Supplemental Guarantor Information

12 Months Ended

Dec. 31, 2011

Supplemental Guarantor Information

Supplemental Guarantor Information

Note L: Supplemental Guarantor Information

The Company's obligations to pay principal, premium, if any, and interest under its 6.9 percent senior notes due June 2013; 5.4 percent senior notes due January 2015; 8.4 percent senior notes due May 2017; and 6.6 percent senior notes due May 2020 are guaranteed on a joint and several basis by substantially all of its 100 percent-owned homebuilding subsidiaries (the "Guarantor Subsidiaries"). Such guarantees are full and unconditional.

In lieu of providing separate financial statements for the Guarantor Subsidiaries, the accompanying condensed consolidating financial statements have been included. Management does not believe that separate financial statements for the Guarantor Subsidiaries are material to investors and are, therefore, not presented.

The following information presents the consolidating statements of earnings, financial position and cash flows for (a) the parent company and issuer, The Ryland Group, Inc. ("TRG, Inc."); (b) the Guarantor Subsidiaries; (c) the non-Guarantor Subsidiaries; and (d) the consolidation eliminations used to arrive at the consolidated information for The Ryland Group, Inc. and subsidiaries.

CONSOLIDATING STATEMENTS OF EARNINGS

	YEAR ENDED DECEMBER 31, 2011
(in thousands)		TRG, INC.			GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES		CONSOLIDATING ELIMINATIONS		CONSOLIDATED TOTAL
REVENUES	$	458,500		$	404,104		$	28,129	$	–	$	890,733
EXPENSES		491,505			411,844			22,390		–		925,739
OTHER INCOME		2,274			–			–		–		2,274
(Loss) earnings from continuing operations before taxes		(30,731	)		(7,740	)		5,739		–		(32,732	)
Tax (benefit) expense		(2,690	)		(677	)		502		–		(2,865	)
Equity in net loss of subsidiaries		(7,589	)		–			–		7,589		–
Net (loss) earnings from continuing operations		(35,630	)		(7,063	)		5,237		7,589		(29,867	)
Loss from discontinued operations, net of taxes		(15,120	)		(5,763	)		–		–		(20,883	)
NET (LOSS) EARNINGS	$	(50,750	)	$	(12,826	)	$	5,237	$	7,589	$	(50,750	)

		YEAR ENDED DECEMBER 31, 2010
REVENUES	$	539,184		$	430,634		$	32,134		$	–	$	1,001,952
EXPENSES		587,638			449,988			31,289			–		1,068,915
OTHER LOSS		(13,534	)		–			–			–		(13,534	)
(Loss) earnings from continuing operations before taxes		(61,988	)		(19,354	)		845			–		(80,497	)
Tax expense (benefit)		149			48			(2	)		–		195
Equity in net loss of subsidiaries		(18,555	)		–			–			18,555		–
Net (loss) earnings from continuing operations		(80,692	)		(19,402	)		847			18,555		(80,692	)
Loss from discontinued operations, net of taxes		(4,447	)		(1,665	)		–			1,665		(4,447	)
NET (LOSS) EARNINGS	$	(85,139	)	$	(21,067	)	$	847		$	20,220	$	(85,139	)

		YEAR ENDED DECEMBER 31, 2009
REVENUES	$	658,932		$	490,500		$	41,902		$	(5,207	)	$	1,186,127
EXPENSES		855,438			548,525			42,211			(5,207	)		1,440,967
OTHER INCOME		14,298			–			–			–			14,298
Loss from continuing operations before taxes		(182,208	)		(58,025	)		(309	)		–			(240,542	)
Tax benefit		(73,298	)		(23,783	)		(116	)		–			(97,197	)
Equity in net loss of subsidiaries		(34,435	)		–			–			34,435			–
Net loss from continuing operations		(143,345	)		(34,242	)		(193	)		34,435			(143,345	)
Loss from discontinued operations, net of taxes		(19,129	)		(5,514	)		–			5,514			(19,129	)
NET LOSS	$	(162,474	)	$	(39,756	)	$	(193	)	$	39,949		$	(162,474	)

CONSOLIDATING BALANCE SHEETS

	DECEMBER 31, 2011
(in thousands)		TRG, INC.		GUARANTOR SUBSIDIARIES		NON- GUARANTOR SUBSIDIARIES		CONSOLIDATING ELIMINATIONS			CONSOLIDATED TOTAL
ASSETS
Cash and cash equivalents	$	25,403	$	117,072	$	16,888	$	–		$	159,363
Marketable securities and restricted cash		370,975		–		32,840		–			403,815
Consolidated inventory owned		470,269		273,791		–		–			744,060
Consolidated inventory not owned		17,177		–		34,223		–			51,400
Total housing inventories		487,446		273,791		34,223		–			795,460
Investment in subsidiaries/
intercompany receivables		456,953		–		–		(456,953	)		–
Other assets		56,758		34,045		94,379		–			185,182
Assets of discontinued operations		8,853		26,471		–		–			35,324
TOTAL ASSETS		1,406,388		451,379		178,330		(456,953	)		1,579,144
LIABILITIES
Accounts payable and other accrued liabilities		131,879		48,750		34,628		–			215,257
Financial services credit facility		–		–		49,933		–			49,933
Debt		822,639		1,188		–		–			823,827
Intercompany payables		–		196,767		29,754		(226,521	)		–
Liabilities of discontinued operations		2,183		4,034		–		–			6,217
TOTAL LIABILITIES		956,701		250,739		114,315		(226,521	)		1,095,234
EQUITY
STOCKHOLDERS' EQUITY		449,687		200,640		29,792		(230,432	)		449,687
NONCONTROLLING INTEREST		–		–		34,223		–			34,223
TOTAL LIABILITIES AND EQUITY	$	1,406,388	$	451,379	$	178,330	$	(456,953	)	$	1,579,144

		DECEMBER 31, 2010
ASSETS
Cash and cash equivalents	$	26,711	$	177,152	$	22,745	$	–		$	226,608
Marketable securities and restricted cash		478,888		–		33,695		–			512,583
Consolidated inventory owned		423,876		240,049		–		–			663,925
Consolidated inventory not owned		26,483		–		61,806		–			88,289
Total housing inventories		450,359		240,049		61,806		–			752,214
Investment in subsidiaries/ intercompany receivables		464,209		–		–		(464,209	)		–
Other assets		59,547		33,879		17,208		–			110,634
Assets of discontinued operations		27,722		22,942		–		–			50,664
TOTAL ASSETS		1,507,436		474,022		135,454		(464,209	)		1,652,703
LIABILITIES
Accounts payable and other accrued liabilities		129,944		41,805		35,152		–			206,901
Debt		875,817		3,972		–		–			879,789
Intercompany payables		–		212,246		7,649		(219,895	)		–
Liabilities of discontinued operations		1,819		2,532		–		–			4,351
TOTAL LIABILITIES		1,007,580		260,555		42,801		(219,895	)		1,091,041
EQUITY
STOCKHOLDERS' EQUITY		499,856		213,467		30,847		(244,314	)		499,856
NONCONTROLLING INTEREST		–		–		61,806		–			61,806
TOTAL LIABILITIES AND EQUITY	$	1,507,436	$	474,022	$	135,454	$	(464,209	)	$	1,652,703

CONSOLIDATING STATEMENT OF CASH FLOWS

	YEAR ENDED DECEMBER 31, 2011
(in thousands)		TRG, INC.			GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES			CONSOLIDATING ELIMINATIONS			CONSOLIDATED TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income from continuing operations	$	(35,630	)	$	(7,063	)	$	5,237		$	7,589		$	(29,867	)
Adjustments to reconcile net (loss) income from continuing operations to net cash used for operating activities		50,860			6,564			588			–			58,012
Changes in assets and liabilities		(51,959	)		(40,741	)		(84,536	)		(7,589	)		(184,825	)
Other operating activities, net		(988	)		–			–			–			(988	)
Net cash used for operating activities from continuing operations		(37,717	)		(41,240	)		(78,711	)		–			(157,668	)
CASH FLOWS FROM INVESTING ACTIVITIES
(Contributions to) return of investment in unconsolidated joint ventures, net		(912	)		2,867			–			–			1,955
Additions to property, plant and equipment		(7,368	)		(3,443	)		(153	)		–			(10,964	)
Purchases of marketable securities, available-for-sale		(1,303,185	)		–			(5,387	)		–			(1,308,572	)
Proceeds from sales and maturities of marketable securities, available-for-sale		1,393,210			–			6,564			–			1,399,774
Other investing activities, net		–			–			118			–			118
Net cash provided by (used for) investing activities from continuing operations		81,745			(576	)		1,142			–			82,311
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in senior debt and short-term borrowings, net		(55,243	)		(2,784	)		–			–			(58,027	)
Borrowings against revolving credit facilities, net		–			–			49,933			–			49,933
Common stock dividends and stock-based compensation		(1,783	)		–			–			–			(1,783	)
Decrease (increase) in restricted cash		18,315			–			(326	)		–			17,989
Intercompany balances		(6,625	)		(15,480	)		22,105			–			–
Net cash (used for) provided by financing activities from continuing operations		(45,336	)		(18,264	)		71,712			–			8,112
Net decrease in cash and cash equivalents from continuing operations		(1,308	)		(60,080	)		(5,857	)		–			(67,245	)
Cash flows from operating activities—discontinued operations		353			116			–			–			469
Cash flows from investing activities—discontinued operations		(237	)		(126	)		–			–			(363	)
Cash flows from financing activities—discontinued operations		(89	)		–			–			–			(89	)
Cash and cash equivalents at beginning of year		26,711			177,191			22,745			–			226,647
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	25,430		$	117,101		$	16,888		$	–		$	159,419

CONSOLIDATING STATEMENT OF CASH FLOWS

	YEAR ENDED DECEMBER 31, 2010
(in thousands)		TRG, INC.			GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES			CONSOLIDATING ELIMINATIONS			CONSOLIDATED TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income from continuing operations	$	(80,692	)	$	(19,402	)	$	847		$	18,555		$	(80,692	)
Adjustments to reconcile net (loss) income from continuing operations to net cash used for operating activities		102,567			15,280			877			–			118,724
Changes in assets and liabilities		(43,237	)		(26,916	)		(16,399	)		(18,555	)		(105,107	)
Other operating activities, net		2,093			(2,550	)		–			–			(457	)
Net cash used for operating activities from continuing operations		(19,269	)		(33,588	)		(14,675	)		–			(67,532	)
CASH FLOWS FROM INVESTING ACTIVITIES
(Contributions to) return of investment in unconsolidated joint ventures, net		(6,443	)		2,400			–			–			(4,043	)
Additions to property, plant and equipment		(6,184	)		(6,206	)		(33	)		–			(12,423	)
Purchases of marketable securities, available-for-sale		(1,314,086	)		(400,583	)		(5,804	)		–			(1,720,473	)
Proceeds from sales and maturities of marketable securities, available-for-sale		1,358,315			375,906			8,692			–			1,742,913
Other investing activities, net		–			–			10			–			10
Net cash provided by (used for) investing activities from continuing operations		31,602			(28,483	)		2,865			–			5,984
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in senior debt and short-term borrowings, net		2,475			3,972			–			–			6,447
Common stock dividends and stock-based compensation		(516	)		–			–			–			(516	)
(Increase) decrease in restricted cash		(13,470	)		10,468			67			–			(2,935	)
Intercompany balances		23,957			(34,218	)		10,261			–			–
Net cash provided by (used for) financing activities from continuing operations		12,446			(19,778	)		10,328			–			2,996
Net increase (decrease) in cash and cash equivalents from continuing operations		24,779			(81,849	)		(1,482	)		–			(58,552	)
Cash flows from operating activities—discontinued operations		1,891			161			–			–			2,052
Cash flows from investing activities—discontinued operations		(390	)		(161	)		–			–			(551	)
Cash flows from financing activities—discontinued operations		(1,501	)		–			–			–			(1,501	)
Cash and cash equivalents at beginning of year		1,932			259,040			24,227			–			285,199
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	26,711		$	177,191		$	22,745		$	–		$	226,647

CONSOLIDATING STATEMENT OF CASH FLOWS

	YEAR ENDED DECEMBER 31, 2009
(in thousands)		TRG, INC.			GUARANTOR SUBSIDIARIES			NON- GUARANTOR SUBSIDIARIES			CONSOLIDATING ELIMINATIONS			CONSOLIDATED TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from continuing operations	$	(143,345	)	$	(34,242	)	$	(193	)	$	34,435		$	(143,345	)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities		173,388			36,725			1,035			–			211,148
Changes in assets and liabilities		151,253			84,195			19,443			(34,435	)		220,456
Other operating activities, net		(9,629	)		(701	)		–			–			(10,330	)
Net cash provided by operating activities from continuing operations		171,667			85,977			20,285			–			277,929
CASH FLOWS FROM INVESTING ACTIVITIES
Return of investment in unconsolidated joint ventures, net		10,908			574			–			–			11,482
Additions to property, plant and equipment		(739	)		(1,110	)		(130	)		–			(1,979	)
Purchases of marketable securities, available-for-sale		–			(1,260,124	)		(13,873	)		–			(1,273,997	)
Proceeds from sales and maturities of marketable securities, available-for-sale		–			812,108			9,481			–			821,589
Other investing activities, net		–			–			91			–			91
Net cash provided by (used for) investing activities from continuing operations		10,169			(448,552	)		(4,431	)		–			(442,814	)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in senior debt and short-term borrowings, net		125,074			(39	)		–			–			125,035
Borrowings against revolving credit facilities, net		–			–			(22,125	)		–			(22,125	)
Common stock dividends and stock-based compensation		(180	)		–			–			–			(180	)
(Increase) decrease in restricted cash		–			(43,186	)		1,333			–			(41,853	)
Intercompany balances		(316,814	)		316,232			582			–			–
Net cash (used for) provided by financing activities from continuing operations		(191,920	)		273,007			(20,210	)		–			60,877
Net decrease in cash and cash equivalents from continuing operations		(10,084	)		(89,568	)		(4,356	)		–			(104,008	)
Cash flows from operating activities—discontinued operations		6,580			(435	)		–			–			6,145
Cash flows from investing activities—discontinued operations		39			(39	)		–			–			–
Cash flows from financing activities—discontinued operations		(6,624	)		–			–			–			(6,624	)
Cash and cash equivalents at beginning of year		12,021			349,082			28,583			–			389,686
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	1,932		$	259,040		$	24,227		$	–		$	285,199