17. 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 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



	December 31, 2017
	NWHM Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	99,586	$	23,772	$	188	$	—		$	123,546
Restricted cash	—		424		—		—			424
Contracts and accounts receivable	10		24,238		—		(1,024		)	23,224
Intercompany receivables	129,414		—		—		(129,414		)	—
Due from affiliates	—		1,060		—		—			1,060
Real estate inventories	—		416,143		—		—			416,143
Investment in and advances to unconsolidated joint ventures	—		55,824		—		—			55,824
Investment in subsidiaries	356,443		—		—		(356,443		)	—
Other assets	8,464		15,827		—		—			24,291
Total assets	$	593,917	$	537,288	$	188	$	(486,881	)	$	644,512

Liabilities and equity
Accounts payable	$	237	$	23,479	$	6	$	—		$	23,722
Accrued expenses and other liabilities	11,034		27,954		80		(1,014		)	38,054
Intercompany payables	—		129,414		—		(129,414		)	—
Due to affiliates	—		10		—		(10		)	—
Senior notes, net	318,656		—		—		—			318,656
Total liabilities	329,927		180,857		86		(130,438		)	380,432
Stockholders' equity	263,990		356,431		12		(356,443		)	263,990
Noncontrolling interest in subsidiary	—		—		90		—			90
Total equity	263,990		356,431		102		(356,443		)	264,080
Total liabilities and equity	$	593,917	$	537,288	$	188	$	(486,881	)	$	644,512



	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 in subsidiary	—		—		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



	Year Ended December 31, 2017
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	560,842		$	—		$	—		$	560,842
Fee building	—			190,324			—			—			190,324
	—			751,166			—			—			751,166
Cost of Sales:
Home sales	—			473,181			32			—			473,213
Home sales impairments	—			2,200			—			—			2,200
Fee building	—			184,827			—			—			184,827
	—			660,208			32			—			660,240

Gross Margin:
Home sales	—			85,461			(32		)	—			85,429
Fee building	—			5,497			—			—			5,497
	—			90,958			(32		)	—			90,926
Selling and marketing expenses	—			(32,702		)	—			—			(32,702		)
General and administrative expenses	(2,403		)	(23,927		)	—			—			(26,330		)
Equity in net income of unconsolidated joint ventures	—			866			—			—			866
Equity in net income of subsidiaries	21,773			—			—			(21,773		)	—
Other income (expense), net	107			(336		)	—			—			(229		)
Pretax income (loss)	19,477			34,859			(32		)	(21,773		)	32,531
Provision for income taxes	(2,325		)	(13,065		)	—			—			(15,390		)
Net income (loss)	17,152			21,794			(32		)	(21,773		)	17,141
Net loss attributable to noncontrolling interest in subsidiary	—			—			11			—			11
Net income (loss) attributable to The New Home Company Inc.	$	17,152		$	21,794		$	(21	)	$	(21,773	)	$	17,152



	Year Ended December 31, 2016
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	502,792		$	5,157		$	—		$	507,949
Fee building	—			186,662			—			(155		)	186,507
	—			689,454			5,157			(155		)	694,456
Cost of Sales:
Home sales	—			428,881			4,678			—			433,559
Home sales impairments	—			2,350			—			—			2,350
Land sales impairment	—			1,150			—			—			1,150
Fee building	2,240			175,863			—			—			178,103
	2,240			608,244			4,678			—			615,162

Gross Margin:
Home sales	—			71,561			479			—			72,040
Land sales	—			(1,150		)	—			—			(1,150		)
Fee building	(2,240		)	10,799			—			(155		)	8,404
	(2,240		)	81,210			479			(155		)	79,294
Selling and marketing expenses	—			(26,058		)	(686		)	—			(26,744		)
General and administrative expenses	(14,719		)	(11,163		)	—			—			(25,882		)
Equity in net income of unconsolidated joint ventures	—			7,691			—			—			7,691
Equity in net income of subsidiaries	32,091			—			—			(32,091		)	—
Other income (expense), net	(119		)	(303		)	(142		)	155			(409		)
Pretax income (loss)	15,013			51,377			(349		)	(32,091		)	33,950
Benefit (provision) for income taxes	6,009			(19,033		)	—			—			(13,024		)
Net income (loss)	21,022			32,344			(349		)	(32,091		)	20,926
Net loss attributable to noncontrolling interest in subsidiary	—			—			96			—			96
Net income (loss) attributable to The New Home Company Inc.	$	21,022		$	32,344		$	(253	)	$	(32,091	)	$	21,022



	Year Ended December 31, 2015
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	269,225		$	10,984		$	—		$	280,209
Fee building	—			150,220			—			(330		)	149,890
	—			419,445			10,984			(330		)	430,099
Cost of Sales:
Home sales	—			225,379			9,853			—			235,232
Fee building	1,735			137,942			—			—			139,677
	1,735			363,321			9,853			—			374,909

Gross Margin:
Home sales	—			43,846			1,131			—			44,977
Fee building	(1,735		)	12,278			—			(330		)	10,213
	(1,735		)	56,124			1,131			(330		)	55,190
Selling and marketing expenses	—			(12,378		)	(1,363		)	—			(13,741		)
General and administrative expenses	(13,602		)	(6,676		)	—			—			(20,278		)
Equity in net income of unconsolidated joint ventures	—			13,767			—			—			13,767
Equity in net income of subsidiaries	31,423			—			—			(31,423		)	—
Other income (expense), net	(301		)	(414		)	(642		)	330			(1,027		)
Pretax income (loss)	15,785			50,423			(874		)	(31,423		)	33,911
Benefit (provision) for income taxes	5,903			(18,436		)	—			—			(12,533		)
Net income (loss)	21,688			31,987			(874		)	(31,423		)	21,378
Net loss attributable to noncontrolling interest in subsidiary	—			—			310			—			310
Net income (loss) attributable to The New Home Company Inc.	$	21,688		$	31,987		$	(564	)	$	(31,423	)	$	21,688

SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended December 31, 2017
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash used in operating activities	$	(31,824	)	$	(41,739	)	$	(81	)	$	(17,058	)	$	(90,702	)
Investing activities:
Purchases of property and equipment	(71		)	(124		)	—			—			(195		)
Cash assumed from joint venture at consolidation	—			995			—			—			995
Contributions and advances to unconsolidated joint ventures	—			(27,479		)	—			—			(27,479		)
Contributions to subsidiaries from corporate	(275,794		)	—			—			275,794			—
Distributions of capital from subsidiaries	192,478			—			—			(192,478		)	—
Distributions of capital and repayment of advances to unconsolidated joint ventures	—			15,577			—			—			15,577
Interest collected on advances to unconsolidated joint ventures	—			552			—			—			552
Net cash used in investing activities	$	(83,387	)	$	(10,479	)	$	—		$	83,316		$	(10,550	)
Financing activities:
Borrowings from credit facility	88,000			—			—			—			88,000
Repayments of credit facility	(206,000		)	—			—			—			(206,000		)
Proceeds from senior notes	324,465			—			—			—			324,465
Repayments of other notes payable	—			(4,110		)	—			—			(4,110		)
Payment of debt issuance costs	(7,565		)	—			—			—			(7,565		)
Contributions to subsidiaries from corporate	—			275,794			—			(275,794		)	—
Distributions to corporate from subsidiaries	—			(209,536		)	—			209,536			—
Minimum tax withholding paid on behalf of employees for stock awards	(590		)	—			—			—			(590		)
Proceeds from exercise of stock options	102			—			—			—			102
Net cash provided by financing activities	$	198,412		$	62,148		$	—		$	(66,258	)	$	194,302
Net increase (decrease) in cash and cash equivalents	83,201			9,930			(81		)	—			93,050
Cash and cash equivalents – beginning of period	16,385			13,842			269			—			30,496
Cash and cash equivalents – end of period	$	99,586		$	23,772		$	188		$	—		$	123,546



	Year Ended December 31, 2016
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(7,041	)	$	(11,753	)	$	3,272		$	(26,894	)	$	(42,416	)
Investing activities:
Purchases of property and equipment	(193		)	(246		)	—			—			(439		)
Cash assumed from joint venture at consolidation	—			2,009			—			—			2,009
Contributions and advances to unconsolidated joint ventures	—			(15,088		)	—			—			(15,088		)
Contributions to subsidiaries from corporate	(225,169		)	—			—			225,169			—
Distributions of capital from subsidiaries	189,392			725			—			(190,117		)	—
Distributions of capital from unconsolidated joint ventures	—			15,307			—			—			15,307
Net cash (used in) provided by investing activities	$	(35,970	)	$	2,707		$	—		$	35,052		$	1,789
Financing activities:
Borrowings from credit facility	223,050			—			—			—			223,050
Repayments of credit facility	(179,974		)	—			—			—			(179,974		)
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	—			225,169			—			(225,169		)	—
Distributions to corporate from subsidiaries	—			(216,286		)	(725		)	217,011			—
Minimum tax withholding paid on behalf of employees for stock awards	(648		)	—			—			—			(648		)
Excess income tax provision from stock-based compensation	(97		)	—			—			—			(97		)
Net cash provided by (used in) financing activities	$	41,267		$	(4,252	)	$	(3,608	)	$	(8,158	)	$	25,249
Net decrease in cash and cash equivalents	(1,744		)	(13,298		)	(336		)	—			(15,378		)
Cash and cash equivalents – beginning of period	18,129			27,140			605			—			45,874
Cash and cash equivalents – end of period	$	16,385		$	13,842		$	269		$	—		$	30,496



	Year Ended December 31, 2015
	NWHM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(1,902	)	$	(10,211	)	$	5,282		$	(25,472	)	$	(32,303	)
Investing activities:
Purchases of property and equipment	(259		)	(159		)	—			—			(418		)
Contributions and advances to unconsolidated joint ventures	—			(13,028		)	—			(2,000		)	(15,028		)
Contributions to subsidiaries from corporate	(131,778		)	—			—			131,778			—
Distributions of capital from subsidiaries	104,695			647			—			(105,342		)	—
Distributions of capital and repayment of advances to unconsolidated joint ventures	—			32,026			—			—			32,026
Net cash (used in) provided by investing activities	$	(27,342	)	$	19,486		$	—		$	24,436		$	16,580
Financing activities:
Net proceeds from issuance of common stock	47,253			—			—			—			47,253
Borrowings from credit facility	99,450			—			—			—			99,450
Repayments of credit facility	(125,000		)	—			—			—			(125,000		)
Borrowings from other notes payable	—			—			3,552			—			3,552
Repayments of other notes payable	—			—			(5,171		)	—			(5,171		)
Cash distributions to noncontrolling interest in subsidiary	—			—			(2,411		)	—			(2,411		)
Contributions to subsidiaries from corporate	—			131,778			—			(131,778		)	—
Distributions to corporate from subsidiaries	—			(132,167		)	(647		)	132,814			—
Minimum tax withholding paid on behalf of employees for stock awards	(248		)	—			—			—			(248		)
Excess income tax benefit from stock-based compensation	97			—			—			—			97
Tax valuation adjustment from stock-based compensation	17			—			—			—			17
Net cash provided by (used in) financing activities	$	21,569		$	(389	)	$	(4,677	)	$	1,036		$	17,539
Net (decrease) increase in cash and cash equivalents	(7,675		)	8,886			605			—			1,816
Cash and cash equivalents – beginning of period	25,804			18,254			—			—			44,058
Cash and cash equivalents – end of period	$	18,129		$	27,140		$	605		$	—		$	45,874