8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 30, 2018

WILLIAM LYON HOMES

(Exact name of registrant as specified in charter)

Delaware	001-31625	33-0864902
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4695 MacArthur Court, 8^th Floor

Newport Beach, California 92660

(Address of principal executive offices and zip code)

(949) 833-3600

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Conditions.

On October 30, 2018, William Lyon Homes (the “Company”) issued a press release announcing its financial results for the three months ended September 30, 2018. A copy of the press release is furnished herewith as Exhibit 99.1, and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including the accompanying Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section, except as specifically incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 7.01. Regulation FD Disclosure.

Senior management of the Company will reference the materials included in Exhibit 99.2 to this report (the “Earnings Presentation”) during an earnings conference call to be held at 9:00 a.m. Pacific Time on October 30, 2018. A copy of the Earnings Presentation is furnished as Exhibit 99.2 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including the Earnings Presentation attached to this report as Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Company that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company. In addition, the Earnings Presentation furnished as an exhibit to this report may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished herewith:

99.1	Press Release issued on October 30, 2018 announcing financial results for the three months ended September 30, 2018.
99.2	Earnings Presentation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WILLIAM LYON HOMES
Dated: October 30, 2018	By:	/S/ COLIN T. SEVERN
		Colin T. Severn
		Senior Vice President
		and Chief Financial Officer

EX-99.1

Exhibit 99.1

WILLIAM LYON HOMES REPORTS THIRD QUARTER 2018 RESULTS

29% INCREASE IN NET NEW HOME ORDERS; 24% INCREASE IN NEW HOME DELIVERIES;

32% INCREASE IN UNITS IN BACKLOG

NEWPORT BEACH, CA— October 30, 2018 — William Lyon Homes (NYSE: WLH), a leading homebuilder in the Western U.S., announced results for its third quarter ended September 30, 2018.

2018 Third Quarter Highlights (Comparison to 2017 Third Quarter)

• Net income available to common stockholders of $26.6 million, or $0.68 per diluted share

• Pre-tax income of $40.8 million

• Net new home orders of 1,001, up 29%

• Units in backlog of 1,596, up 32%

• New home deliveries of 1,053 homes, up 24%

• Dollar value of homes in backlog of $800.6 million, up 14%

• Dollar value of orders of $457.6 million, up 8%

• Average sales locations of 116, up 35%

• Average sales price (ASP) of new homes delivered of $506,700 versus $576,200

• Home sales revenue of $533.5 million, up 9%

• Homebuilding gross margin percentage of 18.2%

• Adjusted homebuilding gross margin percentage of 23.0%

• SG&A percentage of 11.0%

• Adjusted EBITDA of $66.2 million, down 2%

“We are pleased with our financial results for the third quarter, with homebuilding revenues of $533.5 million, up 9% and new home deliveries of 1,053, up 24%,” said Matthew R. Zaist, President and Chief Executive Officer. “During the quarter, our GAAP homebuilding gross margins were 18.2%, which is a 10 basis point improvement over the third quarter of 2017, and a 30 basis point improvement sequentially from the second quarter of this year. We expect our sequential margin improvement to carry into the fourth quarter with GAAP gross margins anticipated to expand approximately 40 to 60 basis points over the third quarter. Our third quarter net new home orders were up 29% year-over-year, to 1,001, and our average number of sales locations for the third quarter was 116, up from 86 in the third quarter of 2017.”

Mr. Zaist continued, “While the long-term fundamentals remain positive in the broader economy as well as our local markets, the cost of home ownership has increased with the significant price appreciation in several of our markets over the last few years, combined with the recent rise in mortgage interest rates. As a result, and most notably in Northern California and Seattle, we have experienced some sales pace moderation, which has led us to adjust our expectations for our fourth quarter results. Overall, in the face of some challenging market conditions, our strong backlog of 1,596 units with a dollar value of over $800 million still puts us in position to finish the year strongly and achieve another year of profitability growth for the Company and a record year in revenue and deliveries. The Company expects fourth quarter results to include backlog conversion of 85% to 92.5%, which we believe will contribute significant cash in-flows in the fourth quarter, enabling us to make further progress on our debt reduction for the year and keep us on track toward our long-term balance sheet goals including targeting 40% debt-to-cap by 2020. Looking forward, our new community openings over the next several quarters will be focused on affordable price points below the market medians with an emphasis on the entry level and active adult buyer segments, which we believe will help to address affordability concerns and drive continued growth for William Lyon Homes.”

Outlook

For the fourth quarter of 2018, the Company anticipates fourth quarter new home deliveries of approximately 1,360 to 1,475 units, average sales price of homes closed of approximately $505,000, and pre-tax income before non-controlling interest of approximately $62 million to $67 million.

For the full year, the Company anticipates new home deliveries of approximately 4,235 to 4,350 units, home sales revenues of approximately $2.115 billion to $2.165 billion and pre-tax income before non-controlling interest of approximately $157 million to $162 million.

Operating Results

Home sales revenue for the third quarter of 2018 was $533.5 million, as compared to $490.3 million in the year-ago period, an increase of 9%. The increase was driven by a 24% increase in deliveries to 1,053 homes, compared to 851 in the third quarter of 2017.

Net new home orders for the quarter were 1,001, up 29% from 774 in the third quarter of 2017. The overall increase in net new home orders was driven by an increase in community count to 116 average sales locations, from 86 in the year-ago period, an increase of 35%.

The dollar value of homes in backlog was $800.6 million as of September 30, 2018, an increase of 14%, compared to $699.3 million as of September 30, 2017. The increase was driven by a 32% increase in units in backlog to 1,596 from 1,208 in the year-ago period. The average sales price of homes in backlog decreased to $501,600 from $578,900 in the prior year, due to the number of homes in backlog at our Texas division of 248 homes at an average sales price of $275,300, with no comparable amount in the prior year.

Homebuilding gross margin percentage for homes closed during the third quarter of 2018 was 18.2%, up 10 basis points from 18.1% in the third quarter of 2017, and up 30 basis points from 17.9% in the second quarter of 2018.

Sales and marketing expense during the third quarter of 2018 was 5.4% of homebuilding revenue, compared to 4.5% in the year-ago quarter, which is driven by an increase in advertising and outside broker commissions of 60 basis points combined, as well as the impact of the adoption of ASC 606 of 20 basis points, which was adopted on January 1, 2018, requiring the Company to record certain selling costs that were previously recorded as cost of sales to sales and marketing expense. General and administrative expenses increased to 5.6% of homebuilding revenue, compared to 4.7% in the year-ago quarter as a result of continued investment in our growing operating business, incremental information technology investment and further investment in building out our financial services group.

Balance Sheet Update

At quarter end, cash and cash equivalents totaled $50.8 million, owned real estate inventories totaled $2.4 billion, total assets were $2.9 billion and total equity was $1.0 billion. Total debt to book capitalization was 60.3%, and net debt to net book capitalization was 59.5% at September 30, 2018, compared to 57.1% and 56.1% at September 30, 2017, and 54.5% and 49.6% at December 31, 2017, respectively.

Conference Call

The Company will host a conference call to discuss these results today, Tuesday, October 30, 2018 at 9:00 a.m. Pacific Time. The call will be available via both the telephone at (855) 851-4524 or (720) 634-2900, conference ID #1076946, or through the Company’s website at www.lyonhomes.com in the Investor Relations section of the site.

A replay of the call will be available through November 6, 2018 by dialing (855) 859-2056 or (404) 537-3406, conference ID #1076946. A webcast replay of the call will also be available on the Company’s website approximately two hours after the broadcast.

About William Lyon Homes

William Lyon Homes is one of the largest Western U.S. regional homebuilders. Headquartered in Newport Beach, California, the Company is primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada, Colorado, Washington, Oregon, and Texas. Its core markets include Orange County, Los Angeles, the Inland Empire, the San Francisco Bay Area, Phoenix, Las Vegas, Denver, Portland, Seattle, Austin and San Antonio. The Company has a distinguished legacy of more than 60 years of homebuilding operations, over which time it has sold in excess of 105,000 homes. The Company markets and sells its homes under the William Lyon Homes brand in all of its markets except for Washington and Oregon, where the Company operates under the Polygon Northwest brand.

Forward-Looking Statements

Certain statements contained in this release and the accompanying comments during our conference call that are not historical information may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, including, but not limited to, forward-looking statements related to: anticipated deliveries, revenue and pre-tax income, gross margin performance, backlog conversion rates, operating and financial results for the fourth quarter of 2018 and beyond, community count growth and project performance, market and industry trends, the continued housing market recovery, average sale price of homes to be closed in various periods, SG&A percentage, future cash needs and liquidity, minority interest from our homebuilding joint ventures, leverage ratios and reduction strategies, land acquisition spending, financial services and ancillary business performance and strategies; the anticipated financial or operational performance resulting from the RSI Communities transaction, and estimated new home deliveries, home sales revenue and community count on a combined Company basis. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. The Company makes no commitment,

and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others: changes in mortgage and other interest rates; affordability pressures; the Company’s ability to successfully integrate RSI Communities’ homebuilding operations with its existing operations; adverse weather conditions; the availability of labor and homebuilding materials and increased construction cycle times; our financial leverage and level of indebtedness and any inability to comply with financial and other covenants under our debt instruments; continued volatility and worsening in general economic conditions either internationally, nationally or in regions in which we operate; increased housing supply in our markets; increased outside broker costs; increased costs of homebuilding materials; changes in governmental laws and regulations and compliance, increased costs, fees and delays associated therewith; government actions, policies, programs and regulations directed at or affecting the housing market (including the Tax Cuts and Jobs Act (“TCJA”), the Dodd-Frank Act, tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities; changes in existing tax laws or enacted corporate income tax rates, including pursuant to the TCJA; worsening in markets for residential housing; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; defects in manufactured products or other homebuilding materials; decline in real estate values resulting in impairment of our real estate assets; volatility in the banking industry, credit and capital markets; restraints on foreign investment; terrorism or other hostilities involving the United States and other geopolitical risk as well as restrictive policies such as tariffs or capital investment restrictions; building moratorium or “slow-growth” or “no-growth” initiatives that could be implemented in states in which we operate; conditions in the capital, credit and financial markets, including mortgage lending standards and the availability of and timing mortgage financing; changes in generally accepted accounting principles or interpretations of those principles; competition for home sales from other sellers of new and resale homes; cancellations and our ability to realize our backlog; the occurrence of events such as landslides, soil subsidence and earthquakes that are uninsurable, not economically insurable or not subject to effective indemnification agreements; limitations on our ability to utilize our tax attributes; whether an ownership change occurred that could, under certain circumstances, have resulted in the limitation of our ability to offset prior years’ taxable income with net operating losses; the timing of receipt of regulatory approvals and the opening of projects; the availability and cost of land for future development; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.

Investor/Media Contacts:

Larry Clark

Financial Profiles, Inc.

(310) 622-8223

WLH@finprofiles.com

WILLIAM LYON HOMES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share data)

(unaudited)

	Three Months Ended September 30, 2018			Three Months Ended September 30, 2017
Operating revenue
Home sales	$	533,514		$	490,304
Construction services		1,190			35
		534,704			490,339
Operating costs
Cost of sales — homes		(436,311	)		(401,700	)
Construction services		(1,121	)		(35	)
Sales and marketing		(28,879	)		(21,935	)
General and administrative		(30,039	)		(22,951	)
Other		(591	)		(548	)
		(496,941	)		(447,169	)
Operating income		37,763			43,170
Equity in income of unconsolidated joint ventures		531			1,160
Other income (loss), net		2,510			(365	)
Income before provision for income taxes		40,804			43,965
Provision for income taxes		(8,990	)		(13,905	)
Net income		31,814			30,060
Less: Net income attributable to noncontrolling interests		(5,256	)		(2,642	)
Net income available to common stockholders	$	26,558		$	27,418
Income per common share:
Basic	$	0.70		$	0.74
Diluted	$	0.68		$	0.71
Weighted average common shares outstanding:
Basic		37,847,743			37,059,483
Diluted		39,160,894			38,583,341

WILLIAM LYON HOMES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except number of shares and per share data)

(unaudited)

	Nine Months Ended September 30, 2018			Nine Months Ended September 30, 2017
Operating revenue
Home sales	$	1,424,331		$	1,171,791
Construction services		3,193			94
		1,427,524			1,171,885
Operating costs
Cost of sales — homes		(1,169,191	)		(973,212	)
Construction services		(3,063	)		(41	)
Sales and marketing		(80,420	)		(57,924	)
General and administrative		(83,067	)		(61,447	)
Transaction expenses		(3,907	)		—
Other		(1,510	)		(1,548	)
		(1,341,158	)		(1,094,172	)
Operating income		86,366			77,713
Equity in income of unconsolidated joint ventures		1,996			2,622
Other income (loss), net		2,856			(12	)
Income before extinguishment of debt		91,218			80,323
Loss on extinguishment of debt		—			(21,828	)
Income before provision for income taxes		91,218			58,495
Provision for income taxes		(19,580	)		(17,480	)
Net income		71,638			41,015
Less: Net income attributable to noncontrolling interests		(14,297	)		(4,643	)
Net income available to common stockholders	$	57,341		$	36,372
Income per common share:
Basic	$	1.51		$	0.98
Diluted	$	1.45		$	0.95
Weighted average common shares outstanding:
Basic		37,931,764			37,007,144
Diluted		39,581,986			38,381,292

WILLIAM LYON HOMES

CONSOLIDATED BALANCE SHEETS

(in thousands, except number of shares and par value per share)

	September 30, 2018		December 31, 2017
	(unaudited)
ASSETS
Cash and cash equivalents	$	50,782	$	182,710
Receivables		10,561		10,223
Escrow proceeds receivable		370		3,319
Real estate inventories
Owned		2,437,450		1,699,850
Not owned		209,819		—
Investment in unconsolidated joint ventures		5,109		7,867
Goodwill		118,877		66,902
Intangibles, net of accumulated amortization of $4,640 as of September 30, 2018 and December 31, 2017		6,700		6,700
Deferred income taxes		48,279		47,915
Lease right-of-use assets		15,353		14,454
Other assets, net		40,748		21,164
Total assets	$	2,944,048	$	2,061,104
LIABILITIES AND EQUITY
Accounts payable	$	94,904	$	58,799
Accrued expenses		125,249		111,491
Liabilities from inventories not owned		209,819		—
Revolving credit facility		220,000		—
Land notes payable		—		589
Construction notes payable		1,426		—
Joint venture notes payable		163,385		93,926
53⁄4% Senior Notes due April 15, 2019		—		149,362
7% Senior Notes due August 15, 2022		347,273		346,740
6% Senior Notes due September 1, 2023		343,568		—
57⁄8% Senior Notes due January 31, 2025		440,597		439,567
		1,946,221		1,200,474
Commitments and contingencies
Equity:
William Lyon Homes stockholders’ equity
Preferred stock, par value $0.01 per share; 10,000,000 shares authorized and no shares issued and outstanding at September 30, 2018 and December 31, 2017		—		—
Common stock, Class A, par value $0.01 per share; 150,000,000 shares authorized; 34,150,104 and 34,267,510 shares issued, 32,937,737 and 33,135,650 shares outstanding at September 30, 2018 and December 31, 2017, respectively		341		344
Common stock, Class B, par value $0.01 per share; 30,000,000 shares authorized; 4,817,394 shares issued and outstanding at September 30, 2018 and December 31, 2017		48		48
Additional paid-in capital		445,694		454,286
Retained earnings		383,135		325,794
Total William Lyon Homes stockholders’ equity		829,218		780,472
Noncontrolling interests		168,609		80,158
Total equity		997,827		860,630
Total liabilities and equity	$	2,944,048	$	2,061,104

WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

	Three Months Ended September 30,
	2018			2017
	Consolidated Total			Consolidated Total			Percentage % Change
Selected Financial Information (1)
(dollars in thousands)
Homes closed		1,053			851			24	%
Home sales revenue	$	533,514		$	490,304			9	%
Cost of sales (excluding interest and purchase accounting adjustments)		(410,908	)		(378,777	)		8	%
Adjusted homebuilding gross margin (2)	$	122,606		$	111,527			10	%
Adjusted homebuilding gross margin percentage (2)		23.0	%		22.7	%		1	%
Interest in cost of sales		(21,548	)		(22,923	)		(6	%)
Purchase accounting adjustments		(3,855	)		—			N/M
Gross margin	$	97,203		$	88,604			10	%
Gross margin percentage		18.2	%		18.1	%		1	%
Number of homes closed
California		301			300			0	%
Arizona		108			133			(19	%)
Nevada		80			74			8	%
Colorado		124			44			182	%
Washington		118			116			2	%
Oregon		159			184			(14	%)
Texas		163			—			N/M
Total		1,053			851			24	%
Average sales price of homes closed
California	$	668,800		$	769,800			(13	%)
Arizona		317,500			297,800			7	%
Nevada		622,700			580,600			7	%
Colorado		440,100			563,900			(22	%)
Washington		686,300			618,900			11	%
Oregon		436,700			435,900			0	%
Texas		264,400			—			N/M
Company Average	$	506,700		$	576,200			(12	%)
Number of net new home orders
California		295			238			24	%
Arizona		118			124			(5	%)
Nevada		94			66			42	%
Colorado		100			82			22	%
Washington		77			116			(34	%)
Oregon		145			148			(2	%)
Texas		172			—			N/M
Total		1,001			774			29	%
Average number of sales locations during period
California		36			23			57	%
Arizona		6			7			(14	%)
Nevada		15			13			15	%
Colorado		12			16			(25	%)
Washington		10			11			(9	%)
Oregon		15			16			(6	%)
Texas		22			—			N/M
Total		116			86			35	%

(1) For the 2018 period presented, the Company is reporting in seven segments: California, Arizona, Nevada, Colorado, Washington, Oregon, and Texas. Texas is a new reporting segment resulting from the RSI Acquisition completed in 2018. For the 2017 period presented, the Company reported in six segments: California, Arizona, Nevada, Colorado, Washington, and Oregon.

(2) Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. It is used by management in evaluating operating performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. We believe this information is meaningful as it isolates the impact that interest and purchase accounting adjustments have on homebuilding gross margin and allows investors to make better comparisons with our competitors.

WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

	Nine Months Ended September 30,
	2018			2017
	Consolidated			Consolidated			Percentage %
	Total			Total			Change
Selected Financial Information (1)
(dollars in thousands)
Homes closed		2,875			2,181			32	%
Home sales revenue	$	1,424,331		$	1,171,791			22	%
Cost of sales (excluding interest and purchase accounting adjustments)		(1,096,535	)		(917,992	)		19	%
Adjusted homebuilding gross margin (2)	$	327,796		$	253,799			29	%
Adjusted homebuilding gross margin percentage (2)		23.0	%		21.7	%		6	%
Interest in cost of sales		(62,681	)		(55,220	)		14	%
Purchase accounting adjustments		(9,975	)		—			N/M
Gross margin	$	255,140		$	198,579			28	%
Gross margin percentage		17.9	%		16.9	%		6	%
Number of homes closed
California		779			637			22	%
Arizona		336			408			(18	%)
Nevada		245			175			40	%
Colorado		362			140			159	%
Washington		350			292			20	%
Oregon		403			529			(24	%)
Texas		400			—			N/M
Total		2,875			2,181			32	%
Average sales price of homes closed
California	$	655,400		$	725,600			(10	%)
Arizona		312,800			290,900			8	%
Nevada		592,700			591,100			0	%
Colorado		433,900			551,100			(21	%)
Washington		628,900			635,400			(1	%)
Oregon		452,900			424,900			7	%
Texas		259,400			—			N/M
Company Average	$	495,400		$	537,300			(8	%)
Number of net new home orders
California		915			783			17	%
Arizona		344			401			(14	%)
Nevada		318			236			35	%
Colorado		404			229			76	%
Washington		392			432			(9	%)
Oregon		553			575			(4	%)
Texas		451			—			N/M
Total		3,377			2,656			27	%
Average number of sales locations during period
California		29			23			26	%
Arizona		6			8			(25	%)
Nevada		13			13			0	%
Colorado		14			14			0	%
Washington		9			9			0	%
Oregon		15			18			(17	%)
Texas		16			—			N/M
Total		102			85			20	%

(1) For the 2018 period presented, the Company is reporting in seven segments: California, Arizona, Nevada, Colorado, Washington, Oregon, and Texas. Texas is a new reporting segment resulting from the RSI Acquisition completed in 2018. For the 2017 period presented, the Company reported in six segments: California, Arizona, Nevada, Colorado, Washington, and Oregon.

(2) Adjusted homebuilding gross margin is a financial measure that is not prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. It is used by management in evaluating operating performance and in making strategic decisions regarding sales pricing, construction and development pace, product mix and other operating decisions. We believe this information is meaningful as it isolates the impact that interest and purchase accounting adjustments have on homebuilding gross margin and allows investors to make better comparisons with our competitors.

WILLIAM LYON HOMES

SELECTED FINANCIAL AND OPERATING INFORMATION

(unaudited)

	As of September 30,
	2018		2017
	Consolidated		Consolidated		Percentage %
	Total		Total		Change
Backlog of homes sold but not closed at end of period
California		451		370		22	%
Arizona		169		197		(14	%)
Nevada		159		120		33	%
Colorado		214		164		30	%
Washington		133		192		(31	%)
Oregon		222		165		35	%
Texas		248		—		N/M
Total		1,596		1,208		32	%
Dollar amount of homes sold but not closed at end of period (in thousands)
California	$	327,838	$	294,861		11	%
Arizona		53,585		60,467		(11	%)
Nevada		94,053		81,192		16	%
Colorado		92,315		69,085		34	%
Washington		83,256		119,299		(30	%)
Oregon		81,270		74,424		9	%
Texas		68,267		—		N/M
Total	$	800,584	$	699,328		14	%
Lots owned and controlled at end of period
Lots owned (1)
California		3,648		1,616		126	%
Arizona		3,756		4,541		(17	%)
Nevada		2,745		2,871		(4	%)
Colorado		1,006		1,376		(27	%)
Washington		1,538		1,363		13	%
Oregon		2,613		1,806		45	%
Texas		3,199		—		N/M
Total		18,505		13,573		36	%
Lots controlled
California		1,709		915		87	%
Arizona		651		157		N/M
Nevada		—		410		(100	%)
Colorado		2,368		292		711	%
Washington		710		797		(11	%)
Oregon		1,307		1,800		(27	%)
Texas		3,885		—		N/M
Total		10,630		4,371		143	%
Total lots owned and controlled
California		5,357		2,531		112	%
Arizona		4,407		4,698		(6	%)
Nevada		2,745		3,281		(16	%)
Colorado		3,374		1,668		102	%
Washington		2,248		2,160		4	%
Oregon		3,920		3,606		9	%
Texas		7,084		—		N/M
Total		29,135		17,944		62	%

(1) Certain lots in California and Texas are consolidated on the Company’s accompanying balance sheet in accordance with FASB ASC Topic 470, Debt (“ASC 470”). Included in lots owned are 876 lots in California and 1,646 lots in Texas that are associated with a land banking transaction that is consolidated on the Company’s accompanying balance sheet in accordance with ASC 470.

WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

	Three			Three			Nine			Nine
	Months			Months			Months			Months
	Ended			Ended			Ended			Ended
	September 30,			September 30,			September 30,			September 30,
	2018			2017			2018			2017
Net income available to common stockholders	$	26,558		$	27,418		$	57,341		$	36,372
Net income, adjusted for transaction expenses and loss on extinguishment of debt, net of tax benefit (1)	$	26,558		$	27,418		$	60,408		$	50,448
Net cash used in (provided by) operating activities	$	(55,046	)	$	43,822		$	(184,996	)	$	(22,990	)
Interest incurred	$	24,725		$	18,112		$	66,791		$	56,358
Adjusted EBITDA (2)	$	66,175		$	67,821		$	170,302		$	137,821
Adjusted EBITDA Margin (3)		12.4	%		13.8	%		11.9	%		11.8	%
Ratio of adjusted EBITDA to interest incurred		2.7			3.7			2.5			2.4

Balance Sheet Data
	September 30,			December 31,
	2018			2017
Cash and cash equivalents	$	50,782		$	182,710
Total William Lyon Homes stockholders’ equity		829,218			780,472
Noncontrolling interests		168,609			80,158
Total debt		1,516,249			1,030,184
Total capital	$	2,514,076		$	1,890,814
Ratio of debt to total capital		60.3	%		54.5	%
Ratio of net debt to total capital (net of cash)		59.5	%		49.6	%

WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

(1) Adjusted net income means net income available to common stockholders plus transaction expenses and loss for the extinguishment of the 8.5% Senior Notes. Adjusted net income is not a financial measure prepared in accordance with U.S. GAAP. Adjusted net income is presented herein because management believes the presentation of adjusted net income provides useful information to the Company’s investors regarding the Company’s results of operations because adjusted net income isolates the impact of the one-time, non-recurring transaction expenses and infrequent extinguishment fees. Adjusted net income should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of net income available to common stockholders to adjusted net income is provided in the following table:

	Nine			Nine
	Months			Months
	Ended			Ended
	September 30,			September 30,
	2018			2017
Net income available to common stockholders	$	57,341		$	36,372
Add: Transaction expenses		3,907			—
Less: Income tax benefit applicable to transaction expenses		(840	)		—
Add: Loss on extinguishment of debt		—			21,828
Less: Income tax benefit applicable to loss on extinguishment of debt		—			(7,752	)
Net income, adjusted for transaction expenses and loss on extinguishment of debt, net of tax benefits	$	60,408		$	50,448
Diluted weighted average common shares outstanding		39,581,986			38,381,292
Adjusted net income excluding noncontrolling interest per diluted share	$	1.53		$	1.31

WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

(2) Adjusted EBITDA means net income available to common stockholders plus (i) provision for income taxes, (ii) interest expense, (iii) amortization of capitalized interest included in cost of sales, (iv) stock based compensation, (v) depreciation and amortization, (vi) non-cash purchase accounting adjustments, (vii) cash distributions of income from unconsolidated joint ventures, (viii) equity in income of unconsolidated joint ventures, (ix) transaction expenses, and (x) loss on extinguishment of debt. Other companies may calculate adjusted EBITDA differently. Adjusted EBITDA is not a financial measure prepared in accordance with U.S. GAAP. Adjusted EBITDA is presented herein because management believes the presentation of adjusted EBITDA provides useful information to the Company’s investors regarding the Company’s financial condition and results of operations because adjusted EBITDA is a widely utilized indicator of a company’s operating performance. Adjusted EBITDA should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of net income available to common stockholders to adjusted EBITDA is provided in the following table:

	Three			Three			Nine			Nine
	Months			Months			Months			Months
	Ended			Ended			Ended			Ended
	September 30,			September 30,			September 30,			September 30,
	2018			2017			2018			2017
Net income available to common stockholders	$	26,558		$	27,418		$	57,341		$	36,372
Provision for income taxes		8,990			13,905			19,580			17,480
Interest expense
Interest incurred		24,725			18,112			66,791			56,358
Interest capitalized		(24,725	)		(18,112	)		(66,791	)		(56,358	)
Amortization of capitalized interest included in cost of sales		22,009			22,940			63,227			55,237
Stock based compensation		2,406			3,045			7,593			6,260
Depreciation and amortization		1,807			535			5,779			1,426
Non-cash purchase accounting adjustments		3,855			—			9,975			—
Cash distributions of income from unconsolidated joint ventures		1,081			1,138			4,896			1,840
Equity in income of unconsolidated joint ventures		(531	)		(1,160	)		(1,996	)		(2,622	)
Transaction expenses		—			—			3,907			—
Loss on extinguishment of debt		—			—			—			21,828
Adjusted EBITDA	$	66,175		$	67,821		$	170,302		$	137,821

WILLIAM LYON HOMES

SUPPLEMENTAL FINANCIAL INFORMATION

(dollars in thousands)

(unaudited)

(3) Calculated as Adjusted EBITDA as a percentage of operating revenue.

Adjusted pre-tax income means income before provision for income taxes plus transaction expenses and loss for the extinguishment of the 8.5% Senior Notes. Adjusted pre-tax income is not a financial measure prepared in accordance with U.S. GAAP. Adjusted pre-tax income is presented herein because management believes the presentation of adjusted pre-tax income provides useful information to the Company’s investors regarding the Company’s results of operations because adjusted pre-tax income isolates the impact of the one-time, non-recurring transaction expenses and infrequent extinguishment fees. Adjusted pre-tax income should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. A reconciliation of income before provision for income taxes to adjusted pre-tax income is provided in the following table:

	Nine		Nine
	Months		Months
	Ended		Ended
	September 30,		September 30,
	2018		2017
Income before provision for income taxes	$	91,218	$	58,495
Add: Transaction expenses		3,907		—
Loss on extinguishment of debt		—		21,828
Pre-tax income, adjusted for transaction expenses and loss on extinguishment of debt	$	95,125	$	80,323

EX-99.2

Board of Directors Meeting Q3 2017 2018 Q3 Earnings Call October 30, 2018, 9:00 am PT Exhibit 99.2

Forward Looking Statements and Non-GAAP Information Certain statements contained in this presentation, in the Company’s press release and the accompanying comments during our conference call that are not historical information may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, including, but not limited to, forward-looking statements related to: anticipated pre-tax income, gross margin performance, backlog conversion rates, operating and financial results for the fourth quarter of 2018 and beyond, community count growth and project performance, market and industry trends, the continued housing market recovery, average sale price of homes to be closed in various periods, SG&A percentage, future cash needs and liquidity, minority interest from our homebuilding joint ventures, leverage ratios and reduction strategies, land acquisition spending, financial services and ancillary business performance and strategies; the anticipated financial or operational performance resulting from the RSI Communities transaction, and estimated new home deliveries, home sales revenue and community count on a combined Company basis. The forward-looking statements involve risks and uncertainties and actual results may differ materially from those projected or implied. The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Further, certain forward-looking statements are based on assumptions of future events which may not prove to be accurate. Factors that may impact such forward-looking statements include, among others: changes in mortgage and other interest rates; affordability pressures; the Company’s ability to successfully integrate RSI Communities’ homebuilding operations with its existing operations; adverse weather conditions; the availability of labor and homebuilding materials and increased construction cycle times; our financial leverage and level of indebtedness and any inability to comply with financial and other covenants under our debt instruments; continued volatility and worsening in general economic conditions either internationally, nationally or in regions in which we operate; increased housing supply in our markets; increased outside broker costs; increased costs of homebuilding materials; changes in governmental laws and regulations and compliance, increased costs, fees and delays associated therewith; government actions, policies, programs and regulations directed at or affecting the housing market (including the Tax Cuts and Jobs Act (“TCJA”), the Dodd-Frank Act, tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities; changes in existing tax laws or enacted corporate income tax rates, including pursuant to the TCJA; worsening in markets for residential housing; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; defects in manufactured products or other homebuilding materials; decline in real estate values resulting in impairment of our real estate assets; volatility in the banking industry, credit and capital markets; restraints on foreign investment; terrorism or other hostilities involving the United States and other geopolitical risk as well as restrictive policies such as tariffs or capital investment restrictions; building moratorium or “slow-growth” or “no-growth” initiatives that could be implemented in states in which we operate; conditions in the capital, credit and financial markets, including mortgage lending standards and the availability of and timing mortgage financing; changes in generally accepted accounting principles or interpretations of those principles; competition for home sales from other sellers of new and resale homes; cancellations and our ability to realize our backlog; the occurrence of events such as landslides, soil subsidence and earthquakes that are uninsurable, not economically insurable or not subject to effective indemnification agreements; limitations on our ability to utilize our tax attributes; whether an ownership change occurred that could, under certain circumstances, have resulted in the limitation of our ability to offset prior years’ taxable income with net operating losses; the timing of receipt of regulatory approvals and the opening of projects; the availability and cost of land for future development; and additional factors discussed under the sections captioned “Risk Factors” included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business. This presentation contains certain supplemental financial measures that are not calculated pursuant to U.S. GAAP. These non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation of non-GAAP measures to GAAP measures is contained in the Appendix to this presentation. A copy of the press release reporting the Company’s financial results for the three months ended September 30, 2018 is available on the Company's website at www.lyonhomes.com.

Management Presenters William H. Lyon Chairman of the Board and Executive Chairman Matthew R. Zaist President and Chief Executive Officer Colin T. Severn Senior Vice President and Chief Financial Officer

2018 Sales Volume Total Net Orders by Month (Units) 2017 2018 Avg. Sales Locations: 81 78 83 77 83 97 90 106 89 107 86 108 88 112 86 117 85 119 81 80 78 Monthly Absorption Rate: 2.8 4.0 3.4 4.3 4.3 4.7 4.8 4.5 3.2 3.3 3.5 4.0 3.0 2.9 2.9 3.0 3.0 2.8 3.3 2.8 2.3 % y-o-y change: +38% +17% +30% +11% +26% +43% +21% +39% +29%

Year over Year Comparisons % y-o-y change: +19% +28% +25% +29% % y-o-y change: +1% +2% +22% +35% % y-o-y change: +17% +26% +3% (3%) Net New Orders (Units) Orders Value (In Millions) Average Community Count Monthly Order Absorption Rate/Avg. Community % y-o-y change: +24% +33% +12% +8% Order ASP ($ In Thousands) $504 $523 $523 $545 $545 $491 $550 $457 ¢ 2016 ¢ 2017 ¢ 2018

% y-o-y change: +32% +44% +23% +9% Year over Year Comparisons (continued) % y-o-y change: +17% +48% +30% +24% Homes Closed Homebuilding Revenue ($ Million) Bps y-o-y change: +190bps +190bps +140bps +10bps Gross Margin (GAAP) Closings ASP ($ In Thousands) $525 $589 $519 $503 $509 $479 $576 $507 ¢ 2016 ¢ 2017 ¢ 2018 % y-o-y change: +54% +169% +21% (7%) Pre-Tax Income ($ Million) As adjusted: Excludes RSI transaction expenses As adjusted: Excludes loss on extinguishment of debt (1) (2) (1)

Q3 and YTD 2018 Summary Results As adjusted: Excludes RSI transaction expenses As adjusted: Excludes loss on extinguishment of debt Q3 adjusted numbers represent GAAP numbers

Backlog Growth – Year over Year Q3 2017 Value $801M Homes 1,596 ASP $502k Units 32% ASP (13%) $ Value 14% Q3 2018 Value $699M Homes 1,208 ASP $579k

Backlog Conversion Rate Backlog Conversion Rate - Quarterly (1) WLH stand alone (excludes RSI activity)

ASP by Buyer Type ($ in ‘000s) Units by Buyer Type Buyer Type Segmentation Buyer Type – Q3 2018 Homes Closed Price Range – Q3 2018 Home Closings and Backlog Home Closings - Units Backlog - Uni ts ASP: $507k Buyer Type – Q3 2018 Ending Backlog ASP by Buyer Type ($ in ‘000s) Units by Buyer Type Lots Owned and Controlled by Buyer Type at 9/30/18 ASP: $502k

Evolution of Market Segmentation and Geographic Diversification 2013 Buyer Type - Homes Closed Buyer Type - Homes in Backlog at 9/30/18 2013 2016 2018 YTD Q3 Average Community Count by Market 2016

Strong New Order Growth – Dollars Trailing Twelve Months Dollar value of new home orders of $2.0 billion TTM Q3, an increase of 19% over the prior year and up 51% over a two year period. Up 19% Y-o-Y Trailing Twelve Months Dollar Value of Orders (In Millions)

Land Portfolio and Lot Count as of 9/30/18 Lots Inventory Summary Total lots owned and controlled vs. years of land supply Total Lots by Region (Units) Avg. Community Count – Q3’18

Appendix

Adjusted Pre-Tax Income

Adjusted Net Income and Adjusted Diluted EPS

Adjusted EBITDA