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 June 30, 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 June 30, 2017
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	444,998	$	11,868		$	—		$	456,866
Costs and expenses:
Land and housing	—		367,598		—			—			367,598
General and administrative	—		24,915		5,197			—			30,112
Selling	—		30,247		—			—			30,247
Equity in income of joint venture arrangements	—		—		(110		)	—			(110		)
Interest	—		3,169		665			—			3,834
Total costs and expenses	—		425,929		5,752			—			431,681

Income before income taxes	—		19,069		6,116			—			25,185

Provision for income taxes	—		6,246		1,950			—			8,196

Equity in subsidiaries	16,989		—		—			(16,989		)	—

Net income	16,989		12,823		4,166			(16,989		)	16,989

Preferred dividends	1,219		—		—			—			1,219

Net income to common shareholders	$	15,770	$	12,823	$	4,166		$	(16,989	)	$	15,770



	Three Months Ended June 30, 2016
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	391,297	$	9,950		$	—		$	401,247
Costs and expenses:
Land and housing	—		319,708		—			—			319,708
General and administrative	—		22,085		4,745			—			26,830
Selling	—		25,533		—			—			25,533
Equity in income of joint venture arrangements	—		—		(82		)	—			(82		)
Interest	—		3,798		510			—			4,308
Total costs and expenses	—		371,124		5,173			—			376,297

Income before income taxes	—		20,173		4,777			—			24,950

Provision for income taxes	—		7,442		1,592			—			9,034

Equity in subsidiaries	15,916		—		—			(15,916		)	—

Net income	15,916		12,731		3,185			(15,916		)	15,916

Preferred dividends	1,219		—		—			—			1,219

Net income to common shareholders	$	14,697	$	12,731	$	3,185		$	(15,916	)	$	14,697



UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME

	Six Months Ended June 30, 2017
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	837,671	$	26,175		$	—		$	863,846
Costs and expenses:
Land and housing	—		687,879		—			—			687,879
General and administrative	—		47,375		10,497						57,872
Selling	—		57,530		—			—			57,530
Equity in income of joint venture arrangements	—		—		(127		)	—			(127		)
Interest	—		7,839		1,333			—			9,172
Total costs and expenses	—		800,623		11,703			—			812,326

Income before income taxes	—		37,048		14,472			—			51,520

Provision for income taxes	—		12,735		4,913			—			17,648

Equity in subsidiaries	33,872		—		—			(33,872		)	—

Net income	33,872		24,313		9,559			(33,872		)	33,872

Preferred dividends	2,438		—		—			—			2,438

Net income to common shareholders	$	31,434	$	24,313	$	9,559		$	(33,872	)	$	31,434



	Six Months Ended June 30, 2016
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	705,614	$	20,003		$	—		$	725,617
Costs and expenses:
Land and housing	—		579,880		—			—			579,880
General and administrative	—		40,387		8,702			—			49,089
Selling	—		47,799		—			—			47,799
Equity in income of joint venture arrangements	—		—		(389		)	—			(389		)
Interest	—		8,679		894			—			9,573
Total costs and expenses	—		676,745		9,207			—			685,952

Income before income taxes	—		28,869		10,796			—			39,665

Provision for income taxes	—		10,886		3,674			—			14,560

Equity in subsidiaries	25,105		—		—			(25,105		)	—

Net income	25,105		17,983		7,122			(25,105		)	25,105

Preferred dividends	2,438		—		—			—			2,438

Net income to common shareholders	$	22,667	$	17,983	$	7,122		$	(25,105	)	$	22,667



UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

	June 30, 2017
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries		Eliminations			Consolidated

ASSETS:
Cash, cash equivalents and restricted cash	$	—	$	6,095	$	23,845	$	—		$	29,940
Mortgage loans held for sale	—		—		91,986		—			91,986
Inventory	—		1,379,544		—		—			1,379,544
Property and equipment - net	—		21,264		991		—			22,255
Investment in joint venture arrangements	—		14,627		8,250		—			22,877
Deferred income taxes, net of valuation allowances	—		29,971		107		—			30,078
Investment in subsidiaries	694,380		—		—		(694,380		)	—
Intercompany assets	437,100		—		—		(437,100		)	—
Other assets	1,223		44,030		9,453		—			54,706
TOTAL ASSETS	$	1,132,703	$	1,495,531	$	134,632	$	(1,131,480	)	$	1,631,386

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Accounts payable	$	—	$	112,702	$	370	$	—		$	113,072
Customer deposits	—		29,655		—		—			29,655
Intercompany liabilities	—		430,472		6,628		(437,100		)	—
Other liabilities	—		101,238		5,399		—			106,637
Community development district obligations	—		5,875		—		—			5,875
Obligation for consolidated inventory not owned	—		12,263		—		—			12,263
Notes payable bank - homebuilding operations	—		138,000		—		—			138,000
Notes payable bank - financial services operations	—		—		89,518		—			89,518
Notes payable - other	—		3,663		—		—			3,663
Convertible senior subordinated notes due 2017 - net	57,380		—		—		—			57,380
Convertible senior subordinated notes due 2018 - net	85,777		—		—		—			85,777
Senior notes due 2021 - net	296,229		—		—		—			296,229
TOTAL LIABILITIES	439,386		833,868		101,915		(437,100		)	938,069

SHAREHOLDERS’ EQUITY	693,317		661,663		32,717		(694,380		)	693,317

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,132,703	$	1,495,531	$	134,632	$	(1,131,480	)	$	1,631,386



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

	Six Months Ended June 30, 2017
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	5,500		$	(120,894	)	$	81,574		$	(5,500	)	$	(39,320	)

INVESTING ACTIVITIES:
Purchase of property and equipment	—			(1,785		)	(87		)	—			(1,872		)
Intercompany investing	(7,854		)	—			—			7,854			—
Investments in and advances to joint venture arrangements	—			(2,128		)	(3,679		)	—			(5,807		)
Return of capital from unconsolidated joint ventures	—			—			1,078			—			1,078
Net proceeds from the sale of mortgage servicing rights	—			—			7,558			—			7,558
Net cash (used in) provided by investing activities	(7,854		)	(3,913		)	4,870			7,854			957

FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			289,400			—			—			289,400
Principal repayments of bank borrowings - homebuilding operations	—			(191,700		)	—			—			(191,700		)
Net repayments of bank borrowings - financial services operations	—			—			(63,377		)	—			(63,377		)
Principal proceeds from notes payable - other and CDD bond obligations	—			(2,752		)	—			—			(2,752		)
Proceeds from exercise of stock options	4,792			—			—			—			4,792
Intercompany financing	—			15,027			(7,173		)	(7,854		)	—
Dividends paid	(2,438		)	—			(5,500		)	5,500			(2,438		)
Debt issue costs	—			—			(63		)	—			(63		)
Net cash provided by (used in) financing activities	2,354			109,975			(76,113		)	(2,354		)	33,862

Net (decrease) increase in cash, cash equivalents and restricted cash	—			(14,832		)	10,331			—			(4,501		)
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	$	—		$	6,095		$	23,845		$	—		$	29,940



	Six Months Ended June 30, 2016
(In thousands)	M/I Homes, Inc.			Guarantor Subsidiaries			Unrestricted Subsidiaries			Eliminations			Consolidated

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities ⁽¹⁾	$	4,938		$	2,523		$	38,416		$	(4,938	)	$	40,939

INVESTING ACTIVITIES:
Purchase of property and equipment	—			(10,996		)	(33		)	—			(11,029		)
Intercompany Investing	(2,573		)	—			—			2,573			—
Investments in and advances to joint venture arrangements	—			(3,525		)	(2,257		)	—			(5,782		)
Net cash (used in) provided by investing activities⁽¹⁾	(2,573		)	(14,521		)	(2,290		)	2,573			(16,811		)

FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			192,200			—			—			192,200
Principal repayments of bank borrowings - homebuilding operations	—			(166,000		)	—			—			(166,000		)
Net repayments of bank borrowings - financial services operations	—			—			(30,982		)	—			(30,982		)
Principal proceeds from notes payable - other and CDD bond obligations	—			111			—			—			111
Intercompany financing	—			15			(5,393		)	5,378			—
Dividends paid	(2,438		)	—			(4,938		)	4,938			(2,438		)
Debt issue costs	—			(153		)	(40		)	—			(193		)
Proceeds from exercise of stock options	73			—			—			—			73
Net cash (used in) provided by financing activities	(2,365		)	26,173			(41,353		)	10,316			(7,229		)

Net increase (decrease) in cash, cash equivalents and restricted cash	—			14,175			(5,227		)	7,951			16,899
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	$	—		$	17,071		$	12,929		$	—		$	30,000


(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.