Supplemental Guarantor Information

The Company’s obligations under the 2025 Senior Notes, the 2021 Senior 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 2025 Senior Notes, the 2021 Senior 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) 2025 Senior Notes on a joint and several senior unsecured basis, (b) 2021 Senior Notes on a joint and several senior 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 September 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, the indenture governing the 2025 Senior Notes 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 September 30, 2017
(In thousands)	M/I Homes, Inc.		Guarantor Subsidiaries		Unrestricted Subsidiaries			Eliminations			Consolidated

Revenue	$	—	$	464,660	$	11,763		$	—		$	476,423
Costs and expenses:
Land and housing	—		374,673		—			—			374,673
General and administrative	—		25,263		6,074			—			31,337
Selling	—		31,136		—			—			31,136
Equity in income of joint venture arrangements	—		—		(71		)	—			(71		)
Interest	—		4,019		656			—			4,675
Total costs and expenses	—		435,091		6,659			—			441,750

Income before income taxes	—		29,569		5,104			—			34,673

Provision for income taxes	—		10,672		1,674			—			12,346

Equity in subsidiaries	22,327		—		—			(22,327		)	—

Net income	22,327		18,897		3,430			(22,327		)	22,327

Preferred dividends	1,218		—		—			—			1,218
Excess of fair value over book value of preferred shares subject to redemption	2,257		—		—			—			2,257

Net income to common shareholders	$	18,852	$	18,897	$	3,430		$	(22,327	)	$	18,852



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

Revenue	$	—	$	431,903	$	10,561		$	—		$	442,464
Costs and expenses:
Land and housing	—		363,635		—			—			363,635
General and administrative	—		24,340		4,820			—			29,160
Selling	—		27,663		—			—			27,663
Equity in income of joint venture arrangements	—		—		(24		)	—			(24		)
Interest	—		3,036		551			—			3,587
Total costs and expenses	—		418,674		5,347			—			424,021

Income before income taxes	—		13,229		5,214			—			18,443

Provision for income taxes	—		5,601		1,900			—			7,501

Equity in subsidiaries	10,942		—		—			(10,942		)	—

Net income	10,942		7,628		3,314			(10,942		)	10,942

Preferred dividends	1,218		—		—			—			1,218

Net income to common shareholders	$	9,724	$	7,628	$	3,314		$	(10,942	)	$	9,724



UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF INCOME

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

Revenue	$	—	$	1,302,331	$	37,938		$	—		$	1,340,269
Costs and expenses:
Land and housing	—		1,062,552		—			—			1,062,552
General and administrative	—		72,638		16,571			—			89,209
Selling	—		88,666		—			—			88,666
Equity in income of joint venture arrangements	—		—		(198		)	—			(198		)
Interest	—		11,858		1,989			—			13,847
Total costs and expenses	—		1,235,714		18,362			—			1,254,076

Income before income taxes	—		66,617		19,576			—			86,193

Provision for income taxes	—		23,407		6,587			—			29,994

Equity in subsidiaries	56,199		—		—			(56,199		)	—

Net income	56,199		43,210		12,989			(56,199		)	56,199

Preferred dividends	3,656		—		—			—			3,656
Excess of fair value over book value of preferred shares subject to redemption	2,257		—		—			—			2,257

Net income to common shareholders	$	50,286	$	43,210	$	12,989		$	(56,199	)	$	50,286



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

Revenue	$	—	$	1,137,517	$	30,564		$	—		$	1,168,081
Costs and expenses:
Land and housing	—		943,515		—			—			943,515
General and administrative	—		64,727		13,522			—			78,249
Selling	—		75,462		—			—			75,462
Equity in income of joint venture arrangements	—		—		(413		)	—			(413		)
Interest	—		11,715		1,445			—			13,160
Total costs and expenses	—		1,095,419		14,554			—			1,109,973

Income before income taxes	—		42,098		16,010			—			58,108

Provision for income taxes	—		16,487		5,574			—			22,061

Equity in subsidiaries	36,047		—		—			(36,047		)	—

Net income	36,047		25,611		10,436			(36,047		)	36,047

Preferred dividends	3,656		—		—			—			3,656

Net income to common shareholders	$	32,391	$	25,611	$	10,436		$	(36,047	)	$	32,391



UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

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

ASSETS:
Cash, cash equivalents and restricted cash	$	—	$	82,504	$	21,132	$	—		$	103,636
Mortgage loans held for sale	—		—		91,987		—			91,987
Inventory	—		1,455,809		—		—			1,455,809
Property and equipment - net	—		24,325		995		—			25,320
Investment in joint venture arrangements	—		15,764		7,217		—			22,981
Deferred income taxes, net of valuation allowances	—		29,461		108		—			29,569
Investment in subsidiaries	710,176		—		—		(710,176		)	—
Intercompany assets	688,260		—		—		(688,260		)	—
Other assets	3,375		42,473		9,545		—			55,393
TOTAL ASSETS	$	1,401,811	$	1,650,336	$	130,984	$	(1,398,436	)	$	1,784,695

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES:
Accounts payable	$	—	$	120,049	$	549	$	—		$	120,598
Customer deposits	—		30,583		—		—			30,583
Intercompany liabilities	—		683,308		4,952		(688,260		)	—
Other liabilities	—		104,279		4,591		—			108,870
Preferred shares subject to redemption	50,420		—		—		—			50,420
Community development district obligations	—		5,298		—		—			5,298
Obligation for consolidated inventory not owned	—		22,203		—		—			22,203
Notes payable bank - financial services operations	—		—		91,275		—			91,275
Notes payable - other	—		4,057		—		—			4,057
Convertible senior subordinated notes due 2018 - net	85,955		—		—		—			85,955
Senior notes due 2021 - net	296,505		—		—		—			296,505
Senior notes due 2025 - net	245,958		—		—		—			245,958
TOTAL LIABILITIES	678,838		969,777		101,367		(688,260		)	1,061,722

SHAREHOLDERS’ EQUITY	722,973		680,559		29,617		(710,176		)	722,973

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,401,811	$	1,650,336	$	130,984	$	(1,398,436	)	$	1,784,695



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

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

OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities	$	12,031		$	(152,148	)	$	86,123		$	(12,031	)	$	(66,025	)

INVESTING ACTIVITIES:
Purchase of property and equipment	—			(5,848		)	(169		)	—			(6,017		)
Intercompany investing	(13,166		)	—			—			13,166			—
Investments in and advances to joint venture arrangements	—			(3,401		)	(5,038		)	—			(8,439		)
Return of capital from unconsolidated joint ventures	—			—			1,833			—			1,833
Net proceeds from the sale of mortgage servicing rights	—			—			7,558			—			7,558
Net cash (used in) provided by investing activities	(13,166		)	(9,249		)	4,184			13,166			(5,065		)

FINANCING ACTIVITIES:
Proceeds from issuance of senior notes	—			250,000			—			—			250,000
Proceeds from bank borrowings - homebuilding operations	—			366,500			—			—			366,500
Principal repayments of bank borrowings - homebuilding operations	—			(406,800		)	—			—			(406,800		)
Net repayments of bank borrowings - financial services operations	—			—			(61,620		)	—			(61,620		)
(Principal repayment of) proceeds from notes payable - other and CDD bond obligations	—			(2,358		)	—			—			(2,358		)
Proceeds from exercise of stock options	4,791			—			—			—			4,791
Intercompany financing	—			22,141			(8,975		)	(13,166		)	—
Dividends paid	(3,656		)	—			(12,031		)	12,031			(3,656		)
Debt issue costs	—			(6,509		)	(63		)	—			(6,572		)
Net cash provided by (used in) financing activities	1,135			222,974			(82,689		)	(1,135		)	140,285

Net increase in cash, cash equivalents and restricted cash	—			61,577			7,618			—			69,195
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	$	—		$	82,504		$	21,132		$	—		$	103,636



	Nine Months Ended September 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⁾	$	7,138		$	(18,210	)	$	44,712		$	(7,138	)	$	26,502

INVESTING ACTIVITIES:
Purchase of property and equipment	—			(11,565		)	(54		)	—			(11,619		)
Intercompany Investing	(3,555		)	—			—			3,555			—
Investments in and advances to joint venture arrangements	—			(5,504		)	(4,556		)	—			(10,060		)
Net cash (used in) provided by investing activities⁽¹⁾	(3,555		)	(17,069		)	(4,610		)	3,555			(21,679		)

FINANCING ACTIVITIES:
Proceeds from bank borrowings - homebuilding operations	—			276,800			—			—			276,800
Principal repayments of bank borrowings - homebuilding operations	—			(235,600		)	—			—			(235,600		)
Net repayments of bank borrowings - financial services operations	—			—			(32,165		)	—			(32,165		)
Principal proceeds from notes payable - other and CDD bond obligations	—			125			—			—			125
Intercompany financing	—			(630		)	(3,766		)	4,396			—
Dividends paid	(3,656		)	—			(7,138		)	7,138			(3,656		)
Debt issue costs	—			(153		)	(40		)	—			(193		)
Proceeds from exercise of stock options	73			—			—			—			73
Net cash (used in) provided by financing activities	(3,583		)	40,542			(43,109		)	11,534			5,384

Net increase (decrease) in cash, cash equivalents and restricted cash	—			5,263			(3,007		)	7,951			10,207
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	$	—		$	8,159		$	15,149		$	—		$	23,308


(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.