8-K

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): February 10, 2009

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)

Registrant’s 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:

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

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

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

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

TABLE OF CONTENTS

Press Release dated February 10, 2009

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION; and

ITEM 7.01. REGULATION FD DISCLOSURE

     On February 10, 2009, M.D.C. Holdings, Inc. issued a press release reporting its fourth quarter and full year 2008 results. A copy of this press release is attached hereto as Exhibit 99.1

     Limitation on Incorporation by Reference. The information being furnished 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 shall be expressly set forth by specific reference in such a filing.

ITEM 9.01. EXHIBITS

Exhibit Number	Description
Exhibit 99.1	Press Release dated February 10, 2009

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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: February 10, 2009	By:	/s/ Joseph H. Fretz
		Joseph H. Fretz
		Secretary and Corporate Counsel

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INDEX TO EXHIBITS

Exhibit Number	Description
Exhibit 99.1	Press Release dated February 10, 2009

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EX-99.1

Exhibit 99.1

M.D.C. HOLDINGS, INC.

NEWS BULLETIN

M.D.C. HOLDINGS, INC.	RICHMOND AMERICAN HOMES HOMEAMERICAN MORTGAGE
FOR IMMEDIATE RELEASE TUESDAY, FEBRUARY 10, 2009

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

M.D.C. HOLDINGS ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2008 RESULTS

    2008 FOURTH QUARTER

• Cash flow from operations of $51.2 million

• Quarter-end cash and investments of $1.42 billion

• No borrowings on homebuilding line of credit

• Pre-tax loss of $86.4 million; includes asset impairments of $59.7 million

• Net loss of $89.0 million vs. $281.1 million in 2007

• Diluted loss per share of $1.92 vs. $6.14 in 2007

• Total revenue of $296.2 million vs. $772.1 million in 2007

• S,G&A expenses of $71.9 million vs. $116.9 million in 2007

• Closed 944 homes at an average selling price of $300,300

• Net orders for 350 homes with an estimated value of $99.0 million

    2008 FULL YEAR

• Cash flow from operations of $479.5 million

• Net loss of $380.5 million vs. $636.9 million in 2007

• Total revenue of $1.46 billion; $2.89 billion in 2007

• Closed 4,488 homes at an average selling price of $302,600

• Net orders for 3,074 homes with an estimated value of $885.0 million

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M.D.C. HOLDINGS, INC.

DENVER, Tuesday, February 10, 2009 — M.D.C. Holdings, Inc. (NYSE: MDC) today announced a net loss for the quarter ended December 31, 2008 of $89.0 million, or $1.92 per diluted share, which included pre-tax charges of $59.7 million for asset impairments and a $19.2 million increase in our deferred tax asset valuation allowance. The net loss for the 2007 fourth quarter was $281.1 million, or $6.14 per diluted share, including pre-tax charges of $175.2 million for asset impairments, $7.8 million for write-offs of deposits and pre-acquisition costs and a deferred tax valuation allowance of $160.0 million.

Net loss for the year ended December 31, 2008 was $380.5 million, or $8.24 per diluted share, which included pre-tax charges of $298.2 million for asset impairments and a $134.3 million increase in our deferred tax asset valuation allowance. The net loss for the 2007 full year was $636.9 million, or $13.94 per diluted share, which included pre-tax charges of $726.6 million for asset impairments, write-offs of deposits and pre-acquisition costs of $23.4 million and a deferred tax valuation allowance of $160.0 million.

Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “During 2008, we faced extraordinary conditions in the homebuilding industry and the overall economy. Increasing unemployment levels, deteriorating consumer confidence, rising foreclosures and faltering conditions in the mortgage and banking industries all contributed to continued deterioration in the housing market.”

Mizel continued, “Even though the downturn in housing negatively impacted our operating results for 2008, we have strengthened our balance sheet during the year and bolstered our position as a one of the strongest companies in our industry. Through our efforts to reduce our inventory balances and adjust our organizational structure, we generated $480 million in operating cash flow during the year, including more than $50 million in the fourth quarter. On the strength of that operating cash flow, our cash and investments balance rose by more than 40% to $1.4 billion at year end and now exceeds our total debt balance by nearly $400 million. Furthermore, we expect to receive a tax refund of $165 million during the first quarter of 2009. “

Mizel concluded, “We look forward to 2009 as a time of continued focus on our Company-wide initiatives to streamline our processes and systems and improve the home buying experience for our customers. In addition, we will continue to explore opportunities to redeploy our capital, with an open mind to different ways in which we might take advantage of current market conditions. We believe successes that are achieved in these areas can ultimately have a positive impact on our bottom line.”

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M.D.C. HOLDINGS, INC.

Homebuilding Results

Homebuilding loss before taxes for the quarter and full year ended December 31, 2008 improved to $67.9 million and $338.7 million, respectively, compared with losses of $195.9 million and $764.2 million for the same periods in 2007. The losses in 2008 were lower in large part due to declines in asset impairments combined with decreased marketing, commissions and general and administrative expenses (“S,G&A”) and were partially offset by the impact of closing fewer homes and lower average selling prices compared with the same periods in 2007. Also, in the 2008 fourth quarter we experienced a lower amount of losses from land sales compared with the fourth quarter of 2007, and in the 2008 full year we recognized a gain on land sales compared with a loss in the prior year.

Homebuilding revenue for the 2008 fourth quarter fell to $291.3 million, compared with $762.7 million in the 2007 fourth quarter, primarily due to a 57% year-over-year decline in home closings combined with an 8% decrease in the average selling price of homes closed. All of our markets experienced year-over-year decreases in home closings in the fourth quarter, while only Colorado experienced an increase in average selling price. The slight increase in our Colorado market primarily was related to changes in the size and style of the homes that were closed and was not due to market appreciation. Homebuilding revenue for the 2008 full year fell to $1.44 billion, compared with $2.85 billion for the 2007 full year, primarily due to a 45% decrease in home closings and a 10% decrease in the average selling price of homes closed.

During the fourth quarter of 2008, we recognized $59.7 million of asset impairments, which included $57.0 million of inventory impairment charges that impacted 2,177 lots in 132 subdivisions. This fourth quarter inventory impairment charge is down 67% from the 2007 fourth quarter, primarily resulting from reduced impairments in our Phoenix, Nevada and California markets. Over the last nine quarters we have taken significant impairments in these markets, thereby significantly reducing our inventory balance and reducing our exposure to further impairments. Partially offsetting the decline in impairments in these markets were higher impairments in Colorado and Utah during the three months ended December 31, 2008. Asset impairments for the 2008 full year were $298.2 million, compared with $726.6 million in 2007.

Homebuilding S,G&A decreased to $44.9 million and $227.8 million, respectively, for the quarter and full year ended December 31, 2008, compared with $95.4 million and $425.5 million for the same periods in the prior year, as we continued to adjust our organizational structure and business practices in response to the decreased levels of closings. This decrease in S,G&A for both periods resulted from various cost saving initiatives associated with right-sizing our operations, including consolidating our homebuilding divisions and reducing our employee headcount, which allowed us to consolidate office space in many of our markets. Also contributing to this decrease from the prior year were lower commission expenses resulting from closing fewer homes and lower marketing expenses due to reduced advertising costs, a lower active subdivision count and significantly fewer model homes in operation.

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M.D.C. HOLDINGS, INC.

The Company recorded 350 net home orders with an estimated sales value of $99.0 million during the 2008 fourth quarter, compared with net orders for 748 homes with an estimated sales value of $187.0 million during the same period in 2007. The drop in net orders was partially due to a 30% year-over-year decline in average active subdivisions, as we continued to limit our investment in new subdivisions, combined with a decrease in the average number of orders received per subdivision. Each market experienced a year-over-year decrease in net orders during the 2008 fourth quarter, with the exception of Maryland and Virginia. For the year ended December 31, 2008, the Company received net orders for 3,074 homes with a sales value of $885.0 million, compared with 6,504 homes with a sales value of $2.11 billion for the 2007 full year.

During the fourth quarter of 2008, the Company’s cancellation rate was 52% compared with 65% during the same period in 2007. The cancellation rate for the year ended December 31, 2008 was 45% compared with 48% in 2007. All of our markets experienced a year-over-year decline in backlog, and we ended 2008 with 533 homes under contract with an estimated sales value of $173.0 million, compared with a backlog of 1,947 homes with an estimated sales value of $650.0 million at December 31, 2007.

Financial Services and Other

Income before taxes from the Company’s Financial Services and Other segment for the quarter ended December 31, 2008 was $3.6 million compared with $6.3 million for the same period in 2007. The decrease in the 2008 fourth quarter primarily resulted from a combined decrease in gains on sales of mortgage loans and broker origination fees. This decline partially was offset by reductions in general and administrative expenses for our mortgage operations. Income before taxes from the Company’s Financial Services and Other segment for the 2008 full year was $11.7 million compared with $23.1 million in 2007.

Balance Sheet and Cash Flow Highlights

For the quarter and year ended December 31, 2008, the Company generated $51.2 million and $479.5 million, respectively, of operating cash flow and ended the year with $1.42 billion in cash and investments. Our ability to generate cash during the quarter and year can be partially attributed to decreases in total lots owned, including WIP lots, of 8% and 39%, respectively, for the quarter and year ended December 31, 2008. As a result, our total inventory balance was only $637.3 million at year end compared with $1.46 billion at the end of 2007. For the lots we controlled under option contracts at December 31, 2008, we only had $10.5 million at risk.

Christopher M. Anderson, MDC’s senior vice president and chief financial officer, said, “Given that our cash and investments exceed total debt and our next debt maturity does not occur until 2012, we believe we are positioned with adequate resources to pursue opportunistic land investments in the future. While we didn’t find many potential land transactions that met our underwriting criteria during the year, we were able to take advantage of isolated opportunities to

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M.D.C. HOLDINGS, INC.

invest during the fourth quarter of 2008. During 2009, we will continue to maintain an active dialogue with potential land sellers and other parties in anticipation of a greater volume of opportunities that we believe may materialize in the future.”

About MDC

Since 1972, MDC has built and financed the American dream for more than 150,000 families. MDC’s commitment to customer satisfaction, quality and value is reflected in each home its subsidiaries build. As one of the largest homebuilders in the United States, the Company has homebuilding divisions across the country, including Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, California, Northern Virginia, Maryland, Philadelphia/Delaware Valley and Jacksonville. The Company also provides mortgage financing, insurance and title services, primarily for MDC homebuyers, through its wholly owned subsidiaries, 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) the relative stability of debt and equity markets; (5) competition; (6) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (7) the availability and cost of performance bonds and insurance covering risks associated with our business; (8) shortages and the cost of labor; (9) weather related slowdowns; (10) slow growth initiatives; (11) building moratoria; (12) governmental regulation, including the interpretation of tax, labor and environmental laws; (13) changes in consumer confidence and preferences; (14) terrorist acts and other acts of war; and (15) 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 Annual Report on Form 10-K for the year ended December 31, 2008, which is scheduled to be filed with the Securities and Exchange Commission today. All

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M.D.C. HOLDINGS, INC.

forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. The Company undertakes no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted.

 
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M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

	Three Months						Year Ended
	December 31,						December 31,
	2008			2007			2008			2007
REVENUE
Home sales revenue	$	283,519		$	715,244		$	1,358,148		$	2,765,981
Land sales revenue		3,351			37,979			60,050			50,130
Other revenue		9,338			18,892			39,910			69,548
Total Revenue		296,208			772,115			1,458,108			2,885,659
COSTS AND EXPENSES
Home cost of sales		246,918			631,262			1,184,865			2,380,427
Land cost of sales		4,288			51,789			53,847			59,529
Asset impairments		59,657			175,199			298,155			726,621
Marketing expenses		13,532			29,944			71,882			117,088
Commission expenses		9,906			26,421			50,295			97,951
General and administrative expenses		48,413			59,486			198,689			306,715
Related party expenses		5			1,096			18			1,382
Total Operating Costs and Expenses		382,719			975,197			1,857,751			3,689,713
LOSS FROM OPERATIONS		(86,511	)		(203,082	)		(399,643	)		(804,054	)
Other income (expense)
Interest income, net		117			10,384			17,470			37,322
Gain (loss) on sale of other assets		(1	)		2,257			38			10,268
LOSS BEFORE TAXES		(86,395	)		(190,441	)		(382,135	)		(756,464	)
(Provision for) benefit from income taxes, net		(2,633	)		(90,651	)		1,590			119,524
NET LOSS	$	(89,028	)	$	(281,092	)	$	(380,545	)	$	(636,940	)
LOSS PER SHARE
Basic	$	(1.92	)	$	(6.14	)	$	(8.24	)	$	(13.94	)
Diluted	$	(1.92	)	$	(6.14	)	$	(8.24	)	$	(13.94	)
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic		46,352			45,772			46,159			45,687
Diluted		46,352			45,772			46,159			45,687
DIVIDENDS DECLARED PER SHARE	$	0.25		$	0.25		$	1.00		$	1.00

 
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M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)

	December 31,
	2008			2007
ASSETS
Cash and cash equivalents	$	1,304,728		$	1,004,763
Short-term investments		54,864			—
Unsettled trades		57,687			—
Restricted cash		670			1,898
Receivables
Home sales receivables		17,104			33,647
Income taxes receivable		170,753			93,515
Other receivables		16,697			16,796
Mortgage loans held-for-sale, net		68,604			100,144
Inventories, net
Housing completed or under construction		415,500			902,221
Land and land under development		221,822			554,336
Property and equipment, net		38,343			44,368
Deferred tax asset, net of valuation allowance		—			160,565
Related party assets		28,627			28,627
Prepaid expenses and other assets, net		79,539			71,884
Total Assets	$	2,474,938		$	3,012,764
LIABILITIES
Accounts payable	$	28,793		$	71,932
Accrued liabilities		332,825			395,880
Related party liabilities		—			1,701
Mortgage repurchase facility		34,873			—
Mortgage line of credit		—			70,147
Senior notes, net		997,527			997,091
Total Liabilities		1,394,018			1,536,751
COMMITMENTS AND CONTINGENCIES		—			—
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding		—			—
Common stock, $0.01 par value; 250,000,000 shares authorized; 46,715,000 and 46,666,000 issued and outstanding, respectively, at December 31, 2008 and 46,084,000 and 46,053,000 issued and outstanding, respectively, at December 31, 2007		467			461
Additional paid-in-capital		788,207			757,039
Retained earnings		292,905			719,841
Accumulated other comprehensive loss		—			(669	)
Treasury stock, at cost; 49,000 and 31,000 shares at December 31, 2008 and December 31, 2007, respectively		(659	)		(659	)
Total Stockholders’ Equity		1,080,920			1,476,013
Total Liabilities and Stockholders’ Equity	$	2,474,938		$	3,012,764

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M.D.C. HOLDINGS, INC.
Information on Segments
(Dollars in thousands)
(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2008			2007			2008			2007
REVENUE
Homebuilding
West	$	146,384		$	448,710		$	785,451		$	1,725,589
Mountain		67,938			131,453			298,441			549,662
East		46,114			113,129			207,931			318,494
Other Homebuilding		30,847			69,421			146,745			253,595
Total Homebuilding		291,283			762,713			1,438,568			2,847,340
Financial Services and Other		7,947			11,848			33,681			55,543
Corporate		540			2,656			643			2,761
Inter-company adjustments		(3,562	)		(5,102	)		(14,784	)		(19,985	)
Consolidated	$	296,208		$	772,115		$	1,458,108		$	2,885,659
(LOSS) INCOME BEFORE INCOME TAXES
Homebuilding
West	$	(14,380	)	$	(159,227	)	$	(157,103	)	$	(621,774	)
Mountain		(31,531	)		(14,613	)		(112,251	)		(11,395	)
East		(8,519	)		(11,580	)		(36,021	)		(38,748	)
Other Homebuilding		(13,429	)		(10,475	)		(33,300	)		(92,251	)
Total Homebuilding		(67,859	)		(195,895	)		(338,675	)		(764,168	)
Financial Services and Other		3,559			6,286			11,678			23,062
Corporate		(22,095	)		(832	)		(55,138	)		(15,358	)
Consolidated	$	(86,395	)	$	(190,441	)	$	(382,135	)	$	(756,464	)
INVENTORY IMPAIRMENTS
West	$	16,048		$	136,370		$	151,969		$	581,494
Mountain		24,021			13,399			83,270			30,106
East		4,857			17,386			27,155			42,055
Other Homebuilding		12,102			7,576			24,342			72,498
Consolidated	$	57,028		$	174,731		$	286,736		$	726,153

	December 31,
	2008			2007
TOTAL ASSETS
Homebuilding
West	$	255,652		$	747,835
Mountain		288,221			474,203
East		132,700			250,658
Other Homebuilding		56,846			125,003
Total Homebuilding		733,419			1,597,699
Financial Services and Other		139,569			174,617
Corporate		1,647,907			1,285,705
Inter-company adjustments		(45,957	)		(45,257	)
Consolidated	$	2,474,938		$	3,012,764

 
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)

	Three Months Ended												Year Ended
	December 31,						Change						December 31,						Change
	2008			2007			Amount			%			2008			2007			Amount			%
SELECTED FINANCIAL DATA
General and Administrative Expenses
Homebuilding	$	21,437		$	39,036		$	(17,599	)		-45	%	$	105,652		$	210,455		$	(104,803	)		-50	%
Financial Services and Other		5,591			9,385			(3,794	)		-40	%		25,790			40,445			(14,655	)		-36	%
Corporate(1)		21,390			12,161			9,229			76	%		67,265			57,197			10,068			18	%
Total	$	48,418		$	60,582		$	(12,164	)		-20	%	$	198,707		$	308,097		$	(109,390	)		-36	%
SG&A as a % of Home Sales Revenue
Homebuilding Segments		15.8	%		13.3	%		2.5	%					16.8	%		15.4	%		1.4	%
Corporate Segment(1)		7.5	%		1.7	%		5.8	%					5.0	%		2.1	%		2.9	%
Depreciation and Amortization (2)	$	5,850		$	13,348		$	(7,498	)		-56	%	$	32,710		$	47,342		$	(14,632	)		-31	%
Home Gross Margins(3)		12.9	%		11.7	%		1.2	%					12.8	%		13.9	%		-1.2	%
Interest in Home Cost of Sales as a % of Home Sales Revenue		4.1	%		2.1	%		2.0	%					4.0	%		2.0	%		2.0	%
Cash Provided by (Used in)
Operating Activities	$	51,162		$	257,015		$	(205,853	)		-80	%	$	479,511		$	592,583		$	(113,072	)		-19	%
Investing Activities	$	96,876		$	6,915		$	89,961			N/A		$	(113,439	)	$	(1,447	)	$	(111,992	)		N/A
Financing Activities	$	(4,178	)	$	11,354		$	(15,532	)		-137	%	$	(66,107	)	$	(94,320	)	$	28,213			-30	%
Corporate and Homebuilding Interest
Interest capitalized, net of interest expense	$	7,186		$	14,471		$	(7,285	)		-50	%	$	39,852		$	57,791		$	(17,939	)		-31	%
Previously capitalized interest included in home cost of sales	$	(11,681	)	$	(14,988	)	$	3,307			-22	%	$	(54,100	)	$	(54,959	)	$	859			-2	%
Interest capitalized in homebuilding inventory, end of year	$	39,239		$	53,487		$	(14,248	)		-27	%	$	39,239		$	53,487		$	(14,248	)		-27	%

(1)	Includes related party expenses.
(2)	Includes depreciation and amortization of long-lived assets and amortization of deferred marketing costs.
(3)	Home sales revenue less home cost of sales (excluding commissions, amortization of deferred marketing, project cost write offs and asset impairments) as a percent of home sales revenue. During the three and twelve months ended December 31, 2008, we closed homes on lots for which we had previously recorded $67.4 million and $249.5 million, respectively, of asset impairments. During the three and twelve months ended December 31, 2007, we closed homes on lots for which we had previously recorded $65.1 million and $121.6 million, respectively, of asset impairments.

 
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M.D.C. HOLDINGS, INC.
Selected Financial Data
(Dollars in thousands)
(Unaudited)

	Three Months Ended												Year Ended
	December 31, 2008						Change						December 31, 2008						Change
	2008			2007			Amount			%			2008			2007			Amount			%
HOMEAMERICAN OPERATING ACTIVITIES
Principal amount of mortgage loans originated	$	172,745		$	303,179		$	(130,434	)		-43	%	$	749,310		$	1,233,948		$	(484,638	)		-39	%
Principal amount of mortgage loans brokered	$	29,751		$	146,993		$	(117,242	)		-80	%	$	170,898		$	511,806		$	(340,908	)		-67	%
Capture Rate		71	%		54	%		17	%					66	%		55	%		11	%
Including brokered loans		81	%		75	%		6	%					78	%		74	%		4	%
Mortgage products (% of mortgage loans originated)
Fixed rate		100	%		94	%		6	%					97	%		82	%		15	%
Adjustable rate - interest only		0	%		4	%		-4	%					1	%		16	%		-15	%
Adjustable rate - other		0	%		2	%		-2	%					2	%		2	%		0	%
Prime loans (4)		40	%		79	%		-39	%					48	%		78	%		-30	%
Alt A loans (5)		0	%		0	%		0	%					0	%		10	%		-10	%
Government loans (6)		60	%		21	%		39	%					52	%		12	%		40	%
Sub-prime loans (7)		0	%		0	%		0	%					0	%		0	%		0	%

(4)	Prime loans generally are defined as loans with Fair, Isaac and Company (“FICO”) scores greater than 620 and that comply with the documentation standards of the government sponsored enterprise guidelines.
(5)	Alt-A loans are defined as loans that would otherwise qualify as prime loans except that they do not comply with the documentation standards of the government sponsored enterprise guidelines.
(6)	Government loans are loans either insured by the Federal Housing Administration or guaranteed by the Department of Veteran Affairs.
(7)	Sub-prime loans generally are defined as loans that have FICO scores of less than or equal to 620.

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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)

	December 31,		December 31,
	2008		2007
HOMES COMPLETED OR UNDER CONSTRUCTION
Unsold Home Under Construction — Final		451		515
Unsold Home Under Construction — Frame		329		656
Unsold Home Under Construction — Foundation		41		229
Total Unsold Homes Under Construction		821		1,400
Sold Homes Under Construction		409		1,350
Model Homes		387		730
Homes Completed or Under Construction		1,617		3,480
LOTS OWNED (excluding homes completed or under construction)
Arizona		1,458		2,969
California		839		1,491
Nevada		1,111		1,549
West		3,408		6,009
Colorado		2,597		2,992
Utah		642		863
Mountain		3,239		3,855
Maryland		176		302
Virginia		241		369
East		417		671
Delaware Valley		115		151
Florida		257		638
Illinois		141		191
Other Homebuilding		513		980
Total		7,577		11,515

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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(unaudited)

	December 31,		December 31,
	2008		2007
LOTS CONTROLLED UNDER OPTION
Arizona		472		512
California		149		157
Nevada		95		4
West		716		673
Colorado		184		262
Utah		—		—
Mountain		184		262
Maryland		355		558
Virginia		592		1,311
East		947		1,869
Delaware Valley		40		327
Florida		471		484
Illinois		—		—
Other Homebuilding		511		811
Total		2,358		3,615
Total Lots Owned and Controlled		9,935		15,130
NON-REFUNDABLE OPTION DEPOSITS
Cash	$	5,145	$	6,292
Letters of Credit		4,358		6,547
Total Non-Refundable Option Deposits	$	9,503	$	12,839

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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)

	Three Months Ended										Year Ended
	December 31,				Change						December 31,				Change
	2008		2007		Amount			%			2008		2007		Amount			%
HOMES CLOSED (UNITS)
Arizona		275		804		(529	)		-66	%		1,313		2,801		(1,488	)		-53	%
California		118		305		(187	)		-61	%		590		1,136		(546	)		-48	%
Nevada		152		262		(110	)		-42	%		791		1,290		(499	)		-39	%
West		545		1,371		(826	)		-60	%		2,694		5,227		(2,533	)		-48	%
Colorado		133		235		(102	)		-43	%		576		818		(242	)		-30	%
Utah		54		145		(91	)		-63	%		268		713		(445	)		-62	%
Mountain		187		380		(193	)		-51	%		844		1,531		(687	)		-45	%
Maryland		42		107		(65	)		-61	%		192		288		(96	)		-33	%
Virginia		58		128		(70	)		-55	%		257		344		(87	)		-25	%
East		100		235		(135	)		-57	%		449		632		(183	)		-29	%
Delaware Valley		16		62		(46	)		-74	%		91		178		(87	)		-49	%
Florida		82		115		(33	)		-29	%		336		496		(160	)		-32	%
Illinois		14		37		(23	)		-62	%		74		105		(31	)		-30	%
Texas		—		—		—			N/A			—		26		(26	)		N/A
Other Homebuilding		112		214		(102	)		-48	%		501		805		(304	)		-38	%
Total		944		2,200		(1,256	)		-57	%		4,488		8,195		(3,707	)		-45	%
AVERAGE SELLING PRICES PER CLOSED HOME
West
Arizona	$	201.1	$	230.1	$	(29.0	)		-13	%	$	216.2	$	247.4	$	(31.2	)		-13	%
California		455.3		494.1		(38.8	)		-8	%		429.0		516.5		(87.5	)		-17	%
Nevada		237.5		275.5		(38.0	)		-14	%		244.6		296.2		(51.6	)		-17	%
Mountain
Colorado		363.7		348.3		15.4			4	%		352.1		346.3		5.8			2	%
Utah		319.4		338.6		(19.2	)		-6	%		333.0		355.5		(22.5	)		-6	%
East
Maryland		489.9		504.8		(14.9	)		-3	%		466.0		515.2		(49.2	)		-10	%
Virginia		436.3		461.7		(25.4	)		-6	%		454.3		480.4		(26.1	)		-5	%
Other Homebuilding
Delaware Valley		392.9		441.4		(48.5	)		-11	%		406.4		448.8		(42.4	)		-9	%
Florida		232.7		249.4		(16.7	)		-7	%		238.5		261.5		(23.0	)		-9	%
Illinois		348.0		355.2		(7.2	)		-2	%		347.9		372.4		(24.5	)		-7	%
Texas		N/A		N/A		N/A			N/A			N/A		129.6		N/A			N/A
Company Average	$	300.3	$	325.1	$	(25.0	)		-8	%	$	302.6	$	337.5	$	(34.9	)		-10	%

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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)

	Three Months												Year Ended
	Ended December 31,						Change						December 31, 2008						Change
	2008			2007			Amount			%			2008			2007			Amount			%
ORDERS FOR HOMES, NET (UNITS)
Arizona		87			139			(52	)		-37	%		879			1,889			(1,010	)		-53	%
California		42			63			(21	)		-33	%		436			912			(476	)		-52	%
Nevada		50			298			(248	)		-83	%		537			1,282			(745	)		-58	%
West		179			500			(321	)		-64	%		1,852			4,083			(2,231	)		-55	%
Colorado		50			101			(51	)		-50	%		435			778			(343	)		-44	%
Utah		27			36			(9	)		-25	%		132			426			(294	)		-69	%
Mountain		77			137			(60	)		-44	%		567			1,204			(637	)		-53	%
Maryland		12			—			12			N/A			124			227			(103	)		-45	%
Virginia		41			33			8			24	%		193			308			(115	)		-37	%
East		53			33			20			61	%		317			535			(218	)		-41	%
Delaware Valley		5			12			(7	)		-58	%		61			116			(55	)		-47	%
Florida		31			47			(16	)		-34	%		246			424			(178	)		-42	%
Illinois		5			19			(14	)		-74	%		31			128			(97	)		-76	%
Texas		—			—			—			N/A			—			14			(14	)		-100	%
Other Homebuilding		41			78			(37	)		-47	%		338			682			(344	)		-50	%
Total		350			748			(398	)		-53	%		3,074			6,504			(3,430	)		-53	%
Estimated Value of Orders for Homes, net	$	99,000		$	187,000			(88,000	)		-47	%	$	885,000		$	2,107,000			(1,222,000	)		-58	%
Estimated Average Selling Price of Orders for Homes, net	$	282.9		$	250.0			32.9			13	%	$	287.9		$	324.0			(36.1	)		-11	%
Cancellation Rate(8)		52	%		65	%		-13	%					45	%		48	%		-3	%

⁽⁸⁾ We define “Cancellation Rate” as the approximate number of cancelled home order contracts during a reporting period as a percent of total home orders received during such reporting period.

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M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
(Dollars in thousands)
(Unaudited)

	December 31,		December 31,
	2008		2007
BACKLOG (UNITS)
Arizona		158		592
California		49		203
Nevada		53		307
West		260		1,102
Colorado		72		213
Utah		42		178
Mountain		114		391
Maryland		58		126
Virginia		36		100
East		94		226
Delaware Valley		27		57
Florida		35		125
Illinois		3		46
Other Homebuilding		65		228
Total		533		1,947
Backlog Estimated Sales Value	$	173,000	$	650,000
Estimated Average Selling Price of Homes in Backlog	$	324.6	$	333.8
ACTIVE SUBDIVISIONS
Arizona		44		66
California		18		41
Nevada		24		39
West		86		146
Colorado		49		47
Utah		22		23
Mountain		71		70
Maryland		11		15
Virginia		12		18
East		23		33
Delaware Valley		3		4
Florida		7		20
Illinois		1		5
Other Homebuilding		11		29
Total		191		278

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