Senior Notes, Secured, and Unsecured Indebtedness (Tables)

3 Months Ended

Mar. 31, 2018

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

Schedule of Maturities of Notes Payable and Senior Notes

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

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%.

Debt Instrument Redemption

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	%

Condensed Consolidating Balance Sheet

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

Condensed Consolidating Statement of Cash Flows

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