Supplemental Guarantor Information

The Company’s obligations under the 2021 Senior Notes, the 2017 Convertible Senior Subordinated Notes and the 2018 Convertible Senior Subordinated Notes are not guaranteed by all of the Company’s subsidiaries and therefore, the Company has disclosed condensed consolidating financial information in accordance with SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered. The subsidiary guarantors of the 2021 Senior Notes, the 2017 Convertible Senior Subordinated Notes and the 2018 Convertible Senior Subordinated Notes are the same.

The following condensed consolidating financial information includes balance sheets, statements of income and cash flow information for M/I Homes, Inc. (the parent company and the issuer of the aforementioned guaranteed notes), the Guarantor Subsidiaries, collectively, and for all other subsidiaries and joint ventures of the Company (the “Unrestricted Subsidiaries”), collectively. Each Guarantor Subsidiary is a direct or indirect 100%-owned subsidiary of M/I Homes, Inc. and has fully and unconditionally guaranteed the (a) 2021 Senior Notes, on a joint and several senior unsecured basis, (b) 2017 Convertible Senior Subordinated Notes on a joint and several senior subordinated unsecured basis and (c) 2018 Convertible Senior Subordinated Notes on a joint and several senior subordinated unsecured basis.

There are no significant restrictions on the parent company’s ability to obtain funds from its Guarantor Subsidiaries in the form of a dividend, loan, or other means.

As of December 31, 2015, each of the Company’s subsidiaries is a Guarantor Subsidiary, with the exception of subsidiaries that are primarily engaged in the business of mortgage financing, title insurance or similar financial businesses relating to the homebuilding and home sales business, certain subsidiaries that are not 100%-owned by the Company or another subsidiary, and other subsidiaries designated by the Company as Unrestricted Subsidiaries, subject to limitations on the aggregate amount invested in such Unrestricted Subsidiaries in accordance with the terms of the Credit Facility and the indenture governing the 2021 Senior Notes.

In the condensed financial tables presented below, the parent company presents all of its 100%-owned subsidiaries as if they were accounted for under the equity method. All applicable corporate expenses have been allocated appropriately among the Guarantor Subsidiaries and Unrestricted Subsidiaries.



CONDENSED CONSOLIDATING STATEMENTS OF INCOME

	Year Ended December 31, 2015
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	1,382,420	$	35,975		$	—		$	1,418,395
Costs and expenses:
Land and housing	—		1,114,663		—			—			1,114,663
Impairment of inventory and investment in unconsolidated joint ventures	—		3,638		—			—			3,638
General and administrative	—		77,662		15,546			—			93,208
Selling	—		95,092		—			—			95,092
Equity in income of unconsolidated joint ventures	—		—		(498		)	—			(498		)
Interest	—		15,905		1,616			—			17,521
Loss on early extinguishment of debt	—		7,842		—			—			7,842
Total costs and expenses	—		1,314,802		16,664			—			1,331,466

Income before income taxes	—		67,618		19,311			—			86,929

Provision for income taxes	—		28,758		6,408			—			35,166

Equity in subsidiaries	51,763		—		—			(51,763		)	—

Net income	$	51,763	$	38,860	$	12,903		$	(51,763	)	$	51,763

Preferred dividends	4,875		—		—			—			4,875

Net income to common shareholders	$	46,888	$	38,860	$	12,903		$	(51,763	)	$	46,888



CONDENSED CONSOLIDATING STATEMENTS OF INCOME

	Year Ended December 31, 2014
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	1,185,058	$	30,122		$	—		$	1,215,180
Costs and expenses:
Land and housing	—		958,991		—			—			958,991
Impairment of inventory and investment in unconsolidated joint ventures	—		3,457		—			—			3,457
General and administrative	—		73,747		15,083			—			88,830
Selling	—		81,148		—			—			81,148
Equity in income of unconsolidated joint ventures	—		—		(347		)	—			(347		)
Interest	—		11,926		1,439			—			13,365
Total costs and expenses	—		1,129,269		16,175			—			1,145,444

Income before income taxes	—		55,789		13,947			—			69,736

Provision for income taxes	—		14,341		4,606			—			18,947

Equity in subsidiaries	50,789		—		—			(50,789		)	—

Net income	$	50,789	$	41,448	$	9,341		$	(50,789	)	$	50,789

Preferred dividends	4,875		—		—			—			4,875

Net income to common shareholders	$	45,914	$	41,448	$	9,341		$	(50,789	)	$	45,914



	Year Ended December 31, 2013
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	1,008,243		$	28,539		$	—		$	1,036,782
Costs and expenses:
Land and housing	—		824,508			—			—			824,508
Impairment of inventory and investment in unconsolidated joint ventures	—		5,805			—			—			5,805
General and administrative	—		66,249			13,245			—			79,494
Selling	—		68,209			73			—			68,282
Equity in income of unconsolidated joint ventures	—		—			(306		)	—			(306		)
Interest	—		14,556			1,382			—			15,938
Loss on early extinguishment of debt	—		1,726			—			—			1,726
Total costs and expenses	—		981,053			14,394			—			995,447

Income before income taxes	—		27,190			14,145			—			41,335

(Benefit) provision for income taxes	—		(114,866		)	4,778			—			(110,088		)

Equity in subsidiaries	151,423		—			—			(151,423		)	—

Net income	$	151,423	$	142,056		$	9,367		$	(151,423	)	$	151,423

Preferred dividends	3,656		—			—			—			3,656
Excess of fair value over book value of preferred shares redeemed	2,190		—			—			—			2,190

Net income to common shareholders	$	145,577	$	142,056		$	9,367		$	(151,423	)	$	145,577



CONDENSED CONSOLIDATING BALANCE SHEET

	December 31, 2015
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated

ASSETS:
Cash and cash equivalents	$	—	$	—	$	18,156	$	(7,951	)	$	10,205
Restricted cash	—		2,896		—		—			2,896
Mortgage loans held for sale	—		—		127,001		—			127,001
Inventory	—		1,112,042		—		—			1,112,042
Property and equipment - net	—		12,222		675		—			12,897
Investment in unconsolidated joint ventures	—		17,425		19,542		—			36,967
Investment in subsidiaries	621,052		—		—		(621,052		)	—
Deferred income taxes, net of valuation allowances	—		67,255		149		—			67,404
Intercompany assets	408,847		—		—		(408,847		)	—
Other assets	2,626		32,335		11,181		—			46,142
TOTAL ASSETS	$	1,032,525	$	1,244,175	$	176,704	$	(1,037,850	)	$	1,415,554

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Accounts payable	$	—	$	94,554	$	275	$	(7,951	)	$	86,878
Customer deposits	—		19,567		—		—			19,567
Intercompany liabilities	—		387,439		21,408		(408,847		)	—
Other liabilities	—		88,550		5,120		—			93,670
Community development district obligations	—		1,018		—		—			1,018
Obligation for consolidated inventory not owned	—		6,007		—		—			6,007
Notes payable bank - homebuilding operations	—		43,800		—		—			43,800
Notes payable bank - financial services operations	—		—		123,648		—			123,648
Notes payable - other	—		8,441		—		—			8,441
Convertible senior subordinated notes due 2017	56,518		—		—		—			56,518
Convertible senior subordinated notes due 2018	84,714		—		—		—			84,714
Senior notes	294,727		—		—		—			294,727
TOTAL LIABILITIES	435,959		649,376		150,451		(416,798		)	818,988

Shareholders’ equity	596,566		594,799		26,253		(621,052		)	596,566

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,032,525	$	1,244,175	$	176,704	$	(1,037,850	)	$	1,415,554



CONDENSED CONSOLIDATING BALANCE SHEET

	December 31, 2014
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated

ASSETS:
Cash and cash equivalents	$	—	$	3,872	$	11,663	$	—		$	15,535
Restricted cash	—		6,951		—		—			6,951
Mortgage loans held for sale	—		—		92,794		—			92,794
Inventory	—		918,589		—		—			918,589
Property and equipment - net	—		11,189		301		—			11,490
Investment in unconsolidated joint ventures	—		15,033		12,736		—			27,769
Investment in subsidiaries	576,468		—		—		(576,468		)	—
Deferred income taxes, net of valuation allowances	—		94,088		324		—			94,412
Intercompany assets	330,786		—		—		(330,786		)	—
Other assets ⁽¹⁾	3,089		24,378		10,232		—			37,699
TOTAL ASSETS	$	910,343	$	1,074,100	$	128,050	$	(907,254	)	$	1,205,239

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Accounts payable	$	—	$	74,344	$	994	$	—		$	75,338
Customer deposits	—		11,759		—		—			11,759
Intercompany liabilities	—		314,946		15,840		(330,786		)	—
Other liabilities	—		74,413		5,310		—			79,723
Community development district obligations	—		2,571		—		—			2,571
Obligation for consolidated inventory not owned	—		608		—		—			608
Notes payable bank - homebuilding operations	—		30,000		—		—			30,000
Notes payable bank - financial services operations	—		—		85,379		—			85,379
Notes payable - other	—		9,518		—		—			9,518
Convertible senior subordinated notes due 2017 ⁽¹⁾	55,943		—		—		—			55,943
Convertible senior subordinated notes due 2018 ⁽¹⁾	84,006		—		—		—			84,006
Senior notes ⁽¹⁾	226,099		—		—		—			226,099
TOTAL LIABILITIES	366,048		518,159		107,523		(330,786		)	660,944

Shareholders’ equity	544,295		555,941		20,527		(576,468		)	544,295

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	910,343	$	1,074,100	$	128,050	$	(907,254	)	$	1,205,239


(1)	During 2015, we elected to early-adopt Accounting Standards Update 2015-03, Interest-Imputation of Interest. Certain amounts above have been adjusted to apply the new method retrospectively.



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2015
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	7,178		$	(58,566	)	$	(23,593	)	$	(7,178	)	$	(82,159	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	—			3,849			—			—			3,849
Purchase of property and equipment	—			(3,156		)	(503		)	—			(3,659		)
Acquisition, net of cash acquired	—			(23,950		)	—			—			(23,950		)
Net proceeds from the sale of mortgage servicing rights	—			—			3,065			—			3,065
Intercompany investing	(3,338		)							3,338			—
Investments in and advances to unconsolidated joint ventures	—			(8,087		)	(10,075		)	—			(18,162		)
Return of capital from unconsolidated joint ventures	—			—			1,226			—			1,226
Net cash (used in) provided by investing activities	(3,338		)	(31,344		)	(6,287		)	3,338			(37,631		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of senior notes	—			(226,874		)	—			—			(226,874		)
Proceeds from issuance of senior notes	—			300,000			—			—			300,000
Proceeds from bank borrowings - homebuilding operations	—			417,300			—			—			417,300
Principal repayments of bank borrowings - homebuilding operations	—			(403,500		)	—			—			(403,500		)
Net proceeds from bank borrowings - financial services operations	—			—			38,269			—			38,269
Principal proceeds from notes payable - other and CDD bond obligations	—			(1,077		)	—			—			(1,077		)
Dividends paid	(4,875		)	—			(7,178		)	7,178			(4,875		)
Intercompany financing	—			5,929			5,360			(11,289		)	—
Debt issue costs	—			(5,740		)	(78		)	—			(5,818		)
Proceeds from exercise of stock options	1,035			—			—			—			1,035
Net cash (used in) provided by financing activities	(3,840		)	86,038			36,373			(4,111		)	114,460

Net decrease in cash and cash equivalents	—			(3,872		)	6,493			(7,951		)	(5,330		)
Cash and cash equivalents balance at beginning of period	—			3,872			11,663			—			15,535
Cash and cash equivalents balance at end of period	$	—		$	—		$	18,156		$	(7,951	)	$	10,205



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

	Year Ended December 31, 2014
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	10,200		$	(143,672	)	$	10,997		$	(10,200	)	$	(132,675	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	—			7,122			—			—			7,122
Purchase of property and equipment	—			(2,793		)	(153		)	—			(2,946		)
Intercompany investing	(7,269		)	—			—			7,269			—
Investments in and advances to unconsolidated joint ventures	—			(14,435		)	(5,980		)	—			(20,415		)
Return of capital from unconsolidated joint ventures	—			275			1,248			—			1,523
Net proceeds from the sale of mortgage servicing rights	—			—			2,135			—			2,135
Net cash (used in) provided by investing activities	(7,269		)	(9,831		)	(2,750		)	7,269			(12,581		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			192,600			—			—			192,600
Principal repayments of bank borrowings - homebuilding operations	—			(162,600		)	—			—			(162,600		)
Net proceeds from bank borrowings - financial services operations	—			—			5,350			—			5,350
Principal repayments of notes payable - other and CDD bond obligations	—			1,728			—			—			1,728
Dividends paid	(4,875		)	—			(10,200		)	10,200			(4,875		)
Intercompany financing	—			14,244			(6,975		)	(7,269		)	—
Debt issue costs	—			(2,004		)	(77		)	—			(2,081		)
Proceeds from exercise of stock options	1,944			—			—			—			1,944
Net cash (used in) provided by financing activities	(2,931		)	43,968			(11,902		)	2,931			32,066

Net decrease in cash and cash equivalents	—			(109,535		)	(3,655		)	—			(113,190		)
Cash and cash equivalents balance at beginning of period	—			113,407			15,318			—			128,725
Cash and cash equivalents balance at end of period	$	—		$	3,872		$	11,663		$	—		$	15,535



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

	Year Ended December 31, 2013
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	7,100		$	(72,633	)	$	(1,341	)	$	(7,100	)	$	(73,974	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	—			(5,185		)	—			—			(5,185		)
Purchase of property and equipment	—			(2,146		)	(236		)	—			(2,382		)
Investments in and advances to unconsolidated joint ventures	—			(13,525		)	(15,984		)	—			(29,509		)
Return of capital from unconsolidated joint ventures	—			—			1,522			—			1,522
Net cash used in investing activities	—			(20,856		)	(14,698		)	—			(35,554		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible senior subordinated notes due 2018	86,250			—			—			—			86,250
Proceeds from issuance of common shares	54,617			—			—			—			54,617
Redemption of preferred shares	(50,352		)	—			—			—			(50,352		)
Net proceeds from bank borrowings - financial services operations	—			—			12,072			—			12,072
Principal proceeds from note payable - other and CDD bond obligations	—			(3,315		)	—			—			(3,315		)
Dividends paid	(3,656		)	—			(7,100		)	7,100			(3,656		)
Intercompany financing	(96,599		)	89,279			7,320			—			—
Debt issue costs	—			(5,402		)	(99		)	—			(5,501		)
Proceeds from exercise of stock options	2,640			—			—			—			2,640
Net cash (used in) provided by financing activities	(7,100		)	80,562			12,193			7,100			92,755

Net increase in cash and cash equivalents	—			(12,927		)	(3,846		)	—			(16,773		)
Cash and cash equivalents balance at beginning of period	—			126,334			19,164			—			145,498
Cash and cash equivalents balance at end of period	$	—		$	113,407		$	15,318		$	—		$	128,725