19. Supplemental Guarantor Information

Our senior notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by the following subsidiaries (collectively, the "Guarantor Subsidiaries"), which are 100%-owned subsidiaries of the Company.

●

M.D.C. Land Corporation

●

RAH of Florida, Inc.

●

Richmond American Construction, Inc.

●

Richmond American Homes of Arizona, Inc.

●

Richmond American Homes of Colorado, Inc.

●

Richmond American Homes of Delaware, Inc.

●

Richmond American Homes of Florida, LP

●

Richmond American Homes of Illinois, Inc.

●

Richmond American Homes of Maryland, Inc.

●

Richmond American Homes of Nevada, Inc.

●

Richmond American Homes of New Jersey, Inc.

●

Richmond American Homes of Pennsylvania, Inc.

●

Richmond American Homes of Utah, Inc.

●

Richmond American Homes of Virginia, Inc.

●

Richmond American Homes of Washington, Inc.

The senior note indentures do not provide for a suspension of the guarantees, but do provide that any Guarantor may be released from its guarantee so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor being released has consolidated net worth of less than 5% of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (3) the Guarantors released from their guarantees in any year-end period comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of the Company’s consolidated net worth as of the end of the most recent fiscal quarter, (4) such release would not have a material adverse effect on the homebuilding business of the Company and its subsidiaries and (5) the Guarantor is released from its guarantee(s) under all Specified Indebtedness (other than by reason of payment under its guarantee of Specified Indebtedness). Upon delivery of an officers’ certificate and an opinion of counsel stating that all conditions precedent provided for in the indenture relating to such transactions have been complied with and the release is authorized, the guarantee will be automatically and unconditionally released. “Specified Indebtedness” means indebtedness under the senior notes, the Company’s Indenture dated as of December 3, 2002, the Revolving Credit Facility, and any refinancing, extension, renewal or replacement of any of the foregoing.

We have determined that separate, full financial statements of the Guarantor Subsidiaries would not be material to investors and, accordingly, supplemental financial information for the Guarantor and Non-Guarantor Subsidiaries is presented below.

Supplemental Condensed Combining Balance Sheet

	June 30, 2016
					Non-
			Guarantor		Guarantor		Eliminating			Consolidated
	MDC		Subsidiaries		Subsidiaries		Entries			MDC
	(Dollars in thousands)
ASSETS
Homebuilding:
Cash and cash equivalents	$	127,973	$	4,033	$	-	$	-		$	132,006
Marketable securities		55,798		-		-		-			55,798
Restricted cash		-		3,946		-		-			3,946
Trade and other receivables		5,915		44,232		-		(2,344	)		47,803
Inventories:
Housing completed or under construction		-		933,922		-		-			933,922
Land and land under development		-		893,096		-		-			893,096
Total inventories		-		1,827,018		-		-			1,827,018

Intercompany receivables		1,637,706		2,805		5,643		(1,646,154	)		-
Investment in subsidiaries		232,695		-		-		(232,695	)		-
Property and equipment, net		26,366		2,777		-		-			29,143
Deferred tax asset, net		87,827		-		-		1,415			89,242
Metropolitan district bond securities (related party)		28,604		-		-		-			28,604
Prepaid and other assets		4,238		61,016		-		-			65,254
Total homebuilding assets		2,207,122		1,945,827		5,643		(1,879,778	)		2,278,814

Financial Services:
Cash and cash equivalents		-		-		39,300		-			39,300
Marketable securities		-		-		14,821		-			14,821
Intercompany receivables		-		-		38,651		(38,651	)		-
Mortgage loans held-for-sale, net		-		-		118,699		-			118,699
Other assets		-		-		11,181		(1,415	)		9,766
Total financial services assets		-		-		222,652		(40,066	)		182,586
Total Assets	$	2,207,122	$	1,945,827	$	228,295	$	(1,919,844	)	$	2,461,400

LIABILITIES AND EQUITY

Homebuilding:
Accounts payable	$	-	$	48,294	$	-	$	-		$	48,294
Accrued liabilities		26,925		101,341		139		2,246			130,651
Advances and notes payable to parent and subsidiaries		47,099		1,607,331		26,268		(1,680,698	)		-
Revolving credit facility		15,000		-		-		-			15,000
Senior notes, net		841,076		-		-		-			841,076
Total homebuilding liabilities		930,100		1,756,966		26,407		(1,678,452	)		1,035,021

Financial Services:
Accounts payable and other liabilities		-		-		60,650		(4,590	)		56,060
Advances and notes payable to parent and subsidiaries		-		-		4,107		(4,107	)		-
Mortgage repurchase facility		-		-		93,297		-			93,297
Total financial services liabilities		-		-		158,054		(8,697	)		149,357
Total Liabilities		930,100		1,756,966		184,461		(1,687,149	)		1,184,378

Equity:
Total Stockholders' Equity		1,277,022		188,861		43,834		(232,695	)		1,277,022
Total Liabilities and Stockholders' Equity	$	2,207,122	$	1,945,827	$	228,295	$	(1,919,844	)	$	2,461,400

Supplemental Co

ndensed Combining Balance Sheet

	December 31, 2015
					Non-
			Guarantor		Guarantor			Eliminating			Consolidated
	MDC		Subsidiaries		Subsidiaries			Entries			MDC
	(Dollars in thousands)
ASSETS
Homebuilding:
Cash and cash equivalents	$	141,245	$	3,097	$	-		$	-		$	144,342
Marketable securities		92,387		-		-			-			92,387
Restricted cash		-		3,750		-			-			3,750
Trade and other receivables		5,304		20,297		-			(2,287	)		23,314
Inventories:
Housing completed or under construction		-		747,036		-			-			747,036
Land and land under development		-		1,016,926		-			-			1,016,926
Total inventories		-		1,763,962		-			-			1,763,962

Intercompany receivables		1,509,551		2,850		5,291			(1,517,692	)		-
Investment in subsidiaries		267,191		-		-			(267,191	)		-
Property and equipment, net		26,073		2,153		-			-			28,226
Deferred tax asset, net		97,083		-		-			2,024			99,107
Metropolitan district bond securities (related party)		25,911		-		-			-			25,911
Prepaid and other assets		5,973		59,421		-			-			65,394
Total homebuilding assets		2,170,718		1,855,530		5,291			(1,785,146	)		2,246,393

Financial Services:
Cash and cash equivalents		-		-		36,646			-			36,646
Marketable securities		-		-		11,307			-			11,307
Intercompany receivables		-		-		39,234			(39,234	)		-
Mortgage loans held-for-sale, net		-		-		115,670			-			115,670
Other assets		-		-		7,907			(2,024	)		5,883
Total financial services assets		-		-		210,764			(41,258	)		169,506
Total Assets	$	2,170,718	$	1,855,530	$	216,055		$	(1,826,404	)	$	2,415,899

LIABILITIES AND EQUITY

Homebuilding:
Accounts payable	$	-	$	40,472	$	-		$	-		$	40,472
Accrued liabilities		11,527		108,445		(33	)		2,947			122,886
Advances and notes payable to parent and subsidiaries		47,375		1,480,589		25,536			(1,553,500	)		-
Revolving credit facility		15,000		-		-			-			15,000
Senior notes, net		840,524		-		-			-			840,524
Total homebuilding liabilities		914,426		1,629,506		25,503			(1,550,553	)		1,018,882

Financial Services:
Accounts payable and accrued liabilities		-		-		57,348			(5,234	)		52,114
Advances and notes payable to parent and subsidiaries		-		-		3,426			(3,426	)		-
Mortgage repurchase facility		-		-		88,611			-			88,611
Total financial services liabilities		-		-		149,385			(8,660	)		140,725
Total Liabilities		914,426		1,629,506		174,888			(1,559,213	)		1,159,607

Equity:
Total Stockholders' Equity		1,256,292		226,024		41,167			(267,191	)		1,256,292
Total Liabilities and Stockholders' Equity	$	2,170,718	$	1,855,530	$	216,055		$	(1,826,404	)	$	2,415,899

Supplementa

l Condensed Combining Statement

of Operations

	Three Months Ended June 30, 2016
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	571,511		$	-		$	-		$	571,511
Home and land cost of sales		-			(476,052	)		-			-			(476,052	)
Inventory impairments		-			(1,600	)		-			-			(1,600	)
Total cost of sales		-			(477,652	)		-			-			(477,652	)
Gross margin		-			93,859			-			-			93,859
Selling, general, and administrative expenses		(11,228	)		(53,024	)		-			(188	)		(64,440	)
Equity income of subsidiaries		32,909			-			-			(32,909	)		-
Interest and other income		2,020			423			2			108			2,553
Other expense		(1	)		(277	)		-			-			(278	)
Other-than-temporary impairment of marketable securities		(288	)		-			-			-			(288	)
Homebuilding pretax income (loss)		23,412			40,981			2			(32,989	)		31,406
Financial Services:
Financial services pretax income		-			-			8,972			80			9,052
Income before income taxes		23,412			40,981			8,974			(32,909	)		40,458
(Provision) benefit for income taxes		3,501			(13,746	)		(3,300	)		-			(13,545	)
Net income	$	26,913		$	27,235		$	5,674		$	(32,909	)	$	26,913
Other comprehensive income related to available for sale securities, net of tax		895			-			371			(371	)		895
Comprehensive income	$	27,808		$	27,235		$	6,045		$	(33,280	)	$	27,808

	Three Months Ended June 30, 2015
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	461,708		$	-		$	-		$	461,708
Home and land cost of sales		-			(385,019	)		-			-			(385,019	)
Inventory impairments		-			-			-			-			-
Total cost of sales		-			(385,019	)		-			-			(385,019	)
Gross margin		-			76,689			-			-			76,689
Selling, general, and administrative expenses		(8,638	)		(46,048	)		-			(95	)		(54,781	)
Equity income of subsidiaries		24,248			-			-			(24,248	)		-
Interest and other income		1,728			994			-			(2	)		2,720
Interest expense		192			-			-			(192	)		-
Other expense		(1	)		(1,054	)		-			-			(1,055	)
Other-than-temporary impairment of marketable securities		-			-			-			-			-
Homebuilding pretax income (loss)		17,529			30,581			-			(24,537	)		23,573
Financial Services:
Financial services pretax income		-			-			8,020			289			8,309
Income before income taxes		17,529			30,581			8,020			(24,248	)		31,882
(Provision) benefit for income taxes		2,469			(11,408	)		(2,945	)		-			(11,884	)
Net income	$	19,998		$	19,173		$	5,075		$	(24,248	)	$	19,998
Other comprehensive income related to available for sale securities, net of tax		(360	)		-			(539	)		539			(360	)
Comprehensive income	$	19,638		$	19,173		$	4,536		$	(23,709	)	$	19,638

Supplementa

l Condensed Combining Statement

of Operations

	Six Months Ended June 30, 2016
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	968,255		$	-		$	-		$	968,255
Home and land cost of sales		-			(807,441	)		(300	)		-			(807,741	)
Inventory impairments		-			(1,600	)		-			-			(1,600	)
Total cost of sales		-			(809,041	)		(300	)		-			(809,341	)
Gross margin		-			159,214			(300	)		-			158,914
Selling, general, and administrative expenses		(23,330	)		(97,040	)		-			(347	)		(120,717	)
Equity income of subsidiaries		50,279			-			-			(50,279	)		-
Interest and other income		2,492			1,152			3			(158	)		3,489
Other expense		(3	)		(902	)		-			-			(905	)
Other-than-temporary impairment of marketable securities		(719	)		-			-			-			(719	)
Homebuilding pretax income (loss)		28,719			62,424			(297	)		(50,784	)		40,062
Financial Services:
Financial services pretax income		-			-			14,164			505			14,669
Income before income taxes		28,719			62,424			13,867			(50,279	)		54,731
(Provision) benefit for income taxes		7,757			(20,822	)		(5,190	)		-			(18,255	)
Net income	$	36,476		$	41,602		$	8,677		$	(50,279	)	$	36,476
Other comprehensive income related to available for sale securities, net of tax		2,843			-			370			(370	)		2,843
Comprehensive income	$	39,319		$	41,602		$	9,047		$	(50,649	)	$	39,319

	Six Months Ended June 30, 2015
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Homebuilding:
Revenues	$	-		$	839,627		$	-		$	-		$	839,627
Home and land cost of sales		-			(704,786	)		-			-			(704,786	)
Inventory impairments		-			(350	)		-			-			(350	)
Total cost of sales		-			(705,136	)		-			-			(705,136	)
Gross margin		-			134,491			-			-			134,491
Selling, general, and administrative expenses		(17,560	)		(87,505	)		-			(248	)		(105,313	)
Equity income of subsidiaries		37,240			-			-			(37,240	)		-
Interest and other income		3,291			1,275			5			3			4,574
Interest expense		278			-			-			(278	)		-
Other expense		(3	)		(2,186	)		-			-			(2,189	)
Other-than-temporary impairment of marketable securities		-			-			-			-			-
Homebuilding pretax income (loss)		23,246			46,075			5			(37,763	)		31,563
Financial Services:
Financial services pretax income		-			-			13,122			523			13,645
Income before income taxes		23,246			46,075			13,127			(37,240	)		45,208
(Provision) benefit for income taxes		5,172			(17,112	)		(4,850	)		-			(16,790	)
Net income	$	28,418		$	28,963		$	8,277		$	(37,240	)	$	28,418
Other comprehensive income related to available for sale securities, net of tax		948			-			(280	)		280			948
Comprehensive income	$	29,366		$	28,963		$	7,997		$	(36,960	)	$	29,366

Supplementa

l Condensed Combining Statement

of Cash Flows

	Six Months Ended June 30, 2016
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	17,988		$	(45,748	)	$	5,674		$	-		$	(22,086	)
Net cash provided by (used in) investing activities		(6,756	)		(1,132	)		(2,967	)		43,077			32,222
Financing activities:
Payments from (advances to) subsidiaries		-			47,816			(4,739	)		(43,077	)		-
Mortgage repurchase facility		-			-			4,686			-			4,686
Dividend payments		(24,504	)		-			-			-			(24,504	)
Proceeds from the exercise of stock options		-			-			-			-			-
Net cash provided by (used in) financing activities		(24,504	)		47,816			(53	)		(43,077	)		(19,818	)

Net increase in cash and cash equivalents		(13,272	)		936			2,654			-			(9,682	)
Cash and cash equivalents:
Beginning of period		141,245			3,097			36,646			-			180,988
End of period	$	127,973		$	4,033		$	39,300		$	-		$	171,306

	Six Months Ended June 30, 2015
							Non-
				Guarantor			Guarantor			Eliminating			Consolidated
	MDC			Subsidiaries			Subsidiaries			Entries			MDC
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	35,266		$	(895	)	$	10,138		$	-		$	44,509
Net cash provided by (used in) investing activities		13,810			(265	)		698			2,346			16,589
Financing activities:
Payments from (advances to) subsidiaries		-			1,481			865			(2,346	)		-
Mortgage repurchase facility		-			-			(10,822	)		-			(10,822	)
Dividend payments		(24,425	)		-			-			-			(24,425	)
Proceeds from the exercise of stock options		612			-			-			-			612
Net cash provided by (used in) financing activities		(23,813	)		1,481			(9,957	)		(2,346	)		(34,635	)

Net increase in cash and cash equivalents		25,263			321			879			-			26,463
Cash and cash equivalents:
Beginning of period		119,951			2,691			31,183			-			153,825
End of period	$	145,214		$	3,012		$	32,062		$	-		$	180,288