Supplemental Guarantor Information

6 Months Ended

Jun. 30, 2011

Supplemental Guarantor Information

Supplemental Guarantor Information

Note 17.  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

	THREE MONTHS ENDED JUNE 30, 2011
								NON-
				GUARANTOR				GUARANTOR			CONSOLIDATING			CONSOLIDATED
(in thousands)	TRG, INC.			SUBSIDIARIES				SUBSIDIARIES			ELIMINATIONS			TOTAL
REVENUES	$	110,010		$	107,896			$	7,317		$	-		$	225,223
EXPENSES	122,848			108,280				5,253			-			236,381
OTHER INCOME (LOSS)	445			-				-			-			445
(Loss) earnings before taxes	(12,393		)	(384			)	2,064			-			(10,713		)
Tax (benefit) expense	(343		)	235				108			-			-
Equity in net earnings of subsidiaries	1,337			-				-			(1,337		)	-
NET (LOSS) EARNINGS	$	(10,713	)	$	(619		)	$	1,956		$	(1,337	)	$	(10,713	)
								SIX MONTHS ENDED JUNE 30, 2011
REVENUES	$	203,245		$		183,246		$	13,661		$	-		$	400,152
EXPENSES	233,210			190,954				10,388			-			434,552
OTHER INCOME (LOSS)	1,753			-				-			-			1,753
(Loss) earnings before taxes	(28,212		)	(7,708			)	3,273			-			(32,647		)
Tax (benefit) expense	(2,072		)	(566			)	240			-			(2,398		)
Equity in net loss of subsidiaries	(4,109		)	-				-			4,109			-
NET (LOSS) EARNINGS	$	(30,249	)	$		(7,142	)	$	3,033		$	4,109		$	(30,249	)
								THREE MONTHS ENDED JUNE 30, 2010
REVENUES	$	199,763		$		162,574		$	10,936		$	-		$	373,273
EXPENSES	204,939			161,171				11,570			-			377,680
OTHER INCOME (LOSS)	(17,356		)	-				-			-			(17,356		)
(Loss) earnings before taxes	(22,532		)	1,403				(634		)	-			(21,763		)
Tax benefit	-			-				-			-			-
Equity in net earnings of subsidiaries	769			-				-			(769		)	-
NET EARNINGS (LOSS)	$	(21,763	)	$		1,403		$	(634	)	$	(769	)	$	(21,763	)
								SIX MONTHS ENDED JUNE 30, 2010
REVENUES	$	327,470		$		276,747		$	19,824		$	-		$	624,041
EXPENSES	343,344			280,333				19,986			-			643,663
OTHER INCOME (LOSS)	(16,438		)	-				-			-			(16,438		)
Loss before taxes	(32,312		)	(3,586			)	(162		)	-			(36,060		)
Tax benefit	-			-				-			-			-
Equity in net loss of subsidiaries	(3,748		)	-				-			3,748			-
NET LOSS	$	(36,060	)	$		(3,586	)	$	(162	)	$	3,748		$	(36,060	)

CONSOLIDATING BALANCE SHEETS

										JUNE 30, 2011
					NON-
			GUARANTOR		GUARANTOR		CONSOLIDATING			CONSOLIDATED
(in thousands)	TRG, INC.		SUBSIDIARIES		SUBSIDIARIES		ELIMINATIONS			TOTAL
ASSETS
Cash and cash equivalents	$	-	$	165,194	$	17,154	$	-		$	182,348
Marketable securities and restricted cash	396,512		-		34,591		-			431,103
Consolidated inventory owned	481,605		299,759		-		-			781,364
Consolidated inventory not owned	17,077		-		41,505		-			58,582
Total inventories	498,682		299,759		41,505		-			839,946
Investment in subsidiaries/intercompany receivables	489,253		-		-		(489,253		)	-
Other assets	57,262		37,774		24,318		-			119,354
TOTAL ASSETS	1,441,709		502,727		117,568		(489,253		)	1,572,751
LIABILITIES
Accounts payable and other accrued liabilities	120,605		51,362		34,486		-			206,453
Debt	848,812		3,689		-		-			852,501
Intercompany payables	-		241,352		5,906		(247,258		)	-
TOTAL LIABILITIES	969,417		296,403		40,392		(247,258		)	1,058,954
EQUITY
STOCKHOLDERS’ EQUITY	472,292		206,324		35,671		(241,995		)	472,292
NONCONTROLLING INTEREST	-		-		41,505		-			41,505
TOTAL LIABILITIES AND EQUITY	$	1,441,709	$	502,727	$	117,568	$	(489,253	)	$	1,572,751
										DECEMBER 31, 2010
ASSETS
Cash and cash equivalents	$	26,711	$	177,191	$	22,745	$	-		$	226,647
Marketable securities and restricted cash	478,888		-		33,695		-			512,583
Consolidated inventory owned	449,977		261,135		-		-			711,112
Consolidated inventory not owned	26,483		-		61,806		-			88,289
Total inventories	476,460		261,135		61,806		-			799,401
Investment in subsidiaries/intercompany receivables	464,209		-		-		(464,209		)	-
Other assets	61,168		35,696		17,208		-			114,072
TOTAL ASSETS	1,507,436		474,022		135,454		(464,209		)	1,652,703
LIABILITIES
Accounts payable and other accrued liabilities	131,674		44,337		35,152		-			211,163
Debt	875,906		3,972		-		-			879,878
Intercompany payables	-		212,246		7,649		(219,895		)	-
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 STATEMENTS OF CASH FLOWS

										SIX MONTHS ENDED JUNE 30, 2011
				GUARANTOR			NON-GUARANTOR			CONSOLIDATING			CONSOLIDATED
(in thousands)	TRG, INC.			SUBSIDIARIES			SUBSIDIARIES			ELIMINATIONS			TOTAL
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(30,249	)	$	(7,142	)	$	3,033		$	4,109		$	(30,249	)
Adjustments to reconcile net (loss) income to net cash used for operating activities	32,104			4,693			324			-			37,121
Changes in assets and liabilities	(47,312		)	(43,790		)	(6,278		)	(4,109		)	(101,489		)
Other operating activities, net	742			-			-			-			742
Net cash used for operating activities	(44,715		)	(46,239		)	(2,921		)	-			(93,875		)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment, net	(3,649		)	(2,286		)	(55		)	-			(5,990		)
Purchases of marketable securities, available-for-sale	(697,208		)	-			(2,927		)	-			(700,135		)
Proceeds from sales and maturities of marketable securities, available-for-sale	778,063			-			2,531			-			780,594
Other investing activities, net	-			-			30			-			30
Net cash provided by (used for) investing activities	77,206			(2,286		)	(421		)	-			74,499
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in senior debt and short-term borrowings	(28,160		)	(283		)	-			-			(28,443		)
Common stock dividends, repurchases and stock-based compensation	829			-			-			-			829
Decrease (increase) in restricted cash	3,197			-			(506		)	-			2,691
Intercompany balances	(35,068		)	36,811			(1,743		)	-			-
Net cash (used for) provided by financing activities	(59,202		)	36,528			(2,249		)	-			(24,923		)
Net decrease in cash and cash equivalents	(26,711		)	(11,997		)	(5,591		)	-			(44,299		)
Cash and cash equivalents at beginning of year	26,711			177,191			22,745			-			226,647
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	-		$	165,194		$	17,154		$	-		$	182,348
							SIX MONTHS ENDED JUNE 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(36,060	)	$	(3,586	)	$	(162	)	$	3,748		$	(36,060	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities	54,953			5,580			546			-			61,079
Changes in assets and liabilities	63,785			(8,421		)	(4,361		)	(3,748		)	47,255
Other operating activities, net	(4,563		)	-			-			-			(4,563		)
Net cash provided by (used for) operating activities	78,115			(6,427		)	(3,977		)	-			67,711
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment, net	(3,223		)	(3,786		)	(7		)	-			(7,016		)
Purchases of marketable securities, available-for-sale	(697,950		)	(400,649		)	(2,064		)	-			(1,100,663		)
Proceeds from sales and maturities of marketable securities, available-for-sale	697,202			375,906			4,241			-			1,077,349
Other investing activities, net	-			-			17			-			17
Net cash (used for) provided by investing activities	(3,971		)	(28,529		)	2,187			-			(30,313		)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in senior debt and short-term borrowings	(755		)	-			-			-			(755		)
Common stock dividends, repurchases and stock-based compensation	1,613			-			-			-			1,613
(Increase) decrease in restricted cash	(985		)	10,468			(331		)	-			9,152
Intercompany balances	(48,494		)	48,782			(288		)	-			-
Net cash (used for) provided by financing activities	(48,621		)	59,250			(619		)	-			10,010
Net increase (decrease) in cash and cash equivalents	25,523			24,294			(2,409		)	-			47,408
Cash and cash equivalents at beginning of year	1,932			259,040			24,227			-			285,199
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	27,455		$	283,334		$	21,818		$	-		$	332,607