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): January 26, 2007

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 January 25, 2007

2

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION; and

ITEM 7.01. REGULATION FD DISCLOSURE

     On January 25, 2007, M.D.C. Holdings, Inc. issued a press release reporting its fourth quarter and full year 2006 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 January 25, 2007

3

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 26, 2007	By:	/s/ Joseph H. Fretz
		Joseph H. Fretz
		Secretary and Corporate Counsel

4

INDEX TO EXHIBITS

Exhibit Number	Description
Exhibit 99.1	Press Release dated January 25, 2007.

5

EX-99.1

NEWS BULLETIN

M.D.C. HOLDINGS, INC.	RICHMOND AMERICAN HOMES
	HOMEAMERICAN MORTGAGE

FOR IMMEDIATE RELEASE
THURSDAY, JANUARY 25, 2007

Contacts:	Paris G. Reece III	Robert N. Martin	Alison Schuller
	Chief Financial Officer	Investor Relations	Corporate Communications
	(303) 804-7706	(720) 977-3431	(720) 977-3554
	greece@mdch.com	bob.martin@mdch.com	alison.schuller@mdch.com

M.D.C. HOLDINGS ANNOUNCES FOURTH QUARTER
AND FULL YEAR 2006 RESULTS

     2006 FOURTH QUARTER

• Net loss of $6.4 million; diluted loss per share of $0.14

• After-tax asset impairments and project cost write-offs of $60.6 million

• Cash flow from operations of $413.0 million

• Ratio of corporate and homebuilding debt to capital, net of cash, of 0.18

• Ending unrestricted cash and available borrowing capacity of $1.74 billion

• Total revenue of $1.34 billion; $1.74 billion in 2005

• Closed 3,594 homes at an average selling price of $360,100

• Net orders for 1,571 homes valued at $515.0 million

     2006 FULL YEAR

• Net income of $214.3 million; diluted earnings per share of $4.66

• After-tax asset impairments and project cost write-offs of $87.7 million

• Cash flow from operations of $371.7 million

• Total revenue of $4.80 billion; $4.89 billion in 2005

• Closed 13,123 homes at an average selling price of $354,400

• Net orders for 10,229 homes valued at $3.47 billion

• Yearend backlog of 3,638 homes valued at $1.30 billion

     DENVER, Thursday, January 25, 2007 — M.D.C. Holdings, Inc. (NYSE: MDC) today announced a net loss for the quarter ended December 31, 2006 of $6.4 million, or $0.14 per diluted share, compared with net income of $197.5 million, or $4.29 per diluted share, for the same period in 2005. Total revenue for the fourth quarter was $1.34 billion, compared with revenue of $1.74 billion for the same period in 2005. Operating results for the 2006 fourth quarter were impacted adversely by after-tax charges for asset impairments and project cost

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M.D.C. HOLDINGS, INC.

write-offs of $56.5 million and $4.1 million respectively. Without these charges, the net loss would have improved to net income of $54.3 million, or $1.18 per diluted share. Please see the last page of this document for a reconciliation of non-GAAP financial measures.

     Net income for the year ended December 31, 2006 was $214.3 million, or $4.66 per diluted share, compared with net income of $505.7 million, or $10.99 per diluted share, for the same period in 2005. Total revenue for the year ended December 31, 2006 was $4.80 billion, compared with $4.89 billion for the year ended December 31, 2005. Operating results for the 2006 full year were impacted adversely by after-tax charges for asset impairments and project cost write-offs of $69.3 million and $18.4 million, respectively. Without these charges, net income would have improved to $302.0 million, or $6.57 per diluted share. Please see the last page of this document for a reconciliation of non-GAAP financial measures.

     Larry A. Mizel, MDC’s chairman and chief executive officer, stated, “Even though the environment for new home sales showed little improvement from the first nine months of 2006, we were successful in strengthening our financial position during the fourth quarter. We reduced our lots owned and under option by over 4,000 since the end of the third quarter, which contributed to a 35% reduction in our total lots controlled since the beginning of the year. Decreases in our homebuilding inventories enabled us to generate more than $400 million of operating cash flow during the fourth quarter alone, which allowed us to end the year with $508 million in cash and nothing outstanding under our $1.25 billion homebuilding line of credit. This contributed to a 30% increase in our combined cash and available borrowing capacity during the fourth quarter to more than $1.7 billion. In addition, our stockholders’ equity and book value per share grew by 11% and 9%, respectively, from the previous year, despite the impact of $88 million in after-tax charges associated with project cost write-offs and asset impairments incurred throughout the year. As a result, we ended the year with a ratio of homebuilding and corporate debt to capital, net of cash, of 0.18, which continues to be one of the lowest in the industry.”

     Mizel concluded, “As we begin a new year, we are focused on initiatives that should help improve our business for the important spring selling season and beyond. We have enhanced the training for our sales and customer service personnel in an effort to better attract and retain potential buyers. We plan to open more than 120 model homes over the next 90 days, with many featuring new or enhanced designs. We recognize the need to continue evaluating potential investments in our core homebuilding operations. Consistent with this objective, we have been and will be communicating to land sellers in all of our markets that we are ready to acquire attractively-priced land assets. If we are successful in taking advantage of opportunities that may emerge during this downturn period, we will be positioned to accelerate our Company’s growth when the industry eventually rebounds.”

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M.D.C. HOLDINGS, INC.

Homebuilding Results

     Homebuilding loss before taxes for the quarter ended December 31, 2006 was $14.3 million, compared with income before taxes of $333.2 million for the same period in 2005. Homebuilding income before taxes for the full year 2006 was $371.4 million, compared with $892.3 million for the full year 2005. The income decreases in the 2006 periods were driven in large part by reduced home closings and significant declines in home gross margins from the record levels achieved during the same periods in 2005, partially offset by the impact of increased average selling prices. In addition, homebuilding results for the 2006 periods were impacted adversely by non-cash, pre-tax asset impairment charges of $91.3 million and $112.0 million, respectively, while no impairments were realized for the comparable periods in 2005. The Company closed 3,594 homes and produced home gross margins of 16.6% in the 2006 fourth quarter, compared with 4,951 home closings and home gross margins of 27.8% for the comparable period in 2005. For the year ended December 31, 2006, the Company closed 13,123 homes and produced home gross margins of 22.2%, compared with 15,307 home closings and home gross margins of 28.3% for the year ended December 31, 2005. Average selling prices reached $360,100 and $354,400, respectively, for the quarter and year ended December 31, 2006, up $15,600 and $41,300 from the same periods in 2005.

     Homebuilding commissions, marketing, general and administrative (“SG&A”) expenses were $141.7 million, or 11.0% of home sales revenue, for the 2006 fourth quarter, compared with $143.2 million, or 8.4% of home sales revenue, for the 2005 fourth quarter. For the year ended December 31, 2006, homebuilding SG&A expenses were $560.1 million, or 12.0% of home sales revenue, compared with $473.0 million, or 9.9% of home sales revenue, for the same period in 2005. The SG&A expenses for the three months and year ended December 31, 2006 included project cost write-offs of $6.7 million and $29.7 million, respectively, compared with $5.2 million and $10.4 million of such costs for the same periods in 2005.

     Paris G. Reece III, MDC’s executive vice president and chief financial officer, said, “From the 2006 third quarter to the 2006 fourth quarter, we experienced a reduction in home gross margins of at least 400 basis points in each of our markets except Utah, Delaware Valley and Colorado, where margins improved slightly. The margin declines were caused by our increased use of incentives, designed to spur demand in the midst of extremely competitive market conditions in most of our markets.”

     Reece continued, “The $91.3 million in impairment charges we recognized during the fourth quarter relate to 52 projects spread throughout most of our markets. More than 80% of the impairment charge occurred in our West homebuilding segment, which includes California, Nevada and Arizona, with California alone accounting for almost half of the total charge. The impairments were recognized in subdivisions where we experienced a much slower than anticipated home order pace and significantly increased incentives required to generate new orders and keep existing orders in backlog.”

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M.D.C. HOLDINGS, INC.

     Reece concluded, “Our SG&A expenses declined slightly year-over-year in the 2006 fourth quarter, reflecting reduced employee-related costs resulting from our continued efforts to right-size our homebuilding operations in view of current market conditions. However, these savings partially were offset by significantly higher advertising expenses incurred to improve traffic levels in response to the more competitive home selling environment in most of our markets. Our 2006 full year SG&A expenses were impacted similarly by higher advertising costs, which contributed to a year-over-year increase in marketing costs of $22.8 million. In addition, our 2006 commissions expense increased by $20.8 million year-over-year as a result of increased amounts paid to outside brokers due to the more competitive home selling conditions. And our project cost write-offs rose by nearly $20 million, as we relinquished control of almost 7,000 optioned lots during the year.”

Financial Services and Other Results

     Income before taxes from the Company’s Financial Services and Other segment for the quarter and year ended December 31, 2006 were $10.0 million and $45.2 million, respectively, compared with $16.1 million and $35.0 million, respectively, for the same periods in the previous year. In the 2006 fourth quarter, increased profits from the mortgage operations were more than offset by increases in actuarially determined loss reserves related to the Company’s insurance activities. Full year profit improvements in 2006 primarily resulted from higher gains on sales of mortgage loans, compared with 2005. Increased dollar volumes of mortgage loan originations and mortgage loans sold during 2006 drove the higher gains. The Company achieved these increased volumes by improving its mortgage capture rate, largely as a result of expanding the mortgage loan products that it could originate directly for its customers, and increasing its average loan amounts in connection with the Company’s higher average selling prices.

Home Orders and Backlog

     MDC received orders, net of cancellations, for 1,571 homes with an estimated sales value of $515.0 million during the 2006 fourth quarter, compared with net orders for 2,405 homes with an estimated sales value of $831.0 million during the same period in 2005. The decline in quarterly net home orders was related almost exclusively to a year-over-year increase in the number of order cancellations recorded, as the number of gross orders taken was virtually unchanged. For the year ended December 31, 2006, the Company received net orders for 10,229 homes with an estimated sales value of $3.47 billion, compared with 15,334 net orders with an estimated sales value of $5.23 billion for the year ended December 31, 2005. The reduction in annual net home orders related largely to an increase in the number of order cancellations received and, to a lesser extent, a decrease in the number of gross orders taken in every market except Utah, Arizona, Maryland and the Delaware Valley. The Company ended the fourth quarter of 2006 with a backlog of 3,638 homes, compared with a backlog of 6,532 homes at

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M.D.C. HOLDINGS, INC.

December 31, 2005. The estimated sales value of backlog at the end of the 2006 fourth quarter was $1.30 billion, compared with $2.44 billion at December 31, 2005.

     MDC, whose subsidiaries build homes under the name “Richmond American Homes,” is one of the top ten homebuilders in the United States, based on 2005 revenue. The Company also provides mortgage financing, primarily for MDC’s homebuyers, through its wholly owned subsidiary HomeAmerican Mortgage Corporation. MDC, a Fortune 500 Company, is a major regional homebuilder with a significant presence in Colorado, Jacksonville, Las Vegas, Maryland, Northern California, Northern Virginia, Phoenix, Salt Lake City, Southern California and Tucson. MDC also has established operating divisions in Chicago, Philadelphia/Delaware Valley and West Florida. For more information about our Company, please visit RichmondAmerican.com.

Forward-Looking Statements

     Certain statements in this release, including statements regarding future home closings, revenue and earnings, 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 and business conditions, including changes in cancellation rates, net home orders, home gross margins, and land and home values; (2) interest rate changes; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of performance bonds and insurance covering risks associated with our business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives; (10) building moratoria; (11) governmental regulation, including the interpretation of tax, labor and environmental laws; (12) changes in consumer confidence and preferences; (13) required accounting changes; (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 reports on Form 10-K/A for the year ended December 31, 2005, and Form 10-Q for the quarter ended September 30, 2006, which were filed with the Securities and Exchange Commission. 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 publicly update 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 Income
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
REVENUE
Home sales revenue	$	1,294,140		$	1,705,525		$	4,650,556		$	4,792,700
Land sales revenue		15,799			430			34,611			2,995
Other revenue		33,474			33,659			116,575			96,894
Total Revenue		1,343,413			1,739,614			4,801,742			4,892,589
COSTS AND EXPENSES
Home cost of sales		1,079,274			1,231,797			3,619,656			3,436,035
Land cost of sales		15,367			365			33,491			1,861
Asset impairments		91,252			—			112,027			—
Marketing expenses		36,957			32,583			128,856			106,015
Commission expenses		44,481			45,045			151,108			130,307
General and administrative expenses		92,285			106,083			419,780			401,184
Related party expenses		1,796			8,210			3,687			8,424
Total Costs and Expenses		1,361,412			1,424,083			4,468,605			4,083,826
Income (loss) before income taxes		(17,999	)		315,531			333,137			808,763
Benefit from (provision for) income taxes		11,634			(118,052	)		(118,884	)		(303,040	)
NET INCOME (LOSS)	$	(6,365	)	$	197,479		$	214,253		$	505,723
EARNINGS (LOSS) PER SHARE
Basic	$	(0.14	)	$	4.43		$	4.77		$	11.48
Diluted	$	(0.14	)	$	4.29		$	4.66		$	10.99
WEIGHTED-AVERAGE SHARES
Basic		45,073			44,605			44,952			44,046
Diluted		46,097			46,068			45,971			46,036
DIVIDENDS DECLARED PER SHARE	$	0.25		$	0.25		$	1.00		$	0.76

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

	December 31,			December 31,
	2006			2005
ASSETS
Cash and cash equivalents	$	507,947		$	214,531
Restricted cash		2,641			6,742
Home sales and other accounts receivable		143,936			158,808
Mortgage loans held in inventory		212,903			237,376
Inventories, net
Housing completed or under construction		1,178,671			1,320,106
Land and land under development		1,575,158			1,677,948
Property and equipment, net		44,606			49,119
Deferred income taxes		124,880			54,319
Prepaid expenses and other assets, net		119,133			140,901
Total Assets	$	3,909,875		$	3,859,850
LIABILITIES
Accounts payable	$	171,005		$	201,747
Accrued liabilities		419,654			442,409
Income taxes payable		28,485			102,656
Related party liabilities		1,700			8,100
Homebuilding line of credit		—			—
Mortgage line of credit		130,467			156,532
Senior notes, net		996,682			996,297
Total Liabilities		1,747,993			1,907,741
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; 45,179,000 and 45,165,000 issued and outstanding, respectively, at December 31, 2006 and 44,642,000 and 44,630,000 issued and outstanding, respectively, at December 31, 2005		452			447
Additional paid-in capital		760,831			719,813
Retained earnings		1,402,261			1,232,971
Accumulated other comprehensive loss		(1,003	)		(622	)
Less treasury stock, at cost; 14,000 and 12,000 shares, respectively, at December 31, 2006 and December 31, 2005		(659	)		(500	)
Total Stockholders’ Equity		2,161,882			1,952,109
Total Liabilities and Stockholders’ Equity	$	3,909,875		$	3,859,850

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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,
	2006			2005			2006			2005
REVENUE
West	$	809,332		$	1,098,986		$	2,871,040		$	2,833,398
Mountain		211,382			230,514			730,489			834,270
East		183,743			261,912			628,508			732,132
Other Homebuilding		119,329			120,362			493,628			413,628
Total Homebuilding		1,323,786			1,711,774			4,723,665			4,813,428
Financial Services and Other		29,086			31,021			103,243			87,849
Corporate		1,113			28			1,788			1,487
Intercompany Adjustments		(10,572	)		(3,209	)		(26,954	)		(10,175	)
Consolidated	$	1,343,413		$	1,739,614		$	4,801,742		$	4,892,589
INCOME (LOSS) BEFORE INCOME TAXES
West	$	(38,688	)	$	226,081		$	235,954		$	611,603
Mountain		18,307			20,852			43,490			70,348
East		19,015			80,844			104,706			203,853
Other Homebuilding		(12,946	)		5,439			(12,709	)		6,538
Total Homebuilding		(14,312	)		333,216			371,441			892,342
Financial Services and Other		10,025			16,067			45,186			34,964
Corporate		(13,712	)		(33,752	)		(83,490	)		(118,543	)
Consolidated	$	(17,999	)	$	315,531		$	333,137		$	808,763
ASSET IMPAIRMENTS
West	$	75,561		$	—		$	90,802		$	—
Mountain		1,265			—			1,891			—
East		6,879			—			8,236			—
Other Homebuilding		7,547			—			11,098			—
Total Homebuilding	$	91,252		$	—		$	112,027		$	—

	December 31,		December 31,
	2006		2005
TOTAL ASSETS
West	$	1,869,442	$	2,092,833
Mountain		535,554		469,572
East		333,902		362,292
Other Homebuilding		266,326		358,958
Total Homebuilding		3,005,224		3,283,655
Financial Services and Other		246,734		277,455
Corporate		657,917		298,740
Consolidated	$	3,909,875	$	3,859,850

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

	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
SELECTED OPERATING DATA
General and Administrative Expenses
Homebuilding Operations	$	60,309		$	65,562		$	280,129		$	236,695
Financial Services and Other Operations		19,019			14,951			58,059			52,883
Corporate		12,957			25,570			81,592			111,606
Total	$	92,285		$	106,083		$	419,780		$	401,184
SG&A as a Percent of Home Sales Revenues
Homebuilding Operations		11.0	%		8.4	%		12.0	%		9.9	%
Corporate		1.1	%		2.0	%		1.8	%		2.5	%
Total Homebuilding and Corporate		12.1	%		10.4	%		13.9	%		12.4	%
Depreciation and Amortization	$	17,493		$	19,907		$	59,030		$	54,425
Home Gross Margins1		16.6	%		27.8	%		22.2	%		28.3	%
Cash Provided by (Used in) Operating Activities	$	413,013		$	132,107		$	371,670		$	(424,929	)
Cash Used in Investing Activities	$	(2,997	)	$	(4,771	)	$	(10,221	)	$	(22,889	)
Cash Provided by (Used in) Financing Activities	$	(34,913	)	$	(32,575	)	$	(68,033	)	$	261,390
Ending Unrestricted Cash and Available Borrowing Capacity	$	1,736,054		$	1,245,540			N/A			N/A
Ending Book Value Per Share2	$	47.87		$	43.74			N/A			N/A
After-Tax Return on Average Capital3		6.6	%		19.2	%		N/A			N/A
After-Tax Return on Average Assets3		5.5	%		15.8	%		N/A			N/A
After-Tax Return on Average Equity3		10.2	%		28.7	%		N/A			N/A
Interest in Home Cost of Sales as a Percent of Home Sales Revenue		1.1	%		0.7	%		1.1	%		0.7	%
Corporate and Homebuilding Interest Capitalized
Interest Capitalized in Inventories at Beginning of Period	$	50,145		$	37,878		$	41,999		$	24,220
Interest Capitalized During the Period		14,148			15,332			58,141			51,872
Interest in Home and Land Cost of Sales for the Period		13,638			11,211			49,485			34,093
Interest Capitalized in Inventories at End of Period	$	50,655		$	41,999		$	50,655		$	41,999
Interest Capitalized as a Percent of Inventories		1.8	%		1.4	%		N/A			N/A

1	Home sales revenue less home cost of sales (excluding commissions, amortization of deferred marketing and asset impairments) as a percent of home sales revenue. Prior year information has been reclassified to conform with current year presentation.
2	Ending stockholders’ equity divided by ending shares outstanding.
3	Based on last twelve months data.

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

	December 31,		December 31,		December 31,
	2006		2005		2004
LOTS OWNED AND CONTROLLED
Lots Owned		19,410		23,445		20,760
Lots Under Option		8,097		18,819		21,164
Homes Completed or Under Construction		4,636		6,891		5,573
LOTS OWNED BY MARKET
(excluding homes completed or under construction)
Arizona		6,368		7,385		5,657
California		2,802		3,367		2,646
Colorado		3,479		3,639		3,993
Delaware Valley		265		471		312
Florida		1,093		1,201		594
Illinois		287		430		508
Maryland		528		679		650
Nevada		2,747		4,055		3,916
Texas		13		471		642
Utah		1,185		964		862
Virginia		643		783		980
Total Company		19,410		23,445		20,760
LOTS UNDER OPTION BY MARKET
Arizona		744		3,650		5,494
California		387		2,005		1,782
Colorado		801		2,198		1,866
Delaware Valley		683		1,283		723
Florida		1,800		3,202		2,980
Illinois		—		186		203
Maryland		960		1,173		1,206
Nevada		250		1,400		1,859
Texas		—		80		1,694
Utah		91		418		216
Virginia		2,381		3,224		3,141
Total Company		8,097		18,819		21,164
Non-refundable Option Deposits
Cash	$	20,228	$	48,157	$	41,804
Letters of Credit		14,224		23,142		22,062
Total Non-refundable Option Deposits	$	34,452	$	71,299	$	63,866

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

	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
HOMES CLOSED (UNITS)
Arizona		1,016			1,121			3,353			3,671
California		536			864			1,788			2,102
Colorado		309			575			1,463			2,190
Delaware Valley		78			15			200			33
Florida		219			251			921			1,083
Illinois		55			46			174			86
Maryland		154			137			444			397
Nevada		647			1,165			2,756			3,016
Texas		29			183			395			799
Utah		342			264			922			904
Virginia		209			330			707			1,026
Total Company		3,594			4,951			13,123			15,307
AVERAGE SELLING PRICE PER HOME CLOSED
Arizona	$	273.9		$	255.0		$	294.6		$	227.2
California		596.0			517.5			558.7			512.6
Colorado		332.7			288.0			308.7			286.3
Delaware Valley		420.1			379.4			405.7			369.6
Florida		267.7			268.2			284.8			219.9
Illinois		367.3			357.2			367.5			389.4
Maryland		528.3			528.8			558.0			482.8
Nevada		307.6			318.2			317.5			305.8
Texas		151.0			165.7			165.9			160.6
Utah		320.8			244.4			303.3			226.4
Virginia		491.2			577.0			536.3			527.1
Company Average	$	360.1		$	344.5		$	354.4		$	313.1
ORDERS FOR HOMES, NET (UNITS)
Arizona		480			587			2,758			3,627
California		241			323			1,450			2,060
Colorado		201			348			1,139			2,075
Delaware Valley		28			35			138			191
Florida		(11	)		127			519			1,044
Illinois		35			35			117			148
Maryland		60			58			380			423
Nevada		314			505			2,048			3,293
Texas		11			109			169			781
Utah		133			212			1,049			953
Virginia		79			66			462			739
Total Company		1,571			2,405			10,229			15,334
Estimated Value of Orders for Homes, net	$	515,000		$	831,000		$	3,467,000		$	5,233,000
Estimated Average Selling Price of Orders for Homes, net	$	327.8		$	345.5		$	338.9		$	341.3
Order Cancellation Rate4		56.5	%		33.8	%		43.4	%		23.7	%

⁴ Gross number of cancellations received divided by gross number of orders received.

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

	December 31,		December 31,		December 31,
	2006		2005		2004
BACKLOG (UNITS)
Arizona		1,504		2,099		2,143
California		427		765		807
Colorado		253		577		692
Delaware Valley		119		181		23
Florida		197		599		638
Illinois		23		80		18
Maryland		187		251		225
Nevada		315		1,023		746
Texas		12		238		256
Utah		465		338		289
Virginia		136		381		668
Total Company		3,638		6,532		6,505
Backlog Estimated Sales Value	$	1,300,000	$	2,440,000	$	1,920,000
Estimated Average Selling Price of Homes in Backlog	$	357.3	$	373.5	$	295.2
ACTIVE SUBDIVISIONS
Arizona		67		54		32
California		45		34		22
Colorado		47		57		53
Delaware Valley		8		7		2
Florida		30		19		18
Illinois		6		8		1
Maryland		19		11		11
Nevada		41		43		31
Texas		2		21		24
Utah		22		18		22
Virginia		19		20		26
Total Company		306		292		242
Average for Quarter Ended		299		287		237

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M.D.C. HOLDINGS, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except ratios and per share amounts)
(Unaudited)

	Three Months Ended					Year Ended
	December 31,					December 31,
	2006			2005		2006		2005
NON-GAAP FINANCIAL MEASURES
Net income and earnings per share, excluding asset impairments and project cost write-offs
Asset impairments, before tax	$	91,252		$	—	$	112,027	$	—
Project cost write-offs, before tax		6,686			5,223		29,708		10,439
Total		97,938			5,223		141,735		10,439
Income tax affect		37,314			1,990		54,001		3,977
After-tax asset impairments and project cost write-offs	$	60,624		$	3,233	$	87,734	$	6,462
Net income (loss), as reported		(6,365	)		197,479		214,253		505,723
Plus After-tax asset impairments and project cost write-offs		60,624			3,233		87,734		6,462
Net income, excluding asset impairments and project cost write-offs	$	54,259		$	200,712	$	301,987	$	512,185
Weighted average shares (basic)		45,073			44,605		44,952		44,046
Weighted average shares (diluted)		46,097			46,068		45,971		46,036
Diluted earnings (loss) per share, as reported	$	(0.14	)	$	4.29	$	4.66	$	10.99
Diluted earnings per share, before asset impairments and project cost write-offs	$	1.18		$	4.36	$	6.57	$	11.13

	December 31,			December 31,
	2006			2005
Corporate and homebuilding debt-to-capital, net of cash
Total debt	$	1,127,149		$	1,152,829
Less mortgage line of credit		(130,467	)		(156,532	)
Total corporate and homebuilding debt		996,682			996,297
Less cash and restricted cash		(510,588	)		(221,273	)
Total corporate and homebuilding debt, net of cash		486,094			775,024
Stockholders’ equity		2,161,882			1,952,109
Total corporate and homebuilding capital, net of cash	$	2,647,976		$	2,727,133
Ratio of corporate and homebuilding debt to capital, net of cash		0.18			0.28

NOTE: From time to time, MDC discloses selected non-GAAP financial measures. While non-GAAP financial measures are not a substitute for the comparable GAAP measures, we believe that certain non-GAAP information is useful to investors and management in comparing current results to historical periods and to competitor results, and that it provides additional information on the performance of MDC’s businesses. The above is a presentation of and reconciliation of non-GAAP measures disclosed in this press release with the most directly comparable GAAP financial measure.

“Net income, excluding asset impairments and project write-offs” and “diluted earnings per share, before asset impairments and project write-offs,” are non-GAAP financial measures. These two non-GAAP measures exclude the impact of asset impairments and project cost write-offs, as these charges generally do not relate to homes that closed during the period. As such, MDC believes that these measures can help its management and investors better assess the Company’s effectiveness in managing the home construction process, including direct and indirect costs, for homes closed during the period.

“Ratio of corporate and homebuilding debt to capital, net of cash” is a non-GAAP financial measure. MDC’s management and investors use this ratio to help assess the risk associated with debt in the Company’s capital structure. It excludes debt incurred under MDC’s mortgage line of credit from both the numerator and denominator, as this debt is directly collateralized by mortgage loans held in inventory, which are typically liquidated within 45 days from origination, thereby substantially reducing the risk associated with this type of debt. The ratio’s numerator and denominator are also reduced by MDC’s cash position, as this balance could be used to reduce MDC’s exposure to debt outstanding.

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