Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 84-0622967 (State or other jurisdiction of incorporation or organization) (I.R.S. employer identification no.) 4350 South Monaco Street, Suite 500 80237 Denver, Colorado (Zip code) (Address of principal executive offices) (303) 773-1100 (Registrant's telep ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 M.D.C. HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 84-0622967 ( ...

Financial Performance - Homebuilding revenues for 2020 were $3,765.4 million, a 17.5% increase from $3,205.2 million in 2019[106]. - Net income for 2020 was $367.6 million, or $5.58 per diluted share, representing a 54% increase compared to $238.3 million, or $3.72 per diluted share, in 2019[116]. - Total revenues for 2020 reached $3,901.2 million, up from $3,293.3 million in 2019, marking a 18.5% increase[106]. - Financial services pretax income increased by 31% to $79.0 million in 2020, up from $60.2 million in 2019[116]. - Total pretax income for the company was $457,512 in 2020, up 50.0% from $304,989 in 2019[297]. - Basic earnings per share (EPS) for 2020 was $5.76, a 50.0% increase from $3.84 in 2019[299]. - Diluted EPS for 2020 was $5.58, up 49.86% from $3.72 in 2019[299]. - Total financial services revenues increased to $135,832 in 2020, up 54.2% from $88,005 in 2019[296]. Homebuilding Operations - The dollar value of net new home orders increased by 56% year-over-year, driven by a 40% increase in the number of net new orders and an 11% increase in the average selling price[117]. - Homebuilding pretax income increased by 55% to $378.5 million in 2020, up from $244.8 million in 2019[116]. - New home deliveries rose to 8,158 homes in 2020, a 17% increase from 6,974 homes in 2019, with the average selling price remaining stable[124]. - The average selling price of homes increased to $495.8 thousand in 2020, up 11% from $445.9 thousand in 2019, driven by price increases and a shift towards more expensive markets[138]. - Homes sold under construction or completed increased by 73% year-over-year to 4,797 homes, attributed to the rise in backlog[148]. - The backlog at December 31, 2020, included 6,655 homes valued at $3.26 billion, reflecting increases of 75% in homes and 87% in dollar value from the previous year[147]. - The average selling price of homes in backlog at the end of 2020 was $490, compared to $459 in 2019[114]. Market and Inventory - Total homebuilding assets increased by 16% from $3.03 billion in 2019 to $3.51 billion in 2020, primarily due to higher inventory balances from land acquisitions[122]. - The estimated backlog sales value at the end of 2020 was $3.26 billion, an 87% increase from $1.75 billion at the end of 2019[114]. - The company had 29,469 lots owned and optioned as of December 31, 2020, an 8% increase from 27,386 lots in 2019, supporting future growth[149]. - Total unsold started homes decreased by 53% year-over-year to 179 homes, indicating strong demand for new homes[148]. Expenses and Cash Flow - General and administrative expenses increased to $184.7 million in 2020, up $9.7 million from 2019, primarily due to higher salaries and compensation-related expenses[135]. - Total selling, general and administrative expenses amounted to $403.2 million, representing 10.7% of home sale revenues, a decrease of 60 basis points from 2019[135]. - Cash used to increase housing completed or under construction was $449.9 million in 2020, significantly higher than $83.5 million in 2019[169]. - Net cash used in operating activities was $23.1 million in 2020, compared to net cash provided of $57.8 million in 2019[169]. - The company paid dividends totaling $89,008,000 in 2020, compared to $73,117,000 in 2019, representing a 21.7% increase[234]. Financial Position - The company ended 2020 with total liquidity of $1.70 billion, following the expansion of its credit facility[115]. - As of December 31, 2020, the remaining borrowing capacity under the Revolving Credit Facility was $1.16 billion[162]. - Total assets increased to $3,864,920 thousand in 2020, up from $3,338,356 thousand in 2019, marking a growth of 15.7%[226]. - Total liabilities increased to $1,745,008 thousand in 2020, up from $1,555,871 thousand in 2019, representing a growth of 12.2%[226]. - The company recorded an income tax provision of $89.9 million in 2020, with an effective income tax rate of 19.7%[153]. Risk Management and Compliance - The company evaluates homebuilding inventories for impairment quarterly, considering factors such as operating margin, estimated future cash flows, and market conditions[180]. - Warranty accruals are recorded for each closed home based on historical payment experience, with potential changes impacting the warranty accrual balances significantly[189]. - The company monitors the adequacy of accruals for home construction and land development costs on a house-by-house basis[197]. - The company is exposed to market risks related to fluctuations in interest rates on mortgage loans held-for-sale and interest rate lock commitments[204].

Financial Performance - Home sale revenues for Q3 2020 reached $1,000.5 million, a 33% increase from $750.3 million in Q3 2019[107] - Gross profit for Q3 2020 was $205.4 million, with a gross margin of 20.5%, compared to 18.8% in Q3 2019[107] - Net income for Q3 2020 was $98.9 million, or $1.49 per diluted share, representing a 96% increase from $50.6 million, or $0.79 per diluted share, in Q3 2019[110] - Homebuilding pretax income for Q3 2020 was $101.7 million, a 109% increase from $48.7 million in Q3 2019[114] - Financial services pretax income increased by 73% to $25.4 million in Q3 2020, driven by higher mortgage origination volumes[110] Home Sales and Orders - The dollar value of net new home orders increased by 89% year-over-year, with a 73% increase in the number of orders and a 10% increase in average selling price[111] - The number of new home deliveries for the three months ended September 30, 2020, was 2,147, an increase of 25% from 1,713 in the same period of 2019[121] - The cancellation rate decreased year-over-year across all segments, with total cancellations as a percentage of homes in beginning backlog at 12% for Q3 2020, down from 15% in Q3 2019[148] - As of September 30, 2020, the backlog included 6,511 homes valued at $3.1 billion, representing a 41% increase in the number of homes and a 47% increase in dollar value compared to the previous year[149] Market Segments Performance - The West segment reported a 22% increase in home sale revenues to $552,319,000 for the three months ended September 30, 2020, compared to $410,414,000 in 2019[121] - The Mountain segment saw a 26% increase in home sale revenues to $347,095,000 for the three months ended September 30, 2020, from $263,802,000 in the prior year[121] - The East segment experienced a 35% increase in home sale revenues to $101,135,000 for the three months ended September 30, 2020, compared to $76,058,000 in 2019[121] Assets and Growth - The dollar value of homes in backlog was $3.1 billion as of September 30, 2020, a 47% increase from the prior year[109] - Total homebuilding assets increased by 10% to $3.34 billion as of September 30, 2020, compared to $3.03 billion at the end of 2019[119] - The total number of active subdivisions increased by 2% to 194 for the three months ended September 30, 2020, compared to 190 in the same period of 2019[139] - The company acquired 3,555 lots in Q3 2020, a 63% increase over the prior year period[109] Selling Prices and Margins - The average selling price of homes delivered increased by 6% to $466,000 for the three months ended September 30, 2020, from $438,000 in the prior year[121] - Gross margin from home sales for the three months ended September 30, 2020, increased by 170 basis points year-over-year to 20.5%[129] Financial Services - Financial services revenues for Q3 2020 reached $36.8 million, a 64% increase from $22.4 million in Q3 2019, driven primarily by mortgage operations[157] - The mortgage operations segment saw a 146% increase in pretax income for Q3 2020, totaling $20.8 million, attributed to higher interest rate lock volume and increased net interest income[157] - Total mortgage loan originations for Q3 2020 were 1,476 loans, a 35% increase from 1,095 loans in Q3 2019, with principal amounting to $563.0 million[161] - The capture rate for mortgage loans as a percentage of all homes delivered increased to 68% in Q3 2020, up from 64% in Q3 2019[161] Cash Flow and Financing - During the nine months ended September 30, 2020, the company generated $29.4 million from operating activities, compared to a cash usage of $33.1 million in the same period of 2019[182] - Cash provided from the sale of mortgage loans increased to $36.5 million for the nine months ended September 30, 2020, up from $32.2 million in the prior year[182] - The company had $130.9 million of mortgage loans obligated for repurchase under the Mortgage Repurchase Facility as of September 30, 2020[178] - The company has an effective shelf registration statement allowing the issuance of equity, debt, or hybrid securities up to $2.0 billion, with $1.70 billion remaining after a $300 million issuance of senior notes[168] Tax and Compliance - The overall effective income tax rate for Q3 2020 was 21.5%, compared to 19.5% in Q3 2019, resulting in an income tax expense of $27.1 million[162] - The company believes it is in compliance with all representations, warranties, and covenants included in its financial agreements as of September 30, 2020[175] Interest Rate and Risk Management - Changes in interest rates do not affect the fair value of fixed-rate debt instruments, but they do impact earnings and cash flows for variable-rate debt[198] - HomeAmerican's economic hedging philosophy limits market risk associated with mortgages sold forward[197] - Interest rate lock commitments are used to manage price risk on fluctuations in interest rates for mortgage loans in inventory[196]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 M.D.C. HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 84-0622967 (S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 M.D.C. HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 84-0622967 (State or other jurisdiction (I.R.S. employer of incorporation or ...

PART I [ITEM 1. Business](index=4&type=section&id=ITEM%201.%20Business) M.D.C. Holdings, Inc. operates in homebuilding (Richmond American Homes) and financial services, with the West segment leading 2019 home deliveries and revenues [(a) General Development of Business](index=4&type=section&id=(a)%20General%20Development%20of%20Business) MDC Holdings, Inc. focuses on homebuilding (Richmond American Homes) and financial services, including mortgage, insurance, and title services - MDC Holdings, Inc. has two primary operations: homebuilding and financial services[14](index=14&type=chunk) - Homebuilding operates under 'Richmond American Homes' across West (AZ, CA, NV, WA, OR), Mountain (CO, UT), and East (MD, VA, FL) segments[14](index=14&type=chunk) - Financial services include HomeAmerican Mortgage Corporation (mortgage origination), Allegiant Insurance Company (insurance for homebuilding subsidiaries/subcontractors), StarAmerican Insurance (re-insurer), American Home Insurance Agency (third-party insurance), and American Home Title and Escrow Company (title services)[15](index=15&type=chunk) [(b) Available Information](index=5&type=section&id=(b)%20Available%20Information) SEC filings and corporate governance documents are publicly available on the company's website - SEC filings (10-K, 10-Q, 8-K) are available free of charge on www.mdcholdings.com under 'SEC Filings'[16](index=16&type=chunk) - Corporate governance documents (Guidelines, Code of Conduct, Audit Committee Procedures, Charters) are also available on the website under 'Governance'[16](index=16&type=chunk) [(c) Narrative Description of Business](index=5&type=section&id=(c)%20Narrative%20Description%20of%20Business) Homebuilding focuses on single-family detached homes, covering land acquisition, construction, sales, and customer service, with a growing backlog - Homebuilding operations focus on building and selling primarily single-family detached homes, with some attached townhomes, targeting first-time and first-time move-up homebuyers[17](index=17&type=chunk)[22](index=22&type=chunk) - Key functions include land acquisition and development, home construction, sales and marketing, and customer service[19](index=19&type=chunk) - The company prefers to purchase finished lots using option contracts, but approximately half of the lots acquired require some level of development[22](index=22&type=chunk) - Backlog at December 31, 2019, totaled **3,801 homes** with an estimated sales value of **$1.75 billion**, an increase from 2,936 homes and $1.43 billion in 2018[27](index=27&type=chunk) - HomeAmerican Mortgage Corporation is the principal originator of mortgage loans for the company's homebuyers, authorized for Fannie Mae, Freddie Mac, FHA, VA, and Ginnie Mae mortgages[32](index=32&type=chunk)[33](index=33&type=chunk) Employee Count by Segment (December 31, 2019 vs. 2018) | Segment | December 31, 2019 | December 31, 2018 | | :----------------- | :---------------- | :---------------- | | Homebuilding | 1,264 | 1,184 | | Financial Services | 155 | 152 | | Corporate | 237 | 245 | | **Total** | **1,656** | **1,581** | 2019 Home Deliveries and Home Sale Revenues by State/Region | State/Region | Percentage of Home Deliveries | Percentage of Home Sale Revenues | | :----------- | :---------------------------- | :------------------------------- | | Arizona | 19% | 15% | | California | 15% | 20% | | Nevada | 15% | 14% | | Oregon | 1% | 1% | | Washington | 5% | 6% | | **West** | **55%** | **56%** | | Colorado | 26% | 30% | | Utah | 5% | 5% | | **Mountain** | **31%** | **35%** | | Maryland | 1% | 0% | | Virginia | 2% | 2% | | Florida | 11% | 7% | | **East** | **14%** | **9%** | | **Total** | **100%** | **100%** | [ITEM 1A. Risk Factors](index=9&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces significant risks from economic and real estate conditions, competition, supply chain issues, regulatory compliance, litigation, and key employee dependence - Homebuilding is cyclical and significantly affected by economic conditions such as employment levels, availability of financing, interest rates, consumer confidence, and cost of land, labor, and construction materials[48](index=48&type=chunk)[55](index=55&type=chunk) - Increased competition in homebuilding and mortgage lending can negatively impact net new home orders, sales prices, and margins[58](index=58&type=chunk)[59](index=59&type=chunk) - Supply shortages and price fluctuations in labor and building materials can increase costs and delay deliveries, which may not be recoverable through higher sales prices for existing contracts[61](index=61&type=chunk)[62](index=62&type=chunk) - Rising mortgage interest rates, increased down payment requirements, or decreased loan limits could adversely affect home demand and sales[63](index=63&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The business is subject to numerous federal, state, and local laws and regulations concerning land development, construction, sales, mortgage lending, and environmental aspects, which could lead to additional liabilities or restrictions[75](index=75&type=chunk)[78](index=78&type=chunk)[80](index=80&type=chunk) - Product liability litigation and warranty claims are costly, and the amount of insurance coverage may be limited, potentially leading to additional expenses[85](index=85&type=chunk) [ITEM 1B. Unresolved Staff Comments](index=14&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report - No unresolved staff comments[91](index=91&type=chunk) [ITEM 2. Properties](index=14&type=section&id=ITEM%202.%20Properties) The company leases its corporate office in Denver, Colorado, and additional office spaces for homebuilding divisions, with current facilities deemed suitable - The corporate office is leased at 4350 South Monaco Street, Denver, Colorado, occupying **144,000 square feet**[91](index=91&type=chunk) - Homebuilding divisions lease additional office space in many markets[91](index=91&type=chunk) [ITEM 3. Legal Proceedings](index=14&type=section&id=ITEM%203.%20Legal%20Proceedings) The company is involved in various ordinary course legal actions, with management believing outcomes will not materially affect financial condition or operations - The company is a defendant in various claims, complaints, and other legal actions arising in the ordinary course of business, including product liability and claims associated with home sales and financing[92](index=92&type=chunk) - Management believes the outcome of these ordinary course matters will not have a material adverse effect on the company's financial condition, results of operations, or cash flows[92](index=92&type=chunk) [ITEM 4. Mine Safety Disclosures](index=14&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[93](index=93&type=chunk) PART II [ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=14&type=section&id=ITEM%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) MDC's common stock trades on the NYSE under 'MDC', with **561 shareholders** of record and **$1.18 per share** in cash dividends declared in 2019, alongside 8% stock dividends - MDC's common stock is traded on the New York Stock Exchange under the symbol **MDC**[3](index=3&type=chunk)[95](index=95&type=chunk) - As of December 31, 2019, there were **561 shareholders** of record and **62,574,961 shares** of common stock outstanding[6](index=6&type=chunk)[95](index=95&type=chunk) Cash Dividends Declared and Paid (2017-2019, in thousands) | Year | Dividend per Share | Total Dividends Paid (in thousands) | | :--- | :----------------- | :---------------------------------- | | 2019 | $1.18 | $73,020 | | 2018 | $1.11 | $67,717 | | 2017 | $0.85 | $51,779 | - The company announced **8% stock dividends** distributed in February 2019 and December 2017[95](index=95&type=chunk) - The company is authorized to repurchase up to **4,000,000 shares** of common stock, but no shares were repurchased under this program during 2019, 2018, or 2017. However, **28,334 shares** were purchased in December 2019 at an average price of **$38.16**, representing shares withheld for taxes[100](index=100&type=chunk)[104](index=104&type=chunk) [ITEM 6. Selected Financial Data](index=16&type=section&id=ITEM%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key financial and operational data, highlighting consistent revenue and net income growth, increased home deliveries, and expanding backlog Selected Income Statement Data (2015-2019, in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Homebuilding revenues | $3,205,248 | $2,981,811 | $2,503,242 | $2,262,853 | $1,860,226 | | Financial services revenues | $88,005 | $83,405 | $74,372 | $63,991 | $48,810 | | Total revenues | $3,293,253 | $3,065,216 | $2,577,614 | $2,326,844 | $1,909,036 | | Homebuilding pretax income | $244,762 | $217,494 | $185,939 | $115,378 | $70,441 | | Financial services pretax income | $60,227 | $46,360 | $43,793 | $36,403 | $30,983 | | Total income before income taxes | $304,989 | $263,854 | $229,732 | $151,781 | $101,424 | | Net income | $238,312 | $210,780 | $141,835 | $103,211 | $65,791 | | Basic earnings per share | $3.84 | $3.46 | $2.35 | $1.72 | $1.10 | | Diluted earnings per share | $3.72 | $3.39 | $2.30 | $1.71 | $1.09 | Selected Balance Sheet Data (2015-2019, in thousands) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Cash and cash equivalents | $459,933 | $463,776 | $505,428 | $282,909 | $180,988 | | Total inventories | $2,366,575 | $2,132,994 | $1,829,736 | $1,758,814 | $1,763,962 | | Total assets | $3,338,356 | $3,001,077 | $2,780,292 | $2,528,589 | $2,415,899 | | Stockholders' equity | $1,782,485 | $1,576,000 | $1,407,287 | $1,320,070 | $1,256,292 | Selected Operational Data (2015-2019, in thousands, except units) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :-------------------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Homes delivered (units) | 6,974 | 6,197 | 5,541 | 5,054 | 4,390 | | Average selling price (in thousands) | $460 | $481 | $451 | $447 | $421 | | Net new orders (units) | 7,839 | 5,974 | 5,816 | 5,606 | 5,203 | | Homes in backlog at period end (units) | 3,801 | 2,936 | 3,159 | 2,884 | 2,332 | | Estimated backlog sales value (in thousands) | $1,745,000 | $1,426,000 | $1,602,000 | $1,382,000 | $1,054,000 | | Active subdivisions at period-end | 185 | 166 | 151 | 164 | 167 | [ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=ITEM%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MDC Holdings reported a **13% increase in net income** to **$238.3 million** in 2019, driven by **7% higher home sale revenues** and improved gross margin, with net new orders up **31%** and a **$1.75 billion backlog** - Net income for 2019 increased **13%** to **$238.3 million** (**$3.72 diluted EPS**) from $210.8 million ($3.39 diluted EPS) in 2018[111](index=111&type=chunk) - Home sale revenues increased by **$223.4 million (7%)** to **$3.21 billion** in 2019, due to a **13% increase in homes delivered**, partially offset by a **4% decrease in average selling price**[112](index=112&type=chunk) - Net new home orders increased **31% in units** and **26% in dollar value**, driven by a **17% increase in average active communities** and a **13% increase in monthly sales absorption pace**[113](index=113&type=chunk) - More affordable product offerings accounted for **60% of net new orders** in 2019, up from 49% in 2018[113](index=113&type=chunk) - Backlog dollar value increased **22%** year-over-year to **$1.75 billion** at the end of 2019[115](index=115&type=chunk) - Financial services pretax income increased **30%** to **$60.2 million** in 2019, primarily due to an **$11.8 million net gain on equity securities**, contrasting with a $3.7 million net loss in the prior year[156](index=156&type=chunk) - Mortgage originations grew **15%** in both loans and principal in 2019, with the capture rate remaining stable at **62%** of all homes delivered[158](index=158&type=chunk) [EXECUTIVE SUMMARY](index=18&type=section&id=EXECUTIVE%20SUMMARY) Net income increased **13%** to **$238.3 million** in 2019, driven by **7% higher home sale revenues** and **31% growth in net new orders**, resulting in a **$1.75 billion backlog** and increased lot supply - Net income for 2019 increased **13%** to **$238.3 million** (**$3.72 diluted EPS**) from $210.8 million ($3.39 diluted EPS) in 2018[111](index=111&type=chunk) - Home sale revenues increased by **$223.4 million (7%)** to **$3.21 billion** in 2019, due to a **13% increase in homes delivered**, partially offset by a **4% decrease in average selling price**[112](index=112&type=chunk) - Net new home orders increased **31% in units** and **26% in dollar value**, driven by a **17% increase in average active communities** and a **13% increase in monthly sales absorption pace**[113](index=113&type=chunk) - More affordable product offerings accounted for **60% of net new orders** in 2019, up from 49% in 2018[113](index=113&type=chunk) - Backlog dollar value increased **22%** year-over-year to **$1.75 billion** at the end of 2019[115](index=115&type=chunk) - Approved over **12,000 lots** in 2019, with approximately **75% for affordable offerings**, leading to a year-end supply of over **27,000 controlled lots** (highest in over a decade)[116](index=116&type=chunk) - Total liquidity was **$1.51 billion** at year-end 2019, with a year-over-year decrease in debt-to-capital ratio[117](index=117&type=chunk) [Homebuilding](index=18&type=section&id=Homebuilding) Homebuilding pretax income increased **13%** in 2019, driven by **13% higher homes delivered** and a **50 basis point gross margin improvement**, despite a **4% decrease in average selling price** Homebuilding Pretax Income by Segment (2018-2019, in thousands) | Segment | 2019 | 2018 | Change (2019 vs 2018) | % Change | | :-------- | :--------- | :--------- | :-------------------- | :------- | | West | $163,069 | $128,829 | $34,240 | 27% | | Mountain | $136,313 | $134,710 | $1,603 | 1% | | East | $9,857 | $12,611 | $(2,754) | (22)% | | Corporate | $(64,477) | $(58,656) | $(5,821) | (10)% | | **Total** | **$244,762** | **$217,494** | **$27,268** | **13%** | New Home Deliveries & Home Sale Revenues (2018-2019, in thousands, except units) | Metric | 2019 | 2018 | % Change (2019 vs 2018) | | :--------------------- | :-------- | :-------- | :---------------------- | | Homes Delivered | 6,974 | 6,197 | 13% | | Home Sale Revenues | $3,205,248 | $2,981,811 | 7% | | Average Selling Price | $459.6 | $481.2 | (4)% | - Gross margin from home sales increased **50 basis points** year-over-year from **18.3% in 2018 to 18.8% in 2019**[131](index=131&type=chunk) Inventory Impairments (2018-2019, in thousands) | Year | Total Impairments | Impact on Gross Margin | | :--- | :---------------- | :--------------------- | | 2019 | $935 | Not significant | | 2018 | $21,850 | (70) basis points | Net New Orders and Active Subdivisions (2018-2019, in thousands, except units) | Metric | 2019 | 2018 | % Change (2019 vs 2018) | | :----------------------------------- | :-------- | :-------- | :---------------------- | | Net New Orders (units) | 7,839 | 5,974 | 31% | | Net New Orders (dollar value) | $3,495,151 | $2,770,782 | 26% | | Average Selling Price of New Orders | $445.9 | $463.8 | (4)% | | Monthly Absorption Rate | 3.56 | 3.16 | 13% | | Active Subdivisions at period-end | 185 | 166 | 11% | | Average Active Subdivisions | 183 | 157 | 17% | - The cancellation rate decreased from **24% in 2018 to 21% in 2019**, with the East segment experiencing the most significant decrease due to additional underwriting procedures[150](index=150&type=chunk) Backlog at December 31 (2018-2019, in thousands, except units) | Metric | Dec 31, 2019 | Dec 31, 2018 | % Change (2019 vs 2018) | | :----------------------------------- | :----------- | :----------- | :---------------------- | | Homes in Backlog (units) | 3,801 | 2,936 | 29% | | Total Value of Backlog | $1,745,347 | $1,425,967 | 22% | | Average Selling Price of Homes in Backlog | $459.2 | $485.7 | (5)% | Total Owned and Optioned Lots (December 31, 2018-2019) | Metric | Dec 31, 2019 | Dec 31, 2018 | % Change | | :----------------------------------- | :----------- | :----------- | :------- | | Lots Owned | 18,505 | 16,297 | | | Lots Optioned | 8,881 | 6,890 | | | **Total Owned and Optioned Lots** | **27,386** | **23,187** | **18%** | [Financial Services](index=24&type=section&id=Financial%20Services) Financial services pretax income increased **30%** to **$60.2 million** in 2019, primarily due to an **$11.8 million net gain on equity securities**, with mortgage originations growing **15%** Financial Services Pretax Income by Segment (2018-2019, in thousands) | Segment | 2019 | 2018 | Change (2019 vs 2018) | % Change | | :----------------- | :--------- | :--------- | :-------------------- | :------- | | Mortgage operations | $29,312 | $31,920 | $(2,608) | (8)% | | Other | $30,915 | $14,440 | $16,475 | 114% | | **Total** | **$60,227** | **$46,360** | **$13,867** | **30%** | - The increase in financial services pretax income was primarily due to an **$11.8 million net gain on equity securities** in 2019, compared to a $3.7 million net loss in 2018[156](index=156&type=chunk) Mortgage Originations and Capture Rate (2018-2019, in thousands, except loans) | Metric | 2019 | 2018 | % Change (2019 vs 2018) | | :----------------------------------- | :---------- | :---------- | :---------------------- | | Total Originations (Loans) | 4,361 | 3,783 | 15% | | Total Originations (Principal) | $1,585,487 | $1,380,164 | 15% | | Capture rate (% of all homes delivered) | 62% | 61% | 1% | | Capture rate (% of all homes delivered, excludes cash sales) | 67% | 66% | 1% | - Mortgage loan origination product mix in 2019 included **39% government loans** (FHA, VA, USDA) and **61% conventional loans**[159](index=159&type=chunk) [Income Taxes](index=25&type=section&id=Income%20Taxes) The effective income tax rate increased to **21.9%** in 2019, influenced by share-based awards, uncertain tax positions, and energy tax credits Effective Income Tax Rates (2017-2019) | Year | Effective Tax Rate | | :--- | :----------------- | | 2019 | 21.9% | | 2018 | 20.1% | | 2017 | 38.3% | - The year-over-year change in the effective tax rate from 2018 to 2019 was impacted by a **$2.8 million benefit from share-based awards** in 2019 (vs. $0.4 million expense in 2018), a **$1.6 million benefit from decreased liability for uncertain tax positions** in 2019 (vs. $4.7 million expense in 2018), and a larger benefit from energy tax credits in 2018[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) MDC's liquidity and capital resources, including cash, marketable securities, a **$1 billion Revolving Credit Facility**, and a **$75 million Mortgage Repurchase Facility**, are deemed adequate for short and long-term needs - The company's capital structure includes stockholders' equity, long-term senior notes, a Revolving Credit Facility, and a Mortgage Repurchase Facility[168](index=168&type=chunk) - In January 2020, the company completed an offering of **$300 million of 3.850% senior notes** due January 2030[168](index=168&type=chunk)[443](index=443&type=chunk) - The Revolving Credit Facility has an aggregate commitment of **$1 billion**, with **$15.0 million in borrowings** and **$23.5 million in letters of credit** outstanding at December 31, 2019, leaving **$961.5 million in borrowing capacity**[171](index=171&type=chunk)[175](index=175&type=chunk) - The Mortgage Repurchase Facility provides liquidity up to **$75 million** (temporarily increased to **$150 million** at December 31, 2019), with **$149.6 million of mortgage loans** obligated to repurchase at year-end 2019[176](index=176&type=chunk) - Net cash provided by operating activities was **$57.8 million** in 2019, a significant improvement from net cash used of $7.9 million in 2018[181](index=181&type=chunk) - Off-balance sheet arrangements include lot option purchase contracts with **$27.4 million in cash deposits** and **$7.2 million in letters of credit** securing options to purchase **8,881 lots** for an estimated **$670.3 million**[184](index=184&type=chunk) Contractual Obligations at December 31, 2019 (in thousands) | Obligation | Total | Less than 1 Year | 1 - 3 Years | 4 - 5 Years | After 5 Years | | :------------------ | :------------ | :--------------- | :---------- | :---------- | :------------ | | Senior notes | $1,000,000 | $250,000 | $- | $250,000 | $500,000 | | Interest on senior notes | $773,906 | $50,781 | $87,500 | $80,625 | $555,000 | | Operating leases | $37,775 | $6,300 | $13,019 | $10,167 | $8,289 | | **Total** | **$1,811,681** | **$307,081** | **$100,519** | **$340,792** | **$1,063,289** | [CRITICAL ACCOUNTING ESTIMATES AND POLICIES](index=28&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20POLICIES) This section outlines key accounting estimates and policies, including homebuilding inventory valuation, warranty accruals, insurance reserves, litigation accruals, and revenue recognition for homebuilding and financial services - Homebuilding inventories are carried at cost unless events indicate the carrying value may not be recoverable, in which case they are evaluated for impairment quarterly at the subdivision level based on estimated future undiscounted cash flows[192](index=192&type=chunk)[193](index=193&type=chunk) - Warranty accruals are recorded for each home closed based on historical payment experience to cover expected costs of materials and labor during warranty periods[202](index=202&type=chunk) - Insurance reserves for Allegiant and StarAmerican are established based on actuarial studies, considering historical claim patterns, pending claims, and changing regulatory environments[203](index=203&type=chunk) - Revenue from home deliveries is recognized when performance obligations are satisfied, generally at the home closing date when title and possession transfer to the buyer[205](index=205&type=chunk)[291](index=291&type=chunk) - Revenue for HomeAmerican primarily reflects origination fees and the sale or expected future sale of mortgage loans, including estimated earnings from servicing rights, recognized when an interest rate lock commitment is made[208](index=208&type=chunk)[295](index=295&type=chunk) - Stock-based compensation expense is measured and recognized at the fair value of share-based payments granted, using Black-Scholes for service/performance conditions and Monte Carlo for market conditions[212](index=212&type=chunk)[300](index=300&type=chunk) [RECENTLY ISSUED ACCOUNTING STANDARDS](index=31&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20STANDARDS) The company adopted several new accounting standards, including ASU 2016-02 (Leases) which resulted in recording **$34.2 million** in net lease assets and **$34.3 million** in lease liabilities, with ASU 2016-13 (Credit Losses) effective January 1, 2020, expected to have an immaterial impact - ASU 2016-02, Leases (ASC 842), adopted January 1, 2019, resulted in recording **$34.2 million** in additional net lease assets and **$34.3 million** in lease liabilities, with no material impact on consolidated statements of operations or cash flows[303](index=303&type=chunk)[304](index=304&type=chunk) - ASU 2016-01, Financial Instruments-Overall, adopted January 1, 2018, changed the recognition of fair value changes for equity investments with readily determinable fair values to net income, resulting in a **$1.6 million decrease in income before taxes** for 2018[308](index=308&type=chunk) - ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), effective January 1, 2020, is expected to result in an approximate **$0.1 million decrease** to the opening balance of retained earnings, with no material impact on operations or cash flows[312](index=312&type=chunk) [ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) MDC is exposed to market risks from interest rate fluctuations on mortgage loans, interest rate lock commitments, and debt, using derivative instruments like forward sales of mortgage-backed securities to hedge risk - The company is exposed to market risks related to fluctuations in interest rates on mortgage loans held-for-sale, mortgage interest rate lock commitments, and debt[217](index=217&type=chunk) - Derivative instruments, primarily interest rate lock commitments and forward sales of mortgage-backed securities, are used to hedge interest rate risk[217](index=217&type=chunk)[218](index=218&type=chunk) - At December 31, 2019, the locked pipeline had an aggregate principal balance of **$104.5 million** (average **3.72% interest rate**), and mortgage loans held-for-sale totaled **$191.3 million** (average **3.66% interest rate**)[217](index=217&type=chunk) - Fixed-rate debt (senior notes) fair value is affected by interest rate changes, but not earnings or cash flows, while variable-rate debt (Revolving Credit Facility, Mortgage Repurchase Facility) affects earnings and cash flows[219](index=219&type=chunk) Fixed Rate Debt (Senior Notes) at December 31, 2019 (in thousands) | Debt Type | Carrying Amount | Fair Value | Average Interest Rate | | :-------------------------------------- | :-------------- | :---------- | :-------------------- | | $250 Million 5.625% senior notes due February 2020 | $249,909 | $250,400 | 5.63% | | $250 Million 5.500% senior notes due January 2024 | $249,005 | $272,083 | 5.50% | | $500 Million 6.000% senior notes due January 2043 | $490,508 | $528,542 | 6.00% | | **Total** | **$989,422** | **$1,051,025** | **5.78%** | [ITEM 8. Consolidated Financial Statements](index=33&type=section&id=ITEM%208.%20Consolidated%20Financial%20Statements) This section presents the audited consolidated financial statements for M.D.C. Holdings, Inc. and its subsidiaries, with Ernst & Young LLP issuing an unqualified opinion on the financial statements and internal control over financial reporting - The consolidated financial statements include the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations and Comprehensive Income, Stockholders' Equity, and Cash Flows[225](index=225&type=chunk) - Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements for the period ended December 31, 2019, and on the effectiveness of the company's internal control over financial reporting[228](index=228&type=chunk)[230](index=230&type=chunk) - Critical audit matters identified include the evaluation of inventories for impairment (due to subjective home sales revenue assumptions) and the evaluation of insurance reserves (due to reliance on actuarial projections of future claims)[234](index=234&type=chunk)[235](index=235&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) [ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=38&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure[459](index=459&type=chunk) [ITEM 9A. Controls and Procedures](index=38&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2019 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[460](index=460&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019, based on the COSO (2013 framework) criteria[461](index=461&type=chunk)[465](index=465&type=chunk) - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the fourth quarter[463](index=463&type=chunk) [ITEM 9B. Other Information](index=39&type=section&id=ITEM%209B.%20Other%20Information) No other information is required to be reported under this item - None[473](index=473&type=chunk) PART III [ITEM 10. Directors, Executive Officers and Corporate Governance](index=39&type=section&id=ITEM%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2020 definitive proxy statement - Information required by this item is incorporated by reference from the company's 2020 definitive proxy statement[475](index=475&type=chunk) - The company's Corporate Code of Conduct, Corporate Governance Guidelines, and committee charters are available on its website, www.mdcholdings.com[476](index=476&type=chunk) [ITEM 11. Executive Compensation](index=39&type=section&id=ITEM%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's proxy statement - Information required by this item is incorporated by reference from the company's proxy statement[477](index=477&type=chunk) [ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=39&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership of beneficial owners and management is incorporated by reference from the company's proxy statement - Information required by this item is incorporated by reference from the company's proxy statement[478](index=478&type=chunk) [ITEM 13. Certain Relationships and Related Transactions, and Director Independence](index=40&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the company's proxy statement - Information required by this item is incorporated by reference from the company's proxy statement[479](index=479&type=chunk) [ITEM 14. Principal Accountant Fees and Services](index=40&type=section&id=ITEM%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the company's proxy statement - Information required by this item is incorporated by reference from the company's proxy statement[480](index=480&type=chunk) PART IV [ITEM 15. Exhibits and Financial Statement Schedules](index=41&type=section&id=ITEM%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements included in Part II, Item 8, and provides an index to all exhibits filed with the 10-K report, including corporate documents, debt agreements, and equity incentive plans - The Consolidated Financial Statements of the Company and its subsidiaries are included in Part II, Item 8[481](index=481&type=chunk)[482](index=482&type=chunk) - All financial statement schedules are omitted because they are not applicable, not material, not required, or the required information is included in the applicable Consolidated Financial Statements or notes thereto[483](index=483&type=chunk) - The Index to Exhibits includes corporate documents, debt agreements (e.g., Senior Notes, Credit Agreement, Master Repurchase Agreement), equity incentive plans, and employment agreements[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk)[488](index=488&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk) [ITEM 16. Form 10-K Summary](index=47&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) This item is not applicable to the company's filing - Not applicable[494](index=494&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) The report is duly signed on behalf of M.D.C. Holdings, Inc. by its Senior Vice President, Chief Financial Officer, and Principal Accounting Officer, Robert N. Martin, and also by the Chairman and CEO, Larry A. Mizel, and Director, President and COO, David D. Mandarich, along with other directors - The report is signed by Robert N. Martin (Senior Vice President, Chief Financial Officer, and Principal Accounting Officer), Larry A. Mizel (Chairman of the Board of Directors and Chief Executive Officer), David D. Mandarich (Director, President and Chief Operating Officer), and other directors[496](index=496&type=chunk)[499](index=499&type=chunk)[500](index=500&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 M.D.C. HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 84-0622967 (State or other jurisdiction (I.R.S. employ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 M.D.C. HOLDINGS, INC. (Exact name of Registrant as specified in its charter) Delaware 84-0622967 (State or other jurisdiction (I.R.S. employer of ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-8951 If an emerging growth company, indicate by check mark if the registrant has elected to use the extended transition period for complying with any ...