Form 8-K MDC HOLDINGS INC For: Jan 28

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January 28, 2015 6:05 AM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

�

FORM 8-K

�

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

�

Date of Report (Date of Earliest Event Reported): January 28, 2015

�

M.D.C. Holdings, Inc.�

(Exact name of registrant as specified in its charter)�

�

Delaware	1-8951	84-0622967
(State or other	(Commission file number)	(I.R.S. employer
jurisdiction of	�	identification no.)
incorporation)	�	�

�

4350 South Monaco Street, Suite 500, Denver, Colorado 80237�

(Address of principal executive offices) (Zip code)�

�

Registrants telephone number, including area code: (303) 773-1100�

�

Not Applicable�

(Former name or former address, if changed since last report)�

�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

��

�

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

�

On January 28, 2015, M.D.C. Holdings, Inc. issued a press release reporting its fourth quarter results for 2014. A copy of this press release is furnished and attached hereto as Exhibit�99.1

�

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

�

(d)��Exhibits

�

The following exhibit is furnished as part of this Current Report on Form 8-K.

�

Exhibit Number	�	Description
�	�	�
Exhibit 99.1	�	Press Release dated January 28, 2015

�

The information in Item 2.02 of the Current Report, including the press release, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (Exchange Act) or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

�

SIGNATURES

�

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

�

________________

�

�	M.D.C. HOLDINGS, INC.��		�
�	�	�	�
�	�	�	�
Dated: January 28, 2015�	By:�	/s/ Joseph H. Fretz�	�
�	�	Joseph H. Fretz��	�
�	�	Secretary and Corporate Counsel�	�

�

2�

�

INDEX TO EXHIBITS

�

Exhibit Number	�	Description
�	�	�
Exhibit 99.1	�	Press Release dated January 28, 2015

�

Exhibit 99.1

�

News Release

�

M.D.C. HOLDINGS ANNOUNCES 2014 FOURTH QUARTER RESULTS

�

DENVER, COLORADO, Wednesday, January 28, 2015. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended December 31, 2014.

�

2014 Fourth Quarter Highlights and Comparisons to 2013 Fourth Quarter

�

Net income of $14.6 million, or $0.30 per share; excluding debt extinguishment charge, net income of $20.1* million, or $0.41* per share vs. $30.7 million or $0.62 per share

�

Year-over-year decrease almost entirely attributable to 2014 fourth quarter debt charge ($8.7 million) and increased effective tax rate (38.7% vs. 10.5%)

�

Income before tax of $23.9 million; excluding debt extinguishment charge, income before tax of $32.6* million vs. $34.3 million

�

Home sale revenues of $493.1 million, up 7% from $460.9 million

�

Homes delivered of 1,242 down from 1,252

�

Average sales price up $28,800 per home, or 8%, to $397,000

�

Gross margin from home sales of 16.3% down from 17.4%

�

Gross margin excluding impairments of 16.5%* vs. 17.5%*

�

Homebuilding SG&A rate of 11.1% vs. 12.0%, a 90 basis point improvement

�

Dollar value of net new orders of $356.4 million, up 25%

�

Ending active community count of 159, up 9%

�

Ending backlog dollar value of $663.2 million, up 31%

�

Larry A. Mizel, MDCs Chairman and Chief Executive Officer, stated, We are pleased to announce a successful 2014 fourth quarter, capping a third consecutive year of profitability for our Company. Although we have made significant progress with our business since the end of the downturn, in 2014 the homebuilding industry experienced weaker demand, following a brief surge in sales velocity and home prices during the first half of 2013. This environment led us to increase our use of incentives during 2014 to stimulate demand for new homes in certain markets. Combined with rising construction and land costs, the increased incentives placed pressure on our homebuilding gross margins for both the fourth quarter and full year, although we have been able to offset some of the gross margin pressure by keeping our overhead low.

�

Mr. Mizel concluded, The outlook for 2015 is somewhat clouded by uncertainty surrounding global and domestic economic conditions, with the full impact of issues such as falling oil prices yet to be fully understood. Nonetheless, primarily as a result of our land acquisition efforts over the past two years, we have set the stage for our Companys growth in 2015 by expanding both our active communities and our backlog year-over-year. Additionally, during 2014, we reduced our interest costs and extended our next senior note maturity to 2020 by eliminating $500 million of existing senior notes and issuing $250 million of new senior notes. These improvements provide us with the opportunity for top and bottom line expansion in future periods, in spite of the obstacles that may remain for the housing market.

�

Homebuilding

�

Home sale revenues for the 2014 fourth quarter increased 7% to $493.1 million, compared to $460.9 million for the prior year period. The increase in revenue was primarily driven by an 8% increase in the average selling price due to the mix of homes closed and, to a lesser extent, price appreciation.

�

Gross margin from home sales for the 2014 fourth quarter was 16.3%, compared with 17.4% for the year-earlier period and 16.5% in the prior quarter. Gross margin from home sales excluding impairments was 16.5%* versus 17.5%* in the prior year and 16.5%* in the prior quarter. The year-over-year decrease was primarily due to the use of additional incentives used to stimulate demand and higher construction and land costs in our homes delivered.

�

SG&A expenses as a percentage of home sale revenues decreased by 90 basis points to 11.1% for the 2014 fourth quarter versus 12.0% for the same period in 2013. The improvement from the prior year was primarily the result of lower compensation-related expenses and, to a lesser extent, lower legal expenses.

�

The dollar value of net new orders for the 2014 fourth quarter increased 25% from the same period in 2013 to $356.4 million. The increase was driven by an 18% increase in unit volume, resulting primarily from a 16% increase in our average active communities, and a 6% increase in the average selling price of net new home orders to $402,000 compared to $379,000 for the same period in 2013. Our cancellation rate for the 2014 fourth quarter was 28% compared to 26% in the same period in the prior year.

�

Our backlog value at the end of the 2014 fourth quarter was up 31% year-over-year to $663.2 million. The increase was driven primarily by a 20% increase in units in backlog, due primarily to the net sales activity discussed above, coupled with a 9% increase in the average selling price of homes in backlog, primarily driven by a shift in mix.

�

During the quarter, we completed the early redemption of $250 million in Senior Notes due July 2015. As a result of this transaction, we recognized an $8.7 million charge related to the extinguishment of debt.

�

Financial Services

�

Income before taxes from our financial services operations for the 2014 fourth quarter was $7.0 million, up $1.7 million compared to $5.3 million for the 2013 fourth quarter, as both our mortgage and insurance operations experienced growth in pretax income. The improvement in pretax income for our mortgage operations was driven primarily by an increase in the number of loans locked, due to higher net sales activity, and lower SG&A expenses.

�

��

Income Taxes

�

During the 2014 fourth quarter, we recognized $9.2 million of income tax expense resulting in an effective tax rate of 38.7% while for the 2013 fourth quarter, we had income tax expense of $3.6 million, resulting in an effective tax rate of 10.5%, due primarily to an $11.3 million reversal of our deferred tax asset valuation allowance.

�

About MDC

�

Since 1972, MDC's homebuilding subsidiary companies, which operate under the name Richmond American Homes, have built and financed the American dream for more than 180,000 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, Philadelphia, Orlando, Jacksonville, South Florida and Seattle. MDCs 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 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 MDCs investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican Mortgage Corporations 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-K for the year ended December 31, 2014, 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:	Robert N. Martin
�	Vice President of Finance and Corporate Controller
�	1-866-424-3395 / (720) 977-3395
�	[email protected]

�

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

�

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

�

Three Months Ended

�

Year Ended

�

December 31,

�

December 31,

�

2014

�

2013

�

2014

�

2013

�

(Dollars in thousands, except per share amounts)

�

(Unaudited)

�

(Unaudited)

�

Homebuilding:

�

Home sale revenues

�

493,070

�

460,939

�

1,647,398

�

1,626,707

�

Land sale revenues

�

636

�

3,233

�

2,468

�

Total home and land sale revenues

�

493,132

�

461,575

�

1,650,631

�

1,629,175

�

Home cost of sales

�

(411,931

)

�

(380,086

)

�

(1,365,621

)

�

(1,336,978

)

Land cost of sales

�

(52

)

�

(491

)

�

(2,559

)

�

(1,961

)

Inventory impairments

�

(910

)

�

(569

)

�

(1,760

)

�

(919

)

Total cost of sales

�

(412,893

)

�

(381,146

)

�

(1,369,940

)

�

(1,339,858

)

Gross margin

�

80,239

�

80,429

�

280,691

�

289,317

�

Selling, general and administrative expenses

�

(54,601

)

�

(55,421

)

�

(203,253

)

�

(213,283

)

Interest and other income

�

2,222

�

6,193

�

26,310

�

29,798

�

Interest expense

�

(685

)

�

(1,726

)

Other expense

�

(2,279

)

�

(2,177

)

�

(4,813

)

�

(3,783

)

Losses from early extinguishments of debt

�

(8,741

)

�

(18,153

)

�

Other-than-temporary impairment of marketable securities

�

(4,293

)

�

Homebuilding pretax income

�

16,840

�

29,024

�

75,804

�

100,323

�

Financial Services:

�

Revenues

�

12,540

�

10,587

�

43,953

�

51,259

�

Expenses

�

(6,152

)

�

(6,127

)

�

(22,334

)

�

(25,271

)

Interest and other income

�

657

�

834

�

3,052

�

3,514

�

Financial services pretax income

�

7,045

�

5,294

�

24,671

�

29,502

�

Income before income taxes

�

23,885

�

34,318

�

100,475

�

129,825

�

Benefit from (provision for) income taxes

�

(9,246

)

�

(3,609

)

�

(37,332

)

�

184,560

�

Net income

�

14,639

�

30,709

�

63,143

�

314,385

�

Other comprehensive income (loss) related to available for sale securities, net of tax

�

3,082

�

4,237

�

(1,120

)

�

6,737

�

Comprehensive income

�

17,721

�

34,946

�

62,023

�

321,122

�

Earnings per share

�

Basic

�

0.30

�

0.62

�

1.29

�

6.39

�

Diluted

�

0.30

�

0.62

�

1.29

�

6.34

�

Weighted average common shares outstanding

�

Basic

�

48,635,629

�

48,497,526

�

48,615,541

�

48,453,119

�

Diluted

�

48,785,682

�

48,728,889

�

48,817,566

�

48,831,785

�

Dividends declared per share

�

0.25

�

1.00

�

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

�

�	�	December 31,		�	�	December 31,		�
�	�	2014		�	�	2013		�
�	�	(Dollars in thousands, except						�
�	�	per share amounts)						�
�	�	(Unaudited)		�	�	�	�	�
ASSETS	�	�	�	�	�	�	�	�
�	�	�	�	�	�	�	�	�
Homebuilding:	�	�	�	�	�	�	�	�
Cash and cash equivalents	�	$	122,642	�	�	$	148,634	�
Marketable securities	�	�	140,878	�	�	�	569,021	�
Restricted cash	�	�	2,816	�	�	�	2,195	�
Trade and other receivables	�	�	28,555	�	�	�	23,407	�
Inventories:	�	�	�	�	�	�	�	�
Housing completed or under construction	�	�	732,692	�	�	�	636,700	�
Land and land under development	�	�	935,268	�	�	�	774,961	�
Total inventories	�	�	1,667,960	�	�	�	1,411,661	�
Property and equipment, net	�	�	30,491	�	�	�	31,248	�
Deferred tax asset, net	�	�	140,486	�	�	�	176,262	�
Metropolitan district bond securities (related party)	�	�	18,203	�	�	�	12,729	�
Prepaid and other assets	�	�	67,996	�	�	�	53,525	�
Total homebuilding assets	�	�	2,220,027	�	�	�	2,428,682	�
Financial Services:	�	�	�	�	�	�	�	�
Cash and cash equivalents	�	�	31,183	�	�	�	50,704	�
Marketable securities	�	�	15,262	�	�	�	19,046	�
Mortgage loans held-for-sale, net	�	�	88,392	�	�	�	92,578	�
Other assets	�	�	3,574	�	�	�	4,439	�
Total financial services assets	�	�	138,411	�	�	�	166,767	�
Total Assets	�	$	2,358,438	�	�	$	2,595,449	�
LIABILITIES AND EQUITY	�	�	�	�	�	�	�	�
Homebuilding:	�	�	�	�	�	�	�	�
Accounts payable	�	$	35,445	�	�	$	15,046	�
Accrued liabilities	�	�	115,117	�	�	�	152,821	�
Revolving credit facility	�	�	15,000	�	�	�	-	�
Senior notes, net	�	�	846,450	�	�	�	1,095,620	�
Total homebuilding liabilities	�	�	1,012,012	�	�	�	1,263,487	�
Financial Services:	�	�	�	�	�	�	�	�
Accounts payable and accrued liabilities	�	�	57,268	�	�	�	55,639	�
Mortgage repurchase facility	�	�	60,822	�	�	�	63,074	�
Total financial services liabilities	�	�	118,090	�	�	�	118,713	�
Total Liabilities	�	�	1,130,102	�	�	�	1,382,200	�
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; 48,831,639 and 48,788,887 issued and outstanding at December 31, 2014 and December 31, 2013, respectively	�	�	488	�	�	�	488	�
Additional paid-in-capital	�	�	909,974	�	�	�	908,090	�
Retained earnings	�	�	307,419	�	�	�	293,096	�
Accumulated other comprehensive income	�	�	10,455	�	�	�	11,575	�
Total Stockholders' Equity	�	�	1,228,336	�	�	�	1,213,249	�
Total Liabilities and Stockholders' Equity	�	$	2,358,438	�	�	$	2,595,449	�

�

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

�

Three Months Ended

�

Year Ended

�

December 31,

�

December 31,

�

2014

�

2013

�

2014

�

2013

�

(Dollars in thousands)

�

(Unaudited)

�

(Unaudited)

�

Operating Activities:

�

Net income

�

14,639

�

30,709

�

63,143

�

314,385

�

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

�

Losses from early extinguishments of debt

�

8,741

�

18,153

�

Stock-based compensation expense

�

1,224

�

1,412

�

5,978

�

9,652

�

Depreciation and amortization

�

1,000

�

904

�

3,928

�

3,864

�

Inventory impairments

�

910

�

569

�

1,760

�

919

�

Other-than-temporary impairment of marketable securities

�

4,293

�

Net loss on sale of marketable securities

�

312

�

(7,310

)

�

Amortization of discount / premiums on marketable debt securities

�

(597

)

�

566

�

219

�

Deferred income tax expense (benefit)

�

5,863

�

2,486

�

34,226

�

(187,171

)

Excess tax benefits from stock-based compensation

�

(26

)

�

(391

)

�

(26

)

�

(391

)

Net changes in assets and liabilities:

�

Restricted cash

�

218

�

)

�

(621

)

�

(336

)

Trade and other receivables

�

(817

)

�

5,785

�

(6,638

)

�

4,186

�

Mortgage loans held-for-sale

�

(30,260

)

�

(18,238

)

�

4,186

�

27,375

�

Housing completed or under construction

�

103,472

�

(3,046

)

�

(96,936

)

�

(124,211

)

Land and land under development

�

(80,998

)

�

(74,852

)

�

(160,463

)

�

(285,070

)

Prepaid expenses and other assets

�

2,211

�

471

�

(11,873

)

�

(13,562

)

Accounts payable and accrued liabilities

�

(16,945

)

�

11,108

�

(16,013

)

�

(19,408

)

Net cash provided by (used in) operating activities

�

9,609

�

(43,689

)

�

(163,647

)

�

(269,549

)

�

Investing Activities:

�

Purchases of marketable securities

�

(18,863

)

�

(35,078

)

�

(428,709

)

�

(404,965

)

Maturities of marketable securities

�

2,250

�

27,100

�

167,339

�

159,592

�

Sales of marketable securities

�

315,391

�

29,673

�

687,692

�

216,756

�

Purchases of property and equipment

�

(1,323

)

�

(507

)

�

(3,242

)

�

(1,785

)

Net cash provided by (used in) investing activities

�

297,455

�

21,188

�

423,080

�

(30,402

)

�

Financing Activities:

�

Advances (payments) on mortgage repurchase facility, net

�

29,040

�

24,162

�

(2,252

)

�

(13,253

)

Proceeds from issuance of senior notes

�

248,375

�

346,938

�

Repayment of senior notes

�

(258,532

)

�

(517,650

)

�

Advances on revolving credit facility, net

�

5,000

�

15,000

�

Dividend payments

�

(12,204

)

�

(48,820

)

�

Excess tax benefits from stock-based compensation

�

391

�

391

�

Proceeds from exercise of stock options

�

312

�

375

�

5,118

�

Net cash provided by (used in) financing activities

�

(236,358

)

�

24,553

�

(304,946

)

�

339,194

�

Net increase (decrease) in cash and cash equivalents

�

70,706

�

2,052

�

(45,513

)

�

39,243

�

Cash and cash equivalents:

�

Beginning of period

�

83,119

�

197,286

�

199,338

�

160,095

�

End of period

�

153,825

�

199,338

�

153,825

�

199,338

�

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

�

New Home Deliveries

�

Three Months Ended December 31,

�

2014

�

2013

�

% Change

�

Homes

�

Dollar Value

�

Average Price

�

Homes

�

Dollar Value

�

Average Price

�

Homes

�

Dollar Value

�

Average Price

�

(Dollars in thousands)

�

Arizona

�

200

�

62,093

�

310.5

�

192

�

50,646

�

263.8

�

�%

�

�%

�

�%

California

�

253

�

121,974

�

482.1

�

174

�

75,164

�

432.0

�

�%

�

�%

�

�%

Nevada

�

169

�

53,355

�

315.7

�

112

�

35,515

�

317.1

�

�%

�

�%

�

Washington

�

21,918

�

371.5

�

22,004

�

343.8

�

�%

West

�

681

�

259,340

�

380.8

�

542

�

183,329

�

338.2

�

�%

�

�%

�

�%

Colorado

�

287

�

124,226

�

432.8

�

354

�

132,409

�

374.0

�

(19

�

�%

Utah

�

17,905

�

331.6

�

12,195

�

329.6

�

�%

�

�%

�

�%

Mountain

�

341

�

142,131

�

416.8

�

391

�

144,604

�

369.8

�

(13

�

�%

Maryland

�

36,345

�

497.9

�

131

�

58,484

�

446.4

�

(44

�

(38

�

�%

Virginia

�

26,029

�

482.0

�

107

�

53,807

�

502.9

�

(50

�

(52

�

Florida

�

29,225

�

314.2

�

20,715

�

255.7

�

�%

�

�%

�

�%

East

�

220

�

91,599

�

416.4

�

319

�

133,006

�

416.9

�

(31

�

(31

�

Total

�

1,242

�

493,070

�

397.0

�

1,252

�

460,939

�

368.2

�

�%

�

�%

�

Year Ended December 31,

�

2014

�

2013

�

% Change

�

Homes

�

Dollar
Value

�

Average Price

�

Homes

�

Dollar
Value

�

Average Price

�

Homes

�

Dollar
Value

�

Average Price

�

(Dollars in thousands)

�

Arizona

�

731

�

200,994

�

275.0

�

635

�

156,308

�

246.2

�

�%

�

�%

�

�%

California

�

624

�

296,189

�

474.7

�

643

�

243,804

�

379.2

�

�%

�

�%

Nevada

�

564

�

176,371

�

312.7

�

593

�

163,127

�

275.1

�

�%

�

�%

Washington

�

267

�

96,496

�

361.4

�

333

�

108,038

�

324.4

�

(20

�

(11

�

�%

West

�

2,186

�

770,050

�

352.3

�

2,204

�

671,277

�

304.6

�

�%

�

�%

Colorado

�

1,172

�

478,669

�

408.4

�

1,287

�

479,619

�

372.7

�

�%

Utah

�

165

�

53,136

�

322.0

�

208

�

65,292

�

313.9

�

(21

�

(19

�

�%

Mountain

�

1,337

�

531,805

�

397.8

�

1,495

�

544,911

�

364.5

�

(11

�

�%

Maryland

�

305

�

144,695

�

474.4

�

368

�

159,169

�

432.5

�

(17

�

�%

Virginia

�

234

�

115,001

�

491.5

�

355

�

177,142

�

499.0

�

(34

�

(35

�

Florida

�

304

�

85,847

�

282.4

�

288

�

74,208

�

257.7

�

�%

�

�%

�

�%

East

�

843

�

345,543

�

409.9

�

1,011

�

410,519

�

406.1

�

(17

�

(16

�

�%

Total

�

4,366

�

1,647,398

�

377.3

�

4,710

�

1,626,707

�

345.4

�

�%

�

�%

�

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

�

Net New Orders

�

Three Months Ended December 31,

�

2014

�

2013

�

% 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

�

141

�

39,533

�

280.4

�

1.31

�

137

�

34,817

�

254.1

�

2.10

�

�%

�

�%

�

�%

�

(38

California

�

138

�

68,509

�

496.4

�

2.19

�

110

�

58,546

�

532.2

�

3.12

�

�%

�

�%

�

(30

Nevada

�

33,750

�

359.0

�

1.87

�

27,285

�

310.1

�

1.89

�

�%

�

�%

�

�%

�

Washington

�

17,517

�

372.7

�

1.57

�

13,277

�

349.4

�

1.01

�

�%

�

�%

�

�%

�

�%

West

�

420

�

159,309

�

379.3

�

1.67

�

373

�

133,925

�

359.0

�

2.02

�

�%

�

�%

�

�%

�

(17

Colorado

�

266

�

116,740

�

438.9

�

2.18

�

184

�

73,557

�

399.8

�

1.61

�

�%

�

�%

�

�%

�

�%

Utah

�

14,512

�

315.5

�

2.45

�

5,186

�

324.1

�

1.07

�

188

�%

�

180

�%

�

129

�%

Mountain

�

312

�

131,252

�

420.7

�

2.21

�

200

�

78,743

�

393.7

�

1.55

�

�%

�

�%

�

�%

�

�%

Maryland

�

21,992

�

499.8

�

1.30

�

29,586

�

477.2

�

1.27

�

(29

�

(26

�

�%

�

�%

Virginia

�

24,031

�

490.4

�

1.72

�

20,377

�

485.2

�

1.51

�

�%

�

�%

�

�%

�

�%

Florida

�

19,776

�

319.0

�

1.45

�

22,597

�

301.3

�

2.00

�

(17

�

(12

�

�%

�

(28

East

�

155

�

65,799

�

424.5

�

1.48

�

179

�

72,560

�

405.4

�

1.57

�

(13

�

�%

�

Total

�

887

�

356,360

�

401.8

�

1.78

�

752

�

285,228

�

379.3

�

1.76

�

�%

�

�%

�

�%

�

�%

�

Year Ended December 31,

�

2014

�

2013

�

% 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

�

802

�

235,041

�

293.1

�

2.04

�

645

�

165,101

�

256.0

�

2.91

�

�%

�

�%

�

�%

�

(30

California

�

669

�

327,248

�

489.2

�

3.22

�

561

�

237,694

�

423.7

�

3.90

�

�%

�

�%

�

�%

�

(17

Nevada

�

579

�

192,708

�

332.8

�

2.93

�

529

�

162,270

�

306.7

�

3.47

�

�%

�

�%

�

�%

�

(16

Washington

�

276

�

102,795

�

372.4

�

2.30

�

300

�

98,156

�

327.2

�

2.19

�

�%

�

�%

�

�%

West

�

2,326

�

857,792

�

368.8

�

2.54

�

2,035

�

663,221

�

325.9

�

3.11

�

�%

�

�%

�

�%

�

(18

Colorado

�

1,334

�

576,322

�

432.0

�

2.88

�

1,234

�

466,285

�

377.9

�

2.67

�

�%

�

�%

�

�%

�

�%

Utah

�

179

�

59,304

�

331.3

�

2.55

�

153

�

48,893

�

319.6

�

1.80

�

�%

�

�%

�

�%

�

�%

Mountain

�

1,513

�

635,626

�

420.1

�

2.84

�

1,387

�

515,178

�

371.4

�

2.53

�

�%

�

�%

�

�%

�

�%

Maryland

�

244

�

117,646

�

482.2

�

1.43

�

314

�

145,310

�

462.8

�

1.45

�

(22

�

(19

�

�%

�

Virginia

�

221

�

111,068

�

502.6

�

1.96

�

273

�

136,054

�

498.4

�

2.07

�

(19

�

(18

�

�%

�

Florida

�

319

�

109,141

�

342.1

�

1.85

�

318

�

84,897

�

267.0

�

2.09

�

�%

�

�%

�

�%

�

(11

East

�

784

�

337,855

�

430.9

�

1.72

�

905

�

366,261

�

404.7

�

1.81

�

(13

�

�%

�

Total

�

4,623

�

1,831,273

�

396.1

�

2.43

�

4,327

�

1,544,660

�

357.0

�

2.54

�

�%

�

�%

�

�%

�

* 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

�

December 31,

�

2014

�

2013

�

Change

�

Arizona

�

�%

California

�

�%

Nevada

�

�%

Washington

�

(23

West

�

�%

Colorado

�

�%

Utah

�

�%

Mountain

�

�%

Maryland

�

(47

Virginia

�

�%

Florida

�

�%

East

�

(18

Total

�

159

�

146

�

�%

Average for Quarter Ended

�

166

�

143

�

�%

Average for Year Ended

�

159

�

142

�

�%

�

Backlog

�

At December 31,

�

2014

�

2013

�

% Change

�

Homes

�

Dollar
Value

�

Average Price

�

Homes

�

Dollar
Value

�

Average Price

�

Homes

�

Dollar
Value

�

Average Price

�

(Dollars in thousands)

�

Arizona

�

231

�

75,419

�

326.5

�

160

�

43,184

�

269.9

�

�%

�

�%

�

�%

California

�

192

�

98,057

�

510.7

�

147

�

71,855

�

488.8

�

�%

�

�%

�

�%

Nevada

�

155

�

61,020

�

393.7

�

140

�

49,350

�

352.5

�

�%

�

�%

�

�%

Washington

�

20,655

�

375.5

�

16,430

�

357.2

�

�%

�

�%

�

�%

West

�

633

�

255,151

�

403.1

�

493

�

180,819

�

366.8

�

�%

�

�%

�

�%

Colorado

�

579

�

266,280

�

459.9

�

417

�

171,688

�

411.7

�

�%

�

�%

�

�%

Utah

�

13,580

�

339.5

�

8,422

�

323.9

�

�%

�

�%

�

�%

Mountain

�

619

�

279,860

�

452.1

�

443

�

180,110

�

406.6

�

�%

�

�%

�

�%

Maryland

�

34,293

�

504.3

�

129

�

65,435

�

507.2

�

(47

�

(48

�

Virginia

�

45,521

�

505.8

�

103

�

51,594

�

500.9

�

(13

�

(12

�

�%

Florida

�

109

�

48,412

�

444.1

�

28,037

�

298.3

�

�%

�

�%

�

�%

East

�

267

�

128,226

�

480.2

�

326

�

145,066

�

445.0

�

(18

�

(12

�

�%

Total

�

1,519

�

663,237

�

436.6

�

1,262

�

505,995

�

400.9

�

�%

�

�%

�

�%

�

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

�

Homes Completed or Under Construction (WIP lots)

�

December 31,

�

2014

�

2013

�

Change

�

Unsold:

�

Completed

�

483

�

378

�

�%

Under construction

�

583

�

1,038

�

(44

Total unsold started homes

�

1,066

�

1,416

�

(25

Sold homes under construction or completed

�

1,089

�

981

�

�%

Model homes

�

272

�

258

�

�%

Total homes completed or under construction

�

2,427

�

2,655

�

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

�

December 31, 2014

�

December 31, 2013

�

Lots Owned

�

Lots Optioned

�

Total

�

Lots Owned

�

Lots Optioned

�

Total

�

Total % Change

�

Arizona

�

2,266

�

2,311

�

2,838

�

2,912

�

(21

California

�

1,600

�

1,694

�

1,765

�

129

�

1,894

�

(11

Nevada

�

1,589

�

286

�

1,875

�

1,503

�

391

�

1,894

�

Washington

�

886

�

886

�

537

�

182

�

719

�

�%

West

�

6,341

�

425

�

6,766

�

6,643

�

776

�

7,419

�

Colorado

�

4,083

�

929

�

5,012

�

4,292

�

1,093

�

5,385

�

Utah

�

598

�

598

�

538

�

557

�

�%

Mountain

�

4,681

�

929

�

5,610

�

4,830

�

1,112

�

5,942

�

Maryland

�

417

�

417

�

834

�

446

�

304

�

750

�

�%

Virginia

�

525

�

469

�

994

�

469

�

133

�

602

�

�%

Florida

�

891

�

184

�

1,075

�

650

�

423

�

1,073

�

�%

East

�

1,833

�

1,070

�

2,903

�

1,565

�

860

�

2,425

�

�%

Total

�

12,855

�

2,424

�

15,279

�

13,038

�

2,748

�

15,786

�

M.D.C. HOLDINGS, INC.

Reconciliations of Non-GAAP Financial Measures

�

Gross Margin from Home Sales Excluding Interest and Impairments (Unaudited)

�

Gross Margin from Home Sales Excluding Impairments and Gross Margin from Home Sales Excluding Interest and Impairments are non-GAAP financial measures. We believe this information is meaningful as it isolates the impact that interest and impairments have 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 December 31,

�

Year Ended December 31,

�

2014

�

Gross Margin %

�

2013

�

Gross Margin %

�

2014

�

Gross Margin %

�

2013

�

Gross Margin %

�

(Dollars in thousands)

�

Gross Margin

�

80,239

�

16.3

�

80,429

�

17.4

�

280,691

�

17.0

�

289,317

�

17.8

Less: Land Sales Revenue

�

(62

)

�

(636

)

�

(3,233

)

�

(2,468

)

�

Add: Land Cost of Sales

�

491

�

2,559

�

1,961

�

Gross Margin from Home Sales

�

80,229

�

16.3

�

80,284

�

17.4

�

280,017

�

17.0

�

288,810

�

17.8

Add: Inventory Impairments

�

910

�

569

�

1,760

�

919

�

Gross Margin from Home Sales

�

Excluding Impairments

�

81,139

�

16.5

�

80,853

�

17.5

�

281,777

�

17.1

�

289,729

�

17.8

Add: Interest in Cost of Sales

�

17,296

�

16,140

�

60,508

�

54,261

�

Gross Margin from Home Sales Excluding Impairments and Interest in Cost of Sales

�

98,435

�

20.0

�

96,993

�

21.0

�

342,285

�

20.8

�

343,990

�

21.1

�

Pretax Income, Net Income and Diluted Earnings per Share before Debt Extinguishment Charge (Unaudited)

�

Pretax Income, Net Income and Diluted Earnings per Share before Debt Extinguishment Charge are non-GAAP financial measures. We believe this information is meaningful as it isolates the impact that the debt extinguishment costs have on the results of MDC and permits investors to make better comparisons with our competitors, who may not have incurred debt extinguishment charges.

�

�	�	Three Months Ended December 31,						�
�	�	2014		�	�	2013		�
�	�	(Dollars in thousands)						�
Income before tax	�	$	23,885	�	�	$	34,318	�
Losses from early extinguishments of debt	�	�	8,741	�	�	�	-	�
Adjusted income before tax	�	�	32,626	�	�	�	34,318	�
Adjusted income tax provision	�	�	(12,568	)	�	�	(3,609	)
Adjusted net income	�	$	20,058	�	�	$	30,709	�

�

Three Months Ended December 31,

�

2014

�

2013

�

Dollars

�

EPS

�

Dollars

�

EPS

�

(Dollars in thousands, except per share amounts)

�

Numerator for diluted earnings per share under two class method

�

14,582

�

0.30

�

30,163

�

0.62

�

Effect of debt extinguishment charge on numerator for diluted earnings per share under two class method

�

5,398

�

0.11

�

Numerator for adjusted diluted earnings per share under two class method

�

19,980

�

0.41

�

30,163

�

0.62

�

Weighted average diluted shares outstanding

�

48,785,682

�

48,728,889

�

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