17. Supplemental Guarantor Information

The Existing 6.875% Notes and the May 2017 Senior Notes are our unsecured senior obligations, and are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our direct and indirect wholly-owned operating subsidiaries (which we refer to as “Guarantors”).

Each of the May 2014 Indenture governing the Existing 6.875% Notes, and the May 2017 Indenture governing the May 2017 Senior 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 respective Indentures), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the respective Indentures) or is made in compliance with applicable provisions of the applicable Indenture; (2) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the applicable Indenture; provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the respective Indentures); (3) 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 applicable Indenture; provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the applicable 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 applicable Indenture; (4) upon the designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the respective Indentures), in accordance with the applicable Indenture; (5) if the Company exercises its legal defeasance option or covenant defeasance option under the applicable Indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the applicable Indenture, upon such exercise or discharge; or (6) in connection with the dissolution of such Guarantor under applicable law in accordance with the applicable Indenture.

As the guarantees were made in connection with the February 2015 exchange offer for the Initial Exchange Notes, the October 2015 exchange offer for the October 2015 Exchange Notes, the April 2017 exchange offer for the April 2017 Exchange Notes, and the issuance of the May 2017 Senior Notes, the Guarantors’ condensed financial information is presented as if the guarantees existed during the periods presented. If any Guarantors are released from the guarantees in future periods, the changes are reflected prospectively.

We have determined that separate, full financial statements of the Guarantors would not be material to investors and, accordingly, supplemental financial information is presented below:



	Supplemental Condensed Consolidated Balance Sheet
	As of September 30, 2017 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Assets
Cash and cash equivalents	$	35,881	$	16,278	$	6,363	$	—	$	58,522
Cash held in escrow		—		41,740		522		—		42,262
Accounts receivable		11,306		9,312		192		—		20,810
Investment in consolidated subsidiaries		1,382,958		—		—		(1,382,958)		—
Inventories		—		1,352,989		—		—		1,352,989
Mortgage loans held for sale		—		—		30,071		—		30,071
Prepaid expenses and other assets		2,859		59,129		374		—		62,362
Deferred tax asset, net		6,403		—		—		—		6,403
Property and equipment, net		2,409		10,760		489		—		13,658
Investment in unconsolidated subsidiaries		20,677		—		—				20,677
Amortizable intangible assets, net		—		1,889		—		—		1,889
Goodwill		—		21,365		—		—		21,365
Total assets	$	1,462,493	$	1,513,462	$	38,011	$	(1,382,958)	$	1,631,008
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	(17)	$	16,707	$	120	$	—	$	16,810
Accrued expenses and other liabilities		35,746		121,251		708		—		157,705
Notes payable		773,752		2,264		—		—		776,016
Revolving line of credit		—		—		—		—		—
Mortgage repurchase facility		—		—		27,465		—		27,465
Total liabilities		809,481		140,222		28,293		—		977,996
Stockholders’ equity:		653,012		1,373,240		9,718		(1,382,958)		653,012
Total liabilities and stockholders’ equity	$	1,462,493	$	1,513,462	$	38,011	$	(1,382,958)	$	1,631,008


	Supplemental Condensed Consolidated Balance Sheet
	As of December 31, 2016 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Assets
Cash and cash equivalents	$	14,637	$	8,646	$	6,167	$	—	$	29,450
Cash held in escrow		—		20,044		—		—		20,044
Accounts receivable		2,980		2,749		—		—		5,729
Investment in consolidated subsidiaries		884,665		—		—		(884,665)		—
Inventories		—		857,885		—		—		857,885
Prepaid expenses and other assets		14,628		25,662		167		—		40,457
Property and equipment, net		1,166		10,224		22		—		11,412
Investment in unconsolidated subsidiaries		18,275		—						18,275
Amortizable intangible assets, net		—		2,911		—		—		2,911
Goodwill		—		21,365		—		—		21,365
Total assets	$	936,351	$	949,486	$	6,356	$	(884,665)	$	1,007,528
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	257	$	15,575	$	(124)	$	—	$	15,708
Accrued expenses and other liabilities		12,587		49,697		30		—		62,314
Deferred tax liability		1,782		—		—		—		1,782
Senior and other notes payable		253,089		5,999		—		—		259,088
Revolving line of credit		195,000		—		—		—		195,000
Total liabilities		462,715		71,271		(94)		—		533,892
Stockholders’ equity:		473,636		878,215		6,450		(884,665)		473,636
Total liabilities and stockholders’ equity	$	936,351	$	949,486	$	6,356	$	(884,665)	$	1,007,528


		Supplemental Condensed Consolidated Statement of Operations
	For the Three Months Ended September 30, 2017 (in thousands)
				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenues
Homebuilding revenues
Home sales revenues		$	—	$	374,935	$	—	$	—	$	374,935
Land sales and other revenues			—		1,826		—		—		1,826
			—		376,761		—		—		376,761
Financial services revenue			—		—		2,955		—		2,955
Total revenues			—		376,761		2,955		—		379,716
Homebuilding cost of revenues
Cost of homes sales revenues			—		(311,365)		—		—		(311,365)
Cost of land sales and other revenues			—		(2,104)		—		—		(2,104)
			—		(313,469)		—		—		(313,469)
Financial services costs			—		—		(2,450)		—		(2,450)
Selling, general and administrative			(13,342)		(32,823)		—		—		(46,165)
Acquisition expense			(7,205)		—		—		—		(7,205)
Equity in earnings from consolidated subsidiaries			20,470		—		—		(20,470)		—
Equity in income of unconsolidated subsidiaries			3,716		—		—		—		3,716
Other income (expense)			495		518		—		—		1,013
Income before income tax expense			4,134		30,987		505		(20,470)		15,156
Income tax expense			5,336		(10,845)		(177)		—		(5,686)
Net income		$	9,470	$	20,142	$	328	$	(20,470)	$	9,470


		Supplemental Condensed Consolidated Statement of Operations
	For the Three Months Ended September 30, 2016 (in thousands)

				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenues
Homebuilding revenues
Home sales revenues		$	—	$	248,075	$	—	$	—	$	248,075
Land sales and other revenues			—		5,338		—		—		5,338
			—		253,413		—		—		253,413
Financial services revenue			—		—		—		—		—
Total revenues			—		253,413		—		—		253,413
Homebuilding cost of revenues
Cost of homes sales revenues			—		(197,650)		—		—		(197,650)
Cost of land sales and other revenues			—		(5,420)		—		—		(5,420)
			—		(203,070)		—		—		(203,070)
Financial services costs			—		—		—		—		—
Selling, general and administrative			(6,846)		(24,098)		—		—		(30,944)
Acquisition expense			(53)		—		—		—		(53)
Equity in earnings from consolidated subsidiaries			17,303		—		—		(17,303)		—
Other income (expense)			10		375		—		—		385
Income before income tax expense			10,414		26,620		—		(17,303)		19,731
Income tax expense			2,928		(9,317)		—		—		(6,389)
Net income		$	13,342	$	17,303	$	—	$	(17,303)	$	13,342


		Supplemental Condensed Consolidated Statement of Operations
	For the Nine Months Ended September 30, 2017 (in thousands)

				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenues
Homebuilding revenues
Home sales revenues		$	—	$	888,942	$	—	$	—	$	888,942
Land sales and other revenues			—		6,216		—		—		6,216
			—		895,158		—		—		895,158
Financial services revenue			—		—		4,697		—		4,697
Total revenues			—		895,158		4,697		—		899,855
Homebuilding cost of revenues
Cost of homes sales revenues			—		(727,577)		—		—		(727,577)
Cost of land sales and other revenues			—		(4,994)		—		—		(4,994)
			—		(732,571)		—		—		(732,571)
Financial services costs			—		—		(4,648)		—		(4,648)
Selling, general and administrative			(30,876)		(82,721)		—		—		(113,597)
Acquisition expense			(8,645)		—		—		—		(8,645)
Equity in earnings from consolidated subsidiaries			52,869		—		—		(52,869)		—
Equity in income of unconsolidated subsidiaries			7,648		—		—		—		7,648
Other income (expense)			852		1,386		36		—		2,274
Income before income tax expense			21,848		81,252		85		(52,869)		50,316
Income tax expense			11,252		(28,438)		(30)		—		(17,216)
Net income		$	33,100	$	52,814	$	55	$	(52,869)	$	33,100



		Supplemental Condensed Consolidated Statement of Operations
	For the Nine Months Ended September 30, 2016 (in thousands)

				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenues
Homebuilding revenues
Home sales revenues		$	—	$	686,335	$	—	$	—	$	686,335
Land sales and other revenues			—		10,816		—		—		10,816
			—		697,151		—		—		697,151
Financial services revenue			—		—		—		—		—
Total revenues			—		697,151		—		—		697,151
Homebuilding cost of revenues
Cost of homes sales revenues			—		(549,886)		—		—		(549,886)
Cost of land sales and other revenues			—		(9,433)		—		—		(9,433)
			—		(559,319)		—		—		(559,319)
Financial services costs			—		—		—		—		—
Selling, general and administrative			(18,323)		(69,189)		—		—		(87,512)
Equity in earnings from consolidated subsidiaries			45,514		—		—		(45,514)		—
Acquisition expense			(466)		—		—		—		(466)
Other income (expense)			24		1,379		—		—		1,403
Income before income tax expense			26,749		70,022		—		(45,514)		51,257
Income tax expense			7,718		(24,508)		—		—		(16,790)
Net income		$	34,467	$	45,514	$	—	$	(45,514)	$	34,467



	Supplemental Condensed Consolidated Statement of Cash Flows
	For the Nine Months Ended September 30, 2017 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Net cash provided by/(used in) operating activities	$	(8,164)	$	(92,577)	$	(30,014)	$	—	$	(130,755)
Net cash used in investing activities	$	(434,617)	$	(63,905)	$	(467)	$	432,867	$	(66,122)
Financing activities
Borrowings under revolving credit facilities	$	75,000	$	—	$	—	$	—	$	75,000
Payments on revolving credit facilities		(270,000)		—		—		—		(270,000)
Proceeds from issuance of senior notes		523,000		—		—		—		523,000
Repyment of debt assumed in business combination		—		(151,919)		—		—		(151,919)
Principal payments on notes payable		—		(4,735)		—		—		(4,735)
Debt issuance costs		(3,731)		—		—		—		(3,731)
Repurchases of common stock upon vesting of restricted stock awards		(4,141)		—		—		—		(4,141)
Payments from (and advances to) parent/subsidiary		108,887		320,768		3,212		(432,867)		—
Net proceeds from mortgage credit facility		—		—		27,465		—		27,465
Net proceeds from issuances of common stock		35,010		—		—		—		35,010
Net cash provided by financing activities	$	464,025	$	164,114	$	30,677	$	(432,867)	$	225,949
Net decrease in cash and cash equivalents	$	21,244	$	7,632	$	196	$	—	$	29,072
Cash and cash equivalents
Beginning of period	$	14,637	$	8,646	$	6,167	$	—	$	29,450
End of period	$	35,881	$	16,278	$	6,363	$	—	$	58,522


	Supplemental Condensed Consolidated Statement of Cash Flows
	For the Nine Months Ended September 30, 2016 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Net cash provided by/(used in) operating activities	$	(17,969)	$	(43,431)	$	—	$	—	$	(61,400)
Net cash used in investing activities	$	(42,791)	$	(4,685)	$	—	$	42,476	$	(5,000)
Financing activities
Borrowings under revolving credit facilities	$	145,000	$	—	$	—	$	—	$	145,000
Payments on revolving credit facilities		(90,000)		—		—		—		(90,000)
Proceeds from insurance notes payable		—		11,612		—		—		11,612
Principal payments on notes payable		—		(7,582)		—		—		(7,582)
Debt issuance costs		(1,156)		—		—		—		(1,156)
Repurchases of common stock under our stock repurchase program		(2,393)		—		—		—		(2,393)
Repurchases of common stock upon vesting of restricted stock awards		(1,014)		—		—		—		(1,014)
Payments from (and advances to) parent/subsidiary		—		42,476		—		(42,476)		—
Net cash provided by financing activities	$	50,437	$	46,506	$	—	$	(42,476)	$	54,467
Net decrease in cash and cash equivalents	$	(10,323)	$	(1,610)	$	—	$	—	$	(11,933)
Cash and cash equivalents
Beginning of period	$	22,002	$	7,285	$	—	$		$	29,287
End of period	$	11,679	$	5,675	$	—	$	—	$	17,354