Senior Notes, Secured, and Unsecured Indebtedness (Tables)

3 Months Ended

Mar. 31, 2016

Senior notes, secured, and unsecured indebtedness consist of the following (in thousands):



	March 31, 2016		December 31, 2015
Notes payable:
Construction notes payable	$	136,817	$	110,181
Revolving line of credit	49,000		65,000
Total notes payable	185,817		175,181

Subordinated amortizing notes	12,390		14,066

Senior notes:
5 ³/₄% Senior Notes due April 15, 2019	148,429		148,295
8 ¹/₂% Senior Notes due November 15, 2020	422,887		422,896
7% Senior Notes due August 15, 2022	345,474		345,338
Total senior notes	916,790		916,529

Total notes payable and senior notes	$	1,114,997	$	1,105,776

Schedule of Maturities of Notes Payable and Senior Notes

As of March 31, 2016, the maturities of the Notes payable, Subordinated amortizing notes, 5 ³/₄% Senior Notes, 8 ¹/₂% Senior Notes, and 7% Senior Notes are as follows (in thousands):



Year Ending December 31,
2016	$	15,179
2017	135,829
2018	14,673
2019	182,526
2020	425,000
Thereafter	350,000
	$	1,123,207

The issuance date, facility size, maturity date and interest rate are listed in the table below as of March 31, 2016 (in millions):



Issuance Date	Facility Size		Outstanding		Maturity	Current Rate
March, 2016	$	33.4	$	14.7	September, 2018	3.44	%	(1)
January, 2016	35.0		17.6		February, 2019	3.68	%	(2)
November, 2015	42.5		15.3		November, 2017	4.50	%	(1)
August, 2015 (4)	14.2		2.8		August, 2017	4.50	%	(1)
August, 2015 (4)	37.5		10.4		August, 2017	4.50	%	(1)
July, 2015	22.5		14.9		July, 2018	4.00	%	(3)
April, 2015	18.5		13.2		October, 2017	4.00	%	(3)
November, 2014	24.0		17.2		November, 2017	4.00	%	(3)
November, 2014	22.0		15.5		November, 2017	4.00	%	(3)
March, 2014	26.0		15.2		October, 2016	3.43	%	(1)
	$	275.6	$	136.8

(1) Loan bears interest at the Company's option of either LIBOR +3.0% or the prime rate +1.0%.

(2) Loan bears interest at LIBOR +3.25%

(3) Loan bears interest at the prime rate +0.5%.

(4) Loan relates to a project that is wholly-owned by the Company.

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

(Unaudited)

As of March 31, 2016

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	30,178		$	194		$	5,426		$	—		$	35,798
Restricted cash	—		505			—			—			—			505
Receivables	—		2,261			624			3,239			—			6,124
Escrow proceeds receivable	—		—			3,024			—			—			3,024
Real estate inventories	—		898,212			620,678			234,425			—			1,753,315
Investment in unconsolidated joint ventures	—		6,264			150			—			—			6,414
Goodwill	—		14,209			52,693			—			—			66,902
Intangibles, net	—		—			6,700			—			—			6,700
Deferred income taxes, net	—		79,631			—			—			—			79,631
Other assets, net	—		18,610			1,708			304			—			20,622
Investments in subsidiaries	641,531		(25,858		)	(597,916		)	—			(17,757		)	—
Intercompany receivables	—		—			241,527			—			(241,527		)	—
Total assets	$	641,531	$	1,024,012		$	329,382		$	243,394		$	(259,284	)	$	1,979,035
LIABILITIES AND EQUITY
Accounts payable	$	—	$	54,077		$	21,037		$	3,740		$	—		$	78,854
Accrued expenses	—		67,200			4,265			111			—			71,576
Notes payable	—		62,201			—			123,616			—			185,817
Subordinated amortizing notes	—		12,390			—			—			—			12,390
5 ³/₄% Senior Notes	—		148,429			—			—			—			148,429
8¹/2% Senior Notes	—		422,887			—			—			—			422,887
7% Senior Notes	—		345,474			—			—			—			345,474
Intercompany payables	—		171,819			—			69,708			(241,527		)	—
Total liabilities	—		1,284,477			25,302			197,175			(241,527		)	1,265,427
Equity
William Lyon Homes stockholders’ equity (deficit)	641,531		(260,465		)	304,080			(25,858		)	(17,757		)	641,531
Noncontrolling interests	—		—			—			72,077			—			72,077
Total liabilities and equity	$	641,531	$	1,024,012		$	329,382		$	243,394		$	(259,284	)	$	1,979,035

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	44,332		$	2,723		$	3,148		$	—		$	50,203
Restricted cash	—		504			—			—			—			504
Receivables	—		8,986			937			4,915			—			14,838
Escrow proceeds receivable	—		2,020			1,021			—			—			3,041
Real estate inventories	—		922,990			589,762			162,354			—			1,675,106
Investment in unconsolidated joint ventures	—		5,263			150			—			—			5,413
Goodwill	—		14,209			52,693			—			—			66,902
Intangibles, net	—		—			6,700			—			—			6,700
Deferred income taxes, net	—		79,726			—			—			—			79,726
Other assets, net	—		18,980			1,738			299			—			21,017
Investments in subsidiaries	632,095		(34,522		)	(561,546		)	—			(36,027		)	—
Intercompany receivables	—		—			239,248			—			(239,248		)	—
Total assets	$	632,095	$	1,062,488		$	333,426		$	170,716		$	(275,275	)	$	1,923,450
LIABILITIES AND EQUITY
Accounts payable	$	—	$	45,065		$	27,807		$	3,009		$	—		$	75,881
Accrued expenses	—		62,167			8,059			98			—			70,324
Notes payable	—		80,915			—			94,266			—			175,181
Subordinated amortizing notes	—		14,066			—			—			—			14,066
5 ³/₄% Senior Notes	—		148,295			—			—			—			148,295
8 ¹/₂% Senior Notes	—		422,896			—			—			—			422,896
7% Senior Notes	—		345,338			—			—			—			345,338
Intercompany payables	—		170,757			—			68,491			(239,248		)	—
Total liabilities	—		1,289,499			35,866			165,864			(239,248		)	1,251,981
Equity
William Lyon Homes stockholders’ equity (deficit)	632,095		(227,011		)	297,560			(34,522		)	(36,027		)	632,095
Noncontrolling interests	—		—			—			39,374			—			39,374
Total liabilities and equity	$	632,095	$	1,062,488		$	333,426		$	170,716		$	(275,275	)	$	1,923,450

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended March 31, 2016

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	100,824		$	137,800		$	22,671		$	—		$	261,295
Construction services	—		3,130			—			—			—			3,130
Management fees	—		(680		)	—			—			680			—
	—		103,274			137,800			22,671			680			264,425
Operating costs
Cost of sales	—		(78,879		)	(115,560		)	(20,052		)	(680		)	(215,171		)
Construction services	—		(2,824		)	—			—			—			(2,824		)
Sales and marketing	—		(5,950		)	(7,625		)	(1,418		)	—			(14,993		)
General and administrative	—		(14,006		)	(3,828		)	—			—			(17,834		)
Other	—		(369		)	46			—			—			(323		)
	—		(102,028		)	(126,967		)	(21,470		)	(680		)	(251,145		)
Income from subsidiaries	9,014		2,237			—			—			(11,251		)	—
Operating income	9,014		3,483			10,833			1,201			(11,251		)	13,280
Equity in income from unconsolidated joint ventures	—		1,002			179			—			—			1,181
Other income (expense), net	—		773			(9		)	(239		)	—			525
Income before provision for income taxes	9,014		5,258			11,003			962			(11,251		)	14,986
Provision for income taxes	—		(5,045		)	—			—			—			(5,045		)
Net income	9,014		213			11,003			962			(11,251		)	9,941
Less: Net income attributable to noncontrolling interests	—		—			—			(927		)	—			(927		)
Net income available to common stockholders	$	9,014	$	213		$	11,003		$	35		$	(11,251	)	$	9,014

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended March 31, 2015

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	89,544		$	83,134		$	17,037		$	—		$	189,715
Construction services	—		7,453			—			—			—			7,453
Management fees	—		(511		)	—			—			511			—
	—		96,486			83,134			17,037			511			197,168
Operating costs
Cost of sales	—		(68,876		)	(70,384		)	(14,310		)	(511		)	(154,081		)
Construction services	—		(6,029		)	—			—			—			(6,029		)
Sales and marketing	—		(5,754		)	(5,524		)	(946		)	—			(12,224		)
General and administrative	—		(11,319		)	(2,629		)	—			—			(13,948		)
Amortization of intangible assets	—		(203		)	—			—			—			(203		)
Other	—		(1,136		)	600			—			—			(536		)
	—		(93,317		)	(77,937		)	(15,256		)	(511		)	(187,021		)
Income from subsidiaries	6,682		(6,744		)	—			—			62			—
Operating income (loss)	6,682		(3,575		)	5,197			1,781			62			10,147
Equity in income from unconsolidated joint ventures	—		—			248			—			—			248
Other income (expense), net	—		4,366			4,813			(8,398		)	—			781
Income (loss) before provision for income taxes	6,682		791			10,258			(6,617		)	62			11,176
Provision for income taxes	—		(3,570		)	—			—			—			(3,570		)
Net income (loss)	6,682		(2,779		)	10,258			(6,617		)	62			7,606
Less: Net income attributable to noncontrolling interests	—		—			—			(924		)	—			(924		)
Net income (loss) available to common stockholders	$	6,682	$	(2,779	)	$	10,258		$	(7,541	)	$	62		$	6,682

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Three Months Ended March 31, 2016

(in thousands)



	Unconsolidated
	Delaware Lyon			California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating activities
Net cash (used in) provided by operating activities	$	(422	)	$	41,317		$	(32,162	)	$	(68,691	)	$	422		$	(59,536	)
Investing activities
Collection of related party note receivable	—			6,188			—			—			—			6,188
Purchases of property and equipment	—			(548		)	25			(3		)	—			(526		)
Investments in subsidiaries	—			(6,427		)	36,370			—			(29,943		)	—
Net cash (used in) provided by investing activities	—			(787		)	36,395			(3		)	(29,943		)	5,662
Financing activities
Proceeds from borrowings on notes payable	—			57			—			53,105			—			53,162
Principal payments on notes payable	—			(2,771		)	—			(23,755		)	—			(26,526		)
Proceeds from borrowings on Revolver	—			55,000			—			—			—			55,000
Payments on Revolver	—			(71,000		)	—			—			—			(71,000		)
Principal payments on subordinated amortizing notes	—			(1,676		)	—			—			—			(1,676		)
Payment of deferred loan costs	—			(197		)	—			—			—			(197		)
Shares remitted to or withheld by Company for employee tax withholding	—			(844		)	—			—			—			(844		)
Excess income tax benefit from stock based awards	—			(226		)	—			—			—			(226		)
Noncontrolling interest contributions	—			—			—			33,241			—			33,241
Noncontrolling interest distributions	—			—			—			(1,465		)	—			(1,465		)
Advances to affiliates	—			—			(4,483		)	8,629			(4,146		)	—
Intercompany receivables/payables	422			(33,027		)	(2,279		)	1,217			33,667			—
Net cash provided by (used in) financing activities	422			(54,684		)	(6,762		)	70,972			29,521			39,469
Net (decrease) increase in cash and cash equivalents	—			(14,154		)	(2,529		)	2,278			—			(14,405		)
Cash and cash equivalents at beginning of period	—			44,332			2,723			3,148			—			50,203
Cash and cash equivalents at end of period	$	—		$	30,178		$	194		$	5,426		$	—		$	35,798

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Three Months Ended March 31, 2015

(in thousands)



	Unconsolidated
	Delaware Lyon			California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating activities
Net cash provided by (used in) operating activities	$	175		$	(53,883	)	$	(6,375	)	$	(838	)	$	(175	)	$	(61,096	)
Investing activities
Investments in and advances to unconsolidated joint ventures	—			(1,000		)	—			—			—			(1,000		)
Purchases of property and equipment	—			(173		)	15			8			—			(150		)
Investments in subsidiaries	—			(4,896		)	11,916			—			(7,020		)	—
Net cash (used in) provided by investing activities	—			(6,069		)	11,931			8			(7,020		)	(1,150		)
Financing activities
Proceeds from borrowings on notes payable	—			—			—			6,148			—			6,148
Principal payments on notes payable	—			(384		)	(162		)	(6,416		)	—			(6,962		)
Proceeds from borrowings on Revolver	—			89,000			—			—			—			89,000
Payments on revolver	—			(40,000		)	—			—			—			(40,000		)
Principal payments on subordinated amortizing notes	—			(1,760		)	—			—			—			(1,760		)
Payment of deferred loan costs	—			(561		)	—			—			—			(561		)
Proceeds from exercise of stock options	—			106			—			—			—			106
Shares remitted to Company for employee tax witholding	—			(1,632		)	—			—			—			(1,632		)
Noncontrolling interest distributions	—			—			—			(5,414		)	—			(5,414		)
Advances to affiliates	—			—			(4,808		)	5,693			(885		)	—
Intercompany receivables/payables	(175		)	(6,620		)	(779		)	(506		)	8,080			—
Net cash provided by (used in) financing activities	(175		)	38,149			(5,749		)	(495		)	7,195			38,925
Net decrease in cash and cash equivalents	—			(21,803		)	(193		)	(1,325		)	—			(23,321		)
Cash and cash equivalents at beginning of period	—			48,462			573			3,736			—			52,771
Cash and cash equivalents at end of period	$	—		$	26,659		$	380		$	2,411		$	—		$	29,450