Senior Notes, Secured, and Unsecured Indebtedness

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



	March 31, 2018		December 31, 2017
Notes payable:
Revolving credit facility	$	85,000	$	—
Seller financing	—		589
Construction notes payable	2,291		—
Joint venture notes payable	84,955		93,926
Total notes payable	172,246		94,515

Senior notes:
5 ³/₄% Senior Notes due April 15, 2019	—		149,362
7% Senior Notes due August 15, 2022	346,924		346,740
6% Senior Notes due September 1, 2023	343,274		—
5 ⁷/₈% Senior Notes due January 31, 2025	439,903		439,567
Total senior notes	1,130,101		935,669

Total notes payable and senior notes	$	1,302,347	$	1,030,184

As of March 31, 2018, the maturities of the Notes payable, 7% Senior Notes, 6% Senior Notes, and 5 ⁷/₈% Senior Notes are as follows (in thousands):



Year Ending December 31,
Remaining in 2018	$	21,352
2019	113,979
2020	—
2021	36,915
2022	350,000
Thereafter	800,000
	$	1,322,246

Maturities above exclude premium on the 7% Senior Notes of $0.7 million and discount on the 5 ⁷/₈% Senior Notes of $3.1 million, and deferred loan costs on the 7%, 6%, and 5 ⁷/₈% Senior Notes of $17.5 million as of March 31, 2018.

Notes Payable

Revolving Credit Facility

On July 1, 2016, California Lyon and Parent entered into an amendment and restatement agreement pursuant to which its existing credit agreement providing for a revolving credit facility, as previously amended and restated on March 27, 2015 as described below, was further amended and restated in its entirety (as amended from time to time, the "Second Amended Facility"). The Second Amended Facility amends and restates the Company’s previous $130.0 million revolving credit facility and provides for total lending commitments of $145.0 million. In addition, the Second Amended Facility has an uncommitted accordion feature under which the Company may increase the total principal amount up to a maximum aggregate of $200.0 million under certain circumstances, as well as a sublimit of $50.0 million for letters of credit. Effective as of November 28, 2017, California Lyon increased the size of the commitment under its revolving credit facility by $25.0 million to an aggregate total of $170.0 million, through exercise of the facility’s accordion feature and entry into a new lender supplement as of such date.

The Second Amended Facility, among other things, also amended the maturity date of the previous facility to July 1, 2019, provided that the Second Amended Facility will terminate on January 14, 2019 (the “Springing Termination Date”) if, on the Springing Termination Date, the aggregate outstanding principal amount of California Lyon’s 5.75% senior notes due 2019 is equal to or greater than the sum of (a) 50% of the Consolidated EBITDA (as defined in the Second Amended Facility) of California Lyon, Parent, certain of the Parent’s direct and indirect wholly owned subsidiaries (together with California Lyon and Parent, the “Loan Parties”) and their Restricted Subsidiaries (as defined in the Second Amended Facility) for the four-quarter period ending September 30, 2018, plus (b) the Liquidity (as defined in the Second Amended Facility) of the Loan Parties and their consolidated subsidiaries on the Springing Termination Date. Further, the Second Amended Facility amended the maximum leverage ratio covenant to extend the timing of the gradual step-downs. Specifically, pursuant to the Second Amended Facility, the maximum leverage ratio remained at 65% from June 30, 2016 through and including December 30, 2016, decreased to 62.5% on the last day of the 2016 fiscal year, remained at 62.5% from December 31, 2016 through and including June 29, 2017, and was scheduled to further decrease to 60% on the last day of the second quarter of 2017 and to remain at 60% thereafter. The Second Amended Facility did not revise any of our other financial covenants thereunder.

On June 16, 2017, California Lyon, Parent and the lenders party thereto entered into a second amendment to the Second Amended Facility, which amended the maximum leverage ratio to extend the timing of the gradual step-downs, such that the leverage ratio remained at 62.5% through and including December 30, 2017, and decreased to 60% on the last day of the 2017 fiscal year and was scheduled to remain at 60% thereafter.

On March 9, 2018, California Lyon, Parent and the lenders party thereto entered into a third amendment to the Second Amended Facility, which temporarily increased the maximum leverage ratio, such that the leverage ratio remained at 60% through and including March 30, 2018, increased to 70% on March 31, 2018 through and including June 29, 2018, decreases to 65% on June 30, 2018 through and including December 30, 2018, and decreases to 60% on the last day of the 2018 fiscal year and will remain at 60% thereafter. The amendment did not revise any of our other financial covenants thereunder.

The Second Amended Facility contains certain financial maintenance covenants, including (a) a minimum tangible net worth requirement of $451.0 million (which is subject to increase over time based on subsequent earnings and proceeds from equity offerings, as well as deferred tax assets to the extent included on the Company's financial statements), (b) a maximum leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding 70% effective as of March 31, 2018 and is scheduled to decrease to 65% on June 30, 2018, and is scheduled to further decrease to 60% effective as of December 31, 2018, and (c) a covenant requiring us to maintain either (i) an interest coverage ratio (EBITDA to interest incurred, as defined therein) of at least 1.50 to 1.00 or (ii) liquidity (as defined therein) of an amount not less than the greater of our consolidated interest incurred during the trailing 12 months and $50.0 million. Our compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Second Amended Facility and can differ in certain respects from comparable GAAP or other commonly used terms. The Second Amended Facility contains customary events of default, subject to cure periods in certain circumstances, including: nonpayment of principal, interest and fees or other amounts; violation of covenants; inaccuracy of representations and warranties; cross default to certain other indebtedness; unpaid judgments; and certain bankruptcy and other insolvency events. The occurrence of any event of default could result in the termination of the commitments under the Second Amended Facility and permit the lenders to accelerate payment on outstanding borrowings under the Second Amended Facility and require cash collateralization of outstanding letters of credit. If a change in control (as defined in the Second Amended Facility) occurs, the lenders may terminate the commitments under the Second Amended Facility and require that the Company repay outstanding borrowings under the Second Amended Facility and cash collateralize outstanding letters of credit. Interest rates on borrowings generally will be based on either LIBOR or a base rate, plus the applicable spread.

In January 2017, the Company entered into an amendment which modifies the definition of Tangible Net Worth for purposes of calculating the Leverage Ratio covenant under the Second Amended Facility, so as to exclude any reduction in Tangible Net Worth (as defined therein) that occurs as a result of the costs related to payment of any call premium or any other costs associated with the refinancing transaction and the redemption of outstanding 8.5% Notes. The Company was in compliance with all covenants under the Second Amended Facility as of March 31, 2018.

Borrowings under the Second Amended Facility, the availability of which is subject to a borrowing base formula, are required to be guaranteed by the Parent and certain of the Parent's wholly-owned subsidiaries, are secured by a pledge of all equity interests held by such guarantors, and may be used for general corporate purposes. Interest rates on borrowings generally will be based on either LIBOR or a base rate, plus the applicable spread. As of March 31, 2018, the commitment fee on the unused portion of the Second Facility accrues at an annual rate of 0.50%. As of March 31, 2018, the Company had $85.0 million outstanding against the Second Amended Facility at an effective rate of 4.88%, as well as a letter of credit for $11.0 million. As of December 31, 2017, the Company had a letter of credit for $7.8 million but no outstanding balance against the Second Amended Facility.

Seller Financing

During the three months ended March 31, 2018, the Company paid in full prior to maturity, along with all accrued interest to date, a note payable outstanding related to a land acquisition for which seller financing was provided. The note bore interest at a rate of 7% per annum and was secured by the underlying land.

Notes Payable

The Company and certain of its consolidated joint ventures have entered into notes payable agreements. These loans will be repaid with proceeds from closings and are secured by the underlying projects. The issuance date, facility size, maturity date and interest rate of the joint ventures notes payable are listed in the table below as of March 31, 2018 (in millions):



Issuance Date	Facility Size		Outstanding			Maturity	Current Rate
July, 2017	$	66.2	$	36.9		February, 2021	4.81	%	(5)
March, 2016	33.4		1.2		(4)	September, 2018	4.76	%	(1)
January, 2016	35.0		29.0			February, 2019	5.13	%	(2)
November, 2015	42.5		16.0		(4)	May, 2018	5.75	%	(1)
November, 2014	7.0		1.4		(4)	May, 2018	5.25	%	(3)
March, 2014	26.0		0.5			April, 2018	4.87	%	(1)
	$	143.9	$	85.0

(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) The Company anticipates paying the borrowings in full upon the maturity date from proceeds from homes closed in the respective project.

(5) Loan bears interest at the greatest of the prime rate, federal funds effective rate +1.0%, or LIBOR +1.0%.

In addition to the above, the Company had $2.3 million of construction notes payable outstanding related to projects that are wholly-owned by the Company.

The notes payable contain certain financial maintenance covenants. The Company was in compliance with all such covenants as of March 31, 2018.

Senior Notes

5 ³/₄% Senior Notes Due 2019

On March 31, 2014, California Lyon completed its private placement with registration rights of 5.75% Senior Notes due 2019 (the "5.75% Notes"), in an aggregate principal amount of $150 million. The 5.75% Notes were issued at 100% of their aggregate principal amount. In August 2014, we exchanged 100% of the initial 5.75% Notes for notes that are freely transferable and registered under the Securities Act of 1933, as amended (the “Securities Act”).

During the three months ended March 31, 2018, Parent, through California Lyon, used the net proceeds from the offering of 6.00% Senior Notes due 2023, as further described below, (i) together with cash generated from certain land banking arrangements, and cash on hand, to finance the RSI Acquisition and to pay related fees and expenses and (ii) to repay all of California Lyon's $150 million in aggregate principal amount of 5.75% Notes such that the 5.75% Notes were satisfied and discharged as of March 31, 2018.

8 ¹/₂% Senior Notes Due 2020

During the three months ended March 31, 2017, Parent, through California Lyon, used the net proceeds from its private placement with registration rights of 5.875% Senior Notes due 2025, as further described below, to purchase $395.6 million of the outstanding aggregate principal amount of the 8.5% Notes, pursuant to a cash tender offer and consent solicitation. Subsequently, the Company used the remaining proceeds, together with cash on hand, for the retirement of the remaining outstanding 8.5% Notes, such that the entire aggregate $425 million of previously outstanding 8.5% Notes are retired and extinguished as of December 31, 2017. The Company incurred certain costs related to the early extinguishment of debt of the 8.5% Notes during the three months ended March 31, 2017 in an amount of $21.8 million, which is included in the Consolidated Statement of Operations as Loss on extinguishment of debt.

7% Senior Notes Due 2022

On August 11, 2014, WLH PNW Finance Corp. (“Escrow Issuer”), completed its private placement with registration rights of 7.00% Senior Notes due 2022 (the “initial 7.00% Notes”), in an aggregate principal amount of $300 million. The initial 7.00% Notes were issued at 100% of their aggregate principal amount. On August 12, 2014, in connection with the consummation of the Polygon Acquisition, Escrow Issuer merged with and into California Lyon, and California Lyon assumed the obligations of the Escrow Issuer under the initial 7.00% Notes and the related indenture by operation of law (the “Escrow Merger”). Following the Escrow Merger, California Lyon is the obligor under the initial 7.00% Notes. In January 2015, we exchanged 100% of the initial 7.00% Notes for notes that are freely transferable and registered under the Securities Act.

On September 15, 2015, California Lyon completed its private placement with registration rights of an additional $50.0 million in aggregate principal amount of its 7.00% Senior Notes due 2022 (the “additional 7.00% Notes”, and together with the initial 7.00% Notes, the "7.00% Notes") at an issue price of 102.0% of their principal amount, plus accrued interest from August 15, 2015, resulting in net proceeds of approximately $50.5 million. In January 2016, we exchanged 100% of the additional 7.00% Notes for notes that are freely transferable and registered under the Securities Act.

As of March 31, 2018 the outstanding amount of the 7.00% Notes was $350 million, excluding unamortized premium of $0.7 million and deferred loan costs of $3.8 million. The 7.00% Notes bear interest at a rate of 7.00% per annum, payable semiannually in arrears on February 15 and August 15, and mature on August 15, 2022. The 7.00% Notes are unconditionally guaranteed on a joint and several unsecured basis by Parent and certain of its existing and future restricted subsidiaries. The 7.00% Notes and the related guarantees are California Lyon’s and the guarantors’ unsecured senior obligations and rank equally in right of payment with all of California Lyon’s and the guarantors’ existing and future unsecured senior debt, including California Lyon’s $350 million in aggregate principal amount of 6.00% Senior Notes due 2023 and $450 million in aggregate principal amount of 5.875% Senior Notes due 2025, each as described below. The 7.00% Notes rank senior in right of payment to all of California Lyon’s and the guarantors’ future subordinated debt. The 7.00% Notes and the guarantees are and will be effectively junior to California Lyon’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such debt.

6% Senior Notes Due 2023

On March 9, 2018, California Lyon completed its private placement with registration rights of 6.00% Senior Notes due 2023 (the "6.00% Notes"), in an aggregate principal amount of $350 million. The 6.00% Notes were issued at 100% of their aggregate principal amount. Parent, through California Lyon, used the net proceeds from the 6.00% Notes offering to (i) together with cash generated from certain land banking arrangements, and cash on hand, to finance the RSI Acquisition and to pay related fees and expenses and (ii) to repay all of California Lyon's $150 million of the outstanding aggregate principal amount of the 5.75% Notes.

As of March 31, 2018, the outstanding principal amount of the 6.00% Notes was $350 million, excluding deferred loan costs of $6.7 million. The 6.00% Notes bear interest at a rate of 6.00% per annum, payable semiannually in arrears on March 1 and September 1, and mature on September 1, 2023. The 6.00% Notes are unconditionally guaranteed on a joint and several unsecured basis by Parent and certain of its existing and future restricted subsidiaries. The 6.00% Notes and the related guarantees are California Lyon’s and the guarantors’ unsecured senior obligations and rank equally in right of payment with all of California Lyon’s and the guarantors’ existing and future unsecured senior debt, including California Lyon’s $350 million in aggregate principal amount of 7.00% Senior Notes due 2022, as described above and $450 million in aggregate principal amount of 5.875% Senior Notes due 2025, as described below. The 6.00% Notes rank senior in right of payment to all of California Lyon’s and the guarantors’ future subordinated debt. The 6.00% Notes and the guarantees are and will be effectively junior to California Lyon’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such debt.

On or after September 1, 2020, California Lyon may redeem all or a portion of the 6.00% Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of the principal amount on the redemption date) set forth below plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, if redeemed during the 12-month period commencing on each of the dates as set forth below:



Year	Percentage
September 1, 2020	103.00	%
September 1, 2021	101.50	%
September 1, 2022	100.00	%

Prior to September 1, 2020, the Notes may be redeemed in whole or in part at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, and accrued and unpaid interest, if any, to, but not including, the redemption date.

In addition, any time prior to September 1, 2020, California Lyon may, at its option on one or more occasions, redeem Notes (including any additional notes that may be issued in the future under the 2023 Notes Indenture) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Notes (including any additional notes that may be issued in the future under the 2023 Notes Indenture) issued prior to such date at a redemption price (expressed as a percentage of principal amount) of 106.00%, plus accrued and unpaid interest, if any, to, but not including, the redemption date, with an amount equal to the net cash proceeds from one or more equity offerings.

5.875% Senior Notes Due 2025

On January 31, 2017, California Lyon completed its private placement with registration rights of 5.875% Senior Notes due 2025 (the "5.875% Notes"), in an aggregate principal amount of $450 million. The 5.875% Notes were issued at 99.215% of their aggregate principal amount. Parent, through California Lyon, used the net proceeds from the 5.875% Notes offering to purchase the outstanding aggregate principal amount of the 8.5% Notes such that the entire aggregate $425 million of previously outstanding 8.5% Notes are retired and extinguished as of March 31, 2018. In May 2017, the Company exchanged 100% of the 5.875% Notes for notes that are freely transferable and registered under the Securities Act.

As of March 31, 2018, the outstanding principal amount of the 5.875% Notes was $450 million, excluding unamortized discount of $3.1 million and deferred loan costs of $7.0 million. The 5.875% Notes bear interest at a rate of 5.875% per annum, payable semiannually in arrears on January 31 and July 31, and mature on January 31, 2025. The 5.875% Notes are unconditionally guaranteed on a joint and several unsecured basis by Parent and certain of its existing and future restricted subsidiaries. The 5.875% Notes and the related guarantees are California Lyon’s and the guarantors’ unsecured senior obligations and rank equally in right of payment with all of California Lyon’s and the guarantors’ existing and future unsecured senior debt, including California Lyon’s $350 million in aggregate principal amount of 7.00% Senior Notes due 2022 and $350 million in aggregate principal amount of 6.00% Senior Notes due 2023, each as described above. The 5.875% Notes rank senior in right of payment to all of California Lyon’s and the guarantors’ future subordinated debt. The 5.875% Notes and the guarantees are and will be effectively junior to California Lyon’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such debt.

Senior Notes Covenant Compliance

The indentures governing the 7.00% Notes, the 6.00% Notes, and the 5.875% Notes contain covenants that limit the ability of Parent, California Lyon, and their restricted subsidiaries to, among other things: (i) incur or guarantee certain additional indebtedness; (ii) pay dividends, distributions, or repurchase equity or make payments in respect of subordinated indebtedness; (iii) make certain investments; (iv) sell assets; (v) incur liens; (vi) enter into agreements restricting the ability of the Company’s restricted subsidiaries to pay dividends or transfer assets; (vii) enter into transactions with affiliates; (viii) create unrestricted subsidiaries; and (viii) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications as described in the indentures. The Company was in compliance with all such covenants as of March 31, 2018.

GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS

The following consolidating financial information includes:

(1) Consolidating balance sheets as of March 31, 2018 and December 31, 2017; consolidating statements of operations for the three months ended March 31, 2018 and 2017; and consolidating statements of cash flows for the three month periods ended March 31, 2018 and 2017, of (a) William Lyon Homes, as the parent, or “Delaware Lyon”, (b) William Lyon Homes, Inc., as the subsidiary issuer, or “California Lyon”, (c) the guarantor subsidiaries, (d) the non-guarantor subsidiaries and (e) William Lyon Homes, Inc. on a consolidated basis; and

(2) Elimination entries necessary to consolidate Delaware Lyon, with California Lyon and its guarantor and non-guarantor subsidiaries.

Delaware Lyon owns 100% of all of its guarantor subsidiaries and all guarantees are full and unconditional, joint and several. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for these subsidiaries as of March 31, 2018 and December 31, 2017, and for the three month periods ended March 31, 2018 and 2017.

CONDENSED CONSOLIDATING BALANCE SHEET

(Unaudited)

As of March 31, 2018

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	39,497		$	3,576		$	7,400		$	—		$	50,473
Receivables	—		7,410			3,356			3,252			—			14,018
Escrow proceeds receivable	—		373			1,179			—			—			1,552
Real estate inventories
Owned	—		883,102			935,092			233,623			—			2,051,817
Not owned	—		—			282,169			—			—			282,169
Investment in unconsolidated joint ventures	—		5,256			150			—			—			5,406
Goodwill	—		14,209			104,668			—			—			118,877
Intangibles, net	—		—			6,700			—			—			6,700
Deferred income taxes, net	—		47,716			—			—			—			47,716
Lease right-of-use assets	—		14,757			—			—			—			14,757
Other assets, net	—		21,772			10,682			467			—			32,921
Investments in subsidiaries	782,285		(18,061		)	(837,268		)	—			73,044			—
Intercompany receivables	—		—			285,102			—			(285,102		)	—
Total assets	$	782,285	$	1,016,031		$	795,406		$	244,742		$	(212,058	)	$	2,626,406
LIABILITIES AND EQUITY
Accounts payable	$	—	$	66,356		$	14,756		$	7,741		$	—		$	88,853
Accrued expenses	—		81,565			17,699			114			—			99,378
Liabilities from inventories not owned	—		—			282,169			—			—			282,169
Notes payable	—		85,000			2,291			84,955			—			172,246
7% Senior Notes	—		346,924			—			—			—			346,924
6% Senior Notes	—		343,274			—			—			—			343,274
5 ⁷/₈% Senior Notes	—		439,903			—			—			—			439,903
Intercompany payables	—		186,483			—			98,619			(285,102		)	—
Total liabilities	—		1,549,505			316,915			191,429			(285,102		)	1,772,747
Equity
William Lyon Homes stockholders’ equity (deficit)	782,285		(533,474		)	478,491			(18,061		)	73,044			782,285
Noncontrolling interests	—		—			—			71,374			—			71,374
Total liabilities and equity	$	782,285	$	1,016,031		$	795,406		$	244,742		$	(212,058	)	$	2,626,406

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2017

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	171,434		$	156		$	11,120		$	—		$	182,710
Receivables	—		4,647			2,252			3,324			—			10,223
Escrow proceeds receivable	—		1,594			1,725			—			—			3,319
Real estate inventories	—		831,007			630,384			238,459			—			1,699,850
Investment in unconsolidated joint ventures	—		7,717			150			—			—			7,867
Goodwill	—		14,209			52,693			—			—			66,902
Intangibles, net	—		—			6,700			—			—			6,700
Deferred income taxes, net	—		47,915			—			—			—			47,915
Lease right-of-use assets	—		14,454			—			—			—			14,454
Other assets, net	—		18,167			2,504			493			—			21,164
Investments in subsidiaries	780,472		(16,544		)	(494,201		)	—			(269,727		)	—
Intercompany receivables	—		—			269,831			—			(269,831		)	—
Total assets	$	780,472	$	1,094,600		$	472,194		$	253,396		$	(539,558	)	$	2,061,104
LIABILITIES AND EQUITY
Accounts payable	$	—	$	40,075		$	13,007		$	5,717		$	—		$	58,799
Accrued expenses	—		108,407			2,988			96			—			111,491
Notes payable	—		589			—			93,926			—			94,515
5 ³/₄% Senior Notes	—		149,362			—			—			—			149,362
7% Senior Notes	—		346,740			—			—			—			346,740
5 ⁷/₈% Senior Notes	—		439,567			—			—			—			439,567
Intercompany payables	—		179,788			—			90,043			(269,831		)	—
Total liabilities	—		1,264,528			15,995			189,782			(269,831		)	1,200,474
Equity
William Lyon Homes stockholders’ equity	780,472		(169,928		)	456,199			(16,544		)	(269,727		)	780,472
Noncontrolling interests	—		—			—			80,158			—			80,158
Total liabilities and equity	$	780,472	$	1,094,600		$	472,194		$	253,396		$	(539,558	)	$	2,061,104

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended March 31, 2018

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—	$	135,173		$	182,944		$	54,268		$	—		$	372,385
Construction services	—		983			—			—			—			983
Management fees	—		(1,750		)	—			—			1,750			—
	—		134,406			182,944			54,268			1,750			373,368
Operating costs
Cost of sales	—		(110,245		)	(150,502		)	(44,811		)	(1,750		)	(307,308		)
Construction services	—		(983		)	—			—			—			(983		)
Sales and marketing	—		(8,383		)	(10,783		)	(3,527		)	—			(22,693		)
General and administrative	—		(18,553		)	(5,966		)	(2		)	—			(24,521		)
Transaction expenses	—		(3,130		)	—			—			—			(3,130		)
Other	—		(353		)	46			9			—			(298		)
	—		(141,647		)	(167,205		)	(48,331		)	(1,750		)	(358,933		)
Income from subsidiaries	8,328		8,107			—			—			(16,435		)	—
Operating income	8,328		866			15,739			5,937			(16,435		)	14,435
Equity in income from unconsolidated joint ventures	—		675			257			—			—			932
Other income (expense), net	—		309			56			(330		)	—			35
Income (loss) before provision for income taxes	8,328		1,850			16,052			5,607			(16,435		)	15,402
Provision for income taxes	—		(2,814		)	—			—			—			(2,814		)
Net income (loss)	8,328		(964		)	16,052			5,607			(16,435		)	12,588
Less: Net income attributable to noncontrolling interests	—		—			—			(4,260		)	—			(4,260		)
Net income (loss) available to common stockholders	$	8,328	$	(964	)	$	16,052		$	1,347		$	(16,435	)	$	8,328

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(Unaudited)

Three Months Ended March 31, 2017

(in thousands)



	Unconsolidated
	Delaware Lyon			California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
Operating revenue
Sales	$	—		$	122,128		$	119,623		$	17,103		$	—		$	258,854
Management fees	—			(513		)	—			—			513			—
	—			121,615			119,623			17,103			513			258,854
Operating costs
Cost of sales	—			(99,395		)	(103,461		)	(15,086		)	(513		)	(218,455		)
Sales and marketing	—			(6,523		)	(6,931		)	(1,251		)	—			(14,705		)
General and administrative	—			(14,516		)	(4,429		)	(1		)	—			(18,946		)
Other	—			(531		)	91			—			—			(440		)
	—			(120,965		)	(114,730		)	(16,338		)	(513		)	(252,546		)
(Loss) income from subsidiaries	(10,000		)	(239		)	—			—			10,239			—
Operating (loss) income	(10,000		)	411			4,893			765			10,239			6,308
Equity in income from unconsolidated joint ventures	—			44			205			—			—			249
Other income (expense), net	—			645			—			(300		)	—			345
(Loss) income before extinguishment of debt	(10,000		)	1,100			5,098			465			10,239			6,902
Loss on extinguishment of debt	—			(21,828		)	—			—			—			(21,828		)
(Loss) income before benefit from income taxes	(10,000		)	(20,728		)	5,098			465			10,239			(14,926		)
Benefit from income taxes	—			5,630			—			—			—			5,630
Net (loss) income	(10,000		)	(15,098		)	5,098			465			10,239			(9,296		)
Less: Net income attributable to noncontrolling interests	—			—			—			(704		)	—			(704		)
Net (loss) income available to common stockholders	$	(10,000	)	$	(15,098	)	$	5,098		$	(239	)	$	10,239		$	(10,000	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Three Months Ended March 31, 2018

(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	$	6,515		$	(60,555	)	$	146,012		$	12,571		$	(6,515	)	$	98,028
Investing activities
Cash paid for acquisitions, net of cash acquired	—			—			(475,221		)	—			—			(475,221		)
Purchases of property and equipment	—			(1,063		)	(1,391		)	12			—			(2,442		)
Investments in subsidiaries	—			9,624			343,067			—			(352,691		)	—
Net cash provided by (used in) investing activities	—			8,561			(133,545		)	12			(352,691		)	(477,663		)
Financing activities
Proceeds from borrowings on notes payable	—			—			—			20,194			—			20,194
Principal payments on notes payable	—			—			(14		)	(29,165		)	—			(29,179		)
Principal payments on 5.75% Senior Notes	—			(150,000		)	—			—			—			(150,000		)
Proceeds from issuance of 6.0% Senior Notes	—			350,000			—			—			—			350,000
Proceeds from borrowings on Revolver	—			110,000			—			—			—			110,000
Payments on Revolver	—			(25,000		)	—			—			—			(25,000		)
Payment of deferred loan costs	—			(5,877		)	—			—			—			(5,877		)
Shares remitted to, or withheld by the Company for employee tax withholding	—			(4,696		)	—			—			—			(4,696		)
Payments to repurchase common stock	—			(5,000		)	—			—			—			(5,000		)
Noncontrolling interest contributions	—			—			—			4,062			—			4,062
Noncontrolling interest distributions	—			—			—			(17,106		)	—			(17,106		)
Advances to affiliates	—			—			6,240			(2,864		)	(3,376		)	—
Intercompany receivables/payables	(6,515		)	(349,370		)	(15,273		)	8,576			362,582			—
Net cash (used in) provided by financing activities	(6,515		)	(79,943		)	(9,047		)	(16,303		)	359,206			247,398
Net (decrease) increase in cash and cash equivalents	—			(131,937		)	3,420			(3,720		)	—			(132,237		)
Cash and cash equivalents - beginning of period	—			171,434			156			11,120			—			182,710
Cash and cash equivalents - end of period	$	—		$	39,497		$	3,576		$	7,400		$	—		$	50,473

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Three Months Ended March 31, 2017

(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	$	(296	)	$	(52,448	)	$	18,589		$	(7,522	)	$	296		$	(41,381	)
Investing activities
Purchases of property and equipment	—			(2		)	—			—			—			(2		)
Investments in subsidiaries	—			(333		)	(18,452		)	—			18,785			—
Net cash (used in) provided by investing activities	—			(335		)	(18,452		)	—			18,785			(2		)
Financing activities
Proceeds from borrowings on notes payable	—			—			—			25,350			—			25,350
Principal payments on notes payable	—			—			—			(20,780		)	—			(20,780		)
Redemption premium of 8.5% Senior Notes	—			(19,645		)	—			—			—			(19,645		)
Principal payments of 8.5% Senior Notes	—			(425,000		)	—			—			—			(425,000		)
Proceeds from issuance of 5.875% Senior Notes	—			446,468			—			—			—			446,468
Proceeds from borrowings on Revolver	—			105,000			—			—			—			105,000
Payments on revolver	—			(77,000		)	—			—			—			(77,000		)
Principal payments on subordinated amortizing notes	—			(1,869		)	—			—			—			(1,869		)
Payment of deferred loan costs	—			(6,840		)	—			—			—			(6,840		)
Shares remitted to or withheld by Company for employee tax withholding	—			(1,380		)	—			—			—			(1,380		)
Cash received for lease transaction	—			19,848			—			—			—			19,848
Noncontrolling interest contributions	—			—			—			1,467			—			1,467
Noncontrolling interest distributions	—			—			—			(7,340		)	—			(7,340		)
Advances to affiliates	—			—			2,845			487			(3,332		)	—
Intercompany receivables/payables	296			11,942			(2,824		)	6,335			(15,749		)	—
Net cash provided by (used in) financing activities	296			51,524			21			5,519			(19,081		)	38,279
Net (decrease) increase in cash and cash equivalents	—			(1,259		)	158			(2,003		)	—			(3,104		)
Cash and cash equivalents - beginning of period	—			36,204			272			6,136			—			42,612
Cash and cash equivalents - end of period	$	—		$	34,945		$	430		$	4,133		$	—		$	39,508