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 Guarantor Subsidiaries 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, 2016, 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, 2016
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	1,649,316	$	42,011		$	—		$	1,691,327
Costs and expenses:
Land and housing	—		1,358,183		—			—			1,358,183
Impairment of inventory and investment in joint venture arrangements	—		3,992		—			—			3,992
General and administrative	—		92,135		19,465			—			111,600
Selling	—		108,809		—			—			108,809
Equity in income of joint venture arrangements	—		—		(640		)	—			(640		)
Interest	—		15,486		2,112			—			17,598
Total costs and expenses	—		1,578,605		20,937			—			1,599,542

Income before income taxes	—		70,711		21,074			—			91,785

Provision for income taxes	—		28,161		7,015			—			35,176

Equity in subsidiaries	56,609		—		—			(56,609		)	—

Net income	$	56,609	$	42,550	$	14,059		$	(56,609	)	$	56,609

Preferred dividends	4,875		—		—			—			4,875

Net income to common shareholders	$	51,734	$	42,550	$	14,059		$	(56,609	)	$	51,734



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 joint venture arrangements	—		3,638		—			—			3,638
General and administrative	—		77,662		15,546			—			93,208
Selling	—		95,092		—			—			95,092
Equity in income of joint venture arrangements	—		—		(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



	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 joint venture arrangements	—		3,457		—			—			3,457
General and administrative	—		73,747		15,083			—			88,830
Selling	—		81,148		—			—			81,148
Equity in income of joint venture arrangements	—		—		(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



CONDENSED CONSOLIDATING BALANCE SHEET

	December 31, 2016
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated

ASSETS:
Cash and cash equivalents	$	—	$	20,927	$	13,514	$	—		$	34,441
Mortgage loans held for sale	—		—		154,020		—			154,020
Inventory	—		1,215,934		—		—			1,215,934
Property and equipment - net	—		21,242		1,057		—			22,299
Investment in joint venture arrangements	—		12,537		15,479		—			28,016
Investment in subsidiaries	666,008		—		—		(666,008		)	—
Deferred income taxes, net of valuation allowances	—		30,767		108		—			30,875
Intercompany assets	424,669		—		—		(424,669		)	—
Other assets	1,690		43,809		17,427		—			62,926
TOTAL ASSETS	$	1,092,367	$	1,345,216	$	201,605	$	(1,090,677	)	$	1,548,511

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Accounts payable	$	—	$	102,663	$	549	$	—		$	103,212
Customer deposits	—		22,156		—		—			22,156
Intercompany liabilities	—		411,196		13,473		(424,669		)	—
Other liabilities	—		117,133		6,029		—			123,162
Community development district obligations	—		476		—		—			476
Obligation for consolidated inventory not owned	—		7,528		—		—			7,528
Notes payable bank - homebuilding operations	—		40,300		—		—			40,300
Notes payable bank - financial services operations	—		—		152,895		—			152,895
Notes payable - other	—		6,415		—		—			6,415
Convertible senior subordinated notes due 2017 - net	57,093		—		—		—			57,093
Convertible senior subordinated notes due 2018 - net	85,423		—		—		—			85,423
Senior notes due 2021 - net	295,677		—		—		—			295,677
TOTAL LIABILITIES	438,193		707,867		172,946		(424,669		)	894,337

Shareholders’ equity	654,174		637,349		28,659		(666,008		)	654,174

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,092,367	$	1,345,216	$	201,605	$	(1,090,677	)	$	1,548,511



CONDENSED CONSOLIDATING BALANCE SHEET

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

ASSETS:
Cash, cash equivalents and restricted cash ⁽¹⁾	$	—	$	2,896	$	18,156	$	(7,951	)	$	13,101
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 joint venture arrangements	—		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 - net	56,518		—		—		—			56,518
Convertible senior subordinated notes due 2018 - net	84,714		—		—		—			84,714
Senior notes due 2021 - net	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


(1)	During 2016, we elected to early-adopt Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. Certain amounts above have been adjusted to apply the new method retrospectively.



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2016
(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	$	11,653		$	42,572		$	(8,375	)	$	(11,653	)	$	34,197

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	—			(12,505		)	(601		)	—			(13,106		)
Intercompany investing	(6,960		)	—			—			6,960			—
Investments in and advances to joint venture arrangements	—			(13,764		)	(7,982		)	—			(21,746		)
Return of capital from joint venture arrangements	—			—			3,207			—			3,207
Net cash (used in) provided by investing activities	(6,960		)	(26,269		)	(5,376		)	6,960			(31,645		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			351,500			—			—			351,500
Principal repayments of bank borrowings - homebuilding operations	—			(355,000		)	—			—			(355,000		)
Net proceeds from bank borrowings - financial services operations	—			—			29,247			—			29,247
Principal repayments of notes payable - other and CDD bond obligations	—			(2,026		)	—			—			(2,026		)
Dividends paid	(4,875		)	—			(11,653		)	11,653			(4,875		)
Intercompany financing	—			7,407			(8,398		)	991			—
Debt issue costs	—			(153		)	(87		)	—			(240		)
Proceeds from exercise of stock options	182			—			—			—			182
Net cash (used in) provided by financing activities	(4,693		)	1,728			9,109			12,644			18,788

Net increase (decrease) in cash and cash equivalents	—			18,031			(4,642		)	7,951			21,340
Cash and cash equivalents balance at beginning of period	—			2,896			18,156			(7,951		)	13,101
Cash and cash equivalents balance at end of period	$	—		$	20,927		$	13,514		$	—		$	34,441



CONDENSED CONSOLIDATING STATEMENT 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⁽¹⁾	$	7,178		$	(58,772	)	$	(23,593	)	$	(7,178	)	$	(82,365	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	—			(3,156		)	(503		)	—			(3,659		)
Acquisition, net of cash acquired	—			(23,950		)	—			—			(23,950		)
Intercompany investing	(3,338		)	—			—			3,338			—
Investments in and advances to joint venture arrangements	—			(8,087		)	(10,075		)	—			(18,162		)
Return of capital from joint venture arrangements	—			—			1,226			—			1,226
Net proceeds from the sale of mortgage servicing rights	—			—			3,065			—			3,065
Net cash (used in) provided by investing activities ⁽¹⁾	(3,338		)	(35,193		)	(6,287		)	3,338			(41,480		)

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 repayments of 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) increase in cash and cash equivalents	—			(7,927		)	6,493			(7,951		)	(9,385		)
Cash and cash equivalents balance at beginning of period	—			10,823			11,663			—			22,486
Cash and cash equivalents balance at end of period	$	—		$	2,896		$	18,156		$	(7,951	)	$	13,101


(1)	During 2016, we elected to early-adopt Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. Certain amounts above have been adjusted to apply the new method retrospectively.



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 ⁽¹⁾	$	10,200		$	(143,501	)	$	10,997		$	(10,200	)	$	(132,504	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	—			(2,793		)	(153		)	—			(2,946		)
Investments in and advances to joint venture arrangements	—			(14,435		)	(5,980		)	—			(20,415		)
Return of capital from joint venture arrangements	—			275			1,248			—			1,523
Intercompany investing	(7,269		)	—			—			7,269			—
Net proceeds from the sale of mortgage servicing rights	—			—			2,135			—			2,135
Net cash (used in) provided by investing activities⁽¹⁾	(7,269		)	(16,953		)	(2,750		)	7,269			(19,703		)

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 proceeds from note 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	—			(116,486		)	(3,655		)	—			(120,141		)
Cash and cash equivalents balance at beginning of period	—			127,309			15,318			—			142,627
Cash and cash equivalents balance at end of period	$	—		$	10,823		$	11,663		$	—		$	22,486


(1)	During 2016, we elected to early-adopt Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. Certain amounts above have been adjusted to apply the new method retrospectively.