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 March 31, 2017, 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.



UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME



	Three Months Ended March 31, 2017
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	392,673	$	14,307		$	—		$	406,980
Costs and expenses:
Land and housing	—		320,281		—			—			320,281
General and administrative	—		22,460		5,300			—			27,760
Selling	—		27,283		—			—			27,283
Equity in income of joint venture arrangements	—		—		(17		)	—			(17		)
Interest	—		4,670		668			—			5,338
Total costs and expenses	—		374,694		5,951			—			380,645

Income before income taxes	—		17,979		8,356			—			26,335

Provision for income taxes	—		6,489		2,963			—			9,452

Equity in subsidiaries	16,883		—		—			(16,883		)	—

Net income	16,883		11,490		5,393			(16,883		)	16,883

Preferred dividends	1,219		—		—			—			1,219

Net income to common shareholders	$	15,664	$	11,490	$	5,393		$	(16,883	)	$	15,664



	Three Months Ended March 31, 2016
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	314,317	$	10,053		$	—		$	324,370
Costs and expenses:
Land and housing	—		260,172		—			—			260,172
General and administrative	—		18,302		3,957			—			22,259
Selling	—		22,266		—			—			22,266
Equity in income of joint venture arrangements	—		—		(307		)	—			(307		)
Interest	—		4,881		384			—			5,265
Total costs and expenses	—		305,621		4,034			—			309,655

Income before income taxes	—		8,696		6,019			—			14,715

Provision for income taxes	—		3,444		2,082			—			5,526

Equity in subsidiaries	9,189		—		—			(9,189		)	—

Net income	9,189		5,252		3,937			(9,189		)	9,189

Preferred dividends	1,219		—		—			—			1,219

Net income to common shareholders	$	7,970	$	5,252	$	3,937		$	(9,189	)	$	7,970



UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

	March 31, 2017
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated

ASSETS:
Cash,cash equivalents and restricted cash	$	—	$	15,158	$	23,740	$	—		$	38,898
Mortgage loans held for sale	—		—		113,596		—			113,596
Inventory	—		1,286,618		—		—			1,286,618
Property and equipment - net	—		21,298		1,040		—			22,338
Investment in joint venture arrangements	—		13,339		10,879		—			24,218
Deferred income taxes, net of valuation allowances	—		30,342		107		—			30,449
Investment in subsidiaries	682,691		—		—		(682,691		)	—
Intercompany assets	426,355		—		—		(426,355		)	—
Other assets	1,456		44,788		9,904		—			56,148
TOTAL ASSETS	$	1,110,502	$	1,411,543	$	159,266	$	(1,109,046	)	$	1,572,265

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Accounts payable	$	—	$	94,129	$	274	$	—		$	94,403
Customer deposits	—		26,680		—		—			26,680
Intercompany liabilities	—		415,164		11,191		(426,355		)	—
Other liabilities	—		90,563		7,013		—			97,576
Community development district obligations	—		6,277		—		—			6,277
Obligation for consolidated inventory not owned	—		11,968		—		—			11,968
Notes payable bank - homebuilding operations	—		110,900		—		—			110,900
Notes payable bank - financial services operations	—		—		106,937		—			106,937
Notes payable - other	—		7,022		—		—			7,022
Convertible senior subordinated notes due 2017 - net	57,237		—		—		—			57,237
Convertible senior subordinated notes due 2018 - net	85,600		—		—		—			85,600
Senior notes due 2021 - net	295,953		—		—		—			295,953
TOTAL LIABILITIES	438,790		762,703		125,415		(426,355		)	900,553

SHAREHOLDERS’ EQUITY	671,712		648,840		33,851		(682,691		)	671,712

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,110,502	$	1,411,543	$	159,266	$	(1,109,046	)	$	1,572,265



CONDENSED CONSOLIDATING BALANCE SHEET

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

ASSETS:
Cash,cash equivalents and restricted cash	$	—	$	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
Deferred income taxes, net of valuation allowances	—		30,767		108		—			30,875
Investment in subsidiaries	666,008		—		—		(666,008		)	—
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



UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Three Months Ended March 31, 2017
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	200		$	(77,003	)	$	53,728		$	(200	)	$	(23,275	)

INVESTING ACTIVITIES:
Purchase of property and equipment	—			(932		)	(61		)	—			(993		)
Intercompany investing	523			—			—			(523		)	—
Investments in and advances to joint venture arrangements	—			(857		)	(2,340		)	—			(3,197		)
Net proceeds from the sale of mortgage servicing rights	—			—			7,396			—			7,396
Net cash provided by (used in) investing activities	523			(1,789		)	4,995			(523		)	3,206

FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			162,000			—			—			162,000
Principal repayments of bank borrowings - homebuilding operations	—			(91,400		)	—			—			(91,400		)
Net repayments of bank borrowings - financial services operations	—			—			(45,958		)	—			(45,958		)
Principal proceeds from notes payable - other and CDD bond obligations	—			607			—			—			607
Proceeds from exercise of stock options	496			—			—			—			496
Intercompany financing	—			1,816			(2,339		)	523			—
Dividends paid	(1,219		)	—			(200		)	200			(1,219		)
Net cash (used in) provided by financing activities	(723		)	73,023			(48,497		)	723			24,526

Net (decrease) increase in cash, cash equivalents and restricted cash	—			(5,769		)	10,226			—			4,457
Cash, cash equivalents and restricted cash balance at beginning of period	—			20,927			13,514			—			34,441
Cash, cash equivalents and restricted cash balance at end of period	$	—		$	15,158		$	23,740		$	—		$	38,898



	Three Months Ended March 31, 2016
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities ⁽¹⁾	$	3,200		$	(38,803	)	$	40,218		$	(3,200	)	$	1,415

INVESTING ACTIVITIES:
Purchase of property and equipment	—			(10,686		)	(20		)	—			(10,706		)
Intercompany Investing	(2,054		)	—			—			2,054			—
Investments in and advances to joint venture arrangements	—			(1,502		)	(1,344		)	—			(2,846		)
Net cash (used in) provided by investing activities⁽¹⁾	(2,054		)	(12,188		)	(1,364		)	2,054			(13,552		)

FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			154,100			—			—			154,100
Principal repayments of bank borrowings - homebuilding operations	—			(83,400		)	—			—			(83,400		)
Net repayments of bank borrowings - financial services operations	—			—			(36,462		)	—			(36,462		)
Principal proceeds from notes payable - other and CDD bond obligations	—			364			—			—			364
Intercompany financing	—			(406		)	(5,491		)	5,897			—
Dividends paid	(1,219		)	—			(3,200		)	3,200			(1,219		)
Debt issue costs	—			(99		)	—			—			(99		)
Proceeds from exercise of stock options	73			—			—			—			73
Net cash (used in) provided by financing activities	(1,146		)	70,559			(45,153		)	9,097			33,357

Net increase (decrease) in cash, cash equivalents and restricted cash	—			19,568			(6,299		)	7,951			21,220
Cash, cash equivalents and restricted cash balance at beginning of period	—			2,896			18,156			(7,951		)	13,101
Cash, cash equivalents and restricted cash balance at end of period	$	—		$	22,464		$	11,857		$	—		$	34,321


(1)	During the fourth quarter of 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.