M.D.C. Holdings, Inc.
July 30, 2013

M.D.C. Holdings Announces 2013 Second Quarter Results

DENVER, July 30, 2013 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended June 30, 2013.

2013 Second Quarter Highlights and Comparisons to 2012 Second Quarter

  • Net income of $224.9 million, or $4.56 per diluted share vs. net income of $10.6 million, or $0.22 per diluted share
    • Net income included a $187.6 million, or $3.80 per diluted share, tax benefit related to the reversal of a substantial portion of the deferred tax asset valuation allowance
    • Excluding the impact of the reversal of the deferred tax asset valuation allowance, net income was $37.3 million*, or $0.76* per diluted share
  • Pretax income of $38.0 million, up 292% from $9.7 million
    • Homebuilding pretax income of $29.8 million vs. $3.0 million
  • Home sale revenues of $400.3 million, up 56%
    • Homes delivered of 1,183, up 37%
    • Average selling price of $338,400, up 14%
  • Gross margin from home sales of 18.1% vs. 14.2%, a 390 basis point increase
    • 70 basis point improvement vs. 17.4% in 2013 first quarter
  • SG&A expenses as a percentage of home sale revenues of 13.0% vs. 15.3%, a 230 basis point improvement
  • Monthly net home order absorption pace of 3.2 homes per active community, up 23%
    • Net new orders of 1,351 homes, down 4%; dollar value up 12% to $485.5 million
  • Backlog dollar value of $784.2 million, up 19%; units up 3% to 2,095 homes
  • Acquired 2,776 lots in 69 communities, including 32 new communities
    • Total land acquisition spend of $185.1 million

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "I am pleased to announce a second quarter profit of $4.56 per diluted share, our sixth consecutive quarterly operating profit, with net income improving by $214.3 million over the prior year. Our favorable results were significantly impacted by a $187.6 million tax benefit related to the reversal of a portion of our deferred tax asset valuation allowance, stemming from our return to consistent profitability and an improving housing market. Additionally, our homebuilding results again improved significantly, as volume and gross margin gains drove both year-over-year and sequential improvements in our homebuilding pretax operating margin to 7.4%."

Mr. Mizel continued, "During the second quarter of 2013, the pace of our new home sales remained strong. Our monthly absorption rate of 3.2 net new home orders per active community was up 23% year-over-year and at our highest level since 2006, even as we increased prices in most of our subdivisions to regulate the pace of sales and maximize profitability. And although interest rates rose significantly toward the end of the quarter, we believe that the impact of increasing interest rates on new homes sales can be offset by the positive influence of other factors impacting new home demand, including low existing home inventories, attractive levels of overall affordability, and continued improvements in employment levels and consumer confidence."

Mr. Mizel concluded, "Our active community count steadied in the second quarter, increasing slightly after five consecutive sequential quarterly declines. We continue to believe that we are poised to increase our active community count by at least 10% from current levels by the end of the year. Our confidence in achieving this goal is rooted in the success we have experienced in acquiring new land over the past year. During the 2013 second quarter alone, we purchased approximately 2,800 lots, our highest level of land acquisition activity since 2006. We ended the quarter with more than 14,700 lots controlled, an increase of 16% from the end of the 2013 first quarter and 44% year-over-year. We believe that we control enough lots to drive meaningful gains in both net orders and closings volume for 2014, provided that market conditions remain favorable for the industry."

Homebuilding

Home sale revenues for the 2013 second quarter increased 56% to $400.3 million compared to $256.5 million for the prior year period.  The increase in revenues resulted from a 37% increase in homes delivered to 1,183 homes as compared to 861 in the prior year and a 14% increase in the Company's average selling price to $338,400. The increase in average selling price was largely due to price appreciation and lower incentives in many of our markets.

Gross margin from home sales for the 2013 second quarter increased to 18.1% from 14.2% for the year-earlier period. On a sequential basis, our 2013 second quarter gross margin from home sales was up 70 basis points as compared to 17.4% for the 2013 first quarter.  The increase was attributable to the Company's continued focus on increasing pricing and decreasing incentives as its markets improved since the start of 2012.

SG&A expenses as a percentage of home sales revenues decreased by 230 basis points to 13.0% for the 2013 second quarter versus 15.3% for the same period in 2012.   The improvement was the result of operating leverage created by the Company's 56% year-over-year increase in home sale revenues, which far outpaced a year-over-year increase in the Company's absolute level of SG&A expenses, and was slightly offset by a year-over-year increase in legal expenses driven by various significant legal recoveries in the 2012 second quarter which did not recur in the 2013 second quarter.

Net new orders for the 2013 second quarter decreased 4% to 1,351 homes, compared to 1,402 homes during the same period in 2012, largely due to a 21% decrease in the Company's active average community count.  However, the Company's monthly sales absorption rate for the 2013 second quarter rose 23% to 3.2 per community, compared to 2.6 per community for the 2012 second quarter and 3.0 for the 2013 first quarter.  The Company's cancellation rate for the 2013 second quarter was 19% versus 20% in the prior year second quarter and 18% in the 2013 first quarter.

The Company ended the 2013 second quarter with 2,095 homes in backlog, with an estimated sales value of $784.2 million, compared with a backlog of 2,028 homes with an estimated sales value of $657.5 million at June 30, 2012, a 19% increase in dollar value.

At June 30, 2013, the Company had 140 active subdivisions, which was up slightly from 139 at March 31, 2013, and represented a reversal of its previous trend of sequential quarterly decreases in community count.  In addition, as a result of the significant increase in our land acquisition activity in the latter half of 2012 and the first half of 2013, the Company's lots owned and under option increased by 44% year-over-year and 16% since March 31, 2013 to more than 14,700 lots.  The Company believes that these significant increases in lots owned and under option will further increase its active community count during the second half of 2013. 

Financial Services

Income before taxes from our financial services operations for the 2013 second quarter was $8.2 million, compared to $6.7 million for the 2012 second quarter.  The increase in pretax income primarily reflected a $1.1 million increase in our mortgage operations pretax income to $6.9 million for the 2013 second quarter, compared to $5.8 million in the 2012 second quarter.  The improvement in our mortgage profitability was driven primarily by year-over-year increases in the volume of loans locked and originated due to increases in new home deliveries from our homebuilding operations.

Income Taxes

During the 2013 second quarter, we realized a $187.6 million income tax benefit related to the reversal of a substantial portion of the Company's deferred tax asset valuation allowance.  Our remaining deferred tax asset valuation allowance at June 30, 2013 was $39.7 million and related to (1) the remaining interim periods of 2013 during which a portion of the remaining valuation allowance will be reversed as pretax income is realized as required by U.S. GAAP and (2) various state net operating loss carryforwards where realization is more uncertain at this time due to the more limited carryforward periods that exist in certain states.

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, Orlando, South Florida and Seattle. 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, 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 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-Q for the quarter ended June 30, 2013, 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.

 * 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


Six Months





Ended June 30,


Ended June 30,





2013


2012


2013


2012





(Dollars in thousands, except per share amounts)

Homebuilding:

(Unaudited)

     Home sale revenues


$    400,327


$    256,532


$    732,075


$    441,210

     Land sale revenues


1,807


1,815


1,807


3,405

          Total home sale and land revenues

402,134


258,347


733,882


444,615

     Home cost of sales


(327,927)


(220,220)


(602,003)


(378,874)

     Land cost of sales


(1,435)


(1,718)


(1,435)


(3,208)

          Total cost of sales


(329,362)


(221,938)


(603,438)


(382,082)

               Gross margin

72,772


36,409


130,444


62,533

     Selling, general and administrative expenses


(51,908)


(39,223)


(100,109)


(73,347)

     Interest income


8,504


5,373


14,686


11,286

     Interest expense


(909)


-


(1,726)


(808)

     Other income (expense)


1,330


418


1,341


576

               Homebuilding pretax income

29,789


2,977


44,636


240












Financial Services:









     Revenues


13,884


10,587


26,390


18,306

     Expenses


(6,581)


(4,640)


(12,223)


(8,305)

     Interest and other income


920


731


1,795


1,539

               Financial services pretax income

8,223


6,678


15,962


11,540












Income before income taxes


38,012


9,655


60,598


11,780

Benefit from income taxes


186,897


983


186,827


1,123

Net income


$    224,909


$      10,638


$    247,425


$      12,903

Other comprehensive income (loss):









     Unrealized gain (loss) related
       to available-
for-sale
       securities, net of tax


(1,995)


(698)


540


5,850

Comprehensive income


$    222,914


$        9,940


$    247,965


$      18,753










Earnings per share:









          Basic


$          4.60


$          0.22


$          5.07


$          0.27

          Diluted


$          4.56


$          0.22


$          5.02


$          0.27












Weighted average common shares outstanding:








          Basic

48,447,005


47,398,088


48,410,486


47,367,051

          Diluted

48,914,984


47,516,258


48,916,988


47,462,544












Dividends declared per share


$                -


$          0.25


$                -


$          0.50

 

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets




June 30, 


December 31, 



2013


2012

ASSETS

(Dollars in thousands, except per share amounts)

Homebuilding:


(Unaudited)



   Cash and cash equivalents


$    208,883


$      129,535

   Marketable securities


610,404


519,465

   Restricted cash


2,679


1,859

   Trade and other receivables


36,676


28,163

   Inventories:





     Housing completed or under construction


569,218


512,949

     Land and land under development


628,282


489,572

        Total inventories


1,197,500


1,002,521

   Property and equipment, net


32,184


33,125

   Deferred tax asset, net of valuation allowance of $39,697 and $248,306 at June 30, 2013 and December 31, 2012, respectively


184,221


-

  Other assets


61,103


44,777

      Total homebuilding assets


2,333,650


1,759,445

Financial Services:





   Cash and cash equivalents


40,535


30,560

   Marketable securities


24,037


32,473

   Mortgage loans held-for-sale, net


92,463


119,953

   Other assets


5,857


3,010

      Total financial services assets


162,892


185,996

             Total Assets


$ 2,496,542


$   1,945,441






LIABILITIES AND EQUITY




Homebuilding:





   Accounts payable 


$      22,267


$        73,055

   Accrued liabilities


137,209


118,456

   Senior notes, net


1,095,225


744,842

      Total homebuilding liabilities


1,254,701


936,353






Financial Services:





   Accounts payable and accrued liabilities


53,798


51,864

   Mortgage repurchase facility


48,848


76,327

      Total financial services liabilities


102,646


128,191

             Total Liabilities


1,357,347


1,064,544






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; 48,869,726 and 48,698,757 issued and outstanding at June 30, 2013 and December 31, 2012, respectively


489


487

 Additional paid-in-capital


907,192


896,861

 Retained earnings (accumulated deficit)


226,136


(21,289)

 Accumulated other comprehensive income


5,378


4,838

      Total Stockholders' Equity


1,139,195


880,897

      Total Liabilities and Stockholders' Equity


$ 2,496,542


$   1,945,441

 

M.D.C. HOLDINGS, INC.

Consolidated Statements of Cash Flows



 Three Months
Ended June 30, 


 Six Months
Ended June 30, 


2013


2012


2013


2012


(Dollars in thousands)


(Unaudited)

Operating Activities:








Net income

$ 224,909


$   10,638


$ 247,425


$   12,903

  Adjustments to reconcile net income to net cash








provided by (used in) operating activities:








    Stock-based compensation expense

1,838


5,110


5,214


7,721

    Depreciation and amortization 

994


1,349


2,072


2,656

    Write-offs of land option deposits

273


229


499


311

    Amortization of discount (premiums) on marketable debt securities

804


1


1,423


(151)

    Deferred income tax benefit

(187,643)


-


(187,643)


-

       Net changes in assets and liabilities:








            Restricted cash

(153)


(1,180)


(820)


(1,593)

            Trade and other receivables

(4,596)


(7,283)


(8,566)


(18,345)

            Mortgage loans held-for-sale

(6,034)


(10,697)


27,490


12,648

            Housing completed or under construction

(47,469)


(90,512)


(56,087)


(136,387)

            Land and land under development

(93,739)


74,048


(138,509)


91,048

            Other assets

(1,687)


562


(8,383)


3,956

            Accounts payable and accrued liabilities

21,678


20,958


(30,358)


9,643

Net cash used in operating activities

(90,825)


3,223


(146,243)


(15,590)









Investing Activities:








    Purchase of marketable securities

(161,284)


(107,178)


(312,095)


(292,788)

    Maturity of marketable securities

87,015


106,000


87,015


106,000

    Sale of marketable securities

92,399


43,680


137,067


225,701

    Purchase of property and equipment

(72)


(304)


(998)


(668)

    Net cash used in investing activities

18,058


42,198


(89,011)


38,245









Financing Activities:








    Payments on mortgage repurchase facility

(55,790)


(36,784)


(135,559)


(90,409)

    Advances on mortgage repurchase facility

63,170


43,604


108,080


74,367

    Dividend payments

-


(11,996)


-


(23,990)

    Proceeds from issuance of senior notes

99,125


-


346,938


-

    Proceeds from exercise of stock options

-


140


5,118


140

    Net cash provided by (used in) financing activities

106,505


(5,036)


324,577


(39,892)









Net increase (decrease) in cash and cash equivalents

33,738


40,385


89,323


(17,237)

Cash and cash equivalents:








      Beginning of period

215,680


285,739


160,095


343,361

      End of period

$ 249,418


$ 326,124


$ 249,418


$ 326,124

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data







New Home Deliveries:

































 Three Months Ended June 30, 


2013


2012


 % Change 


 Homes 


 Dollar Value 


 Average Price 


 Homes 


 Dollar Value 


 Average Price 


 Homes 


 Dollar Value 


 Average Price 


(Dollars in thousands)

Arizona 

130


$   30,472


$ 234.4


127


$   27,086


$ 213.3


2%


13%


10%

California 

167


61,199


366.5


133


43,195


324.8


26%


42%


13%

Nevada 

161


41,850


259.9


155


28,460


183.6


4%


47%


42%

Washington

98


30,992


316.2


59


17,170


291.0


66%


81%


9%

 West 

556


164,513


295.9


474


115,911


244.5


17%


42%


21%

Colorado 

309


113,320


366.7


185


66,254


358.1


67%


71%


2%

Utah 

59


18,643


316.0


46


13,142


285.7


28%


42%


11%

 Mountain 

368


131,963


358.6


231


79,396


343.7


59%


66%


4%

Maryland 

83


35,407


426.6


47


19,777


420.8


77%


79%


1%

Virginia 

95


47,350


498.4


70


32,171


459.6


36%


47%


8%

Florida 

81


21,094


260.4


37


8,726


235.8


119%


142%


10%

Illinois

-


-


-


2


551


275.5


N/M


N/M


N/M

 East 

259


103,851


401.0


156


61,225


392.5


66%


70%


2%

   Total 

1,183


$ 400,327


$ 338.4


861


$ 256,532


$ 297.9


37%


56%


14%

 

New Home Deliveries:















 Six Months Ended June 30, 


2013


2012


 % Change 


 Homes 


 Dollar Value 


 Average Price 


 Homes 


 Dollar Value 


 Average Price 


 Homes 


 Dollar Value 


 Average Price 


(Dollars in thousands)

Arizona 

270


$   63,633


$ 235.7


215


$   45,043


$ 209.5


26%


41%


12%

California 

313


110,788


354.0


188


61,188


325.5


66%


81%


9%

Nevada 

294


74,595


253.7


261


50,056


191.8


13%


49%


32%

Washington

159


50,476


317.5


103


29,166


283.2


54%


73%


12%

 West 

1,036


299,492


289.1


767


185,453


241.8


35%


61%


20%

Colorado 

613


226,808


370.0


310


111,217


358.8


98%


104%


3%

Utah 

126


38,532


305.8


98


27,242


278.0


29%


41%


10%

 Mountain 

739


265,340


359.1


408


138,459


339.4


81%


92%


6%

Maryland 

137


57,111


416.9


91


38,571


423.9


51%


48%


-2%

Virginia 

158


76,469


484.0


129


58,326


452.1


22%


31%


7%

Florida 

131


33,663


257.0


83


19,850


239.2


58%


70%


7%

Illinois

-


-


-


2


551


275.5


N/M


N/M


N/M

 East 

426


167,243


392.6


305


117,298


384.6


40%


43%


2%

   Total 

2,201


$ 732,075


$ 332.6


1,480


$ 441,210


$ 298.1


49%


66%


12%



















N/M - Not meaningful

















 


Net New Orders:






















 Three Months Ended June 30, 


2013


2012


% 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 

196


$   48,825


$  249.1


3.84


246


$   55,544


$  225.8


4.10


-20%


-12%


10%


-6%

California 

196


79,196


404.1


5.23


217


74,876


345.1


3.71


-10%


6%


17%


41%

Nevada 

152


49,085


322.9


4.94


225


48,926


217.4


3.90


-32%


0%


49%


27%

Washington

94


31,016


330.0


2.72


69


19,346


280.4


2.19


36%


60%


18%


24%

 West 

638


208,122


326.2


4.15


757


198,692


262.5


3.64


-16%


5%


24%


14%

Colorado 

381


143,754


377.3


3.30


311


108,045


347.4


2.19


23%


33%


9%


51%

Utah 

44


14,582


331.4


2.10


69


19,945


289.1


1.39


-36%


-27%


15%


51%

 Mountain 

425


158,336


372.6


3.11


380


127,990


336.8


1.99


12%


24%


11%


56%

Maryland 

112


53,091


474.0


1.84


113


46,677


413.1


1.96


-1%


14%


15%


-6%

Virginia 

90


43,830


487.0


2.50


98


48,168


491.5


2.29


-8%


-9%


-1%


9%

Florida 

86


22,080


256.7


2.25


53


12,842


242.3


1.28


62%


72%


6%


76%

Illinois

-


-


-


-


1


315


315.0


N/M


N/M


N/M


N/M


N/M

 East 

288


119,001


413.2


2.13


265


108,002


407.6


1.87


9%


10%


1%


14%

   Total 

1,351


$ 485,459


$  359.3


3.18


1,402


$ 434,684


$  310.0


2.59


-4%


12%


16%


23%


















































 Six Months Ended June 30, 


2013


2012


% 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 

323


$   79,760


$  246.9


3.36


433


$   96,737


$  223.4


3.35


-25%


-18%


11%


0%

California 

360


140,358


389.9


4.77


338


117,611


348.0


3.06


7%


19%


12%


56%

Nevada 

322


95,267


295.9


4.94


391


83,748


214.2


3.31


-18%


14%


38%


49%

Washington

187


59,942


320.5


2.91


145


42,042


289.9


2.38


29%


43%


11%


22%

 West 

1,192


375,327


314.9


3.96


1,307


340,138


260.2


3.12


-9%


10%


21%


27%

Colorado 

799


291,343


364.6


3.40


546


192,192


352.0


1.93


46%


52%


4%


76%

Utah 

109


35,179


322.7


1.99


137


38,938


284.2


1.26


-20%


-10%


14%


58%

 Mountain 

908


326,522


359.6


3.13


683


231,130


338.4


1.74


33%


41%


6%


80%

Maryland 

202


91,526


453.1


1.76


196


81,825


417.5


1.80


3%


12%


9%


-2%

Virginia 

183


92,714


506.6


2.51


188


92,227


490.6


2.13


-3%


1%


3%


18%

Florida 

166


42,626


256.8


2.11


89


21,778


244.7


1.00


87%


96%


5%


111%

Illinois

-


-


-


-


2


550


275.0


N/M


N/M


N/M


N/M


N/M

 East 

551


226,866


411.7


2.07


475


196,380


413.4


1.66


16%


16%


0%


25%

   Total 

2,651


$ 928,715


$  350.3


3.09


2,465


$ 767,648


$  311.4


2.25


8%


21%


12%


37%

























N/M - Not meaningful


















* Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period










 


Active Subdivisions:







 June 30, 




2013


2012


% Change

Arizona 

19


17


12%

California 

11


19


-42%

Nevada 

13


19


-32%

Washington

12


11


9%

 West 

55


66


-17%

Colorado 

38


47


-19%

Utah 

4


17


-76%

 Mountain 

42


64


-34%

Maryland 

20


19


5%

Virginia 

11


12


-8%

Florida 

12


12


0%

 East

43


43


0%

   Total 

140


173


-19%

   Average for quarter ended

142


180


-21%

   Average for six months ended

143


183


-22%

 

Backlog:



















June 30,


2013


2012


% Change


 Homes 


 Dollar Value 


 Average Price 


 Homes 


 Dollar Value 


 Average Price 


 Homes 


 Dollar Value 


 Average Price 


 (Dollars in thousands) 



Arizona 

203


$   50,836


$ 250.4


346


$   76,564


$ 221.3


-41%


-34%


13%

California 

276


107,950


391.1


268


92,161


343.9


3%


17%


14%

Nevada 

232


71,488


308.1


286


63,283


221.3


-19%


13%


39%

Washington

107


36,118


337.6


96


30,438


317.1


11%


19%


6%

 West 

818


266,392


325.7


996


262,446


263.5


-18%


2%


24%

Colorado 

656


246,797


376.2


469


171,862


366.4


40%


44%


3%

Utah 

64


21,576


337.1


107


30,116


281.5


-40%


-28%


20%

 Mountain 

720


268,373


372.7


576


201,978


350.7


25%


33%


6%

Maryland 

248


113,824


459.0


218


90,570


415.5


14%


26%


10%

Virginia 

210


109,180


519.9


162


82,723


510.6


30%


32%


2%

Florida 

99


26,470


267.4


76


19,734


259.7


30%


34%


3%

 East

557


249,474


447.9


456


193,027


423.3


22%


29%


6%

   Total 

2,095


$ 784,239


$ 374.3


2,028


$ 657,451


$ 324.2


3%


19%


15%

 


Homes Completed or Under Construction (WIP lots):













June 30,


 % Change 


2013


2012


Unsold:






 Completed

185


138


34%

 Under construction

628


479


31%

   Total unsold started homes 

813


617


32%

Sold homes under construction or completed

1,652


1,392


19%

Model homes 

207


221


-6%

   Total homes completed or under construction

2,672


2,230


20%

 

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
















June 30, 2013


June 30, 2012


Total % Change


Lots Owned


Lots Optioned


Total


Lots Owned


Lots Optioned


Total


Arizona 

2,707


239


2,946


774


108


882


234%

California 

971


-


971


1,196


-


1,196


-19%

Nevada 

1,573


136


1,709


966


27


993


72%

Washington

477


141


618


397


161


558


11%

 West

5,728


516


6,244


3,333


296


3,629


72%

Colorado 

4,174


1,079


5,253


3,236


584


3,820


38%

Utah 

468


-


468


492


13


505


-7%

 Mountain

4,642


1,079


5,721


3,728


597


4,325


32%

Maryland 

551


358


909


607


399


1,006


-10%

Virginia 

491


284


775


596


121


717


8%

Florida 

648


424


1,072


285


133


418


156%

Illinois 

-


-


-


123


-


123


N/M

 East

1,690


1,066


2,756


1,611


653


2,264


22%

   Total 

12,060


2,661


14,721


8,672


1,546


10,218


44%















N/M - Not meaningful









 

M.D.C. HOLDINGS, INC.

Reconciliation of Non-GAAP Financial Measures


Net income excluding the impact of the reversal of the deferred tax asset per diluted share is a non-GAAP financial measure. We believe this information is meaningful as it more clearly reflects the Company's current operating results and facilitates the investors ability to compare our financial results to those of our peer group and to our prior financial performance by excluding items which otherwise would distort the comparison. Net income excluding the impact of the reversal of the deferred tax asset valuation allowance per basic and diluted share for the three and six months ended June 30, 2013 is calculated as follows:



 Three Months Ended
June 30, 2013 


 Six Months Ended
June 30, 2013 


 (Dollars in thousands, except per share amounts) 

Numerator

Net income

$           224,909


$           247,425

    Less: deferred tax asset valuation allowance reversal

(187,643)


(187,643)

Adjusted net income

37,266


59,782

    Less: distributed earnings allocated to participating securities

-


-

    Less: undistributed earnings allocated to participating securities

(309)


(504)

Net income attributable to common stockholders (numerator for basic earnings per share)

36,957


59,278

    Add back: undistributed earnings allocated to participating securities

309


504

    Less: undistributed earnings reallocated to participating securities

(306)


(499)

Numerator for diluted earnings per share

$             36,960


$             59,283





Denominator




 Weighted-average common shares outstanding

48,447,005


48,410,486

    Add: dilutive effect of stock options

467,979


506,502

 Denominator for diluted earnings per share under two class method

48,914,984


48,916,988





Basic earnings per common share excluding impact of reversal of deferred tax asset valuation allowance

$                 0.76


$                 1.22

Diluted earnings per common share excluding impact of reversal of deferred tax asset valuation allowance

$                 0.76


$                 1.21

SOURCE M.D.C. Holdings, Inc.

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