16. Supplemental Guarantor Information

In May 2014, we completed a private offering of $200.0 million in aggregate principal amount of our 6.875% senior notes due 2022 (which we refer to as the “Initial Senior Notes”). In February 2015, we completed an offer to exchange $200.0 million in aggregate principal amount of our 6.875% Senior Notes due 2022, which are registered under the Securities Act (which we refer to as the “Initial Exchange Notes”), for all of the Initial Senior Notes sold and issued in the May 2014 private offering. The terms of the Initial Exchange Notes are identical in all material respects to the Initial Senior Notes, except that the Initial Exchange Notes are registered under the Securities Act and the transfer restrictions, registration rights, and additional interest provisions applicable to the Initial Senior Notes do not apply to the Initial Exchange Notes.

In April 2015, we completed a private offering of an additional $60 million in aggregate principal amount of our 6.875% senior notes due 2022 (which we refer to as the “Additional Senior Notes”). The Additional Senior Notes are additional notes issued under the indenture pursuant to which the Initial Senior Notes and Initial Exchange Notes were issued. The Initial Exchange Notes and the Additional Senior Notes have substantially identical terms and are treated as a single series of notes under the indenture. We refer to the Initial Exchange Notes and the Additional Senior Notes, collectively, as the “Senior Notes.”

The Senior Notes are unsecured senior obligations of the Company (which we refer to as “CCS”), which are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our operating subsidiaries (which we refer to as “Guarantors”), which are wholly owned subsidiaries of the Company.

The Indenture governing the Senior Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a “Restricted Subsidiary” (as defined in the Indenture), which sale, transfer, exchange or other disposition does not constitute an “Asset Sale” (as defined in the Indenture) or is made in compliance with applicable provisions of the Indenture; (2) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the assets of such Guarantor, which sale, transfer, exchange or other disposition does not constitute an Asset Sale or is made in compliance with applicable provisions of the Indenture; provided, that after such sale, transfer, exchange or other disposition, such Guarantor is an “Immaterial Subsidiary” (as defined in the Indenture); (3) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the Indenture; provided that if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the Indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the Indenture; (4) upon the designation of such Guarantor as an “Unrestricted Subsidiary” (as defined in the Indenture), in accordance with the Indenture; (5) if the Company exercises its legal defeasance option or covenant defeasance option under the Indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the Indenture, upon such exercise or discharge; or (6) in connection with the dissolution of such Guarantor under applicable law in accordance with the Indenture.

As the guarantees were made in connection with the May 2014 private offering of the Initial Senior Notes and April 2015 private offering of the Additional Senior Notes, the Guarantors’ condensed financial information is presented as if the guarantees existed during the periods presented. If any Guarantors are released from the guarantees in future periods, the changes are reflected prospectively.

We have determined that separate, full financial statements of the Guarantors would not be material to investors and, accordingly, supplemental financial information is presented below:



	Supplemental Condensed Consolidated Balance Sheet
	As of September 30, 2015 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Assets
Cash and cash equivalents	$	4,155	$	8,630	$	—	$	—	$	12,785
Accounts receivable		2,260		27,301		—		—		29,561
Investment in subsidiaries		743,534		—		—		(743,534)		—
Inventories		—		741,554		—		—		741,554
Prepaid expenses and other assets		9,348		27,286		—		—		36,634
Property and equipment, net		802		6,563		—		—		7,365
Deferred tax asset, net		5,363		—		—		—		5,363
Amortizable intangible assets, net		—		5,428		—		—		5,428
Goodwill		—		21,365		—		—		21,365
Total assets	$	765,462	$	838,127	$	—	$	(743,534)	$	860,055
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	121	$	8,182	$	—	$	—	$	8,303
Accrued expenses and other liabilities		12,622		81,862		—		—		94,484
Notes payable and revolving line of credit		357,777		4,549		—		—		362,326
Total liabilities		370,520		94,593		—		—		465,113
Stockholders’ equity:		394,942		743,534		—		(743,534)		394,942
Total liabilities and stockholders’ equity	$	765,462	$	838,127	$	—	$	(743,534)	$	860,055



	Supplemental Condensed Consolidated Balance Sheet
	As of December 31, 2014 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Assets
Cash and cash equivalents	$	22,710	$	10,752	$	—	$	—	$	33,462
Accounts receivable		1,202		12,597		—		—		13,799
Investment in subsidiaries		558,177		—		—		(558,177)		—
Inventories		—		556,323		—		—		556,323
Prepaid expenses and other assets		7,286		21,510		—		—		28,796
Property and equipment, net		641		11,830		—		—		12,471
Deferred tax asset, net		1,359		—		—		—		1,359
Amortizable intangible assets, net		—		8,632		—		—		8,632
Goodwill		—		21,137		—		—		21,137
Total assets	$	591,375	$	642,781	$	—	$	(558,177)	$	675,979
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	70	$	17,065	$	—	$	—	$	17,135
Accrued expenses and other liabilities		7,495		56,534		—		—		64,029
Notes payable and revolving line of credit		218,605		11,005		—		—		229,610
Total liabilities		226,170		84,604		—		—		310,774
Stockholders’ equity:		365,205		558,177		—		(558,177)		365,205
Total liabilities and stockholders’ equity	$	591,375	$	642,781	$	—	$	(558,177)	$	675,979



		Supplemental Condensed Consolidated Statement of Operations
	For the Three Months Ended September 30, 2015 (in thousands)
				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenue
Home sales revenues		$	—	$	179,775	$	—	$	—	$	179,775
Land sales revenues			—		2,257		—		—		2,257
Golf course and other revenue			—		700		—		—		700
Total revenue			—		182,732		—		—		182,732
Costs and expenses
Cost of homes sales revenues			—		141,452		—		—		141,452
Cost of land sales revenues			—		2,250		—		—		2,250
Cost of golf course and other revenue			—		1,046		—		—		1,046
Selling, general and administrative			4,827		17,348		—		—		22,175
Total operating costs and expenses			4,827		162,096		—		—		166,923
Operating income			(4,827)		20,636		—		—		15,809
Other income (expense)
Equity in earnings from consolidated subsidiaries			13,707		—		—		(13,707)		—
Interest income			7		44		—		—		51
Interest expense			—		(2)		—		—		(2)
Acquisition expense			(323)		—		—		—		(323)
Other income			—		434		—		—		434
Loss on disposition of assets			—		(24)		—		—		(24)
Income before income tax expense			8,564		21,088		—		(13,707)		15,945
Income tax expense			(2,019)		7,381		—		—		5,362
Net income		$	10,583	$	13,707	$	—	$	(13,707)	$	10,583



	Supplemental Condensed Consolidated Statement of Operations
	For the Three Months Ended September 30, 2014 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS

Revenue
Home sales revenues	$	—	$	90,735	$	—	$	—	$	90,735
Land sales revenues		—		—		—		—		—
Golf course and other revenue		—		1,226		—		—		1,226
Total revenue		—		91,961		—		—		91,961
Cost of home sale revenues
Cost of homes sales revenues		—		70,896		—		—		70,896
Cost of land sales revenues		—		—		—		—		—
Cost of golf course and other revenue		—		2,175		—		—		2,175
Selling, general and administrative		3,803		8,781		—		—		12,584
Total operating costs and expenses		3,803		81,852		—		—		85,655
Operating income		(3,803)		10,109		—		—		6,306
Other income (expense)
Equity in earnings from consolidated subsidiaries		6,503		—		—		(6,503)		—
Interest income		130		—		—		—		130
Interest expense		—		(2)		—		—		(2)
Acquisition expense		(119)		—		—		—		(119)
Other income		—		327		—		—		327
Gain on disposition of assets		—		55		—		—		55
Income before income tax expense		2,711		10,489		—		(6,503)		6,697
Income tax expense		(1,416)		3,986		—		—		2,570
Net income	$	4,127	$	6,503	$	—	$	(6,503)	$	4,127



		Supplemental Condensed Consolidated Statement of Operations
	For the Nine Months Ended September 30, 2015 (in thousands)
				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenue
Home sales revenues		$	—	$	520,918	$	—	$	—	$	520,918
Land sales revenues			—		2,627		—		—		2,627
Golf course and other revenue			—		4,679		—		—		4,679
Total revenue			—		528,224		—		—		528,224
Costs and expenses
Cost of homes sales revenues			—		416,483		—		—		416,483
Cost of land sales revenues			—		2,615		—		—		2,615
Cost of golf course and other revenue			—		4,214		—		—		4,214
Selling, general and administrative			15,267		50,652		—		—		65,919
Total operating costs and expenses			15,267		473,964		—		—		489,231
Operating income			(15,267)		54,260		—		—		38,993
Other income (expense)
Equity in earnings from consolidated subsidiaries			36,054		—		—		(36,054)		—
Interest income			37		51		—		—		88
Interest expense			—		(8)		—		—		(8)
Acquisition expense			(338)		—		—		—		(338)
Other income			—		1,059		—		—		1,059
Gain on disposition of assets			—		106		—		—		106
Income before income tax expense			20,486		55,468		—		(36,054)		39,900
Income tax expense			(6,246)		19,414		—		—		13,168
Net income		$	26,732	$	36,054	$	—	$	(36,054)	$	26,732



	Supplemental Condensed Consolidated Statement of Operations
	For the Nine Months Ended September 30, 2014 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS

Revenue
Home sales revenues	$	—	$	217,734	$	—	$	—	$	217,734
Land sales revenues		—		—		—		—		—
Golf course and other revenue		—		3,750		—		—		3,750
Total revenue		—		221,484		—		—		221,484
Cost of home sale revenues
Cost of homes sales revenues		—		166,367		—		—		166,367
Cost of land sales revenues		—		—		—		—		—
Cost of golf course and other revenue		—		4,329		—		—		4,329
Selling, general and administrative		8,993		21,913		—		—		30,906
Total operating costs and expenses		8,993		192,609		—		—		201,602
Operating income		(8,993)		28,875		—		—		19,882
Other income (expense)
Equity in earnings from consolidated subsidiaries		19,101		—		—		(19,101)		—
Interest income		267		—		—		—		267
Interest expense		—		(13)		—		—		(13)
Acquisition expense		(923)		—		—		—		(923)
Other income		—		585		—		—		585
Gain on disposition of assets		—		145		—		—		145
Income before income tax expense		9,452		29,592		—		(19,101)		19,943
Income tax expense		(3,382)		10,491		—		—		7,109
Net income	$	12,834	$	19,101	$	—	$	(19,101)	$	12,834



	Supplemental Condensed Consolidated Statement of Cash Flows
	For the Nine Months Ended September 30, 2015 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Net cash used in operating activities	$	(5,168)	$	(141,735)	$	—	$	—	$	(146,903)
Net cash used in investing activities	$	(148,667)	$	(2,398)	$	—	$	148,378	$	(2,687)
Financing activities
Borrowings under revolving credit facilities	$	135,000	$	—	$	—	$	—	$	135,000
Payments on revolving credit facilities		(55,000)		—		—		—		(55,000)
Proceeds from issuance of senior notes		58,956		—		—		—		58,956
Proceeds from issuance of notes payable		—		448		—		—		448
Principal payments on notes payable		—		(6,815)		—		—		(6,815)
Debt issuance costs		(2,817)		—		—		—		(2,817)
Repurchases of common stock upon vesting of restricted stock awards		(859)		—		—		—		(859)
Payments from (and advances to) parent/subsidiary		—		148,378		—		(148,378)		—
Net cash provided by financing activities	$	135,280	$	142,011	$	—	$	(148,378)	$	128,913
Net decrease in cash and cash equivalents	$	(18,555)	$	(2,122)	$	—	$	—	$	(20,677)
Cash and cash equivalents
Beginning of period	$	22,710	$	10,752	$	—	$		$	33,462
End of period	$	4,155	$	8,630	$	—	$	—	$	12,785



	Supplemental Condensed Consolidated Statement of Cash Flows
	For the Nine Months Ended September 30, 2014 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS

Net cash used in operating activities	$	(767)	$	(108,504)	$	—	$	—	$	(109,271)
Net cash used in investing activities	$	(287,323)	$	(178,628)	$	—	$	287,323	$	(178,628)
Financing activities
Borrowings under revolving credit facilities	$	99,000	$	—	$	—	$	—	$	99,000
Payments on revolving credit facilities		(99,000)		—		—				(99,000)
Proceeds from issuance of senior notes		198,478		—						198,478
Proceeds from issuance of notes payable		—		5,894		—				5,894
Principal payments on notes payable		—		(1,562)		—		—		(1,562)
Debt issuance costs		(5,132)		—		—		—		(5,132)
Net proceeds from issuances of common stock		81,890				—				81,890
Excess tax benefit on stock-based compensation		37								37
Payments from (and advances to) parent/subsidiary		—		287,323		—		(287,323)		—
Net cash provided by financing activities	$	275,273	$	291,655	$	—	$	(287,323)	$	279,605
Net increase (decrease) in cash and cash equivalents	$	(12,817)	$	4,523	$	—	$	—	$	(8,294)
Cash and cash equivalents
Beginning of period		106,614		3,384		—		—		109,998
End of period	$	93,797	$	7,907	$	—	$	—	$	101,704