Senior Notes, Secured, and Unsecured Indebtedness (Tables)

6 Months Ended

Jun. 30, 2019

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



	June 30, 2019		December 31, 2018
Notes payable:
Revolving credit facility	$	133,000	$	45,000
Construction notes payable	1,342		1,231
Joint venture notes payable	155,892		151,788
Total notes payable	290,234		198,019

Senior notes:
7% Senior Notes due August 15, 2022	347,821		347,456
6% Senior Notes due September 1, 2023	344,526		343,878
5.875% Senior Notes due January 31, 2025	428,775		431,992
Total senior notes	1,121,122		1,123,326

Total notes payable and senior notes	$	1,411,356	$	1,321,345

Schedule of Maturities of Notes Payable and Senior Notes

The issuance date, facility size, maturity date and interest rate of the joint ventures notes payable are listed in the table below as of June 30, 2019 (in millions):



Issuance Date	Facility Size		Outstanding		Maturity	Current Rate
March, 2019	$	18.9	$	1.8	November, 2020	5.28	%	(3)
May, 2018	128.0		105.7		May, 2021	5.59	%	(2)
May, 2018	13.3		12.5		June, 2020	5.28	%	(3)
July, 2017	66.2		24.1		February, 2021	5.63	%	(2)
January, 2016	35.0		11.8		August, 2019	5.65	%	(1)
	$	261.4	$	155.9

(1) Loan bears interest at LIBOR +3.25%. The Company intends to extend the maturity of this borrowing prior to its expiration date.

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

(3) Loan bears interest at LIBOR +2.90%.

As of June 30, 2019, the maturities of the Notes payable, 7% Senior Notes, 6% Senior Notes, and 5.875% Senior Notes are as follows (in thousands):



Year Ending December 31,
Remaining in 2019	$	13,139
2020	44,406
2021	232,689
2022	350,000
2023	350,000
Thereafter	436,886
	$	1,427,120

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 June 30, 2019

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	19,736		$	4,409		$	11,353		$	—		$	35,498
Receivables	—		8,724			4,051			3,311			—			16,086
Escrow proceeds receivable	—		—			—			—			—			—
Real estate inventories
Owned	—		736,244			1,169,400			443,794			—			2,349,438
Not owned	—		92,098			147,917			—			—			240,015
Investment in unconsolidated joint ventures	—		6,536			150			—			—			6,686
Goodwill	—		14,209			109,486			—			—			123,695
Intangibles, net	—		—			6,700			—			—			6,700
Deferred income taxes, net	—		46,255			—			—			—			46,255
Lease right-of-use assets	—		18,681			—			18,812			—			37,493
Financial services assets	—		—			—			45,367			—			45,367
Other assets, net	—		27,266			9,603			2,020			—			38,889
Investments in subsidiaries	884,258		26,431			(978,104		)	—			67,415			—
Intercompany receivables	—		—			299,334			(17,557		)	(281,777		)	—
Total assets	$	884,258	$	996,180		$	772,946		$	507,100		$	(214,362	)	$	2,946,122
LIABILITIES AND EQUITY
Accounts payable	$	—	$	49,204		$	32,285		$	32,537		$	—		$	114,026
Accrued expenses	—		109,485			13,286			100			—			122,871
Financial services liabilities	—		—			—			31,452			—			31,452
Liabilities from inventories not owned	—		92,098			147,917			—			—			240,015
Notes payable	—		133,000			1,342			155,892			—			290,234
7% Senior Notes	—		347,821			—			—			—			347,821
6% Senior Notes	—		344,526			—			—			—			344,526
5.875% Senior Notes	—		428,775			—			—			—			428,775
Intercompany payables	—		163,233			—			118,544			(281,777		)	—
Total liabilities	—		1,668,142			194,830			338,525			(281,777		)	1,919,720
Equity
William Lyon Homes stockholders’ equity	884,258		(671,962		)	578,116			26,431			67,415			884,258
Noncontrolling interests	—		—			—			142,144			—			142,144
Total liabilities and equity	$	884,258	$	996,180		$	772,946		$	507,100		$	(214,362	)	$	2,946,122

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2018

(in thousands)



	Unconsolidated
	Delaware Lyon		California Lyon			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminating Entries			Consolidated Company
ASSETS
Cash and cash equivalents	$	—	$	21,450		$	2,888		$	9,441	$	—		$	33,779
Receivables	—		6,054			4,151			3,297		—			13,502
Real estate inventories
Owned	—		745,750			1,152,786			434,671		—			2,333,207
Not owned	—		114,859			200,717			—		—			315,576
Investment in unconsolidated joint ventures	—		5,392			150			—		—			5,542
Goodwill	—		14,209			109,486			—		—			123,695
Intangibles, net	—		—			6,700			—		—			6,700
Deferred income taxes, net	—		47,241			—			—		—			47,241
Lease right-of-use assets	—		13,561			—			—		—			13,561
Other assets, net	—		26,797			9,688			486		—			36,971
Investments in subsidiaries	863,322		16,059			(961,950		)	—		82,569			—
Intercompany receivables	—		—			285,675			—		(285,675		)	—
Total assets	$	863,322	$	1,011,372		$	810,291		$	447,895	$	(203,106	)	$	2,929,774
LIABILITIES AND EQUITY
Accounts payable	$	—	$	78,462		$	34,546		$	15,363	$	—		$	128,371
Accrued expenses	—		123,088			26,967			100		—			150,155
Liabilities from inventories not owned	—		114,859			200,717			—		—			315,576
Notes payable	—		45,000			1,231			151,788		—			198,019
7% Senior Notes	—		347,456			—			—		—			347,456
6% Senior Notes	—		343,878			—			—		—			343,878
5.875% Senior Notes	—		431,992			—			—		—			431,992
Intercompany payables	—		172,095			—			113,580		(285,675		)	—
Total liabilities	—		1,656,830			263,461			280,831		(285,675		)	1,915,447
Equity
William Lyon Homes stockholders’ equity	863,322		(645,458		)	546,830			16,059		82,569			863,322
Noncontrolling interests	—		—			—			151,005		—			151,005
Total liabilities and equity	$	863,322	$	1,011,372		$	810,291		$	447,895	$	(203,106	)	$	2,929,774

Condensed Consolidating Statement of Operations

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Six Months Ended June 30, 2019

(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	$	(2,366	)	$	(52,648	)	$	2,473		$	(2,702	)	$	(4,560	)	$	(59,803	)
Investing activities
Investment in (advances to) unconsolidated joint ventures	—			—			—			—			—			—
Cash paid for acquisitions, net of cash acquired	—			—			—			(3,900		)	—			(3,900		)
Sales (purchases) of property and equipment	—			—			330			(20		)	—			310
Investments in subsidiaries	—			312			16,154			—			(16,466		)	—
Net cash provided by (used in) investing activities	—			312			16,484			(3,920		)	(16,466		)	(3,590		)
Financing activities
Proceeds from borrowings on notes payable	—			—			138			66,974			—			67,112
Principal payments on notes payable	—			—			(27		)	(62,870		)	—			(62,897		)
Principal payments on 5.875% Senior Notes	—			(3,591		)	—			—			—			(3,591		)
Proceeds from borrowings on Revolver	—			285,000			—			—			—			285,000
Payments on Revolver	—			(197,000		)	—			—			—			(197,000		)
Payment of principal portion of finance lease liabilities	—			—			—			(1,208		)	—			(1,208		)
Payment of deferred loan costs	—			(87		)	—			—			—			(87		)
Proceeds from stock options exercised	—			(6		)	—			—			—			(6		)
Shares remitted to, or withheld by the Company for employee tax withholding	—			(2,356		)	—			—			—			(2,356		)
Noncontrolling interest contributions	—			—			—			2,854			—			2,854
Noncontrolling interest distributions	—			—			—			(22,709		)	—			(22,709		)
Advances to affiliates	—			—			(3,888		)	2,972			916			—
Intercompany receivables/payables	2,366			(31,338		)	(13,659		)	22,521			20,110			—
Net cash provided by (used in) financing activities	2,366			50,622			(17,436		)	8,534			21,026			65,112
Net (decrease) increase in cash and cash equivalents	—			(1,714		)	1,521			1,912			—			1,719
Cash and cash equivalents - beginning of period	—			21,450			2,888			9,441			—			33,779
Cash and cash equivalents - end of period	$	—		$	19,736		$	4,409		$	11,353		$	—		$	35,498

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(Unaudited)

Six Months Ended June 30, 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	$	5,630		$	24,688		$	57,426		$	(203,957	)	$	(13,737	)	$	(129,950	)
Investing activities
Cash paid for acquisitions, net of cash acquired	—			—			(475,221		)	—			—			(475,221		)
Purchases of property and equipment	—			(1,844		)	(4,351		)	12			—			(6,183		)
Investments in subsidiaries	—			(33,399		)	402,658			—			(369,259		)	—
Net cash (used in) provided by investing activities	—			(35,243		)	(76,914		)	12			(369,259		)	(481,404		)
Financing activities
Proceeds from borrowings on notes payable	—			—			145			120,594			—			120,739
Principal payments on notes payable	—			—			(940		)	(52,958		)	—			(53,898		)
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	—			255,000			—			—			—			255,000
Payments on Revolver	—			(110,000		)	—			—			—			(110,000		)
Payment of deferred loan costs	—			(9,340		)	—			—			—			(9,340		)
Shares remitted to, or withheld by the Company for employee tax withholding	—			(4,696		)	—			—			—			(4,696		)
Payments to repurchase common stock	—			(6,121		)	—			—			—			(6,121		)
Noncontrolling interest contributions	—			—			—			120,102			—			120,102
Noncontrolling interest distributions	—			—			—			(33,971		)	—			(33,971		)
Advances to affiliates	—			—			37,497			36,506			(74,003		)	—
Intercompany receivables/payables	(5,630		)	(455,703		)	(11,278		)	15,612			456,999			—
Net cash (used in) provided by financing activities	(5,630		)	(130,860		)	25,424			205,885			382,996			477,815
Net (decrease) increase in cash and cash equivalents	—			(141,415		)	5,936			1,940			—			(133,539		)
Cash and cash equivalents - beginning of period	—			171,434			156			11,120			—			182,710
Cash and cash equivalents - end of period	$	—		$	30,019		$	6,092		$	13,060		$	—		$	49,171