Supplemental Guarantor Information

The Company's 7.25% Senior Notes due 2022 (the "Notes") are guaranteed, on an unsecured basis, jointly and severally, by all of the Company's 100% owned subsidiaries (collectively, the "Guarantors"). The guarantees are full and unconditional. The Indenture governing the Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the Indenture), which sale, transfer, exchange or other disposition is made in compliance with applicable provisions of the Indenture; (2) upon the proper designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the Indenture), in accordance with the Indenture; (3) upon request of the Company and certification in an officers’ certificate provided to the trustee that the applicable Guarantor has become an "Immaterial Subsidiary" (as defined in the indenture), so long as such Guarantor would not otherwise be required to provide a guarantee pursuant to the Indenture; provided that, if immediately after giving effect to such release the consolidated tangible assets of all Immaterial Subsidiaries that are not Guarantors would exceed 5.0% of consolidated tangible assets, no such release shall occur, (4) if the Company exercises its legal defeasance option or covenant defeasance option under the Indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the Indenture, upon such exercise or discharge; (5) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the Indenture; or (6) upon the full satisfaction of the Company’s obligations under the Indenture; provided that in each case if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the Indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the Indenture. The Company has determined that separate, full financial statements of the Guarantors would not be material to investors and, accordingly, supplemental financial information for the guarantors is presented.

As the guarantees were made in connection with the first and second quarter 2017 private offering of notes, the Guarantors’ condensed financial information is presented as if the guarantees existed during the period presented. If any subsidiaries are released from the guarantees in future periods, the changes are reflected prospectively.

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS



	June 30, 2017
	NWHM Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	120,557	$	33,180	$	222	$	—		$	153,959
Restricted cash	—		88		—		—			88
Contracts and accounts receivable	14		19,667		7		(1,367		)	18,321
Intercompany receivables	91,737		—		—		(91,737		)	—
Due from affiliates	—		2,062		—		—			2,062
Real estate inventories	—		365,400		—		—			365,400
Investment in and advances to unconsolidated joint ventures	—		55,864		—		—			55,864
Investment in subsidiaries	345,376		—		—		(345,376		)	—
Other assets	15,836		8,080		—		—			23,916
Total assets	$	573,520	$	484,341	$	229	$	(438,480	)	$	619,610

Liabilities and equity
Accounts payable	$	110	$	34,105	$	—	$	—		$	34,215
Accrued expenses and other liabilities	7,579		13,126		126		(1,358		)	19,473
Intercompany payables	—		91,737		—		(91,737		)	—
Due to affiliates	—		9		—		(9		)	—
Senior notes, net	318,121		—		—		—			318,121
Total liabilities	325,810		138,977		126		(93,104		)	371,809
Stockholders' equity	247,710		345,364		12		(345,376		)	247,710
Noncontrolling interest	—		—		91		—			91
Total equity	247,710		345,364		103		(345,376		)	247,801
Total liabilities and equity	$	573,520	$	484,341	$	229	$	(438,480	)	$	619,610



	December 31, 2016
	NWHM Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	16,385	$	13,842	$	269	$	—		$	30,496
Restricted cash	—		585		—		—			585
Contracts and accounts receivable	30		29,774		—		(1,971		)	27,833
Intercompany receivables	73,972		—		—		(73,972		)	—
Due from affiliates	—		1,138		—		—			1,138
Real estate inventories	—		286,928		—		—			286,928
Investment in and advances to unconsolidated joint ventures	—		50,857		—		—			50,857
Investment in subsidiaries	268,411		—		—		(268,411		)	—
Other assets	9,381		11,918		—		—			21,299
Total assets	$	368,179	$	395,042	$	269	$	(344,354	)	$	419,136

Liabilities and equity
Accounts payable	$	167	$	32,900	$	27	$	—		$	33,094
Accrued expenses and other liabilities	5,489		19,763		108		(1,942		)	23,418
Intercompany payables	—		73,972		—		(73,972		)	—
Due to affiliates	—		29		—		(29		)	—
Unsecured revolving credit facility	118,000		—		—		—			118,000
Total liabilities	123,656		126,664		135		(75,943		)	174,512
Stockholders' equity	244,523		268,378		33		(268,411		)	244,523
Noncontrolling interest	—		—		101		—			101
Total equity	244,523		268,378		$	134	(268,411		)	244,624
Total liabilities and equity	$	368,179	$	395,042	$	269	$	(344,354	)	$	419,136

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS



	Three Months Ended June 30, 2017
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	96,929		$	—	$	—		$	96,929
Fee Building	—			47,181			—		—			47,181
	—			144,110			—		—			144,110
Cost of Sales:
Home sales	—			82,488			—		—			82,488
Home sales impairment	—			1,300			—		—			1,300
Fee building	595			45,304			—		—			45,899
	595			129,092			—		—			129,687

Gross Margin:
Home sales	—			13,141			—		—			13,141
Fee building	(595		)	1,877			—		—			1,282
	(595		)	15,018			—		—			14,423
Selling and marketing expenses	—			(6,376		)	—		—			(6,376		)
General and administrative expenses	(375		)	(5,220		)	—		—			(5,595		)
Equity in net income of unconsolidated joint ventures	—			201			—		—			201
Equity in net income of subsidiaries	2,022			—			—		(2,022		)	—
Other income (expense), net	26			(174		)	—		—			(148		)
Income before income taxes	1,078			3,449			—		(2,022		)	2,505
Benefit (provision) for income taxes	439			(1,427		)	—		—			(988		)
Net income	1,517			2,022			—		(2,022		)	1,517
Net loss attributable to noncontrolling interest	—			—			—		—			—
Net income attributable to The New Home Company Inc.	$	1,517		$	2,022		$	—	$	(2,022	)	$	1,517



	Three Months Ended June 30, 2016
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	77,486		$	1,350		$	—		$	78,836
Fee Building	—			30,068			—			(40		)	30,028
	—			107,554			1,350			(40		)	108,864
Cost of Sales:
Home sales	—			68,152			1,238			—			69,390
Fee building	496			27,821			—			—			28,317
	496			95,973			1,238			—			97,707

Gross Margin:
Home sales	—			9,334			112			—			9,446
Fee building	(496		)	2,247			—			(40		)	1,711
	(496		)	11,581			112			(40		)	11,157
Selling and marketing expenses	—			(4,820		)	(226		)	—			(5,046		)
General and administrative expenses	(3,283		)	(2,550		)	—			—			(5,833		)
Equity in net income of unconsolidated joint ventures	—			3,947			—			—			3,947
Equity in net income of subsidiaries	4,843			—			—			(4,843		)	—
Other income (expense), net	(57		)	(229		)	(40		)	40			(286		)
Income (loss) before income taxes	1,007			7,929			(154		)	(4,843		)	3,939
Benefit (provision) for income taxes	1,502			(2,997		)	—			—			(1,495		)
Net income (loss)	2,509			4,932			(154		)	(4,843		)	2,444
Net loss attributable to noncontrolling interest	—			—			65			—			65
Net income (loss) attributable to The New Home Company Inc.	$	2,509		$	4,932		$	(89	)	$	(4,843	)	$	2,509



	Six Months Ended June 30, 2017
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	166,335		$	—		$	—		$	166,335
Fee Building	—			102,798			—			—			102,798
	—			269,133			—			—			269,133
Cost of Sales:
Home sales	—			142,522			31			—			142,553
Home sales impairment	—			1,300			—			—			1,300
Fee building	1,085			98,740			—			—			99,825
	1,085			242,562			31			—			243,678

Gross Margin:
Home sales	—			22,513			(31		)	—			22,482
Fee building	(1,085		)	4,058			—			—			2,973
	(1,085		)	26,571			(31		)	—			25,455
Selling and marketing expenses	—			(11,377		)	—			—			(11,377		)
General and administrative expenses	(1,154		)	(9,531		)	—			—			(10,685		)
Equity in net income of unconsolidated joint ventures	—			507			—			—			507
Equity in net income of subsidiaries	3,694			—			—			(3,694		)	—
Other income (expense), net	44			(79		)	—			—			(35		)
Income (loss) before income taxes	1,499			6,091			(31		)	(3,694		)	3,865
Benefit (provision) for income taxes	864			(2,376		)	—			—			(1,512		)
Net income (loss)	2,363			3,715			(31		)	(3,694		)	2,353
Net loss attributable to noncontrolling interest	—			—			10			—			10
Net income (loss) attributable to The New Home Company Inc.	$	2,363		$	3,715		$	(21	)	$	(3,694	)	$	2,363



	Six Months Ended June 30, 2016
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	115,982		$	5,157		$	—		$	121,139
Fee Building	—			73,120			—			(155		)	72,965
	—			189,102			5,157			(155		)	194,104
Cost of Sales:
Home sales	—			101,422			4,638			—			106,060
Fee building	966			68,265			—			—			69,231
	966			169,687			4,638			—			175,291

Gross Margin:
Home sales	—			14,560			519			—			15,079
Fee building	(966		)	4,855			—			(155		)	3,734
	(966		)	19,415			519			(155		)	18,813
Selling and marketing expenses	—			(7,838		)	(684		)	—			(8,522		)
General and administrative expenses	(6,466		)	(4,542		)	—			—			(11,008		)
Equity in net income of unconsolidated joint ventures	—			3,940			—			—			3,940
Equity in net income of subsidiaries	6,448			—			—			(6,448		)	—
Other income (expense), net	(39		)	(369		)	(142		)	155			(395		)
Income (loss) before income taxes	(1,023		)	10,606			(307		)	(6,448		)	2,828
Benefit (provision) for income taxes	2,718			(3,971		)	—			—			(1,253		)
Net income (loss)	1,695			6,635			(307		)	(6,448		)	1,575
Net loss attributable to noncontrolling interest	—			—			120			—			120
Net income (loss) attributable to The New Home Company Inc.	$	1,695		$	6,635		$	(187	)	$	(6,448	)	$	1,695

SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



	Six Months Ended June 30, 2017
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash used in operating activities	$	(21,176	)	$	(49,302	)	$	(47	)	$	(886	)	$	(71,411	)
Investing activities:
Purchases of property and equipment	(40		)	(55		)	—			—			(95		)
Cash assumed from joint venture at consolidation	—			995			—			—			995
Contributions and advances to unconsolidated joint venture	—			(8,517		)	—			—			(8,517		)
Contributions to subsidiaries from corporate	(94,035		)	—			—			94,035			—
Distributions of capital from subsidiaries	19,880			—			—			(19,880		)	—
Distributions of capital from unconsolidated joint ventures	—			2,948			—			—			2,948
Net cash (used in) provided by investing activities	$	(74,195	)	$	(4,629	)	$	—		$	74,155		$	(4,669	)
Financing activities:
Proceeds from senior notes	324,465			—			—			—			324,465
Borrowings from credit facility	72,000			—			—			—			72,000
Repayments of credit facility	(190,000		)	—			—			—			(190,000		)
Payment of debt issuance costs	(6,440		)	—			—			—			(6,440		)
Contributions to subsidiaries from corporate	—			94,035			—			(94,035		)	—
Distributions to corporate from subsidiaries	—			(20,766		)	—			20,766			—
Minimum tax withholding paid on behalf of employees for stock awards	(584		)	—			—			—			(584		)
Proceeds from exercise of stock options	102			—			—			—			102
Net cash provided by financing activities	$	199,543		$	73,269		$	—		$	(73,269	)	$	199,543
Net increase (decrease) in cash and cash equivalents	104,172			19,338			(47		)	—			123,463
Cash and cash equivalents – beginning of period	16,385			13,842			269			—			30,496
Cash and cash equivalents – end of period	$	120,557		$	33,180		$	222		$	—		$	153,959



	Six Months Ended June 30, 2016
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash used in operating activities	$	(22,026	)	$	(144,949	)	$	3,347		$	(2,071	)	$	(165,699	)
Investing activities:
Purchases of property and equipment	(156		)	(140		)	—			—			(296		)
Cash assumed from joint venture at consolidation	—			2,009			—			—			2,009
Contributions and advances to unconsolidated joint venture	—			(5,656		)	—			—			(5,656		)
Contributions to subsidiaries from corporate	(160,406		)	—			—			160,406			—
Distributions of capital from subsidiaries	18,929			725			—			(19,654		)	—
Distributions of capital from unconsolidated joint ventures	—			7,405			—			—			7,405
Net cash (used in) provided by investing activities	$	(141,633	)	$	4,343		$	—		$	140,752		$	3,462
Financing activities:
Borrowings from senior notes and credit facility	175,000			—			—			—			175,000
Repayments of credit facility	(11,000		)	—			—			—			(11,000		)
Borrowings from other notes payable	—			—			343			—			343
Repayments of other notes payable	—			(13,135		)	(2,501		)	—			(15,636		)
Payment of debt issuance costs	(1,064		)	—			—			—			(1,064		)
Cash distributions to noncontrolling interest in subsidiary	—			—			(725		)	—			(725		)
Contributions to subsidiaries from corporate	—			160,406			—			(160,406		)	—
Distributions to corporate from subsidiaries	—			(21,000		)	(725		)	21,725			—
Minimum tax withholding paid on behalf of employees for stock awards	(647		)	—			—			—			(647		)
Excess income tax provision from stock-based compensation	(97		)	—			—			—			(97		)
Net cash provided by (used in) financing activities	$	162,192		$	126,271		$	(3,608	)	$	(138,681	)	$	146,174
Net decrease in cash and cash equivalents	(1,467		)	(14,335		)	(261		)	—			(16,063		)
Cash and cash equivalents – beginning of period	18,129			27,140			605			—			45,874
Cash and cash equivalents – end of period	$	16,662		$	12,805		$	344		$	—		$	29,811