17. 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 “April 2015 Senior Notes”). In October 2015, we completed an offer to exchange $60.0 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 “October 2015 Exchange Notes”), for all of the April 2015 Senior Notes. The terms of the October 2015 Exchange Notes are identical in all material respects to the April 2015 Senior Notes, except that the October 2015 Exchange Notes are registered under the Securities Act and the transfer restrictions, registration rights, and additional interest provisions applicable to the April 2015 Senior Notes do not apply to the October 2015 Exchange Notes.

In January 2017, we completed a private offering of an additional $125 million in aggregate principal amount of our 6.875% senior notes due 2022 (which we refer to as the “January 2017 Senior Notes”) in reliance on Rule 144A and Regulation S under the Securities Act. The January 2017 Senior Notes are additional notes issued under the Indenture pursuant to which the Initial Exchange Notes and the October 2015 Exchange Notes (collectively, the “Existing Notes”) were issued. The January 2017 Senior Notes and the Existing Notes will be treated as a single series of notes under the Indenture, and will vote as a single class of notes for all matters submitted to a vote of holders under the Indenture.

The January 2017 Senior Notes and the Existing Notes are our unsecured senior obligations, and are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by substantially all of our direct and indirect wholly-owned operating subsidiaries (which we refer to as “Guarantors”).

The Indenture governing the January 2017 Senior Notes and the Existing 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 February 2015 exchange offer for the Initial Exchange Notes, the October 2015 exchange offer for the October 2015 Exchange Notes, and the issuance of the January 2017 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 March 31, 2017 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Assets
Cash and cash equivalents	$	12,972	$	4,590	$	5,903	$	—	$	23,465
Cash held in escrow		—		17,216		—		—		17,216
Accounts receivable		115		6,781		141		—		7,037
Investment in consolidated subsidiaries		912,505		—		—		(912,505)		—
Inventories		—		884,072		—		—		884,072
Prepaid expenses and other assets		12,759		27,277		223		—		40,259
Property and equipment, net		1,647		9,569		149		—		11,365
Investment in unconsolidated subsidiaries		18,680		—		—		—		18,680
Amortizable intangible assets, net		—		2,567		—		—		2,567
Goodwill		—		21,365		—		—		21,365
Total assets	$	958,678	$	973,437	$	6,416	$	(912,505)	$	1,026,026
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	(24)	$	8,283	$	21	$	—	$	8,280
Accrued expenses and other liabilities		18,256		54,561		66		—		72,883
Deferred tax liability		450		—		—		—		450
Notes payable and revolving line of credit		443,531		4,417		—		—		447,948
Total liabilities		462,213		67,261		87		—		529,561
Stockholders’ equity:		496,465		906,176		6,329		(912,505)		496,465
Total liabilities and stockholders’ equity	$	958,678	$	973,437	$	6,416	$	(912,505)	$	1,026,026


	Supplemental Condensed Consolidated Balance Sheet
	As of December 31, 2016 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Assets
Cash and cash equivalents	$	14,637	$	8,646	$	6,167	$	—	$	29,450
Cash held in escrow		—		20,044		—		—		20,044
Accounts receivable		2,980		2,749		—		—		5,729
Investment in consolidated subsidiaries		884,665		—		—		(884,665)		—
Inventories		—		857,885		—		—		857,885
Prepaid expenses and other assets		14,628		25,662		167		—		40,457
Property and equipment, net		1,166		10,224		22		—		11,412
Investment in unconsolidated subsidiaries		18,275		—						18,275
Amortizable intangible assets, net		—		2,911		—		—		2,911
Goodwill		—		21,365		—		—		21,365
Total assets	$	936,351	$	949,486	$	6,356	$	(884,665)	$	1,007,528
Liabilities and stockholders’ equity
Liabilities:
Accounts payable	$	257	$	15,575	$	(124)	$	—	$	15,708
Accrued expenses and other liabilities		12,587		49,697		30		—		62,314
Deferred tax liability		1,782		—		—		—		1,782
Notes payable and revolving line of credit		448,089		5,999		—		—		454,088
Total liabilities		462,715		71,271		(94)		—		533,892
Stockholders’ equity:		473,636		878,215		6,450		(884,665)		473,636
Total liabilities and stockholders’ equity	$	936,351	$	949,486	$	6,356	$	(884,665)	$	1,007,528



		Supplemental Condensed Consolidated Statement of Operations
	For the Three Months Ended March 31, 2017 (in thousands)
				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenues
Homebuilding revenues
Home sales revenues		$	—	$	226,420	$	—	$	—	$	226,420
Land sales and other revenues			—		1,896		241		(241)		1,896
			—		228,316		241		(241)		228,316
Financial services revenue
Total revenues			—		228,316		241		(241)		228,316
Homebuilding cost of revenues
Cost of homes sales revenues			—		(182,324)		—		—		(182,324)
Cost of land sales and other revenues			—		(1,144)		—		—		(1,144)
			—		(183,468)		—		—		(183,468)
Financial services costs			—		—		(754)		—		(754)
Selling, general and administrative			(9,948)		(23,264)		—		—		(33,212)
Equity in earnings from consolidated subsidiaries			13,541		—		—		(13,541)		—
Equity in income from unconsolidated subsidiaries			1,255		—		—		—		1,255
Other income (expense)			(474)		351		37		—		(86)
Income before income tax expense			4,374		21,935		(476)		(13,782)		12,051
Income tax expense			4,425		(7,677)		—		—		(3,252)
Net income		$	8,799	$	14,258	$	(476)	$	(13,782)	$	8,799


		Supplemental Condensed Consolidated Statement of Operations
	For the Three Months Ended March 31, 2016 (in thousands)

				Guarantor		Non Guarantor		Elimination		Consolidated
		CCS		Subsidiaries		Subsidiaries		Entries		CCS
Revenues
Homebuilding revenues
Home sales revenues		$	—	$	181,081	$	—	$	—	$	181,081
Land sales and other revenues			—		3,015		—		—		3,015
			—		184,096		—		—		184,096
Financial services revenue			—		—		—		—		—
Total revenues			—		184,096		—		—		184,096
Homebuilding cost of revenues
Cost of homes sales revenues			—		(144,353)		—		—		(144,353)
Cost of land sales and other revenues			—		(2,542)		—		—		(2,542)
			—		(146,895)		—		—		(146,895)
Financial services costs			—		—		—		—		—
Selling, general and administrative			(5,392)		(19,793)		—		—		(25,185)
Equity in earnings from consolidated subsidiaries			11,689		—		—		(11,689)		—
Other income (expense)			(162)		575		—		—		413
Income before income tax expense			6,135		17,983		—		(11,689)		12,429
Income tax expense			1,848		(6,294)		—		—		(4,446)
Net income		$	7,983	$	11,689	$	—	$	(11,689)	$	7,983



	Supplemental Condensed Consolidated Statement of Cash Flows
	For the Three Months Ended March 31, 2017 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Net cash provided by/(used in) operating activities	$	(2,141)	$	(7,588)	$	(733)	$	—	$	(10,462)
Net cash used in investing activities	$	(6,610)	$	(298)	$	(127)	$	6,008	$	(1,027)
Financing activities
Borrowings under revolving credit facilities	$	45,000	$	—	$	—	$	—	$	45,000
Payments on revolving credit facilities		(175,000)		—		—		—		(175,000)
Proceeds from insurance notes payable		127,500		—		—		—		127,500
Principal payments on notes payable		—		(1,582)		—		—		(1,582)
Debt issuance costs		(2,533)		—		—		—		(2,533)
Repurchases of common stock upon vesting of restricted stock awards		(2,904)		—		—		—		(2,904)
Payments from (and advances to) parent/subsidiary		—		5,412		596		(6,008)		—
Net proceeds from issuances of common stock		15,023		—		—		—		15,023
Net cash provided by financing activities	$	7,086	$	3,830	$	596	$	(6,008)	$	5,504
Net decrease in cash and cash equivalents	$	(1,665)	$	(4,056)	$	(264)	$	—	$	(5,985)
Cash and cash equivalents
Beginning of period	$	14,637	$	8,646	$	6,167	$	—	$	29,450
End of period	$	12,972	$	4,590	$	5,903	$	—	$	23,465


	Supplemental Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2016 (in thousands)
			Guarantor		Non Guarantor		Elimination		Consolidated
	CCS		Subsidiaries		Subsidiaries		Entries		CCS
Net cash provided by/(used in) operating activities	$	2,837	$	(40,401)	$	—	$	—	$	(37,564)
Net cash used in investing activities	$	(39,206)	$	(1,915)	$	—	$	38,997	$	(2,124)
Financing activities
Borrowings under revolving credit facilities	$	50,000	$	—	$	—	$	—	$	50,000
Payments on revolving credit facilities		(25,000)		—		—		—		(25,000)
Principal payments from notes payable		—		(515)		—		—		(515)
Repurchases of common stock under our stock repurchase program		(2,393)		—		—		—		(2,393)
Repurchases of common stock upon vesting of restricted stock awards		(254)		—		—		—		(254)
Payments from (and advances to) parent/subsidiary		—		38,997		—		(38,997)		—
Net cash provided by financing activities	$	22,353	$	38,482	$	—	$	(38,997)	$	21,838
Net decrease in cash and cash equivalents	$	(14,016)	$	(3,834)	$	—	$	—	$	(17,850)
Cash and cash equivalents
Beginning of period	$	22,002	$	7,285	$	—	$	—	$	29,287
End of period	$	7,986	$	3,451	$	—	$	—	$	11,437