C. Holdings Announces 2012 Fourth Quarter Results

Exhibit 99.1

M.D.C. HOLDINGS, INC.

News Release

M.D.C. HOLDINGS ANNOUNCES 2012 FOURTH QUARTER RESULTS

DENVER, COLORADO, Thursday, January 31, 2013. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended December 31, 2012.

2012 Fourth Quarter Highlights and Comparisons to 2011 Fourth Quarter

• Net income of $29.7 million, or $0.59 per diluted share vs. net loss of $18.8 million, or $0.40 per diluted share

• 2011 fourth quarter included $20.2 million charge related to debt extinguishment

• Net new orders of 869 homes, up 66%

• Backlog of 1,645 homes, up 58%; backlog dollar value up 76% to $579.0 million

• Home sale revenues of $389.1 million, up 69%

• Homes closed of 1,221 homes, up 54%

• Gross margin from home sales of 16.7% vs. 14.9%

• Improvement of 120 basis points vs. 15.5% in 2012 third quarter

• Excluding impairments of $1.1 million, gross margin from home sales was up 150 basis points from the 2012 third quarter to 17.0%*

• SG&A expenses as a percentage of home sale revenues of 12.6% vs. 15.6%, a 300 basis point improvement

• Homebuilding operations pretax income of $22.2 million vs. loss of $18.5 million

• Financial services segment pretax profit of $7.7 million vs. loss of $1.3 million

• Acquired 2,335 lots in 67 communities, including 42 new communities

2012 Full Year Highlights and Comparisons to 2011 Full Year

• Net income of $62.7 million, or $1.28 per diluted share vs. net loss of $98.4 million, or $2.12 per diluted share

• 2011 included $38.8 million charge related to debt extinguishment

• Net new orders of 4,342 homes, up 50%

• Home sale revenues of $1.15 billion, up 43%

• Homes closed of 3,740 homes, up 35%

• Gross margin from home sales of 15.4% vs. 13.1%

• SG&A expenses as a percentage of home sale revenues of 14.5% vs. 22.2%, a 770 basis point improvement

Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “I am pleased to announce a fourth quarter profit of $0.59 per share, our fourth consecutive quarterly operating profit, with net income improving by almost $50 million over the prior year. For the full year,

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M.D.C. HOLDINGS, INC.

our net income improved by more than $160 million. Our favorable results were attributable to significantly improved operating profits from both our homebuilding and financial services segments, which benefited from improving market conditions and our operational improvements, leading to increased volume and margins for both businesses.”

Mr. Mizel continued, “During the fourth quarter, we continued to see signs of improving demand. While historically our sales pace has declined from the third to the fourth quarter, in 2012 it was almost unchanged, leading to a year-over-year improvement in our fourth quarter net home orders of 66%. The strengthening sales pace has allowed us to raise prices and reduce incentives, leading to significant improvements in our gross profit margin on both a sequential and year-over-year basis. We believe that our focus on the balance between price and sales pace will continue to be critical to our success in 2013, as we expect to see pressure on land and building costs based on improving demand. In addition, we believe our unit backlog, which ended the quarter up 58% from a year ago, will help drive the revenue increases we need to improve our operating leverage in future periods.”

Mizel concluded, “Given the expanding volume for our business, land acquisition remains a key Company focus. During the fourth quarter, we purchased more than 2,300 lots, exceeding our combined acquisition activity for the previous four quarters. These land purchases drove a 10% increase in our lot supply from the end of the third quarter and should help us to grow our community count in the first half of 2013. After increasing our investment in homebuilding assets in the fourth quarter, we recently raised $250 million in the form of 30-year senior unsecured notes, in support of the long-term growth and continued financial strength and liquidity of our Company.”

Homebuilding

Home sale revenues for the 2012 fourth quarter increased 69% to $389.1 million compared to $230.7 million for the prior year period. The increase in revenues resulted primarily from a 54% increase in homes closed to 1,221 homes as compared to 792 in the prior year. The Company’s average selling price for homes closed was $318,700, up 9% year-over-year compared to $291,300 for the prior year period, primarily due to increased prices and lower incentives in many of our markets, coupled with a mix shift in closings to more desirable communities within individual markets.

Gross margin from home sales for the 2012 fourth quarter increased to 16.7% from 14.9% for the year-earlier period. On a sequential basis, our 2012 fourth quarter gross margin from home sales was up 120 basis points as compared to 15.5% for the 2012 third quarter and up 150 basis points to 17.0% excluding $1.1 million of inventory impairments*. Both increases were attributable to the Company’s increased pricing and decreased incentives in most markets for much of 2012. Additionally, the year-over-year and sequential increases for homes started without a buyer under contract were particularly strong, as the available resale inventory in many of our markets remained at low levels.

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Our 2012 fourth quarter SG&A expenses were $49.2 million, compared to $35.9 million for the 2011 fourth quarter. The increase in SG&A was attributable to a $7.5 million increase in general and administrative expenses, as the 2011 fourth quarter benefited from sizeable reductions to our bonus and legal accruals, which did not recur in the 2012 fourth quarter. Additionally, the Company’s commissions expense increased by $4.9 million, attributable to our increase in home sale revenues. Despite the increased SG&A expenses, the Company’s operating leverage improved because of strong top-line growth, with SG&A expenses as a percentage of home sales revenues decreasing 300 basis points to 12.6% for the 2012 fourth quarter versus 15.6% for the same period in 2011.

Net new orders for the 2012 fourth quarter increased 66% to 869 homes, compared to 523 homes during the same period in 2011. The Company’s monthly sales absorption rate for the 2012 fourth quarter rose 98% to 1.86 per community, compared to 0.94 per community for the 2011 fourth quarter. The Company’s cancellation rate for the 2012 fourth quarter was 24% versus 45% in the prior year fourth quarter and 27% in the 2012 third quarter.

The Company ended the 2012 fourth quarter with 1,645 homes in backlog, with an estimated sales value of $579.0 million, compared with a backlog of 1,043 homes with an estimated sales value of $329.9 million at December 31, 2011.

Financial Services

Income before taxes from our financial services operations for the 2012 fourth quarter was $7.7 million, compared to a loss of $1.3 million for the 2011 fourth quarter. The increase in pretax income primarily reflected a $7.7 million increase in our mortgage segment’s pretax results from a loss of $0.4 million in the 2011 fourth quarter to income of $7.3 million for the 2012 fourth quarter. The improvement in our mortgage profitability was driven primarily by year-over-year increases in the gains on sales of mortgage loans and the corresponding servicing rights, and higher origination income. These increases were due largely to favorable mortgage market conditions, increases in the volume of loans locked and originated, and a decrease in the level of special financing programs that we offered our homebuyers. Additionally, mortgage operations benefited from a $4.0 million decrease in the expense recognized for mortgage loan losses.

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 and Seattle. The Company’s subsidiaries also provide mortgage financing, insurance and title services, primarily for Richmond American homebuyers, through

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M.D.C. HOLDINGS, INC.

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) 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-K for the year ended December 31, 2012, 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
	(720) 977-3431
	bob.martin@mdch.com

* Please see “Reconciliation of Non-GAAP Financial Measures” at the end of this release.

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M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

	Three Months Ended December 31,						Year Ended December 31,
	2012			2011			2012			2011
	(Dollars in thousands, except per share amounts)
	(Unaudited)
Homebuilding:
Home sale revenues	$	389,141		$	230,732		$	1,150,998		$	805,164
Land sale revenues		1,724			8,360			5,144			11,859
Total home sale and land revenues		390,865			239,092			1,156,142			817,023
Home cost of sales		(323,179	)		(196,140	)		(973,120	)		(686,661	)
Land cost of sales		(1,613	)		(8,314	)		(4,823	)		(10,796	)
Inventory impairments		(1,105	)		(283	)		(1,105	)		(12,965	)
Total cost of sales		(325,897	)		(204,737	)		(979,048	)		(710,422	)
Gross margin		64,968			34,355			177,094			106,601
Selling, general and administrative expenses		(44,160	)		(35,934	)		(167,295	)		(179,105	)
Interest income		6,747			6,631			23,398			26,068
Interest expense		—			(1,200	)		(808	)		(20,842	)
Other income (expense)		(364	)		(22,365	)		228			(43,350	)
Homebuilding pretax income (loss)		22,191			(18,513	)		32,617			(110,628	)
Financial Services:
Revenues		14,908			8,111			46,881			26,086
Expenses		(8,186	)		(10,244	)		(21,645	)		(26,306	)
Interest and other income		938			870			3,262			3,376
Financial services pretax income (loss)		7,660			(1,263	)		28,498			3,156
Income (loss) before income taxes		29,851			(19,776	)		61,115			(107,472	)
Benefit (provision) for income taxes		(181	)		955			1,584			9,082
Net income (loss)	$	29,670		$	(18,821	)	$	62,699		$	(98,390	)
Other comprehensive income (loss):
Unrealized gain related to available-for-sale securities		1,133			6,781			12,078			(12,124	)
Comprehensive income (loss)	$	30,803		$	(12,040	)	$	74,777		$	(110,514	)
Earnings (loss) per share:
Basic	$	0.60		$	(0.40	)	$	1.29		$	(2.12	)
Diluted	$	0.59		$	(0.40	)	$	1.28		$	(2.12	)
Weighted Average Common Shares Outstanding:
Basic		48,140,725			47,011,311			47,660,629			46,796,334
Diluted		48,865,996			47,011,311			48,064,839			46,796,334
Dividends declared per share	$	1.25		$	0.25		$	2.00		$	1.00

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M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

	December 31,
	2012			2011
	(Dollars in thousands, except per share amounts)
	(Unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents	$	129,535		$	316,418
Marketable securities		519,465			485,434
Restricted cash		1,859			667
Trade and other receivables		28,163			21,593
Inventories:
Housing completed or under construction		512,949			300,714
Land and land under development		489,572			505,338
Total inventories		1,002,521			806,052
Property and equipment, net		33,125			36,277
Deferred tax asset, net of valuation allowance of $248,306 and $281,178 at December 31, 2012 and 2011, respectively		—			—
Prepaid expenses and other assets		44,777			50,423
Total homebuilding assets		1,759,445			1,716,864
Financial Services:
Cash and cash equivalents		30,560			26,943
Marketable securities		32,473			34,509
Mortgage loans held-for-sale, net		119,953			78,335
Prepaid expenses and other assets		3,010			2,074
Total financial services assets		185,996			141,861
Total Assets	$	1,945,441		$	1,858,725
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	73,055		$	25,645
Accrued liabilities		118,456			119,188
Senior notes, net		744,842			744,108
Total homebuilding liabilities		936,353			888,941
Financial Services:
Accounts payable and accrued liabilities		51,864			52,446
Mortgage repurchase facility		76,327			48,702
Total financial services liabilities		128,191			101,148
Total Liabilities		1,064,544			990,089
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; 48,698,757 issued and outstanding at December 31, 2012 and 48,017,108 and 47,957,196 issued and outstanding, respectively, at December 31, 2011		487			480
Additional paid-in-capital		896,861			863,128
Retained earnings (accumulated defecit)		(21,289	)		12,927
Accumulated other comprehensive income (loss)		4,838			(7,240	)
Treasury stock, at cost; no shares at December 31, 2012 and 59,912 at December 31, 2011		—			(659	)
Total Stockholders’ Equity		880,897			868,636
Total Liabilities and Stockholders’ Equity	$	1,945,441		$	1,858,725

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M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

	Three Months Ended December 31,						Year Ended December 31,
	2012			2011			2012			2011
	(Dollars in thousands)
	(Unaudited)
Operating Activities:
Net income (loss)	$	29,670		$	(18,821	)	$	62,699		$	(98,390	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss on extinguishment of senior notes		—			20,236			—			38,795
Stock-based compensation expense		3,597			3,340			16,225			15,432
Depreciation and amortization		1,058			1,658			4,766			6,371
Inventory impairments and write-offs of land option deposits		1,429			2,126			1,843			20,009
Amortization of (premium) discount on marketable debt securities		317			(333	)		596			1,271
Net changes in assets and liabilities:
Restricted cash		225			15			(1,192	)		(247	)
Trade and other receivables		7,462			(4,036	)		(6,223	)		12,078
Mortgage loans held-for-sale		(33,305	)		(36,034	)		(41,618	)		(13,221	)
Housing completed or under construction		(9,160	)		32,616			(212,154	)		86,477
Land and land under development		(97,092	)		11,773			15,314			(93,381	)
Prepaid expenses and other assets		4,203			12,901			3,650			10,119
Accounts payable		23,410			(1,289	)		47,473			(9,012	)
Accrued liabilities		9,822			(23,693	)		(198	)		(56,585	)
Net cash provided by (used in) operating activities		(58,364	)		459			(108,819	)		(80,284	)
Investing Activities:
Purchase of marketable securities		(81,534	)		(42,344	)		(478,701	)		(330,968	)
Maturity of marketable securities		2,250			38,980			108,250			492,051
Sale of marketable securities		64,882			26,606			349,938			275,038
Purchase of property and equipment and other		(310	)		(140	)		(1,268	)		(31,857	)
Net cash provided by (used in) investing activities		(14,712	)		23,102			(21,781	)		404,264
Financing Activities:
Extinguishment of senior notes		—			(282,821	)		—			(537,724	)
Payments on mortgage repurchase facility		(58,873	)		(34,918	)		(196,402	)		(91,372	)
Advances on mortgage repurchase facility		88,312			72,912			224,027			114,640
Dividend payments		(60,869	)		(11,872	)		(96,915	)		(47,432	)
Proceeds from exercise of stock options		804			8,998			16,624			9,044
Net cash provided by (used in) financing activities		(30,626	)		(247,701	)		(52,666	)		(552,844	)
Net increase (decrease) in cash and cash equivalents		(103,702	)		(224,140	)		(183,266	)		(228,864	)
Cash and cash equivalents:
Beginning of period		263,797			567,501			343,361			572,225
End of period	$	160,095		$	343,361		$	160,095		$	343,361

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Homebuilding Operational Data

New Home Deliveries:

	Three Months Ended December 31,
	2012						2011						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		185	$	41,358	$	223.6		122	$	22,950	$	188.1		52	%		80	%		19	%
California		224		76,722		342.5		104		30,934		297.4		115	%		148	%		15	%
Nevada		165		37,990		230.2		108		19,683		182.3		53	%		93	%		26	%
Washington		81		25,014		308.8		46		11,798		256.5		76	%		112	%		20	%
West		655		181,084		276.5		380		85,365		224.6		72	%		112	%		23	%
Colorado		268		96,493		360.0		211		71,679		339.7		27	%		35	%		6	%
Utah		75		22,132		295.1		47		12,576		267.6		60	%		76	%		10	%
Mountain		343		118,625		345.8		258		84,255		326.6		33	%		41	%		6	%
Maryland		77		31,523		409.4		54		24,806		459.4		43	%		27	%		-11	%
Virginia		84		42,672		508.0		60		26,683		444.7		40	%		60	%		14	%
Florida		62		15,237		245.8		36		8,499		236.1		72	%		79	%		4	%
Illinois		—		—		—		4		1,124		281.0		N/M			N/M			N/M
East		223		89,432		401.0		154		61,112		396.8		45	%		46	%		1	%
Total		1,221	$	389,141	$	318.7		792	$	230,732	$	291.3		54	%		69	%		9	%
	Year Ended December 31,
	2012						2011						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		603	$	131,278	$	217.7		423	$	80,133	$	189.4		43	%		64	%		15	%
California		543		184,490		339.8		272		83,488		306.9		100	%		121	%		11	%
Nevada		604		125,725		208.2		331		61,833		186.8		82	%		103	%		11	%
Washington		247		73,074		295.8		146		38,710		265.1		69	%		89	%		12	%
West		1,997		514,567		257.7		1,172		264,164		225.4		70	%		95	%		14	%
Colorado		807		289,416		358.6		748		251,935		336.8		8	%		15	%		6	%
Utah		226		64,006		283.2		225		61,761		274.5		0	%		4	%		3	%
Mountain		1,033		353,422		342.1		973		313,696		322.4		6	%		13	%		6	%
Maryland		233		99,476		426.9		207		90,312		436.3		13	%		10	%		-2	%
Virginia		280		135,067		482.4		211		90,844		430.5		33	%		49	%		12	%
Florida		195		47,915		245.7		190		43,450		228.7		3	%		10	%		7	%
Illinois		2		551		275.5		9		2,698		299.8		N/M			N/M			N/M
East		710		283,009		398.6		617		227,304		368.4		15	%		25	%		8	%
Total		3,740	$	1,150,998	$	307.8		2,762	$	805,164	$	291.5		35	%		43	%		6	%

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Homebuilding Operational Data

Net New Orders:

	Three Months Ended December 31,
	2012						2011						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		56	$	12,436	$	222.1		77	$	13,216	$	171.6		-27	%		-6	%		29	%
California		143		49,641		347.1		64		19,419		303.4		123	%		156	%		14	%
Nevada		130		31,271		240.5		62		10,755		173.5		110	%		191	%		39	%
Washington		56		18,285		326.5		56		15,113		269.9		0	%		21	%		21	%
West		385		111,633		290.0		259		58,503		225.9		49	%		91	%		28	%
Colorado		247		87,289		353.4		148		50,111		338.6		67	%		74	%		4	%
Utah		36		10,589		294.1		10		2,606		260.6		260	%		306	%		13	%
Mountain		283		97,878		345.9		158		52,717		333.7		79	%		86	%		4	%
Maryland		68		26,812		394.3		26		11,653		448.2		162	%		130	%		-12	%
Virginia		86		43,004		500.0		39		20,434		523.9		121	%		110	%		-5	%
Florida		47		12,991		276.4		38		9,253		243.5		24	%		40	%		14	%
Illinois		—		—		—		3		802		267.3		N/M			N/M			N/M
East		201		82,807		412.0		106		42,142		397.6		90	%		96	%		4	%
Total		869	$	292,318	$	336.4		523	$	153,362	$	293.2		66	%		91	%		15	%
	Year Ended December 31,
	2012						2011						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		625	$	137,159	$	219.5		467	$	87,223	$	186.8		34	%		57	%		17	%
California		654		225,174		344.3		311		92,760		298.3		110	%		143	%		15	%
Nevada		652		146,094		224.1		411		75,011		182.5		59	%		95	%		23	%
Washington		272		82,325		302.7		124		32,577		262.7		119	%		153	%		15	%
West		2,203		590,752		268.2		1,313		287,571		219.0		68	%		105	%		22	%
Colorado		1,044		364,056		348.7		708		240,671		339.9		47	%		51	%		3	%
Utah		239		71,080		297.4		224		61,760		275.7		7	%		15	%		8	%
Mountain		1,283		435,136		339.2		932		302,431		324.5		38	%		44	%		5	%
Maryland		303		129,891		428.7		194		87,279		449.9		56	%		49	%		-5	%
Virginia		362		179,744		496.5		244		109,103		447.1		48	%		65	%		11	%
Florida		189		46,493		246.0		196		45,592		232.6		-4	%		2	%		6	%
Illinois		2		550		275.0		8		2,279		284.9		N/M			N/M			N/M
East		856		356,678		416.7		642		244,253		380.5		33	%		46	%		10	%
Total		4,342	$	1,382,566	$	318.4		2,887	$	834,255	$	289.0		50	%		66	%		10	%

9

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Active Subdivisions:

	December 31,
	2012		2011		% Change
Arizona		12		25		-52	%
California		13		17		-24	%
Nevada		12		20		-40	%
Washington		10		9		11	%
West		47		71		-34	%
Colorado		42		47		-11	%
Utah		14		21		-33	%
Mountain		56		68		-18	%
Maryland		18		16		13	%
Virginia		12		15		-20	%
Florida		15		17		-12	%
East		45		48		-6	%
Total		148		187		-21	%
Average for quarter ended		156		185		-16	%
Average for year ended		173		171		1	%

Backlog:

	December 31,
	2012						2011						% Change
	Homes		Dollar Value		Average Price		Homes		Dollar Value		Average Price		Homes			Dollar Value			Average Price
	(Dollars in thousands)
Arizona		150	$	35,064	$	233.8		128	$	26,875	$	210.0		17	%		30	%		11	%
California		229		78,400		342.4		118		37,341		316.4		94	%		110	%		8	%
Nevada		204		50,533		247.7		156		29,969		192.1		31	%		69	%		29	%
Washington		79		26,761		338.7		54		14,958		277.0		46	%		79	%		22	%
West		662		190,758		288.2		456		109,143		239.3		45	%		75	%		20	%
Colorado		470		174,280		370.8		233		84,519		362.7		102	%		106	%		2	%
Utah		81		25,058		309.4		68		19,253		283.1		19	%		30	%		9	%
Mountain		551		199,338		361.8		301		103,772		344.8		83	%		92	%		5	%
Maryland		183		79,162		432.6		113		48,987		433.5		62	%		62	%		0	%
Virginia		185		92,303		498.9		103		49,953		485.0		80	%		85	%		3	%
Florida		64		17,452		272.7		70		18,020		257.4		-9	%		-3	%		6	%
East		432		188,917		437.3		286		116,960		409.0		51	%		62	%		7	%
Total		1,645	$	579,013	$	352.0		1,043	$	329,875	$	316.3		58	%		76	%		11	%

10

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Homes Completed or Under Construction (WIP lots):

	December 31,
	2012		2011		% Change
Unsold
Completed		221		146		51	%
Under construction—frame		421		249		69	%
Under construction—foundation		183		79		132	%
Total unsold started homes		825		474		74	%
Sold homes under construction or completed		1,147		638		80	%
Model homes		221		226		-2	%
Total homes completed or under construction		2,193		1,338		64	%

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

	December 31, 2012						December 31, 2011
	Lots Owned		Lots Optioned		Total		Lots Owned		Lots Optioned		Total
Arizona		1,763		80		1,843		955		92		1,047
California		1,080		—		1,080		1,384		—		1,384
Nevada		1,226		40		1,266		1,191		33		1,224
Washington		472		162		634		385		147		532
West		4,541		282		4,823		3,915		272		4,187
Colorado		3,335		508		3,843		3,220		321		3,541
Utah		532		13		545		607		17		624
Mountain		3,867		521		4,388		3,827		338		4,165
Maryland		577		315		892		564		598		1,162
Virginia		553		263		816		678		173		851
Florida		365		159		524		330		340		670
Illinois		—		—		—		125		—		125
East		1,495		737		2,232		1,697		1,111		2,808
Total		9,903		1,540		11,443		9,439		1,721		11,160

11

M.D.C. HOLDINGS, INC.

Reconciliation of Non-GAAP Financial Measures

Gross margin from home sales before impairments is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact that inventory impairments has on our Gross Margin from Home Sales and permits investors to make better comparisons with our competitors, who also break out and adjust gross margins in a similar fashion.

	Three Months Ended												Year Ended
	December 31, 2012			Gross Margin %			December 31, 2011			Gross Margin %			December 31, 2012			Gross Margin %			December 31, 2011			Gross Margin %
	(Dollars in thousands)
Gross Margin	$	64,968			16.6	%	$	34,355			14.4	%	$	177,094			15.3	%	$	106,601			13.0	%
Less: Land Sales Revenue		(1,724	)					(8,360	)					(5,144	)					(11,859	)
Add: Land Cost of Sales		1,613						8,314						4,823						10,796
Gross Margin from Home Sales	$	64,857			16.7	%	$	34,309			14.9	%	$	176,773			15.4	%	$	105,538			13.1	%
Add: Inventory Impairments		1,105						283						1,105						12,965
Gross Margin from Home Sales before Impairments	$	65,962			17.0	%	$	34,592			15.0	%	$	177,878			15.5	%	$	118,503			14.7	%

12