Senior Notes, Secured, and Unsecured Indebtedness (Tables)

6 Months Ended

Jun. 30, 2016

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



	June 30, 2016		December 31, 2015
Notes payable:
Construction notes payable	$	150,951	$	110,181
Seller financing	29,439		—
Revolving line of credit	59,000		65,000
Total notes payable	239,390		175,181

Subordinated amortizing notes	10,692		14,066

Senior notes:
5 ³/₄% Senior Notes due April 15, 2019	148,555		148,295
8 ¹/₂% Senior Notes due November 15, 2020	422,872		422,896
7% Senior Notes due August 15, 2022	345,661		345,338
Total senior notes	917,088		916,529

Total notes payable and senior notes	$	1,167,170	$	1,105,776

Schedule of Maturities of Notes Payable and Senior Notes

As of June 30, 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	$	16,636
2017	149,683
2018	44,327
2019	189,436
2020	425,000
Thereafter	350,000
	$	1,175,082

The issuance date, facility size, maturity date and interest rate are listed in the table below as of June 30, 2016 (in millions):



Issuance Date	Facility Size		Outstanding		Maturity	Current Rate
March, 2016	$	33.4	$	14.9	September, 2018	3.45	%	(1)
January, 2016	35.0		18.3		February, 2019	3.72	%	(2)
November, 2015	42.5		16.3		November, 2017	4.50	%	(1)
August, 2015 (4)	14.2		1.7		August, 2017	4.50	%	(1)
August, 2015 (4)	37.5		8.3		August, 2017	4.50	%	(1)
July, 2015	22.5		21.2		July, 2018	4.00	%	(3)
April, 2015	18.5		18.4		October, 2017	4.00	%	(3)
November, 2014	24.0		18.2		November, 2017	4.00	%	(3)
November, 2014	22.0		17.0		November, 2017	4.00	%	(3)
March, 2014	26.0		16.6		October, 2016	3.45	%	(1)
	$	275.6	$	150.9

(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 June 30, 2016

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	34,723		$	563		$	4,478		$	—		$	39,764
Restricted cash	—		—			—			—			—			—
Receivables	—		2,810			680			3,240			—			6,730
Escrow proceeds receivable	—		887			1,414			—			—			2,301
Real estate inventories	—		945,690			631,365			251,792			—			1,828,847
Investment in unconsolidated joint ventures	—		7,124			150			—			—			7,274
Goodwill	—		14,209			52,693			—			—			66,902
Intangibles, net	—		—			6,700			—			—			6,700
Deferred income taxes, net	—		79,846			—			—			—			79,846
Other assets, net	—		17,056			1,176			294			—			18,526
Investments in subsidiaries	657,209		(26,354		)	(592,218		)	—			(38,637		)	—
Intercompany receivables	—		—			245,506			—			(245,506		)	—
Total assets	$	657,209	$	1,075,991		$	348,029		$	259,804		$	(284,143	)	$	2,056,890
LIABILITIES AND EQUITY
Accounts payable	$	—	$	63,320		$	20,533		$	5,240		$	—		$	89,093
Accrued expenses	—		68,725			5,025			105			—			73,855
Notes payable	—		98,481			—			140,909			—			239,390
Subordinated amortizing notes	—		10,692			—			—			—			10,692
5 ³/₄% Senior Notes	—		148,555			—			—			—			148,555
8¹/2% Senior Notes	—		422,872			—			—			—			422,872
7% Senior Notes	—		345,661			—			—			—			345,661
Intercompany payables	—		175,165			—			70,341			(245,506		)	—
Total liabilities	—		1,333,471			25,558			216,595			(245,506		)	1,330,118
Equity
William Lyon Homes stockholders’ equity (deficit)	657,209		(257,480		)	322,471			(26,354		)	(38,637		)	657,209
Noncontrolling interests	—		—			—			69,563			—			69,563
Total liabilities and equity	$	657,209	$	1,075,991		$	348,029		$	259,804		$	(284,143	)	$	2,056,890

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 June 30, 2016

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	137,673		$	175,203		$	12,183		$	—		$	325,059
Construction services	—		594			—			—			—			594
Management fees	—		(366		)	—			—			366			—
	—		137,901			175,203			12,183			366			325,653
Operating costs
Cost of sales	—		(112,950		)	(144,473		)	(10,849		)	(366		)	(268,638		)
Construction services	—		(548		)	—			—			—			(548		)
Sales and marketing	—		(5,925		)	(9,332		)	(2,855		)	—			(18,112		)
General and administrative	—		(13,475		)	(3,210		)	—			—			(16,685		)
Other	—		(358		)	(129		)	—			—			(487		)
	—		(133,256		)	(157,144		)	(13,704		)	(366		)	(304,470		)
Income from subsidiaries	14,561		1,687			—			—			(16,248		)	—
Operating income	14,561		6,332			18,059			(1,521		)	(16,248		)	21,183
Equity in income from unconsolidated joint ventures	—		859			335			—			—			1,194
Other income (expense), net	—		550			(6		)	(316		)	—			228
Income before provision for income taxes	14,561		7,741			18,388			(1,837		)	(16,248		)	22,605
Provision for income taxes	—		(7,519		)	—			—			—			(7,519		)
Net income	14,561		222			18,388			(1,837		)	(16,248		)	15,086
Less: Net income attributable to noncontrolling interests	—		—			—			(525		)	—			(525		)
Net income available to common stockholders	$	14,561	$	222		$	18,388		$	(2,362	)	$	(16,248	)	$	14,561

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended June 30, 2015

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	104,998		$	136,263		$	6,479		$	—		$	247,740
Construction services	—		6,955			—			—			—			6,955
Management fees	—		(195		)	—			—			195			—
	—		111,758			136,263			6,479			195			254,695
Operating costs
Cost of sales	—		(80,482		)	(114,216		)	(5,355		)	(195		)	(200,248		)
Construction services	—		(5,898		)	—			—			—			(5,898		)
Sales and marketing	—		(6,412		)	(7,776		)	(716		)	—			(14,904		)
General and administrative	—		(10,669		)	(2,746		)	—			—			(13,415		)
Amortization of intangible assets	—		(462		)	—			—			—			(462		)
Other	—		(646		)	225			—			—			(421		)
	—		(104,569		)	(124,513		)	(6,071		)	(195		)	(235,348		)
Income from subsidiaries	12,277		276			—			—			(12,553		)	—
Operating income (loss)	12,277		7,465			11,750			408			(12,553		)	19,347
Equity in income from unconsolidated joint ventures	—		245			270			—			—			515
Other income (expense), net	—		840			(14		)	(184		)	—			642
Income (loss) before provision for income taxes	12,277		8,550			12,006			224			(12,553		)	20,504
Provision for income taxes	—		(7,254		)	—			—			—			(7,254		)
Net income (loss)	12,277		1,296			12,006			224			(12,553		)	13,250
Less: Net income attributable to noncontrolling interests	—		—			—			(973		)	—			(973		)
Net income (loss) available to common stockholders	$	12,277	$	1,296		$	12,006		$	(749	)	$	(12,553	)	$	12,277

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Six Months Ended June 30, 2016

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	238,497		$	313,003		$	34,854		$	—		$	586,354
Construction services	—		3,724			—			—			—			3,724
Management fees	—		(1,046		)	—			—			1,046			—
	—		241,175			313,003			34,854			1,046			590,078
Operating costs
Cost of sales	—		(191,829		)	(260,033		)	(30,901		)	(1,046		)	(483,809		)
Construction services	—		(3,372		)	—			—			—			(3,372		)
Sales and marketing	—		(11,875		)	(16,957		)	(4,273		)	—			(33,105		)
General and administrative	—		(27,481		)	(7,038		)	—			—			(34,519		)
Amortization of intangible assets	—		—			—			—			—			—
Other	—		(727		)	(83		)	—			—			(810		)
	—		(235,284		)	(284,111		)	(35,174		)	(1,046		)	(555,615		)
Income from subsidiaries	23,575		3,924			—			—			(27,499		)	—
Operating income (loss)	23,575		9,815			28,892			(320		)	(27,499		)	34,463
Equity in income from unconsolidated joint ventures	—		1,861			514			—			—			2,375
Other income (expense), net	—		1,323			(15		)	(555		)	—			753
Income (loss) before provision for income taxes	23,575		12,999			29,391			(875		)	(27,499		)	37,591
Provision for income taxes	—		(12,564		)	—						—			(12,564		)
Net income (loss)	23,575		435			29,391			(875		)	(27,499		)	25,027
Less: Net income attributable to noncontrolling interests	—		—			—			(1,452		)	—			(1,452		)
Net income (loss) available to common stockholders	$	23,575	$	435		$	29,391		$	(2,327	)	$	(27,499	)	$	23,575

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Six Months Ended June 30, 2015

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	194,542		$	219,397		$	23,516		$	—		$	437,455
Construction services	—		14,408			—			—			—			14,408
Management fees	—		(706		)	—			—			706			—
	—		208,244			219,397			23,516			706			451,863
Operating costs
Cost of sales	—		(149,358		)	(184,600		)	(19,665		)	(706		)	(354,329		)
Construction services	—		(11,927		)	—			—			—			(11,927		)
Sales and marketing	—		(12,166		)	(13,300		)	(1,662		)	—			(27,128		)
General and administrative	—		(21,988		)	(5,375		)	—						(27,363		)
Amortization of intangible assets	—		(665		)	—			—			—			(665		)
Other	—		(1,782		)	825			—			—			(957		)
	—		(197,886		)	(202,450		)	(21,327		)	(706		)	(422,369		)
Income from subsidiaries	18,959		(6,468		)	—			—			(12,491		)	—
Operating income (loss)	18,959		3,890			16,947			2,189			(12,491		)	29,494
Equity in income from unconsolidated joint ventures	—		245			518			—			—			763
Other income (expense), net	—		5,206			4,799			(8,582		)	—			1,423
Income (loss) before provision for income taxes	18,959		9,341			22,264			(6,393		)	(12,491		)	31,680
Provision for income taxes	—		(10,824		)	—			—			—			(10,824		)
Net income (loss)	18,959		(1,483		)	22,264			(6,393		)	(12,491		)	20,856
Less: Net income attributable to noncontrolling interests	—		—			—			(1,897		)	—			(1,897		)
Net income (loss) available to common stockholders	$	18,959	$	(1,483	)	$	22,264		$	(8,290	)	$	(12,491	)	$	18,959

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Six Months Ended June 30, 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	$	(1,539	)	$	33,612		$	(22,138	)	$	(86,379	)	$	1,539		$	(74,905	)
Investing activities
Collection of related party note receivable	—			6,188			—			—			—			6,188
Purchases of property and equipment	—			(647		)	44			(16		)	—			(619		)
Investments in subsidiaries	—			(4,244		)	30,672			—			(26,428		)	—
Net cash (used in) provided by investing activities	—			1,297			30,716			(16		)	(26,428		)	5,569
Financing activities
Proceeds from borrowings on notes payable	—			2,211			—			80,658			—			82,869
Principal payments on notes payable	—			(8,084		)	—			(34,015		)				(42,099		)
Proceeds from borrowings on Revolver	—			120,000			—			—						120,000
Payments on Revolver	—			(126,000		)	—			—			—			(126,000		)
Principal payments on subordinated amortizing notes	—			(3,374		)	—			—			—			(3,374		)
Payment of deferred loan costs	—			(214		)	—			—			—			(214		)
Shares remitted to or withheld by Company for employee tax withholding	—			(844		)	—			—			—			(844		)
Excess income tax benefit from stock based awards	—			(178		)	—			—			—			(178		)
Noncontrolling interest contributions	—			—			—			33,963			—			33,963
Noncontrolling interest distributions	—			—			—			(5,226		)	—			(5,226		)
Advances to affiliates	—			—			(4,480		)	10,495			(6,015		)	—
Intercompany receivables/payables	1,539			(28,035		)	(6,258		)	1,850			30,904			—
Net cash provided by (used in) financing activities	1,539			(44,518		)	(10,738		)	87,725			24,889			58,897
Net (decrease) increase in cash and cash equivalents	—			(9,609		)	(2,160		)	1,330			—			(10,439		)
Cash and cash equivalents at beginning of period	—			44,332			2,723			3,148			—			50,203
Cash and cash equivalents at end of period	$	—		$	34,723		$	563		$	4,478		$	—		$	39,764

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Six Months Ended June 30, 2015

(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	$	(1,631	)	$	(98,069	)	$	13,591		$	(20,462	)	$	1,631		$	(104,940	)
Investing activities
Investments in and advances to unconsolidated joint ventures	—			(1,000		)	—			—			—			(1,000		)
Purchases of property and equipment	—			(303		)	41			15			—			(247		)
Investments in subsidiaries	—			(5,004		)	(6,627		)	—			11,631			—
Net cash (used in) provided by investing activities	—			(6,307		)	(6,586		)	15			11,631			(1,247		)
Financing activities
Proceeds from borrowings on notes payable	—			—			—			28,394			—			28,394
Principal payments on notes payable	—			(2,385		)	(162		)	(9,301		)	—			(11,848		)
Proceeds from borrowings on Revolver	—			144,000			—			—			—			144,000
Payments on revolver	—			(40,000		)	—			—			—			(40,000		)
Principal payments on subordinated amortizing notes	—			(3,368		)	—			—			—			(3,368		)
Payment of deferred loan costs	—			(799		)	—			—			—			(799		)
Proceeds from exercise of stock options	—			106			—			—			—			106
Shares remitted to Company for employee tax witholding	—			(1,632		)	—			—			—			(1,632		)
Noncontrolling interest contributions	—			—			—			5,625			—			5,625
Noncontrolling interest distributions	—			—			—			(6,417		)	—			(6,417		)
Advances to affiliates	—			—			(4,807		)	6,826			(2,019		)	—
Intercompany receivables/payables	1,631			12,599			(1,845		)	(1,142		)	(11,243		)	—
Net cash provided by (used in) financing activities	1,631			108,521			(6,814		)	23,985			(13,262		)	114,061
Net increase in cash and cash equivalents	—			4,145			191			3,538			—			7,874
Cash and cash equivalents at beginning of period	—			48,462			573			3,736			—			52,771
Cash and cash equivalents at end of period	$	—		$	52,607		$	764		$	7,274		$	—		$	60,645