Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 05, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | WLH | |
Entity Registrant Name | WILLIAM LYON HOMES | |
Entity Central Index Key | 1,095,996 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Common stock, Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 27,641,834 | |
Common stock, Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 3,813,884 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $ 60,645 | $ 52,771 |
Restricted cash | 504 | 504 |
Receivables | 20,665 | 21,250 |
Escrow proceeds receivable | 8,253 | 2,915 |
Real estate inventories | 1,552,251 | 1,404,639 |
Deferred loan costs, net | 15,088 | 15,988 |
Goodwill | 60,887 | 60,887 |
Intangibles, net of accumulated amortization of $10,085 as of June 30, 2015 and $9,420 as of December 31, 2014 | 6,993 | 7,657 |
Deferred income taxes, net valuation allowance of $1,584 as of June 30, 2015 and $1,626 as of December 31, 2014 | 89,825 | 88,039 |
Other assets, net | 24,688 | 19,777 |
Total assets | 1,839,799 | 1,674,427 |
LIABILITIES AND EQUITY | ||
Accounts payable | 69,516 | 51,814 |
Accrued expenses | 85,267 | 85,366 |
Notes payable | 169,281 | 39,235 |
Total senior notes | 1,066,175 | 940,101 |
Total liabilities | $ 1,220,958 | $ 1,077,281 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, par value $0.01 per share, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | $ 0 | $ 0 |
Additional paid-in capital | 410,597 | 408,969 |
Retained earnings | 179,586 | 160,627 |
Total William Lyon Homes stockholders’ equity | 590,505 | 569,915 |
Noncontrolling interests | 28,336 | 27,231 |
Total equity | 618,841 | 597,146 |
Total liabilities and equity | 1,839,799 | 1,674,427 |
Common stock, Class A, par value $0.01 per share; 150,000,000 shares authorized; 28,370,514 and 28,073,438 shares issued, 27,641,834 and 27,487,257 outstanding at June 30, 2015 and December 31, 2014, respectively | ||
Equity: | ||
Common stock | 284 | 281 |
Common stock, Class B, par value $0.01 per share; 30,000,000 shares authorized; 3,813,884 shares issued and outstanding at June 30, 2015 and December 31, 2014 | ||
Equity: | ||
Common stock | 38 | 38 |
Senior unsecured loan facility | ||
LIABILITIES AND EQUITY | ||
Total senior notes | 17,349 | 20,717 |
5 3/4% Senior Notes due April 15, 2019 | ||
LIABILITIES AND EQUITY | ||
Total senior notes | 150,000 | 150,000 |
8 1/2% Senior Notes due November 15, 2020 | ||
LIABILITIES AND EQUITY | ||
Total senior notes | 429,545 | 430,149 |
7% Senior Notes due August 15, 2022 | ||
LIABILITIES AND EQUITY | ||
Total senior notes | $ 300,000 | $ 300,000 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Intangibles - Accumulated Amortization | $ 10,085 | $ 9,420 |
Deferred Income Taxes - Valuation Allowance | $ 1,584 | $ 1,626 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, Class A | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 28,370,514 | 28,073,438 |
Common stock, shares outstanding (in shares) | 27,641,834 | 27,487,457 |
Common stock, Class B | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 3,813,884 | 3,813,884 |
Common stock, shares outstanding (in shares) | 3,813,884 | 3,813,884 |
5 3/4% Senior Notes due April 15, 2019 | ||
Stated interest rate | 5.75% | 5.75% |
8 1/2% Senior Notes due November 15, 2020 | ||
Stated interest rate | 8.50% | 8.50% |
7% Senior Notes due August 15, 2022 | ||
Stated interest rate | 7.00% | 7.00% |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating revenue | ||||
Home sales | $ 247,740 | $ 168,157 | $ 437,455 | $ 308,456 |
Lots, land and other sales | 0 | 1,711 | 0 | 1,711 |
Construction services | 6,955 | 9,941 | 14,408 | 19,593 |
Operating revenue | 254,695 | 179,809 | 451,863 | 329,760 |
Operating costs | ||||
Cost of sales — homes | (200,248) | (128,306) | (354,329) | (234,518) |
Cost of sales — lots, land and other | 0 | (1,320) | 0 | (1,320) |
Construction services | (5,898) | (8,405) | (11,927) | (16,473) |
Sales and marketing | (14,904) | (8,924) | (27,128) | (15,482) |
General and administrative | (13,415) | (11,019) | (27,363) | (23,155) |
Amortization of intangible assets | (462) | (502) | (665) | (1,120) |
Other | 94 | (729) | (194) | (1,291) |
Total operating costs | (234,833) | (159,205) | (421,606) | (293,359) |
Operating income | 19,862 | 20,604 | 30,257 | 36,401 |
Other income, net | 642 | 354 | 1,423 | 473 |
Income before provision for income taxes | 20,504 | 20,958 | 31,680 | 36,874 |
Provision for income taxes | (7,254) | (6,206) | (10,824) | (10,780) |
Net income (loss) | 13,250 | 14,752 | 20,856 | 26,094 |
Less: Net income attributable to noncontrolling interests | (973) | (2,467) | (1,897) | (5,112) |
Net income available to common stockholders | $ 12,277 | $ 12,285 | $ 18,959 | $ 20,982 |
Income per common share: | ||||
Basic (in USD per share) | $ 0.34 | $ 0.39 | $ 0.52 | $ 0.67 |
Diluted (in USD per share) | $ 0.32 | $ 0.38 | $ 0.50 | $ 0.64 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 36,565,369 | 31,224,252 | 36,514,962 | 31,159,422 |
Diluted (in shares) | 38,026,866 | 32,750,108 | 37,876,696 | 32,669,560 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 6 months ended Jun. 30, 2015 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Non-Controlling Interests |
Beginning Balance at Dec. 31, 2014 | $ 597,146 | $ 319 | $ 408,969 | $ 160,627 | $ 27,231 |
Beginning Balance (in shares) at Dec. 31, 2014 | 31,887 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 20,856 | 18,959 | 1,897 | ||
Cash contributions from members of consolidated entities | 5,625 | 5,625 | |||
Cash distributions to members of consolidated entities | (6,417) | (6,417) | |||
Exercise of stock options | 106 | $ 0 | 106 | ||
Exercise of stock options (in shares) | 48 | ||||
Shares remitted to Company to satisfy employee obligations | (1,632) | $ (1) | (1,631) | ||
Shares remitted to Company to satisfy employee obligations (in shares) | (85) | ||||
Stock based compensation expense | 3,157 | $ 4 | 3,153 | ||
Stock based compensation expense (in shares) | 335 | ||||
Ending Balance at Jun. 30, 2015 | $ 618,841 | $ 322 | $ 410,597 | $ 179,586 | $ 28,336 |
Ending Balance (in shares) at Jun. 30, 2015 | 32,185 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities | ||
Net income | $ 20,856 | $ 26,094 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 1,407 | 2,683 |
Net change in deferred income taxes | (1,786) | 3,727 |
Stock based compensation expense | 3,157 | 1,854 |
Equity in earnings of unconsolidated joint ventures | (763) | 0 |
Net changes in operating assets and liabilities: | ||
Restricted cash | 0 | 350 |
Receivables | 740 | (744) |
Escrow proceeds receivable | (5,338) | (276) |
Real estate inventories | (137,049) | (257,546) |
Real estate inventories — not owned | 0 | 12,960 |
Other assets | (4,161) | (2,479) |
Accounts payable | 17,702 | 13,944 |
Accrued expenses | (67) | 9,852 |
Liabilities from real estate inventories not owned | 0 | (12,960) |
Net cash used in operating activities | (105,302) | (202,541) |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | (1,000) | 0 |
Distributions from unconsolidated joint ventures | 362 | 0 |
Purchases of property and equipment | (247) | (1,640) |
Net cash (used in) provided by investing activities | (885) | (1,640) |
Financing activities | ||
Proceeds from borrowings on notes payable | 28,394 | 34,153 |
Principal payments on notes payable | (11,848) | (38,720) |
Proceeds from borrowings on Revolver | 144,000 | 0 |
Payments on Revolver | (40,000) | 0 |
Principal payments on subordinated amortizing notes | (3,368) | 0 |
Payment of deferred loan costs | (799) | (3,560) |
Proceeds from stock options exercised | 106 | 285 |
Shares remitted to, or withheld by the Company for employee tax withholding | (1,632) | (1,414) |
Offering costs related to sale of common stock | 0 | (105) |
Noncontrolling interest contributions | 5,625 | 8,742 |
Noncontrolling interest distributions | (6,417) | (14,091) |
Net cash provided by (used in) financing activities | 114,061 | 135,290 |
Net increase (decrease) in cash and cash equivalents | 7,874 | (68,891) |
Cash and cash equivalents — beginning of period | 52,771 | 171,672 |
Cash and cash equivalents — end of period | 60,645 | 102,781 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Issuance of note payable related to land acquisition | 9,500 | 2,413 |
5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | $ 0 | $ 150,000 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Operations William Lyon Homes, a Delaware corporation (“Parent” and together with its subsidiaries, the “Company”), is primarily engaged in designing, constructing, marketing and selling single-family detached and attached homes in California, Arizona, Nevada, Colorado (under the Village Homes brand), Washington and Oregon (each under the Polygon Northwest Homes brand). Basis of Presentation The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities as of June 30, 2015 and December 31, 2014 and revenues and expenses for the three and six month periods ended June 30, 2015 and 2014 . Accordingly, actual results could differ from those estimates. The significant accounting policies using estimates include real estate inventories and cost of sales, impairment of real estate inventories, warranty reserves, loss contingencies, sales and profit recognition, accounting for variable interest entities, business combinations, and valuation of deferred tax assets. The current economic environment increases the uncertainty inherent in these estimates and assumptions. The condensed consolidated financial statements include the accounts of the Company and all majority-owned and controlled subsidiaries and joint ventures, and certain joint ventures and other entities which have been determined to be variable interest entities ("VIEs") in which the Company is considered the primary beneficiary (see Note 3). The accounting policies of the joint ventures are substantially the same as those of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements were prepared from our books and records without audit and include all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented. Readers of this quarterly report should refer to our audited consolidated financial statements as of and for the year ended December 31, 2014 , which are included in our 2014 Annual Report on Form 10-K, as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report. Real Estate Inventories Real estate inventories are carried at cost net of impairment losses, if any. Real estate inventories consist primarily of land deposits, land and land under development, homes completed and under construction, and model homes. All direct and indirect land costs, offsite and onsite improvements and applicable interest and other carrying charges are capitalized to real estate projects during periods when the project is under development. Land, offsite costs and all other common costs are allocated to land parcels benefited based upon relative fair values before construction. Onsite construction costs and related carrying charges (principally interest and property taxes) are allocated to the individual homes within a phase based upon the relative sales value of the homes. The Company relieves its real estate inventories through cost of sales for the estimated cost of homes sold. Selling expenses and other marketing costs are expensed in the period incurred. A provision for warranty costs relating to the Company’s limited warranty plans is included in cost of sales and accrued expenses at the time the sale of a home is recorded. The Company generally reserves either approximately one percent of the sales price of its homes, or a set amount per home closed depending on the operating division, against the possibility of future charges relating to its warranty programs and similar potential claims. Factors that affect the Company’s warranty liability include the number of homes under warranty, historical and anticipated rates of warranty claims, and cost per claim. The Company continually assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. Changes in the Company’s warranty liability for the six months ended June 30, 2015 and 2014 , are as follows (in thousands): Six Six Warranty liability, beginning of period $ 18,155 $ 14,935 Warranty provision during period 3,057 3,693 Warranty payments during period (3,767 ) (3,449 ) Warranty charges related to construction services projects 594 652 Warranty liability, end of period $ 18,039 $ 15,831 The Company began accruing for warranty costs for units closed in the Washington and Oregon segments in conjunction with their acquisition (see Note 2) at a set rate per home. The Company did not assume any warranty liability for units closed prior to the acquisition date. Interest incurred under the Company’s debt obligations, as more fully discussed in Note 6, is capitalized to qualifying real estate projects under development. Interest activity for the three and six months ended June 30, 2015 and 2014 are as follows (in thousands): Three Three Six Six Interest incurred $ 18,611 $ 11,919 $ 36,644 $ 21,314 Less: Interest capitalized 18,611 11,919 36,644 21,314 Interest expense, net of amounts capitalized $ — $ — $ — $ — Cash paid for interest $ 23,325 $ 19,051 $ 35,025 $ 19,671 Construction Services The Company accounts for construction management agreements using the Percentage of Completion Method in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 605 Revenue Recognition (“ASC 605”). Under ASC 605, the Company records revenues and expenses as a contracted project progresses, and based on the percentage of costs incurred to date compared to the total estimated costs of the contract. The Company entered into construction management agreements to build, sell and market homes in certain communities. For such services, the Company will receive fees (generally 3 to 5 percent of the sales price, as defined) and may, under certain circumstances, receive additional compensation if certain financial thresholds are achieved. Financial Instruments Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, restricted cash, receivables, and deposits. The Company typically places its cash and cash equivalents in investment grade short-term instruments. Deposits, included in other assets, are due from municipalities or utility companies and are generally collected from such entities through fees assessed to other developers. The Company is an issuer of, or subject to, financial instruments with off-balance sheet risk in the normal course of business which exposes it to credit risks. These financial instruments include letters of credit and obligations in connection with assessment district bonds. These off-balance sheet financial instruments are described in more detail in Note 12. Cash and Cash Equivalents Short-term investments with a maturity of three months or less when purchased are considered cash equivalents. The Company’s cash and cash equivalents balance exceeds federally insurable limits as of June 30, 2015 and December 31, 2014 . The Company monitors the cash balances in its operating accounts, however, these cash balances could be negatively impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Restricted Cash Restricted cash consists of deposits made by the Company to a bank account as collateral for the use of letters of credit to guarantee the Company’s financial obligations under certain other contractual arrangements in the normal course of business. Deferred Loan Costs Deferred loan costs represent debt issuance costs and are primarily amortized to interest incurred using the straight line method which approximates the effective interest method. Goodwill In accordance with the provisions of ASC 350, Intangibles, Goodwill and Other , goodwill amounts are not amortized, but rather are analyzed for impairment at the reporting segment level. Goodwill is analyzed on an annual basis, or when indicators of impairment exist. We have determined that we have six reporting segments, as discussed in Note 4, and we perform an annual goodwill impairment analysis during the fourth quarter of each fiscal year. Intangibles Recorded intangible assets primarily relate to brand names of acquired entities, construction management contracts, homes in backlog, and joint venture management fee contracts recorded in conjunction with FASB ASC Topic 852, Reorganizations ("ASC 852"), or FASB ASC Topic 805, Business Combinations ("ASC 805"). All Intangible assets with the exception of those relating to brand names were valued based on expected cash flows related to home closings, and the asset is amortized on a per unit basis, as homes under the contracts close. Our brand name intangible assets are deemed to have an indefinite useful life. Income per common share The Company computes income per common share in accordance with FASB ASC Topic 260, Earnings per Share , which requires income per common share for each class of stock to be calculated using the two-class method. The two-class method is an allocation of income between the holders of common stock and a company’s participating security holders. Basic income per common share is computed by dividing income or loss available to common stockholders by the weighted average number of shares of common stock outstanding. For purposes of determining diluted income per common share, basic income per common share is further adjusted to include the effect of potential dilutive common shares. Income Taxes Income taxes are accounted for under the provisions of Financial Accounting Standards Board ASC 740 , Income Taxes, using an asset and liability approach. Deferred income taxes reflect the net effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and operating loss and tax credit carryforwards measured by applying currently enacted tax laws. A valuation allowance is provided to reduce net deferred tax assets to an amount that is more likely than not to be realized. ASC 740 prescribes a recognition threshold and a measurement criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be considered “more-likely-than-not” to be sustained upon examination by taxing authorities. In addition, the Company has elected to recognize interest and penalties related to uncertain tax positions in the income tax provision. Impact of Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which clarifies existing accounting literature relating to how and when revenue is recognized by an entity. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. In doing so, an entity will need to exercise a greater degree of judgment and make more estimates than under the current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. ASU 2014-09 also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . ASU 2014-09 is effective for public companies for interim and annual reporting periods beginning after December 15, 2017, and is to be applied either retrospectively or using the cumulative effect transition method, with early adoption not permitted. The Company has not yet selected a transition method, and is currently evaluating the impact the adoption of ASU 2014-09 will have on its condensed consolidated financial statements and related disclosures. In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis , which improves targeted areas of the consolidation guidance and reduces the number of consolidation models. The amendments in the ASU are effective for annual and interim periods in fiscal years beginning after December 15, 2015, with early adoption permitted. The Company is currently evaluating the effect the guidance will have on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, " Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. " The amendment requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard also indicates that debt issuance costs do not meet the definition of an asset because they provide no future economic benefit. The amendments in the ASU are effective for annual and interim periods in fiscal years beginning after December 15, 2015, and is to be applied on a retrospective basis. Early adoption is permitted. The Company does not anticipate that adoption of this standard will have a material impact on its consolidated financial statements. |
Acquisition of Polygon Northwes
Acquisition of Polygon Northwest Homes | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisition of Polygon Northwest Homes | Acquisition of Polygon Northwest Homes On August 12, 2014 , the Company completed its acquisition of the residential homebuilding business of PNW Home Builders, L.L.C. (“PNW Parent”) pursuant to the Purchase and Sale Agreement (the “Purchase Agreement”) dated June 22, 2014 among William Lyon Homes, Inc., a California corporation and wholly-owned subsidiary of Parent ("California Lyon"), PNW Parent, PNW Home Builders North, L.L.C., PNW Home Builders South, L.L.C. and Crescent Ventures, L.L.C. Prior to such completion, California Lyon assigned its interests in the Purchase Agreement to Polygon WLH LLC, a newly formed Delaware limited liability company and wholly-owned subsidiary of California Lyon (“Polygon WLH”). Pursuant to the Purchase Agreement, Polygon WLH acquired, for cash, all of the membership interests of the underlying limited liability companies and certain service companies and other assets that comprised the residential homebuilding operations of PNW Parent (such operations being referred herein as "Polygon Northwest Homes") and which conducts business as Polygon Northwest Company (“Polygon”), for an aggregate cash purchase price of $520.0 million , an additional approximately $28.0 million at closing pursuant to initial working capital adjustments, plus an additional $4.3 million of consideration (the “Polygon Acquisition”). The acquired entities now operate as two new divisions of the Company under the Polygon name, one in Washington, with a core market of Seattle, and the other in Oregon, with a core market in Portland. The Company financed the Polygon Acquisition with a combination of proceeds as follows: (i) $300 million in aggregate principal amount of 7.00% senior notes due 2022 , (ii) approximately $100 million of aggregate proceeds from several land banking arrangements for land parcels located in California, Washington and Oregon, (iii) $120 million of borrowings under a senior unsecured loan facility which was subsequently paid off, and (iv) cash on hand. As a result of the Polygon Acquisition, the entities comprising the business of Polygon Northwest Homes became wholly-owned direct or indirect subsidiaries of the Company, and its results are included in our condensed consolidated financial statements and related disclosures from the date of the Polygon Acquisition. For the three and six months ended June 30, 2015 , operating revenue and income before provision for income taxes from Polygon operations, were $98.4 million and $156.1 million , and $10.1 million and $15.0 million , respectively. The Polygon Acquisition was accounted for as a business combination in accordance with ASC 805. Under ASC 805, the Company recorded the acquired assets and assumed liabilities of Polygon Northwest Homes at their estimated fair values, with the excess allocated to Goodwill, as shown below. Goodwill represents the value the Company expects to achieve through the operational synergies and the expansion of the Company into new markets. The Company estimates that the entire $46.7 million of goodwill resulting from the Acquisition will be tax deductible. Goodwill will be allocated to the Washington and Oregon segments (see Note 4). A reconciliation of the consideration transferred as of the acquisition date is as follows: Purchase consideration $ 552,252 Net proceeds received from Polygon parcels involved in land banking transactions (excludes California) (59,834 ) $ 492,418 As of June 30, 2015 the Company had not completed its final estimate of the fair value of the net assets of Polygon Northwest Homes, as the Company is waiting for additional information to finalize the valuation of real estate inventories, intangible assets, goodwill and tax related matters, which is expected to be completed during August 2015. As such, the estimates used as of June 30, 2015 are subject to change. The following table summarizes the preliminary amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands): Assets Acquired Real estate inventories $ 441,069 Goodwill 46,678 Intangible asset - brand name 6,700 Joint venture in mortgage business 2,000 Other 545 Total Assets $ 496,992 Liabilities Assumed Accounts payable $ 603 Accrued expenses 3,971 Total liabilities 4,574 Net assets acquired $ 492,418 The Company determined the fair value of real estate inventories on a project level basis using a combination of discounted cash flow models, and market comparable land transactions, where available. These methods are significantly impacted by estimates relating to i) expected selling prices, ii) anticipated sales pace, iii) cost to complete, iv) highest and best use of projects prior to acquisition, and v) comparable land values. These estimates were developed and used at the individual project level, and may vary significantly between projects. The acquisition date fair value of the Intangible asset relating to brand name was estimated using comparable values ascribed in other recent market transactions, as well as taking into account Polygon Northwest Homes market position as a leading builder in the Seattle, WA, and Portland, OR, residential markets. This asset is deemed to have an indefinite life. Additionally, the Company acquired a non-controlling interest in a joint venture mortgage business. The fair value of this investment was estimated using the discounted cash flow method, which was significantly impacted by estimated cash flow streams and income of the joint venture. Other assets, accounts payable, and accrued expenses were generally stated at historical value due to the short-term nature of these liabilities. There were no acquisition related costs incurred during the three and six months ended June 30, 2015 . Supplemental Pro Forma Information The following table presents unaudited pro forma amounts for the three and six months ended June 30, 2014 as if the Polygon Acquisition had been completed as of January 1, 2013 (amounts in thousands, except per share data): Three Six Operating revenues $ 253,696 $ 446,817 Net income available to common stockholders $ 14,957 $ 25,190 Income per share - basic $ 0.48 $ 0.81 Income per share - diluted $ 0.46 $ 0.77 The unaudited pro forma operating results have been determined after adjusting the unaudited operating results of Polygon Northwest Homes to reflect the estimated purchase accounting and other acquisition adjustments including interest expense associated with the debt used to fund a portion of the acquisition. The unaudited pro forma results presented above do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the Acquisition, the costs to combine the operations of the Company and Polygon Northwest Homes or the costs necessary to achieve any of the foregoing cost savings, operating synergies or revenue enhancements. As such, the unaudited pro forma amounts are for comparative purposes only and may not necessarily reflect the results of operations which would have resulted had the acquisition been completed at the beginning of the applicable period or indicative of the results that will be attained in the future. |
Variable Interest Entities and
Variable Interest Entities and Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Variable Interest Entities and Noncontrolling Interests | Variable Interest Entities and Noncontrolling Interests As of June 30, 2015 and December 31, 2014 , the Company was party to seven and six joint ventures, respectively, for the purpose of land development and homebuilding activities which we have determined to be VIEs. The Company, as the managing member, has the power to direct the activities of the VIEs since it manages the daily operations and has exposure to the risks and rewards of the VIEs, based upon the allocation of income and loss per the respective joint venture agreements. Therefore, the Company is the primary beneficiary of the joint ventures, and the VIEs were consolidated as of June 30, 2015 and December 31, 2014 . As of June 30, 2015 , the assets of the consolidated VIEs totaled $104.2 million , of which $6.9 million was cash and cash equivalents and $93.7 million was real estate inventories. The liabilities of the consolidated VIEs totaled $60.9 million , primarily comprised of notes payable, accounts payable and accrued liabilities. As of December 31, 2014 , the assets of the consolidated VIEs totaled $88.1 million , of which $3.3 million was cash and cash equivalents and $81.3 million was real estate inventories. The liabilities of the consolidated VIEs totaled $45.0 million , primarily comprised of notes payable, accounts payable and accrued liabilities. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates one principal homebuilding business. In accordance with FASB ASC Topic 280, Segment Reporting ("ASC 280"), the Company has determined that each of its operating divisions is an operating segment.The Company’s Co-Chief Executive Officers have been identified as the chief operating decision makers. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability and cash flows of each respective segment. The Company’s homebuilding operations design, construct and sell a wide range of homes designed to meet the specific needs in each of its markets. As such, in accordance with the aggregation criteria defined by FASB ASC Topic 280, Segment Reporting (“ASC 280”), the Company’s homebuilding operating segments have been grouped into six reportable segments: California , consisting of operating divisions in i ) Southern California, consisting of operations in Orange, Los Angeles, San Diego, Riverside and San Bernardino counties; and ii ) Northern California, consisting of operations in Alameda, Contra Costa, San Joaquin, and Santa Clara counties. Arizona , consisting of operations in the Phoenix, Arizona metropolitan area. Nevada , consisting of operations in the Las Vegas, Nevada metropolitan area. Colorado , consisting of operations in the Denver, Fort Collins and Granby, Colorado markets. Washington , consisting of operations in the Seattle, Washington metropolitan area. Oregon , consisting of operations in the Portland, Oregon metropolitan area. Corporate develops and implements strategic initiatives and supports the Company’s operating segments by centralizing key administrative functions such as finance and treasury, information technology, risk management and litigation and human resources. All prior periods have been restated to reflect the Company's current segment reporting structure. Segment financial information relating to the Company’s operations was as follows (in thousands): Three Three Six Six Operating revenue: California (1) $ 87,661 $ 135,817 174,454 250,072 Arizona 10,508 16,431 17,694 29,709 Nevada 30,771 18,392 58,013 35,541 Colorado 27,404 9,169 45,593 14,438 Washington 46,186 — 77,466 — Oregon 52,165 — 78,643 — Total operating revenue $ 254,695 $ 179,809 $ 451,863 $ 329,760 (1) Operating revenue in the California segment includes construction services revenue. Three Three Six Six Income before provision for income taxes California $ 11,765 $ 23,193 21,077 43,831 Arizona 306 2,321 610 3,672 Nevada 2,687 1,673 6,049 3,029 Colorado 809 (453 ) 639 (1,112 ) Washington 4,319 — 6,892 — Oregon 5,866 — 8,111 — Corporate (5,248 ) (5,776 ) (11,698 ) (12,546 ) Income before provision for income taxes $ 20,504 $ 20,958 $ 31,680 $ 36,874 June 30, 2015 December 31, 2014 Homebuilding assets: California $ 667,994 $ 572,900 Arizona 196,743 179,529 Nevada 163,215 135,358 Colorado 126,982 131,085 Washington 253,391 281,456 Oregon 195,848 200,761 Corporate (1) 235,626 173,338 Total homebuilding assets $ 1,839,799 $ 1,674,427 (1) Comprised primarily of cash and cash equivalents, deferred income taxes, receivables, deferred loan costs, and other assets. |
Real Estate Inventories
Real Estate Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Real Estate Inventories | Real Estate Inventories Real estate inventories consist of the following (in thousands): June 30, 2015 December 31, 2014 Real estate inventories: Land deposits $ 58,267 $ 65,873 Land and land under development 926,592 1,057,860 Homes completed and under construction 465,716 225,496 Model homes 101,676 55,410 Total $ 1,552,251 $ 1,404,639 |
Senior Notes, Secured, and Unse
Senior Notes, Secured, and Unsecured Indebtedness | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Senior Notes, Secured, and Unsecured Indebtedness | Senior Notes, Secured, and Unsecured Indebtedness June 30, 2015 December 31, 2014 Notes payable: Construction notes payable $ 57,781 $ 38,688 Seller financing 7,500 547 Revolving line of credit 104,000 — Total notes payable 169,281 39,235 Subordinated amortizing notes 17,349 20,717 Senior notes: 5 3 / 4 % Senior Notes due April 15, 2019 150,000 150,000 8 1 / 2 % Senior Notes due November 15, 2020 429,545 430,149 7% Senior Notes due August 15, 2022 300,000 300,000 Total senior notes 879,545 880,149 Total notes payable and senior notes $ 1,066,175 $ 940,101 As of June 30, 2015 , the maturities of the Notes payable, Subordinated amortizing notes, 5 3 / 4 % Senior Notes, 8 1 / 2 % Senior Notes, and 7% Senior Notes are as follows (in thousands): Year Ending December 31, 2015 $ 7,500 2016 18,502 2017 160,628 2018 — 2019 150,000 Thereafter 725,000 $ 1,061,630 Maturities above exclude premium on 8 1 / 2 % Senior Notes of $4.5 million as of June 30, 2015 . Notes Payable Construction Notes Payable Certain of the Company's consolidated joint ventures have entered into construction notes payable agreements. The issuance date, total availability under each facility outstanding, maturity date and interest rate are listed in the table below as of June 30, 2015 (in millions): Issuance Date Facility Size Outstanding Maturity Current Rate April, 2015 $ 18.5 $ 8.8 October, 2017 3.75 % (1) November, 2014 24.0 15.8 November, 2017 3.75 % (1) November, 2014 22.0 14.7 November, 2017 3.75 % (1) March, 2014 26.0 11.7 October, 2016 3.19 % (2) December, 2013 18.6 6.8 January, 2016 4.25 % (2) $ 109.1 $ 57.8 (1) Loan bears interest at the prime rate +0.5% . (2) Loan bears interest at the Company's option of either LIBOR +3.0% or the prime rate +1.0% . Seller Financing At June 30, 2015 , the Company had $7.5 million of notes payable outstanding related to one land acquisition for which seller financing was provided. The note bears interest at 5% per annum, is secured by the underlying land, and had an original maturity of April 2015, which was subsequently extended to August 2015. Revolving Line of Credit On March 27, 201 5, California Lyon and Parent entered into an amendment and restatement agreement pursuant to which its existing credit agreement for a revolving credit facility of up to $100 million (the "Revolver") was amended and restated in its entirety (as so amended and restated, the “Amended Facility”). The Amended Facility amends and restates the Revolver and provides for total lending commitments of $130.0 million . In addition, the Amended Facility has an uncommitted accordion feature under which the Company may increase the total principal amount up to a maximum aggregate of $200.0 million under certain circumstances (up from a maximum aggregate of $125.0 million under the previous facility), as well as a sublimit of $50.0 million for letters of credit, and extends the maturity date of the previous facility by one year to August 7, 2017 . The Amended Facility contains various covenants, including financial covenants relating to tangible net worth, leverage, liquidity and interest coverage, as well as a limitation on investments in joint ventures and non-guarantor subsidiaries. The Amended Facility contains customary events of default, subject to cure periods in certain circumstances, including: nonpayment of principal, interest and fees or other amounts; violation of covenants; inaccuracy of representations and warranties; cross default to certain other indebtedness; unpaid judgments; and certain bankruptcy and other insolvency events. The occurrence of any event of default could result in the termination of the commitments under the Amended Facility and permit the lenders to accelerate payment on outstanding borrowings under the Amended Facility and require cash collateralization of outstanding letters of credit. If a change in control (as defined in the Amended Facility) occurs, the lenders may terminate the commitments under the Amended Facility and require that the the Company repay outstanding borrowings under the Amended Facility and cash collateralize outstanding letters of credit. Interest rates on borrowings generally will be based on either LIBOR or a base rate, plus the applicable spread. The commitment fee on the unused portion of the Amended Facility currently accrues at an annual rate of 0.50% . The Company was in compliance with all covenants under the Amended Facility as of June 30, 2015 . Borrowings under the Amended Facility, the availability of which is subject to a borrowing base formula, are required to be guaranteed by Parent and certain of Parent’s direct and indirect wholly-owned subsidiaries, are secured by a pledge of all equity interests held by such guarantors, and may be used for general corporate purposes. As of June 30, 2015 , the Company had $104.0 million outstanding against the Amended Facility at an effective rate of 3.41% , as well as a letter of credit for $7.3 million . As of December 31, 2014, the Company had no amounts outstanding under the Amended Facility, with the exception of the above mentioned letter of credit. Subordinated Amortizing Notes On November 21, 2014, in order to pay down amounts borrowed under the senior unsecured bridge loan facility entered into in conjunction with the Polygon Acquisition, the Company completed its public offering and sale of 1,000,000 6.50% tangible equity units (“TEUs”, or "Units"), sold for a stated amount of $100 per Unit, featuring a 17.5% conversion premium. On December 3, 2014, the Company sold an additional 150,000 TEUs pursuant to an over-allotment option granted to the underwriters. Each TEU is a unit composed of two parts: • a prepaid stock purchase contract (a “purchase contract”); and • a senior subordinated amortizing note (an “amortizing note”). Unless settled earlier at the holder’s option, each purchase contract will automatically settle on December 1, 2017 (the "mandatory settlement date"), and the Company will deliver not more than 5.2247 shares of Class A Common Stock and not less than 4.4465 shares of Class A Common Stock on the mandatory settlement date, subject to adjustment, based upon the applicable settlement rate and applicable market value of Class A Common Stock. Each amortizing note had an initial principal amount of $18.01 , bear interest at the annual rate of 5.50% and have a final installment payment date of December 1, 2017. On each March 1, June 1, September 1 and December 1, commencing on March 1, 2015, William Lyon Homes will pay equal quarterly installments of $1.6250 on each amortizing note (except for the March 1, 2015 installment payment, which was $1.8056 per amortizing note). Each installment will constitute a payment of interest and a partial repayment of principal. The amortizing notes rank equally in right of payment to all of the Company's existing and future senior indebtedness, other than borrowings under the Amended Facility and the Company's secured project level financing, which will be senior in right of payment to the obligations under the amortizing notes, in each case to the extent of the value of the assets securing such indebtedness. Each TEU may be separated into its constituent purchase contract and amortizing note on any business day during the period beginning on, and including, the business day immediately succeeding the date of initial issuance of the Units to, but excluding, the third scheduled trading day immediately preceding the mandatory settlement date. Prior to separation, the purchase contracts and amortizing notes may only be purchased and transferred together as Units. The net proceeds received from the TEU issuance were allocated between the amortizing note and the purchase contract under the relative fair value method, with amounts allocated to the purchase contract classified as additional paid-in capital. As of June 30, 2015 and December 31, 2014, the amortizing notes had an unamortized carrying value of $17.3 million and $20.7 million , respectively. Senior Notes 5 3 / 4 % Senior Notes Due 2019 On March 31, 2014, California Lyon completed its private placement with registration rights of 5.75% Senior Notes due 2019 (the "5.75% Notes"), in an aggregate principal amount of $150 million . The 5.75% Notes were issued at 100% of their aggregate principal amount. In August 2014, we exchanged 100% of the initial 5.75% Notes for notes that are freely transferable and registered under the Securities Act of 1933, as amended (the “Securities Act”). As of June 30, 2015 , the outstanding amount of the 5.75% Notes was $150 million . The 5.75% Notes bear interest at a rate of 5.75% per annum, payable semiannually in arrears on April 15 and October 15, and mature on April 15, 2019 . The 5.75% Notes are unconditionally guaranteed on a joint and several unsecured basis by Parent and certain of its existing and future restricted subsidiaries. The 5.75% Notes and the related guarantees are California Lyon’s and the guarantors’ unsecured senior obligations and rank equally in right of payment with all of California Lyon’s and the guarantors’ existing and future unsecured senior debt, including California Lyon’s $425 million in aggregate principal amount of 8.5% Senior Notes due 2020 and $300 million in aggregate principal amount of 7.00% Notes, each as described below. The 5.75% Notes rank senior in right of payment to all of California Lyon’s and the guarantors’ future subordinated debt. The 5.75% Notes and the guarantees are and will be effectively junior to California Lyon’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such debt. 8 1 / 2 % Senior Notes Due 2020 On November 8, 2012, California Lyon completed its private placement with registration rights of 8.5% Senior Notes due 2020, (the "initial 8.5% notes"), in an aggregate principal amount of $325 million . The initial 8.5% Notes were issued at 100% of their aggregate principal amount. In July 2013, we exchanged 100% of the initial 8.5% Notes for notes that are freely transferable and registered under the Securities Act. On October 24, 2013, California Lyon completed its private placement with registration rights of an additional $100.0 million in aggregate principal amount of its 8.5% Senior Notes due 2020 (the “additional 8.5 % Notes”, and together with the initial 8.5% notes, the "8.5% Notes" ) at an issue price of 106.5% of their aggregate principal amount, plus accrued interest from and including May 15, 2013, resulting in net proceeds of approximately $104.7 million . In February 2014, we exchanged 100% of the additional 8.5% Notes for notes that are freely transferable and registered under the Securities Act. As of both June 30, 2015 and December 31, 2014 , the outstanding amount of the 8.5% Notes was $425 million , excluding unamortized premium of $4.5 million and $5.1 million , respectively. The 8.5% Notes bear interest at a rate of 8.5% per annum, payable semiannually in arrears on May 15 and November 15, and mature on November 15, 2020 . The 8.5% Notes are unconditionally guaranteed on a joint and several unsecured basis by Parent and by certain of its existing and future restricted subsidiaries. The 8.5% Notes and the related guarantees are California Lyon's and the guarantors' unsecured senior obligations and rank equally in right of payment with all of California Lyon’s and the guarantors’ existing and future unsecured senior debt, including the 5.75% Notes, as described above, and the 7.00% Notes, as described below. The 8.5% Notes rank senior in right of payment to all of California Lyon’s and the guarantors’ future subordinated debt. The 8.5% Notes and the guarantees are and will be effectively junior to any of California Lyon’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such debt. 7% Senior Notes Due 2022 On August 11, 2014, WLH PNW Finance Corp. (“Escrow Issuer”), completed its private placement with registration rights of 7.00% Senior Notes due 2022 (the “7.00% Notes”), in an aggregate principal amount of $300 million . The 7.00% Notes were issued at 100% of their aggregate principal amount. On August 12, 2014 , in connection with the consummation of the Polygon Acquisition, Escrow Issuer merged with and into California Lyon, and California Lyon assumed the obligations of the Escrow Issuer under the 2022 Notes and the related indenture by operation of law (the “Escrow Merger”). Following the Escrow Merger, California Lyon is the obligor under the 2022 Notes. In January 2015, we exchanged 100% of the initial 7.00% Notes for notes that are freely transferable and registered under the Securities Act. As of June 30, 2015 , the outstanding amount of the notes was $300 million . The notes bear interest at a rate of 7.00% per annum, payable semiannually in arrears on February 15 and August 15, and mature on August 15, 2022 . The 7.00% Notes are unconditionally guaranteed on a joint and several unsecured basis by Parent and certain of its existing and future restricted subsidiaries. The 7.00% Notes and the related guarantees are California Lyon’s and the guarantors’ unsecured senior obligations and rank equally in right of payment with all of California Lyon’s and the guarantors’ existing and future unsecured senior debt, including California Lyon’s $150.0 million in aggregate principal amount of 5.75% Senior Notes due 2019 and $425 million in aggregate principal amount of 8.5% Senior Notes due 2020, each as described above. The 7.00% Notes rank senior in right of payment to all of California Lyon’s and the guarantors’ future subordinated debt. The 7.00% Notes and the guarantees are and will be effectively junior to California Lyon’s and the guarantors’ existing and future secured debt to the extent of the value of the collateral securing such debt. Senior Note Covenant Compliance The indentures governing the 5.75% Notes, the 8.5% Notes, and the 7.00% Notes contain covenants that limit the ability of Parent, California Lyon, and their restricted subsidiaries to, among other things: (i) incur or guarantee certain additional indebtedness; (ii) pay dividends, distributions, or repurchase equity or make payments in respect of subordinated indebtedness; (iii) make certain investments; (iv) sell assets; (v) incur liens; (vi) enter into agreements restricting the ability of the Company’s restricted subsidiaries to pay dividends or transfer assets; (vii) enter into transactions with affiliates; (viii) create unrestricted subsidiaries; and (viii) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications as described in the indentures. The Company was in compliance with all such covenants as of June 30, 2015 . GUARANTOR AND NON-GUARANTOR FINANCIAL STATEMENTS The following consolidating financial information includes: (1) Consolidating balance sheets as of June 30, 2015 and December 31, 2014 ; consolidating statements of operations for the three and six months ended June 30, 2015 and 2014 ; and consolidating statements of cash flows for the six month periods ended June 30, 2015 and 2014 , of (a) William Lyon Homes, as the parent, or “Delaware Lyon”, (b) William Lyon Homes, Inc., as the subsidiary issuer, or “California Lyon”, (c) the guarantor subsidiaries, (d) the non-guarantor subsidiaries and (e) William Lyon Homes, Inc. on a consolidated basis; and (2) Elimination entries necessary to consolidate Delaware Lyon, with California Lyon and its guarantor and non-guarantor subsidiaries. Delaware Lyon owns 100% of all of its guarantor subsidiaries and all guarantees are full and unconditional, joint and several. As a result, in accordance with Rule 3-10 (d) of Regulation S-X promulgated by the SEC, no separate financial statements are required for these subsidiaries as of June 30, 2015 and December 31, 2014 , and for the three and six month periods ended June 30, 2015 and 2014 . CONDENSED CONSOLIDATING BALANCE SHEET (Unaudited) As of June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company ASSETS Cash and cash equivalents $ — $ 52,607 $ 764 $ 7,274 $ — $ 60,645 Restricted cash — 504 — — — 504 Receivables — 16,489 368 3,808 — 20,665 Escrow proceeds receivable — 1,831 6,422 — — 8,253 Real estate inventories — 878,748 566,227 107,276 — 1,552,251 Deferred loan costs, net — 15,088 — — — 15,088 Goodwill — 14,209 46,678 — — 60,887 Intangibles, net — 293 6,700 — — 6,993 Deferred income taxes, net — 89,825 — — — 89,825 Other assets, net — 21,803 2,591 294 — 24,688 Investments in subsidiaries 590,505 (37,425 ) (567,502 ) — 14,422 — Intercompany receivables — — 234,741 — (234,741 ) — Total assets $ 590,505 $ 1,053,972 $ 296,989 $ 118,652 $ (220,319 ) $ 1,839,799 LIABILITIES AND EQUITY Accounts payable $ — $ 58,037 $ 8,827 $ 2,652 $ — $ 69,516 Accrued expenses — 58,915 26,257 95 — 85,267 Notes payable — 111,500 — 57,781 — 169,281 Subordinated amortizing notes — 17,349 — — — 17,349 5 3 / 4 % Senior Notes — 150,000 — — — 150,000 8 1 / 2 % Senior Notes — 429,545 — — — 429,545 7% Senior Notes — 300,000 — — — 300,000 Intercompany payables — 167,528 — 67,213 (234,741 ) — Total liabilities — 1,292,874 35,084 127,741 (234,741 ) 1,220,958 Equity William Lyon Homes stockholders’ equity (deficit) 590,505 (238,902 ) 261,905 (37,425 ) 14,422 590,505 Noncontrolling interests — — — 28,336 — 28,336 Total liabilities and equity $ 590,505 $ 1,053,972 $ 296,989 $ 118,652 $ (220,319 ) $ 1,839,799 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2014 (in thousands) Unconsolidated Delaware California Guarantor Non-Guarantor Eliminating Consolidated ASSETS Cash and cash equivalents $ — $ 48,462 $ 573 $ 3,736 $ — $ 52,771 Restricted cash — 504 — — — 504 Receivables — 16,783 878 3,589 — 21,250 Escrow proceeds receivable — 613 2,302 — — 2,915 Real estate inventories — 755,748 554,170 94,721 — 1,404,639 Deferred loan costs, net — 15,988 — — — 15,988 Goodwill — 14,209 46,678 — — 60,887 Intangibles, net — 957 6,700 — — 7,657 Deferred income taxes, net — 88,039 — — — 88,039 Other assets, net — 17,243 2,176 358 — 19,777 Investments in subsidiaries 569,915 (35,961 ) (574,129 ) — 40,175 — Intercompany receivables — — 232,895 — (232,895 ) — Total assets $ 569,915 $ 922,585 $ 272,243 $ 102,404 $ (192,720 ) $ 1,674,427 LIABILITIES AND EQUITY Accounts payable $ — $ 28,792 $ 19,023 $ 3,999 $ — $ 51,814 Accrued expenses — 76,664 8,610 92 — 85,366 Notes payable — 384 162 38,689 — 39,235 Subordinated amortizing notes — 20,717 — — 20,717 5 3/4% Senior Notes — 150,000 — — 150,000 8 1/2% Senior Notes — 430,149 — — — 430,149 7% Senior Notes — 300,000 — — 300,000 Intercompany payables — 164,541 — 68,354 (232,895 ) — Total liabilities — 1,171,247 27,795 111,134 (232,895 ) 1,077,281 Equity William Lyon Homes stockholders’ equity (deficit) 569,915 (248,662 ) 244,448 (35,961 ) 40,175 569,915 Noncontrolling interests — — — 27,231 — 27,231 Total liabilities and equity $ 569,915 $ 922,585 $ 272,243 $ 102,404 $ (192,720 ) $ 1,674,427 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Three Months Ended June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 104,998 $ 136,263 $ 6,479 $ — $ 247,740 Construction services — 6,955 — — — 6,955 Management fees — (195 ) — — 195 — — 111,758 136,263 6,479 195 254,695 Operating costs Cost of sales - homes — (80,482 ) (114,216 ) (5,355 ) (195 ) (200,248 ) Construction services — (5,898 ) — — — (5,898 ) Sales and marketing — (6,412 ) (7,776 ) (716 ) — (14,904 ) General and administrative — (10,669 ) (2,746 ) — — (13,415 ) Amortization of intangible assets — (462 ) — — — (462 ) Other — (401 ) 495 — — 94 — (104,324 ) (124,243 ) (6,071 ) (195 ) (234,833 ) Income from subsidiaries 12,277 276 — — (12,553 ) — Operating income 12,277 7,710 12,020 408 (12,553 ) 19,862 Other income (expense), net — 840 (14 ) (184 ) — 642 Income before provision for income taxes 12,277 8,550 12,006 224 (12,553 ) 20,504 Provision for income taxes — (7,254 ) — — — (7,254 ) Net income 12,277 1,296 12,006 224 (12,553 ) 13,250 Less: Net income attributable to noncontrolling interests — — — (973 ) — (973 ) Net income (loss) available to common stockholders $ 12,277 $ 1,296 $ 12,006 $ (749 ) $ (12,553 ) $ 12,277 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Three Months Ended June 30, 2014 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 136,300 $ 23,889 $ 9,679 $ — $ 169,868 Construction services — 9,941 — — — 9,941 Management fees — 685 — — (685 ) — — 146,926 23,889 9,679 (685 ) 179,809 Operating costs Cost of sales - homes — (103,732 ) (19,466 ) (7,113 ) 685 (129,626 ) Construction services — (8,405 ) — — — (8,405 ) Sales and marketing — (6,743 ) (1,620 ) (561 ) — (8,924 ) General and administrative — (10,220 ) (797 ) (2 ) — (11,019 ) Amortization of intangible assets — (502 ) — — — (502 ) Other — (929 ) 19 181 — (729 ) — (130,531 ) (21,864 ) (7,495 ) 685 (159,205 ) Income from subsidiaries 12,285 1,949 — — (14,234 ) — Operating income 12,285 18,344 2,025 2,184 (14,234 ) 20,604 Other income (expense), net — 606 (8 ) (244 ) — 354 Income before provision for income taxes 12,285 18,950 2,017 1,940 (14,234 ) 20,958 Provision for income taxes — (6,206 ) — — — (6,206 ) Net income 12,285 12,744 2,017 1,940 (14,234 ) 14,752 Less: Net income attributable to noncontrolling interests — — — (2,467 ) — (2,467 ) Net income (loss) available to common stockholders $ 12,285 $ 12,744 $ 2,017 $ (527 ) $ (14,234 ) $ 12,285 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Six Months Ended June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 194,542 $ 219,397 $ 23,516 $ — $ 437,455 Construction services — 14,408 — — — 14,408 Management fees — (706 ) — — 706 — — 208,244 219,397 23,516 706 451,863 Operating costs Cost of sales - homes — (149,358 ) (184,600 ) (19,665 ) (706 ) (354,329 ) Construction services — (11,927 ) — — — (11,927 ) Sales and marketing — (12,166 ) (13,300 ) (1,662 ) — (27,128 ) General and administrative — (21,988 ) (5,375 ) — — (27,363 ) Amortization of intangible assets — (665 ) — — — (665 ) Other — (1,537 ) 1,343 — — (194 ) — (197,641 ) (201,932 ) (21,327 ) (706 ) (421,606 ) Income (loss) from subsidiaries 18,959 (6,468 ) — — (12,491 ) — Operating income 18,959 4,135 17,465 2,189 (12,491 ) 30,257 Other income (expense), net — 5,206 4,799 (8,582 ) — 1,423 Income (loss) before provision for income taxes 18,959 9,341 22,264 (6,393 ) (12,491 ) 31,680 Provision for income taxes — (10,824 ) — — — (10,824 ) Net income (loss) 18,959 (1,483 ) 22,264 (6,393 ) (12,491 ) 20,856 Less: Net income attributable to noncontrolling interests — — — (1,897 ) — (1,897 ) Net income (loss) available to common stockholders $ 18,959 $ (1,483 ) $ 22,264 $ (8,290 ) $ (12,491 ) $ 18,959 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Six Months Ended June 30, 2014 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 242,899 $ 42,437 $ 24,831 $ — $ 310,167 Construction services — 19,593 — — — 19,593 Management fees — 1,140 — — (1,140 ) — — 263,632 42,437 24,831 (1,140 ) 329,760 Operating costs Cost of sales - homes — (184,161 ) (34,523 ) (18,294 ) 1,140 (235,838 ) Construction services — (16,473 ) — — — (16,473 ) Sales and marketing — (11,432 ) (2,815 ) (1,235 ) — (15,482 ) General and administrative — (21,498 ) (1,655 ) (2 ) — (23,155 ) Amortization of intangible assets — (1,120 ) — — — (1,120 ) Other — (1,899 ) 18 590 — (1,291 ) — (236,583 ) (38,975 ) (18,941 ) 1,140 (293,359 ) Income from subsidiaries 20,982 4,964 — — (25,946 ) — Operating income 20,982 32,013 3,462 5,890 (25,946 ) 36,401 Other income (expense), net — 875 (11 ) (391 ) — 473 Income before provision for income taxes 20,982 32,888 3,451 5,499 (25,946 ) 36,874 Provision for income taxes — (10,780 ) — — — (10,780 ) Net income 20,982 22,108 3,451 5,499 (25,946 ) 26,094 Less: Net income attributable to noncontrolling interests — — — (5,112 ) — (5,112 ) Net income available to common stockholders $ 20,982 $ 22,108 $ 3,451 $ 387 $ (25,946 ) $ 20,982 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating activities Net cash (used in) provided by operating activities $ (1,631 ) $ (98,069 ) $ 13,229 $ (20,462 ) $ 1,631 $ (105,302 ) Investing activities Investments in and advances to unconsolidated joint ventures — (1,000 ) — — — (1,000 ) Distributions from unconsolidated joint ventures — — 362 — — 362 Purchases of property and equipment — (303 ) 41 15 — (247 ) Investments in subsidiaries — (5,004 ) (6,627 ) — 11,631 — Net cash (used in) provided by investing activities — (6,307 ) (6,224 ) 15 11,631 (885 ) Financing activities Proceeds from borrowings on notes payable — — — 28,394 — 28,394 Principal payments on notes payable — (2,385 ) (162 ) (9,301 ) — (11,848 ) Proceeds from borrowings on Revolver — 144,000 — — — 144,000 Payments on Revolver — (40,000 ) — — — (40,000 ) Principal payments on subordinated amortizing notes — (3,368 ) — — — (3,368 ) Payment of deferred loan costs — (799 ) — — — (799 ) Proceeds from stock options exercised — 106 — — — 106 Shares remitted to or withheld by Company for employee tax withholding — (1,632 ) — — — (1,632 ) Noncontrolling interest contributions — — — 5,625 — 5,625 Noncontrolling interest distributions — — — (6,417 ) — (6,417 ) Advances to affiliates — — (4,807 ) 6,826 (2,019 ) — Intercompany receivables/payables 1,631 12,599 (1,845 ) (1,142 ) (11,243 ) — Net cash provided by (used in) financing activities 1,631 108,521 (6,814 ) 23,985 (13,262 ) 114,061 Net increase in cash and cash equivalents — 4,145 191 3,538 — 7,874 Cash and cash equivalents at beginning of period — 48,462 573 3,736 — 52,771 Cash and cash equivalents at end of period $ — $ 52,607 $ 764 $ 7,274 $ — $ 60,645 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2014 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating activities Net cash (used in) provided by operating activities $ (619 ) $ (199,766 ) $ 5,062 $ (7,837 ) $ 619 $ (202,541 ) Investing activities Purchases of property and equipment — (1,609 ) (31 ) — — (1,640 ) Investments in subsidiaries — 50,342 — — (50,342 ) — Net cash provided by (used in) investing activities — 48,733 (31 ) — (50,342 ) (1,640 ) Financing activities Proceeds from borrowings on notes payable — 394 (394 ) 34,153 — 34,153 Principal payments on notes payable — (10,428 ) — (28,292 ) — (38,720 ) Proceeds from issuance of 5 3/4% notes — 150,000 — — — 150,000 Payment of deferred loan costs — (3,560 ) — — — (3,560 ) Proceeds from exercise of stock options — 285 — — — 285 Shares remitted to Company for employee tax witholding — (1,414 ) — — — (1,414 ) Offering costs related to sale of common stock — (105 ) — — — (105 ) Noncontrolling interest contributions — — — 8,742 — 8,742 Noncontrolling interest distributions — — — (14,091 ) — (14,091 ) Advances to affiliates — — 5 (45,765 ) 45,760 — Intercompany receivables/payables 619 (55,011 ) (4,609 ) 55,038 3,963 — Net cash provided by (used in) financing activities 619 80,161 (4,998 ) 9,785 49,723 135,290 Net (decrease) increase in cash and cash equivalents — (70,872 ) 33 1,948 — (68,891 ) Cash and cash equivalents at beginning of period — 166,516 28 5,128 — 171,672 Cash and cash equivalents at end of period $ — $ 95,644 $ 61 $ 7,076 $ — $ 102,781 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments In accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosure (“ASC 820”), the Company is required to disclose the estimated fair value of financial instruments. As of June 30, 2015 and December 31, 2014 , the Company used the following assumptions to estimate the fair value of each type of financial instrument for which it is practicable to estimate: • Notes payable—The carrying amount is a reasonable estimate of fair value of the notes payable because market rates are unchanged and/or the outstanding balance at quarter end is expected to be repaid within one year. • Subordinated amortizing notes—The Subordinated amortizing notes are traded over the counter and their fair values were based upon quotes from industry sources. • 5 3 / 4 % Senior Notes due April 15, 2019 —The 5 3 / 4 % Senior Notes are traded over the counter and their fair values were based upon quotes from industry sources. • 8 1 / 2 % Senior Notes due November 15, 2020 —The 8 1 / 2 % Senior Notes are traded over the counter and their fair values were based upon quotes from industry sources. • 7% Senior Notes due August 15, 2022 —The 7% Senior Notes are traded over the counter and their fair values were based upon quotes from industry sources. The following table excludes cash and cash equivalents, restricted cash, receivables and accounts payable, which had fair values approximating their carrying amounts due to the short maturities and liquidity of these instruments. The estimated fair values of financial instruments are as follows (in thousands): June 30, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Financial liabilities: Notes payable $ 169,281 $ 169,281 $ 39,235 $ 39,235 Subordinated amortizing notes $ 17,349 $ 24,004 $ 20,717 $ 20,717 5 3 / 4 % Senior Notes due 2019 $ 150,000 $ 151,125 $ 150,000 $ 149,250 8 1 / 2 % Senior Notes due 2020 $ 429,545 $ 459,000 $ 430,149 $ 462,410 7% Senior Notes due 2022 $ 300,000 $ 310,500 $ 300,000 $ 300,750 ASC 820 establishes a framework for measuring fair value, expands disclosures regarding fair value measurements and defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires the Company to maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements. The Company used Level 3 to measure the fair value of its Notes payable, and Level 2 to measure the fair value of its Senior notes and Subordinated amortizing notes. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. The three levels of the hierarchy are as follows: • Level 1—quoted prices for identical assets or liabilities in active markets; • Level 2—quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3—valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions On September 3, 2009, Presley CMR, Inc., a California corporation (“Presley CMR”) and a wholly owned subsidiary of California Lyon, entered into an Aircraft Purchase and Sale Agreement (“PSA”) with an affiliate of General William Lyon to sell an aircraft (the “Aircraft”). The PSA provided for an aggregate purchase price for the Aircraft of $8.3 million , (which value was the appraised fair market value of the Aircraft), which consisted of: (i) cash in the amount of $2.1 million to be paid at closing and (ii) a promissory note from the affiliate in the amount of $6.2 million . The note is secured by the Aircraft. As part of the Company’s fresh start accounting, the note was adjusted to its fair value of $5.2 million . The discount on the fresh start adjustment is amortized over the remaining life of the note. The note requires semiannual interest payments to California Lyon of approximately $0.1 million . The note is due in September 2016 . As of June 30, 2015 and December 31, 2014 the amortized balance of the note was $5.9 million and $5.8 million , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Since inception, the Company has operated solely within the United States. The Company’s effective income tax rate was 35.4% and 34.2% , and 29.6% and 29.2% for the three and six months ended June 30, 2015 and 2014, respectively. The significant drivers of the effective tax rate are allocation of income to noncontrolling interests and the domestic production activities deduction,. Management assesses its deferred tax assets quarterly to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740. The Company is required to establish a valuation allowance for any portion of the asset that management concludes is more likely than not to be unrealizable. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company's assessment considers all evidence, both positive and negative, including the nature, frequency and severity of any current and cumulative losses, taxable income in carry back years, the scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income in making this assessment. At June 30, 2015 the Company’s valuation allowance was $1.6 million due to projected excess realized built-in-losses and state net operating losses which may expire unused. At June 30, 2015 , the Company had $3.6 million remaining federal net operating loss carryforwards and $79.5 million of remaining state net operating loss carryforwards. Federal and state net operating loss carryforwards begin to expire in 2031 and 2015, respectively. In addition, as of June 30, 2015 , the Company had unused federal and state built-in losses of $64.2 million and $10.3 million , respectively. The five year testing period for built-in losses expires in 2017 and the unused built-in loss carryforwards begin to expire in 2032. The Company had AMT credit carryovers of $1.4 million at June 30, 2015 , which have an indefinite life. FASB ASC Topic 740 , Income Taxes (“ASC 740”), prescribes a recognition threshold and a measurement criterion for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be considered more likely than not to be sustained upon examination by taxing authorities. The Company records interest and penalties related to uncertain tax positions as a component of the provision for income taxes. The Company has no unrecognized tax benefits. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is subject to U.S. federal income tax examination for calendar tax years ended 2011 through 2014 and forward. The Company is subject to various state income tax examinations for calendar tax years ended 2008 through 2014 and forward. The Company does not have any tax examinations currently in progress. |
Income Per Common Share
Income Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Income Per Common Share | Income Per Common Share Basic and diluted income per common share for the three and six months ended June 30, 2015 and 2014 were calculated as follows (in thousands, except number of shares and per share amounts): Three Three Six Six Basic weighted average number of common shares outstanding 36,565,369 31,224,252 36,514,962 31,159,422 Effect of dilutive securities: Stock options, unvested common shares, and warrants 1,461,497 1,525,856 1,361,734 1,510,138 Diluted average shares outstanding 38,026,866 32,750,108 37,876,696 32,669,560 Net income available to common stockholders $ 12,277 $ 12,285 $ 18,959 $ 20,982 Basic income per common share $ 0.34 $ 0.39 $ 0.52 $ 0.67 Dilutive income per common share $ 0.32 $ 0.38 $ 0.50 $ 0.64 Antidilutive securities not included in the calculation of diluted income per common share (weighted average): Unvested stock options 240,000 — 120,000 — |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | Stock Based Compensation We account for share-based awards in accordance with ASC Topic 718, Compensation-Stock Compensation , which requires the fair value of stock-based compensation awards to be amortized as an expense over the vesting period. Stock-based compensation awards are valued at the fair value on the date of grant. Compensation expense for awards with performance based conditions is recognized over the vesting period once achievement of the performance condition is deemed probable. During the three and six months ended June 30, 2015 , the Company granted zero and 197,614 shares of restricted stock, and zero and 282,216 shares of performance based restricted stock, respectively. During the three and six months ended June 30, 2015 , the Company granted 240,000 stock options. On the Consolidated Balance Sheets and Statement of Equity, the Company considers unvested shares of restricted stock to be issued, but not outstanding. The Company recorded total stock based compensation expense during the three and six months ended June 30, 2015 and 2014 was $1.8 million and $3.2 million , and $0.9 million and $1.9 million , respectively. Stock Options During the three months months ended June 30, 2015, the Company granted options to purchase 240,000 shares of the Company's Class A common stock. The options have a grant date of April 1, 2015, and were granted under the Company’s 2012 Equity Incentive Plan and have an exercise price per share of $25.82 , the closing trading price of the Company's common stock on March 31, 2015. 120,000 of the options vest in three equal annual installments commencing on March 31, 2018, and the other 120,000 options vest in a single installment on March 31, 2018, in each case, subject to continued employment by the option holder with the Company. Performance-Based Restricted Stock Awards With respect to the performance based restricted stock awards granted to certain employees during the six months ended June 30, 2015 , the actual number of such shares of restricted stock that will be earned (the “Earned Shares”) is subject to the Company’s achievement of a pre-established performance target as of the end of the 2015 fiscal year. For each of the aforementioned awards, one-third of the Earned Shares will vest on March 1st of each of 2016, 2017 and 2018, subject to each grantee’s continued service through each vesting date. Based on the assessment as of June 30, 2015 , management determined that the currently available data was sufficient to support that the achievement of performance targets is probable, and as such compensation expense of $0.5 million has been recognized for these awards to date. Restricted Stock Awards With respect to the restricted stock awards granted to certain employees during the six months ended June 30, 2015 , representing 177,397 shares of restricted stock, 141,102 of such shares are subject to a vesting schedule pursuant to which one-third of the shares will vest on March 1st of each of 2016, 2017 and 2018, and 36,295 of such shares are subject to a vesting schedule pursuant to which one-half of the shares will vest on March 1st of each of 2016 and 2017. With respect to the restricted stock awards granted to certain non-employee directors of the Company during the six months ended June 30, 2015 , representing 20,217 shares of restricted stock, the awards vest in equal quarterly installments on each of June 1, 2015, September 1, 2015, December 1, 2015 and March 1, 2016, subject to each grantee’s continued service on the board through each vesting date. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company’s commitments and contingent liabilities include the usual obligations incurred by real estate developers in the normal course of business. In the opinion of management, these matters will not have a material effect on the Company’s condensed consolidated financial position, results of operations or cash flows. The Company is a defendant in various lawsuits related to its normal business activities. We believe that the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of June 30, 2015 , it was not reasonably possible that an additional material loss had been incurred in an amount in excess of the estimated amounts already recognized on our condensed consolidated financial statements. The outcome of any of these proceedings, including the defense and other litigation-related costs and expenses we may incur, however, is inherently uncertain and could differ significantly from the estimate reflected in a related accrual, if made. Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a related accrual or if no accrual had been made, could be material to our consolidated financial statements. We have non-cancelable operating leases primarily associated with our office facilities. Rent expense under cancelable and non-cancelable operating leases totaled $0.8 million and $1.7 million , and $0.7 million and $1.4 million , respectively, in the three and six months ended June 30, 2015 and 2014 , respectively, and is included in general and administrative expense in our consolidated statements of operations for the respective periods. The table below shows the future minimum payments under non-cancelable operating leases at June 30, 2015 (in thousands). Year Ending December 31 2015 $ 1,432 2016 2,362 2017 2,149 2018 2,139 2019 1,923 Thereafter 4,118 Total $ 14,123 As of June 30, 2015 and December 31, 2014 , the Company had $0.5 million and $0.5 million , respectively, in deposits as collateral for outstanding surety bonds to guarantee the Company’s financial obligations under certain contractual arrangements in the normal course of business. The standby letters of credit were secured by cash as reflected as restricted cash on the accompanying consolidated balance sheet. The Company also had outstanding performance and surety bonds of $122.5 million at June 30, 2015 , related principally to its obligations for site improvements at various projects. The Company does not believe that draws upon these bonds, if any, will have a material effect on the Company’s financial position, results of operations or cash flows. As of June 30, 2015 , the Company had $161.1 million of project commitments relating to the construction of projects. See Note 6 for additional information relating to the Company’s guarantee arrangements. The Company has entered into various purchase option agreements with third parties to acquire land. As of June 30, 2015 , the Company has made non-refundable deposits of $58.0 million . The Company is under no obligation to purchase the land, but would forfeit remaining deposits if the land were not purchased. The total remaining purchase price under the option agreements is $535.4 million as of June 30, 2015 . |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events No events have occurred subsequent to June 30, 2015 , that would require recognition or disclosure in the Company’s financial statements. |
Basis of Presentation and Sig20
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Operations | Operations William Lyon Homes, a Delaware corporation (“Parent” and together with its subsidiaries, the “Company”), is primarily engaged in designing, constructing, marketing and selling single-family detached and attached homes in California, Arizona, Nevada, Colorado (under the Village Homes brand), Washington and Oregon (each under the Polygon Northwest Homes brand). |
Basis of Presentation | Basis of Presentation The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities as of June 30, 2015 and December 31, 2014 and revenues and expenses for the three and six month periods ended June 30, 2015 and 2014 . Accordingly, actual results could differ from those estimates. The significant accounting policies using estimates include real estate inventories and cost of sales, impairment of real estate inventories, warranty reserves, loss contingencies, sales and profit recognition, accounting for variable interest entities, business combinations, and valuation of deferred tax assets. The current economic environment increases the uncertainty inherent in these estimates and assumptions. The condensed consolidated financial statements include the accounts of the Company and all majority-owned and controlled subsidiaries and joint ventures, and certain joint ventures and other entities which have been determined to be variable interest entities ("VIEs") in which the Company is considered the primary beneficiary (see Note 3). The accounting policies of the joint ventures are substantially the same as those of the Company. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements were prepared from our books and records without audit and include all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented. Readers of this quarterly report should refer to our audited consolidated financial statements as of and for the year ended December 31, 2014 , which are included in our 2014 Annual Report on Form 10-K, as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report. |
Real Estate Inventories | Real Estate Inventories Real estate inventories are carried at cost net of impairment losses, if any. Real estate inventories consist primarily of land deposits, land and land under development, homes completed and under construction, and model homes. All direct and indirect land costs, offsite and onsite improvements and applicable interest and other carrying charges are capitalized to real estate projects during periods when the project is under development. Land, offsite costs and all other common costs are allocated to land parcels benefited based upon relative fair values before construction. Onsite construction costs and related carrying charges (principally interest and property taxes) are allocated to the individual homes within a phase based upon the relative sales value of the homes. The Company relieves its real estate inventories through cost of sales for the estimated cost of homes sold. Selling expenses and other marketing costs are expensed in the period incurred. A provision for warranty costs relating to the Company’s limited warranty plans is included in cost of sales and accrued expenses at the time the sale of a home is recorded. The Company generally reserves either approximately one percent of the sales price of its homes, or a set amount per home closed depending on the operating division, against the possibility of future charges relating to its warranty programs and similar potential claims. Factors that affect the Company’s warranty liability include the number of homes under warranty, historical and anticipated rates of warranty claims, and cost per claim. The Company continually assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. |
Construction Services | Construction Services The Company accounts for construction management agreements using the Percentage of Completion Method in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 605 Revenue Recognition (“ASC 605”). Under ASC 605, the Company records revenues and expenses as a contracted project progresses, and based on the percentage of costs incurred to date compared to the total estimated costs of the contract. |
Financial Instruments | Financial Instruments Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents, restricted cash, receivables, and deposits. The Company typically places its cash and cash equivalents in investment grade short-term instruments. Deposits, included in other assets, are due from municipalities or utility companies and are generally collected from such entities through fees assessed to other developers. The Company is an issuer of, or subject to, financial instruments with off-balance sheet risk in the normal course of business which exposes it to credit risks. These financial instruments include letters of credit and obligations in connection with assessment district bonds. |
Cash and Cash Equivalents | Cash and Cash Equivalents Short-term investments with a maturity of three months or less when purchased are considered cash equivalents. The Company’s cash and cash equivalents balance exceeds federally insurable limits as of June 30, 2015 and December 31, 2014 . The Company monitors the cash balances in its operating accounts, however, these cash balances could be negatively impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Restricted Cash | Restricted Cash Restricted cash consists of deposits made by the Company to a bank account as collateral for the use of letters of credit to guarantee the Company’s financial obligations under certain other contractual arrangements in the normal course of business. |
Deferred Loan Costs | Deferred Loan Costs Deferred loan costs represent debt issuance costs and are primarily amortized to interest incurred using the straight line method which approximates the effective interest method. |
Goodwill | Goodwill In accordance with the provisions of ASC 350, Intangibles, Goodwill and Other , goodwill amounts are not amortized, but rather are analyzed for impairment at the reporting segment level. Goodwill is analyzed on an annual basis, or when indicators of impairment exist. We have determined that we have six reporting segments, as discussed in Note 4, and we perform an annual goodwill impairment analysis during the fourth quarter of each fiscal year. |
Intangibles | Intangibles Recorded intangible assets primarily relate to brand names of acquired entities, construction management contracts, homes in backlog, and joint venture management fee contracts recorded in conjunction with FASB ASC Topic 852, Reorganizations ("ASC 852"), or FASB ASC Topic 805, Business Combinations ("ASC 805"). All Intangible assets with the exception of those relating to brand names were valued based on expected cash flows related to home closings, and the asset is amortized on a per unit basis, as homes under the contracts close. Our brand name intangible assets are deemed to have an indefinite useful life. |
Income per common share | Income per common share The Company computes income per common share in accordance with FASB ASC Topic 260, Earnings per Share , which requires income per common share for each class of stock to be calculated using the two-class method. The two-class method is an allocation of income between the holders of common stock and a company’s participating security holders. Basic income per common share is computed by dividing income or loss available to common stockholders by the weighted average number of shares of common stock outstanding. For purposes of determining diluted income per common share, basic income per common share is further adjusted to include the effect of potential dilutive common shares. |
Income Taxes | Income Taxes Income taxes are accounted for under the provisions of Financial Accounting Standards Board ASC 740 , Income Taxes, using an asset and liability approach. Deferred income taxes reflect the net effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and operating loss and tax credit carryforwards measured by applying currently enacted tax laws. A valuation allowance is provided to reduce net deferred tax assets to an amount that is more likely than not to be realized. ASC 740 prescribes a recognition threshold and a measurement criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be considered “more-likely-than-not” to be sustained upon examination by taxing authorities. In addition, the Company has elected to recognize interest and penalties related to uncertain tax positions in the income tax provision. |
Basis of Presentation and Sig21
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Changes in Warranty Liability | Changes in the Company’s warranty liability for the six months ended June 30, 2015 and 2014 , are as follows (in thousands): Six Six Warranty liability, beginning of period $ 18,155 $ 14,935 Warranty provision during period 3,057 3,693 Warranty payments during period (3,767 ) (3,449 ) Warranty charges related to construction services projects 594 652 Warranty liability, end of period $ 18,039 $ 15,831 |
Schedule of Interest Activity | Interest activity for the three and six months ended June 30, 2015 and 2014 are as follows (in thousands): Three Three Six Six Interest incurred $ 18,611 $ 11,919 $ 36,644 $ 21,314 Less: Interest capitalized 18,611 11,919 36,644 21,314 Interest expense, net of amounts capitalized $ — $ — $ — $ — Cash paid for interest $ 23,325 $ 19,051 $ 35,025 $ 19,671 |
Acquisition of Polygon Northw22
Acquisition of Polygon Northwest Homes (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Reconciliation of Consideration Transferred as of Acquisition Date | A reconciliation of the consideration transferred as of the acquisition date is as follows: Purchase consideration $ 552,252 Net proceeds received from Polygon parcels involved in land banking transactions (excludes California) (59,834 ) $ 492,418 |
Summary of Preliminary Amounts for Acquired Assets and Liabilities Recorded at Fair Value | The following table summarizes the preliminary amounts for acquired assets and liabilities recorded at their fair values as of the acquisition date (in thousands): Assets Acquired Real estate inventories $ 441,069 Goodwill 46,678 Intangible asset - brand name 6,700 Joint venture in mortgage business 2,000 Other 545 Total Assets $ 496,992 Liabilities Assumed Accounts payable $ 603 Accrued expenses 3,971 Total liabilities 4,574 Net assets acquired $ 492,418 |
Summary of Unaudited Pro Forma Amounts of Polygon Northwest Homes Acquisition | The following table presents unaudited pro forma amounts for the three and six months ended June 30, 2014 as if the Polygon Acquisition had been completed as of January 1, 2013 (amounts in thousands, except per share data): Three Six Operating revenues $ 253,696 $ 446,817 Net income available to common stockholders $ 14,957 $ 25,190 Income per share - basic $ 0.48 $ 0.81 Income per share - diluted $ 0.46 $ 0.77 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Financial Information Relating to Operations | Segment financial information relating to the Company’s operations was as follows (in thousands): Three Three Six Six Operating revenue: California (1) $ 87,661 $ 135,817 174,454 250,072 Arizona 10,508 16,431 17,694 29,709 Nevada 30,771 18,392 58,013 35,541 Colorado 27,404 9,169 45,593 14,438 Washington 46,186 — 77,466 — Oregon 52,165 — 78,643 — Total operating revenue $ 254,695 $ 179,809 $ 451,863 $ 329,760 (1) Operating revenue in the California segment includes construction services revenue. Three Three Six Six Income before provision for income taxes California $ 11,765 $ 23,193 21,077 43,831 Arizona 306 2,321 610 3,672 Nevada 2,687 1,673 6,049 3,029 Colorado 809 (453 ) 639 (1,112 ) Washington 4,319 — 6,892 — Oregon 5,866 — 8,111 — Corporate (5,248 ) (5,776 ) (11,698 ) (12,546 ) Income before provision for income taxes $ 20,504 $ 20,958 $ 31,680 $ 36,874 |
Schedule of Segment Homebuilding Assets | June 30, 2015 December 31, 2014 Homebuilding assets: California $ 667,994 $ 572,900 Arizona 196,743 179,529 Nevada 163,215 135,358 Colorado 126,982 131,085 Washington 253,391 281,456 Oregon 195,848 200,761 Corporate (1) 235,626 173,338 Total homebuilding assets $ 1,839,799 $ 1,674,427 (1) Comprised primarily of cash and cash equivalents, deferred income taxes, receivables, deferred loan costs, and other assets. |
Real Estate Inventories (Tables
Real Estate Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Schedule of Real Estate Inventories | Real estate inventories consist of the following (in thousands): June 30, 2015 December 31, 2014 Real estate inventories: Land deposits $ 58,267 $ 65,873 Land and land under development 926,592 1,057,860 Homes completed and under construction 465,716 225,496 Model homes 101,676 55,410 Total $ 1,552,251 $ 1,404,639 |
Senior Notes, Secured, and Un25
Senior Notes, Secured, and Unsecured Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | June 30, 2015 December 31, 2014 Notes payable: Construction notes payable $ 57,781 $ 38,688 Seller financing 7,500 547 Revolving line of credit 104,000 — Total notes payable 169,281 39,235 Subordinated amortizing notes 17,349 20,717 Senior notes: 5 3 / 4 % Senior Notes due April 15, 2019 150,000 150,000 8 1 / 2 % Senior Notes due November 15, 2020 429,545 430,149 7% Senior Notes due August 15, 2022 300,000 300,000 Total senior notes 879,545 880,149 Total notes payable and senior notes $ 1,066,175 $ 940,101 |
Schedule of Maturities of Notes Payable and Senior Notes | As of June 30, 2015 , the maturities of the Notes payable, Subordinated amortizing notes, 5 3 / 4 % Senior Notes, 8 1 / 2 % Senior Notes, and 7% Senior Notes are as follows (in thousands): Year Ending December 31, 2015 $ 7,500 2016 18,502 2017 160,628 2018 — 2019 150,000 Thereafter 725,000 $ 1,061,630 The issuance date, total availability under each facility outstanding, maturity date and interest rate are listed in the table below as of June 30, 2015 (in millions): Issuance Date Facility Size Outstanding Maturity Current Rate April, 2015 $ 18.5 $ 8.8 October, 2017 3.75 % (1) November, 2014 24.0 15.8 November, 2017 3.75 % (1) November, 2014 22.0 14.7 November, 2017 3.75 % (1) March, 2014 26.0 11.7 October, 2016 3.19 % (2) December, 2013 18.6 6.8 January, 2016 4.25 % (2) $ 109.1 $ 57.8 (1) Loan bears interest at the prime rate +0.5% . (2) Loan bears interest at the Company's option of either LIBOR +3.0% or the prime rate +1.0% . |
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET (Unaudited) As of June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company ASSETS Cash and cash equivalents $ — $ 52,607 $ 764 $ 7,274 $ — $ 60,645 Restricted cash — 504 — — — 504 Receivables — 16,489 368 3,808 — 20,665 Escrow proceeds receivable — 1,831 6,422 — — 8,253 Real estate inventories — 878,748 566,227 107,276 — 1,552,251 Deferred loan costs, net — 15,088 — — — 15,088 Goodwill — 14,209 46,678 — — 60,887 Intangibles, net — 293 6,700 — — 6,993 Deferred income taxes, net — 89,825 — — — 89,825 Other assets, net — 21,803 2,591 294 — 24,688 Investments in subsidiaries 590,505 (37,425 ) (567,502 ) — 14,422 — Intercompany receivables — — 234,741 — (234,741 ) — Total assets $ 590,505 $ 1,053,972 $ 296,989 $ 118,652 $ (220,319 ) $ 1,839,799 LIABILITIES AND EQUITY Accounts payable $ — $ 58,037 $ 8,827 $ 2,652 $ — $ 69,516 Accrued expenses — 58,915 26,257 95 — 85,267 Notes payable — 111,500 — 57,781 — 169,281 Subordinated amortizing notes — 17,349 — — — 17,349 5 3 / 4 % Senior Notes — 150,000 — — — 150,000 8 1 / 2 % Senior Notes — 429,545 — — — 429,545 7% Senior Notes — 300,000 — — — 300,000 Intercompany payables — 167,528 — 67,213 (234,741 ) — Total liabilities — 1,292,874 35,084 127,741 (234,741 ) 1,220,958 Equity William Lyon Homes stockholders’ equity (deficit) 590,505 (238,902 ) 261,905 (37,425 ) 14,422 590,505 Noncontrolling interests — — — 28,336 — 28,336 Total liabilities and equity $ 590,505 $ 1,053,972 $ 296,989 $ 118,652 $ (220,319 ) $ 1,839,799 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2014 (in thousands) Unconsolidated Delaware California Guarantor Non-Guarantor Eliminating Consolidated ASSETS Cash and cash equivalents $ — $ 48,462 $ 573 $ 3,736 $ — $ 52,771 Restricted cash — 504 — — — 504 Receivables — 16,783 878 3,589 — 21,250 Escrow proceeds receivable — 613 2,302 — — 2,915 Real estate inventories — 755,748 554,170 94,721 — 1,404,639 Deferred loan costs, net — 15,988 — — — 15,988 Goodwill — 14,209 46,678 — — 60,887 Intangibles, net — 957 6,700 — — 7,657 Deferred income taxes, net — 88,039 — — — 88,039 Other assets, net — 17,243 2,176 358 — 19,777 Investments in subsidiaries 569,915 (35,961 ) (574,129 ) — 40,175 — Intercompany receivables — — 232,895 — (232,895 ) — Total assets $ 569,915 $ 922,585 $ 272,243 $ 102,404 $ (192,720 ) $ 1,674,427 LIABILITIES AND EQUITY Accounts payable $ — $ 28,792 $ 19,023 $ 3,999 $ — $ 51,814 Accrued expenses — 76,664 8,610 92 — 85,366 Notes payable — 384 162 38,689 — 39,235 Subordinated amortizing notes — 20,717 — — 20,717 5 3/4% Senior Notes — 150,000 — — 150,000 8 1/2% Senior Notes — 430,149 — — — 430,149 7% Senior Notes — 300,000 — — 300,000 Intercompany payables — 164,541 — 68,354 (232,895 ) — Total liabilities — 1,171,247 27,795 111,134 (232,895 ) 1,077,281 Equity William Lyon Homes stockholders’ equity (deficit) 569,915 (248,662 ) 244,448 (35,961 ) 40,175 569,915 Noncontrolling interests — — — 27,231 — 27,231 Total liabilities and equity $ 569,915 $ 922,585 $ 272,243 $ 102,404 $ (192,720 ) $ 1,674,427 |
Condensed Consolidating Statement of Operations | CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Three Months Ended June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 104,998 $ 136,263 $ 6,479 $ — $ 247,740 Construction services — 6,955 — — — 6,955 Management fees — (195 ) — — 195 — — 111,758 136,263 6,479 195 254,695 Operating costs Cost of sales - homes — (80,482 ) (114,216 ) (5,355 ) (195 ) (200,248 ) Construction services — (5,898 ) — — — (5,898 ) Sales and marketing — (6,412 ) (7,776 ) (716 ) — (14,904 ) General and administrative — (10,669 ) (2,746 ) — — (13,415 ) Amortization of intangible assets — (462 ) — — — (462 ) Other — (401 ) 495 — — 94 — (104,324 ) (124,243 ) (6,071 ) (195 ) (234,833 ) Income from subsidiaries 12,277 276 — — (12,553 ) — Operating income 12,277 7,710 12,020 408 (12,553 ) 19,862 Other income (expense), net — 840 (14 ) (184 ) — 642 Income before provision for income taxes 12,277 8,550 12,006 224 (12,553 ) 20,504 Provision for income taxes — (7,254 ) — — — (7,254 ) Net income 12,277 1,296 12,006 224 (12,553 ) 13,250 Less: Net income attributable to noncontrolling interests — — — (973 ) — (973 ) Net income (loss) available to common stockholders $ 12,277 $ 1,296 $ 12,006 $ (749 ) $ (12,553 ) $ 12,277 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Three Months Ended June 30, 2014 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 136,300 $ 23,889 $ 9,679 $ — $ 169,868 Construction services — 9,941 — — — 9,941 Management fees — 685 — — (685 ) — — 146,926 23,889 9,679 (685 ) 179,809 Operating costs Cost of sales - homes — (103,732 ) (19,466 ) (7,113 ) 685 (129,626 ) Construction services — (8,405 ) — — — (8,405 ) Sales and marketing — (6,743 ) (1,620 ) (561 ) — (8,924 ) General and administrative — (10,220 ) (797 ) (2 ) — (11,019 ) Amortization of intangible assets — (502 ) — — — (502 ) Other — (929 ) 19 181 — (729 ) — (130,531 ) (21,864 ) (7,495 ) 685 (159,205 ) Income from subsidiaries 12,285 1,949 — — (14,234 ) — Operating income 12,285 18,344 2,025 2,184 (14,234 ) 20,604 Other income (expense), net — 606 (8 ) (244 ) — 354 Income before provision for income taxes 12,285 18,950 2,017 1,940 (14,234 ) 20,958 Provision for income taxes — (6,206 ) — — — (6,206 ) Net income 12,285 12,744 2,017 1,940 (14,234 ) 14,752 Less: Net income attributable to noncontrolling interests — — — (2,467 ) — (2,467 ) Net income (loss) available to common stockholders $ 12,285 $ 12,744 $ 2,017 $ (527 ) $ (14,234 ) $ 12,285 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Six Months Ended June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 194,542 $ 219,397 $ 23,516 $ — $ 437,455 Construction services — 14,408 — — — 14,408 Management fees — (706 ) — — 706 — — 208,244 219,397 23,516 706 451,863 Operating costs Cost of sales - homes — (149,358 ) (184,600 ) (19,665 ) (706 ) (354,329 ) Construction services — (11,927 ) — — — (11,927 ) Sales and marketing — (12,166 ) (13,300 ) (1,662 ) — (27,128 ) General and administrative — (21,988 ) (5,375 ) — — (27,363 ) Amortization of intangible assets — (665 ) — — — (665 ) Other — (1,537 ) 1,343 — — (194 ) — (197,641 ) (201,932 ) (21,327 ) (706 ) (421,606 ) Income (loss) from subsidiaries 18,959 (6,468 ) — — (12,491 ) — Operating income 18,959 4,135 17,465 2,189 (12,491 ) 30,257 Other income (expense), net — 5,206 4,799 (8,582 ) — 1,423 Income (loss) before provision for income taxes 18,959 9,341 22,264 (6,393 ) (12,491 ) 31,680 Provision for income taxes — (10,824 ) — — — (10,824 ) Net income (loss) 18,959 (1,483 ) 22,264 (6,393 ) (12,491 ) 20,856 Less: Net income attributable to noncontrolling interests — — — (1,897 ) — (1,897 ) Net income (loss) available to common stockholders $ 18,959 $ (1,483 ) $ 22,264 $ (8,290 ) $ (12,491 ) $ 18,959 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (Unaudited) Six Months Ended June 30, 2014 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating revenue Home sales $ — $ 242,899 $ 42,437 $ 24,831 $ — $ 310,167 Construction services — 19,593 — — — 19,593 Management fees — 1,140 — — (1,140 ) — — 263,632 42,437 24,831 (1,140 ) 329,760 Operating costs Cost of sales - homes — (184,161 ) (34,523 ) (18,294 ) 1,140 (235,838 ) Construction services — (16,473 ) — — — (16,473 ) Sales and marketing — (11,432 ) (2,815 ) (1,235 ) — (15,482 ) General and administrative — (21,498 ) (1,655 ) (2 ) — (23,155 ) Amortization of intangible assets — (1,120 ) — — — (1,120 ) Other — (1,899 ) 18 590 — (1,291 ) — (236,583 ) (38,975 ) (18,941 ) 1,140 (293,359 ) Income from subsidiaries 20,982 4,964 — — (25,946 ) — Operating income 20,982 32,013 3,462 5,890 (25,946 ) 36,401 Other income (expense), net — 875 (11 ) (391 ) — 473 Income before provision for income taxes 20,982 32,888 3,451 5,499 (25,946 ) 36,874 Provision for income taxes — (10,780 ) — — — (10,780 ) Net income 20,982 22,108 3,451 5,499 (25,946 ) 26,094 Less: Net income attributable to noncontrolling interests — — — (5,112 ) — (5,112 ) Net income available to common stockholders $ 20,982 $ 22,108 $ 3,451 $ 387 $ (25,946 ) $ 20,982 |
Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2015 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating activities Net cash (used in) provided by operating activities $ (1,631 ) $ (98,069 ) $ 13,229 $ (20,462 ) $ 1,631 $ (105,302 ) Investing activities Investments in and advances to unconsolidated joint ventures — (1,000 ) — — — (1,000 ) Distributions from unconsolidated joint ventures — — 362 — — 362 Purchases of property and equipment — (303 ) 41 15 — (247 ) Investments in subsidiaries — (5,004 ) (6,627 ) — 11,631 — Net cash (used in) provided by investing activities — (6,307 ) (6,224 ) 15 11,631 (885 ) Financing activities Proceeds from borrowings on notes payable — — — 28,394 — 28,394 Principal payments on notes payable — (2,385 ) (162 ) (9,301 ) — (11,848 ) Proceeds from borrowings on Revolver — 144,000 — — — 144,000 Payments on Revolver — (40,000 ) — — — (40,000 ) Principal payments on subordinated amortizing notes — (3,368 ) — — — (3,368 ) Payment of deferred loan costs — (799 ) — — — (799 ) Proceeds from stock options exercised — 106 — — — 106 Shares remitted to or withheld by Company for employee tax withholding — (1,632 ) — — — (1,632 ) Noncontrolling interest contributions — — — 5,625 — 5,625 Noncontrolling interest distributions — — — (6,417 ) — (6,417 ) Advances to affiliates — — (4,807 ) 6,826 (2,019 ) — Intercompany receivables/payables 1,631 12,599 (1,845 ) (1,142 ) (11,243 ) — Net cash provided by (used in) financing activities 1,631 108,521 (6,814 ) 23,985 (13,262 ) 114,061 Net increase in cash and cash equivalents — 4,145 191 3,538 — 7,874 Cash and cash equivalents at beginning of period — 48,462 573 3,736 — 52,771 Cash and cash equivalents at end of period $ — $ 52,607 $ 764 $ 7,274 $ — $ 60,645 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended June 30, 2014 (in thousands) Unconsolidated Delaware Lyon California Lyon Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminating Entries Consolidated Company Operating activities Net cash (used in) provided by operating activities $ (619 ) $ (199,766 ) $ 5,062 $ (7,837 ) $ 619 $ (202,541 ) Investing activities Purchases of property and equipment — (1,609 ) (31 ) — — (1,640 ) Investments in subsidiaries — 50,342 — — (50,342 ) — Net cash provided by (used in) investing activities — 48,733 (31 ) — (50,342 ) (1,640 ) Financing activities Proceeds from borrowings on notes payable — 394 (394 ) 34,153 — 34,153 Principal payments on notes payable — (10,428 ) — (28,292 ) — (38,720 ) Proceeds from issuance of 5 3/4% notes — 150,000 — — — 150,000 Payment of deferred loan costs — (3,560 ) — — — (3,560 ) Proceeds from exercise of stock options — 285 — — — 285 Shares remitted to Company for employee tax witholding — (1,414 ) — — — (1,414 ) Offering costs related to sale of common stock — (105 ) — — — (105 ) Noncontrolling interest contributions — — — 8,742 — 8,742 Noncontrolling interest distributions — — — (14,091 ) — (14,091 ) Advances to affiliates — — 5 (45,765 ) 45,760 — Intercompany receivables/payables 619 (55,011 ) (4,609 ) 55,038 3,963 — Net cash provided by (used in) financing activities 619 80,161 (4,998 ) 9,785 49,723 135,290 Net (decrease) increase in cash and cash equivalents — (70,872 ) 33 1,948 — (68,891 ) Cash and cash equivalents at beginning of period — 166,516 28 5,128 — 171,672 Cash and cash equivalents at end of period $ — $ 95,644 $ 61 $ 7,076 $ — $ 102,781 |
Fair Value of Financial Instr26
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Estimated Fair Values of Financial Instruments | The estimated fair values of financial instruments are as follows (in thousands): June 30, 2015 December 31, 2014 Carrying Amount Fair Value Carrying Amount Fair Value Financial liabilities: Notes payable $ 169,281 $ 169,281 $ 39,235 $ 39,235 Subordinated amortizing notes $ 17,349 $ 24,004 $ 20,717 $ 20,717 5 3 / 4 % Senior Notes due 2019 $ 150,000 $ 151,125 $ 150,000 $ 149,250 8 1 / 2 % Senior Notes due 2020 $ 429,545 $ 459,000 $ 430,149 $ 462,410 7% Senior Notes due 2022 $ 300,000 $ 310,500 $ 300,000 $ 300,750 |
Income Per Common Share (Tables
Income Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income (Loss) Per Common Share | Basic and diluted income per common share for the three and six months ended June 30, 2015 and 2014 were calculated as follows (in thousands, except number of shares and per share amounts): Three Three Six Six Basic weighted average number of common shares outstanding 36,565,369 31,224,252 36,514,962 31,159,422 Effect of dilutive securities: Stock options, unvested common shares, and warrants 1,461,497 1,525,856 1,361,734 1,510,138 Diluted average shares outstanding 38,026,866 32,750,108 37,876,696 32,669,560 Net income available to common stockholders $ 12,277 $ 12,285 $ 18,959 $ 20,982 Basic income per common share $ 0.34 $ 0.39 $ 0.52 $ 0.67 Dilutive income per common share $ 0.32 $ 0.38 $ 0.50 $ 0.64 Antidilutive securities not included in the calculation of diluted income per common share (weighted average): Unvested stock options 240,000 — 120,000 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Under Non-Cancelable Operating Leases | The table below shows the future minimum payments under non-cancelable operating leases at June 30, 2015 (in thousands). Year Ending December 31 2015 $ 1,432 2016 2,362 2017 2,149 2018 2,139 2019 1,923 Thereafter 4,118 Total $ 14,123 |
Basis of Presentation and Sig29
Basis of Presentation and Significant Accounting Policies - Narrative (Details) - 6 months ended Jun. 30, 2015 - segment | Total |
Significant Accounting Policies [Line Items] | |
Number of reportable segments | 6 |
Minimum | |
Significant Accounting Policies [Line Items] | |
Percentage of home sale price reserved | 1.00% |
Percentage of sales price from construction management agreements | 3.00% |
Maximum | |
Significant Accounting Policies [Line Items] | |
Percentage of sales price from construction management agreements | 5.00% |
Basis of Presentation and Sig30
Basis of Presentation and Significant Accounting Policies - Summary of Changes in Warranty Liability (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Accounting Policies [Abstract] | ||
Warranty liability, beginning of period | $ 18,155 | $ 14,935 |
Warranty provision during period | 3,057 | 3,693 |
Warranty payments during period | (3,767) | (3,449) |
Warranty charges related to construction services projects | 594 | 652 |
Warranty liability, end of period | $ 18,039 | $ 15,831 |
Basis of Presentation and Sig31
Basis of Presentation and Significant Accounting Policies - Schedule of Interest Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accounting Policies [Abstract] | ||||
Interest incurred | $ 18,611 | $ 11,919 | $ 36,644 | $ 21,314 |
Less: Interest capitalized | 18,611 | 11,919 | 36,644 | 21,314 |
Interest expense, net of amounts capitalized | 0 | 0 | 0 | 0 |
Cash paid for interest | $ 23,325 | $ 19,051 | $ 35,025 | $ 19,671 |
Acquisition of Polygon Northw32
Acquisition of Polygon Northwest Homes - Narrative (Details) | Aug. 12, 2014USD ($)segment | Aug. 11, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)segment | Jun. 30, 2014USD ($) | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||
Number of operating segments as a result of acquired business | segment | 1 | ||||||
Operation revenues | $ 254,695,000 | $ 179,809,000 | $ 451,863,000 | $ 329,760,000 | |||
Income before provision for income taxes | 20,504,000 | $ 20,958,000 | 31,680,000 | $ 36,874,000 | |||
Polygon Northwest Homes | |||||||
Business Acquisition [Line Items] | |||||||
Operation revenues | 98,400,000 | 156,100,000 | |||||
Income before provision for income taxes | $ 10,100,000 | $ 15,000,000 | |||||
7% Senior Notes due August 15, 2022 | |||||||
Business Acquisition [Line Items] | |||||||
Stated interest rate | 7.00% | 7.00% | 7.00% | ||||
7% Senior Notes due August 15, 2022 | Senior notes | |||||||
Business Acquisition [Line Items] | |||||||
Principal amount | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Stated interest rate | 7.00% | 7.00% | 7.00% | ||||
Proceeds from land banking arrangements | $ 100,000,000 | ||||||
Senior unsecured loan facility | |||||||
Business Acquisition [Line Items] | |||||||
Total senior notes | $ 120,000,000 | ||||||
Polygon Northwest Homes | |||||||
Business Acquisition [Line Items] | |||||||
Cash purchase price | $ 520,000,000 | ||||||
Working capital adjustments | 28,000,000 | ||||||
Additional consideration, partly subject to final adjustment | $ 4,300,000 | ||||||
Number of operating segments as a result of acquired business | segment | 2 | ||||||
Goodwill, expected tax deductible amount | $ 46,700,000 | $ 46,700,000 | |||||
Acquisition related costs | $ 0 | $ 0 |
Acquisition of Polygon Northw33
Acquisition of Polygon Northwest Homes - Schedule of Reconciliation of Consideration Transferred as of Acquisition Date (Details) - Polygon Northwest Homes $ in Thousands | Aug. 12, 2014USD ($) |
Business Acquisition [Line Items] | |
Purchase consideration | $ 552,252 |
Net proceeds received from Polygon parcels involved in land banking transactions (excludes California) | (59,834) |
Total consideration transferred | $ 492,418 |
Acquisition of Polygon Northw34
Acquisition of Polygon Northwest Homes - Summary of Preliminary Amounts for Acquired Assets and Liabilities Recorded at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Aug. 12, 2014 |
Assets Acquired | |||
Goodwill | $ 60,887 | $ 60,887 | |
Polygon Northwest Homes | |||
Assets Acquired | |||
Real estate inventories | $ 441,069 | ||
Goodwill | 46,678 | ||
Intangible asset - brand name | 6,700 | ||
Joint venture in mortgage business | 2,000 | ||
Other | 545 | ||
Total Assets | 496,992 | ||
Liabilities Assumed | |||
Accounts payable | 603 | ||
Accrued expenses | 3,971 | ||
Total liabilities | 4,574 | ||
Net assets acquired | $ 492,418 |
Acquisition of Polygon Northw35
Acquisition of Polygon Northwest Homes - Summary of Unaudited Pro Forma Amounts of Polygon Northwest Homes Acquisition (Details) - Jun. 30, 2014 - Polygon Northwest Homes - USD ($) $ / shares in Units, $ in Thousands | Total | Total |
Business Acquisition [Line Items] | ||
Operating revenues | $ 253,696 | $ 446,817 |
Net income available to common stockholders | $ 14,957 | $ 25,190 |
Income per share - basic (in USD per share) | $ 0.48 | $ 0.81 |
Income per share - diluted (in USD per share) | $ 0.46 | $ 0.77 |
Variable Interest Entities an36
Variable Interest Entities and Noncontrolling Interests - Narrative (Details) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015USD ($)joint_venture | Dec. 31, 2014USD ($)joint_venture | |
Noncontrolling Interest [Line Items] | ||
Number of joint ventures | joint_venture | 7 | 6 |
Consolidated variable interest entities, assets | $ 104.2 | $ 88.1 |
Consolidated variable interest entities, liabilities | 60.9 | 45 |
Cash | ||
Noncontrolling Interest [Line Items] | ||
Consolidated variable interest entities, assets | 6.9 | 3.3 |
Real estate | ||
Noncontrolling Interest [Line Items] | ||
Consolidated variable interest entities, assets | $ 93.7 | $ 81.3 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | Aug. 12, 2014 | Jun. 30, 2015 |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 1 | |
Number of reportable segments | 6 | |
Polygon Northwest Homes | ||
Segment Reporting Information [Line Items] | ||
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Financial Information Relating to Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Operating revenue | |||||
Total operating revenue | $ 254,695 | $ 179,809 | $ 451,863 | $ 329,760 | |
Income before provision for income taxes | |||||
Income before provision for income taxes | 20,504 | 20,958 | 31,680 | 36,874 | |
Reportable Geographical Components | California | |||||
Operating revenue | |||||
Total operating revenue | [1] | 87,661 | 135,817 | 174,454 | 250,072 |
Income before provision for income taxes | |||||
Income before provision for income taxes | 11,765 | 23,193 | 21,077 | 43,831 | |
Reportable Geographical Components | Arizona | |||||
Operating revenue | |||||
Total operating revenue | 10,508 | 16,431 | 17,694 | 29,709 | |
Income before provision for income taxes | |||||
Income before provision for income taxes | 306 | 2,321 | 610 | 3,672 | |
Reportable Geographical Components | Nevada | |||||
Operating revenue | |||||
Total operating revenue | 30,771 | 18,392 | 58,013 | 35,541 | |
Income before provision for income taxes | |||||
Income before provision for income taxes | 2,687 | 1,673 | 6,049 | 3,029 | |
Reportable Geographical Components | Colorado | |||||
Operating revenue | |||||
Total operating revenue | 27,404 | 9,169 | 45,593 | 14,438 | |
Income before provision for income taxes | |||||
Income before provision for income taxes | 809 | (453) | 639 | (1,112) | |
Reportable Geographical Components | Washington | |||||
Operating revenue | |||||
Total operating revenue | 46,186 | 0 | 77,466 | 0 | |
Income before provision for income taxes | |||||
Income before provision for income taxes | 4,319 | 0 | 6,892 | 0 | |
Reportable Geographical Components | Oregon | |||||
Operating revenue | |||||
Total operating revenue | 52,165 | 0 | 78,643 | 0 | |
Income before provision for income taxes | |||||
Income before provision for income taxes | 5,866 | 0 | 8,111 | 0 | |
Reportable Geographical Components | Corporate | |||||
Income before provision for income taxes | |||||
Income before provision for income taxes | $ (5,248) | $ (5,776) | $ (11,698) | $ (12,546) | |
[1] | Operating revenue in the California segment includes construction services revenue. |
Segment Information - Schedul39
Segment Information - Schedule of Segment Homebuilding Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Homebuilding assets: | |||
Total homebuilding assets | $ 1,839,799 | $ 1,674,427 | |
California | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | 667,994 | 572,900 | |
Arizona | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | 196,743 | 179,529 | |
Nevada | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | 163,215 | 135,358 | |
Colorado | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | 126,982 | 131,085 | |
Washington | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | 253,391 | 281,456 | |
Oregon | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | 195,848 | 200,761 | |
Corporate | Reportable Geographical Components | |||
Homebuilding assets: | |||
Total homebuilding assets | [1] | $ 235,626 | $ 173,338 |
[1] | Comprised primarily of cash and cash equivalents, deferred income taxes, receivables, deferred loan costs, and other assets. |
Real Estate Inventories - Summa
Real Estate Inventories - Summary of Real Estate Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Real estate inventories: | ||
Land deposits | $ 58,267 | $ 65,873 |
Land and land under development | 926,592 | 1,057,860 |
Homes completed and under construction | 465,716 | 225,496 |
Model homes | 101,676 | 55,410 |
Total | $ 1,552,251 | $ 1,404,639 |
Senior Notes, Secured, and Un41
Senior Notes, Secured, and Unsecured Indebtedness - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Notes payable: | ||
Total notes payable | $ 169,281 | $ 39,235 |
Total debt | 1,066,175 | 940,101 |
Subordinated amortizing notes | ||
Notes payable: | ||
Total debt | 17,349 | 20,717 |
5 3/4% Senior Notes due April 15, 2019 | ||
Notes payable: | ||
Total debt | 150,000 | 150,000 |
8 1/2% Senior Notes due November 15, 2020 | ||
Notes payable: | ||
Total debt | 429,545 | 430,149 |
7% Senior Notes due August 15, 2022 | ||
Notes payable: | ||
Total debt | 300,000 | 300,000 |
Construction notes payable | ||
Notes payable: | ||
Total notes payable | 57,781 | 38,688 |
Seller financing | ||
Notes payable: | ||
Total notes payable | 7,500 | 547 |
Revolving line of credit | ||
Notes payable: | ||
Total notes payable | 104,000 | 0 |
Senior notes | ||
Notes payable: | ||
Total debt | $ 879,545 | $ 880,149 |
Senior Notes, Secured, and Un42
Senior Notes, Secured, and Unsecured Indebtedness - Schedule of Maturities of Notes Payable, Senior Unsecured Facility, 5 3/4% and 8 1/2% Senior Notes (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,066,175 | $ 940,101 |
Senior Notes and Subordinated Amortizing Notes | ||
Debt Instrument [Line Items] | ||
2,015 | 7,500 | |
2,016 | 18,502 | |
2,017 | 160,628 | |
2,018 | 0 | |
2,019 | 150,000 | |
Thereafter | 725,000 | |
Total debt | $ 1,061,630 |
Senior Notes, Secured, and Un43
Senior Notes, Secured, and Unsecured Indebtedness - Schedule of Maturities of Construction Notes Payable (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Total notes payable | $ 169,281 | $ 39,235 | |
Construction Loans | |||
Debt Instrument [Line Items] | |||
Total notes payable | 109,100 | ||
Outstanding | 57,800 | ||
Construction Loans | April 2015 Construction Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable | 18,500 | ||
Outstanding | $ 8,800 | ||
Current Rate | [1] | 3.75% | |
Construction Loans | November 2014 Construction Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 24,000 | ||
Outstanding | $ 15,800 | ||
Current Rate | [1] | 3.75% | |
Construction Loans | November 2014 Construction Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 22,000 | ||
Outstanding | $ 14,700 | ||
Current Rate | [1] | 3.75% | |
Construction Loans | March 2014 Construction Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 26,000 | ||
Outstanding | $ 11,700 | ||
Current Rate | [2] | 3.19% | |
Construction Loans | December 2013 Construction Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 18,600 | ||
Outstanding | $ 6,800 | ||
Current Rate | [2] | 4.25% | |
[1] | Loan bears interest at the prime rate +0.5%. | ||
[2] | Loan bears interest at the Company's option of either LIBOR +3.0% or the prime rate +1.0%. |
Senior Notes, Secured, and Un44
Senior Notes, Secured, and Unsecured Indebtedness - Schedule of Maturities of Construction Notes Payable (Footnote) (Details) | 6 Months Ended |
Jun. 30, 2015 | |
November 2014 Construction Notes Payable | Prime rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.50% |
March 2014 and December 2013 Construction Notes Payable | Prime rate | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.00% |
March 2014 and December 2013 Construction Notes Payable | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 3.00% |
Senior Notes, Secured, and Un45
Senior Notes, Secured, and Unsecured Indebtedness - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
8 1/2% Senior Notes due November 15, 2020 | ||
Debt Instrument [Line Items] | ||
Premium on 8 1/2% Senior Notes | $ 4.5 | $ 5.1 |
Senior Notes, Secured, and Un46
Senior Notes, Secured, and Unsecured Indebtedness - Notes Payable - Narrative (Details) | 6 Months Ended | |||
Jun. 30, 2015USD ($)land_acquisition | Mar. 27, 2015USD ($) | Mar. 26, 2015USD ($) | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | ||||
Notes payable | $ 169,281,000 | $ 39,235,000 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 130,000,000 | $ 100,000,000 | ||
Additional capacity under accordion feature | 200,000,000 | $ 125,000,000 | ||
Minimum borrowing capacity | $ 50,000,000 | |||
Revolving Credit Facility | Revolving Credit Facility Agreement | ||||
Debt Instrument [Line Items] | ||||
Commitment fee percentage | 0.50% | |||
Outstanding letter of credit | $ 7,300,000 | |||
Seller financing | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 7,500,000 | 547,000 | ||
Number of land acquisitions | land_acquisition | 1 | |||
Stated interest rate | 5.00% | |||
Amended facility | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 104,000,000 | $ 0 | ||
Effective rate | 3.41% |
Senior Notes, Secured, and Un47
Senior Notes, Secured, and Unsecured Indebtedness - Subordinated Amortizing Notes - Narrative (Details) $ / shares in Units, $ in Thousands | Nov. 21, 2014$ / sharesshares | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 03, 2014$ / noteshares |
Debt Instrument [Line Items] | ||||
Total debt | $ 1,066,175 | $ 940,101 | ||
Subordinated amortizing notes | ||||
Debt Instrument [Line Items] | ||||
Initial principal amount | $ / note | 18.01 | |||
Stated interest rate | 5.50% | |||
Quarterly installments amount per amortizing note (in USD per note) | $ / note | 1.6250 | |||
Installment payment amount per amortizing note (in USD per note) | $ / note | 1.8056 | |||
Total debt | 17,349 | 20,717 | ||
Senior unsecured loan facility | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 17,349 | $ 20,717 | ||
Maximum | Common stock, Class A | ||||
Debt Instrument [Line Items] | ||||
Shares delivered on mandatory settlement date (in shares) | shares | 5.2247 | |||
Minimum | Common stock, Class A | ||||
Debt Instrument [Line Items] | ||||
Shares delivered on mandatory settlement date (in shares) | shares | 4.4465 | |||
Tangible Equity Units | ||||
Debt Instrument [Line Items] | ||||
Number of TEUs sold (in shares) | shares | 1,000,000 | 150,000 | ||
Stated rate | 6.50% | |||
Share price (in USD per share) | $ / shares | $ 100 | |||
Percent conversion premium | 17.50% |
Senior Notes, Secured, and Un48
Senior Notes, Secured, and Unsecured Indebtedness - Senior Notes - Narrative (Details) - USD ($) | Aug. 11, 2014 | Mar. 31, 2014 | Oct. 24, 2013 | Nov. 08, 2012 | Sep. 03, 2009 | Jan. 31, 2015 | Aug. 31, 2014 | Feb. 28, 2014 | Jul. 31, 2013 | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||||||||
Total senior notes | $ 1,066,175,000 | $ 940,101,000 | |||||||||
Maturity date | Sep. 30, 2016 | ||||||||||
5 3/4% Senior Notes due April 15, 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 5.75% | 5.75% | |||||||||
Total senior notes | $ 150,000,000 | $ 150,000,000 | |||||||||
8 1/2% Senior Notes due November 15, 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 8.50% | 8.50% | |||||||||
Total senior notes | $ 429,545,000 | $ 430,149,000 | |||||||||
Outstanding amount | 425,000,000 | 425,000,000 | |||||||||
Unamortized premium | $ 4,500,000 | $ 5,100,000 | |||||||||
7% Senior Notes due August 15, 2022 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 7.00% | 7.00% | |||||||||
Total senior notes | $ 300,000,000 | $ 300,000,000 | |||||||||
Senior notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total senior notes | $ 879,545,000 | $ 880,149,000 | |||||||||
Senior notes | 5 3/4% Senior Notes due April 15, 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 5.75% | 5.75% | |||||||||
Principal amount | $ 150,000,000 | ||||||||||
Percentage of principal amount | 100.00% | ||||||||||
Percent exchanged | 100.00% | ||||||||||
Maturity date | Apr. 15, 2019 | ||||||||||
Senior notes | 8 1/2% Senior Notes due November 15, 2020 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 8.50% | 8.50% | |||||||||
Principal amount | $ 100,000,000 | $ 325,000,000 | $ 425,000,000 | ||||||||
Percentage of principal amount | 106.50% | 100.00% | |||||||||
Percent exchanged | 100.00% | 100.00% | |||||||||
Maturity date | Nov. 15, 2020 | ||||||||||
Net proceeds from issuance of debt | $ 104,700,000 | ||||||||||
Senior notes | 7% Senior Notes due August 15, 2022 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 7.00% | 7.00% | |||||||||
Principal amount | $ 300,000,000 | $ 300,000,000 | |||||||||
Percentage of principal amount | 100.00% | ||||||||||
Percent exchanged | 100.00% |
Senior Notes, Secured, and Un49
Senior Notes, Secured, and Unsecured Indebtedness - Guarantor and Non-Guarantor Financial Statements - Narrative (Details) | Jun. 30, 2015 |
Parent | |
Debt Instrument [Line Items] | |
Ownership percentage | 100.00% |
Senior Notes, Secured, and Un50
Senior Notes, Secured, and Unsecured Indebtedness - Condensed Consolidating Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
ASSETS | ||||
Cash and cash equivalents | $ 60,645 | $ 52,771 | $ 102,781 | $ 171,672 |
Restricted cash | 504 | 504 | ||
Receivables | 20,665 | 21,250 | ||
Escrow proceeds receivable | 8,253 | 2,915 | ||
Real estate inventories | 1,552,251 | 1,404,639 | ||
Deferred loan costs, net | 15,088 | 15,988 | ||
Goodwill | 60,887 | 60,887 | ||
Intangibles, net | 6,993 | 7,657 | ||
Deferred income taxes, net | 89,825 | 88,039 | ||
Other assets, net | 24,688 | 19,777 | ||
Investments in subsidiaries | 0 | 0 | ||
Intercompany receivables | 0 | 0 | ||
Total assets | 1,839,799 | 1,674,427 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable | 69,516 | 51,814 | ||
Accrued expenses | 85,267 | 85,366 | ||
Notes payable | 169,281 | 39,235 | ||
Total debt | 1,066,175 | 940,101 | ||
Intercompany payables | 0 | 0 | ||
Total liabilities | 1,220,958 | 1,077,281 | ||
Equity | ||||
William Lyon Homes stockholders’ equity (deficit) | 590,505 | 569,915 | ||
Noncontrolling interests | 28,336 | 27,231 | ||
Total liabilities and equity | 1,839,799 | 1,674,427 | ||
Subordinated amortizing notes | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 17,349 | 20,717 | ||
5 3/4% Senior Notes due April 15, 2019 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 150,000 | 150,000 | ||
8 1/2% Senior Notes due November 15, 2020 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 429,545 | 430,149 | ||
7% Senior Notes due August 15, 2022 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 300,000 | 300,000 | ||
Delaware Lyon | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Restricted cash | 0 | 0 | ||
Receivables | 0 | 0 | ||
Escrow proceeds receivable | 0 | 0 | ||
Real estate inventories | 0 | 0 | ||
Deferred loan costs, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Intangibles, net | 0 | 0 | ||
Deferred income taxes, net | 0 | 0 | ||
Other assets, net | 0 | 0 | ||
Investments in subsidiaries | 590,505 | 569,915 | ||
Intercompany receivables | 0 | 0 | ||
Total assets | 590,505 | 569,915 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses | 0 | 0 | ||
Notes payable | 0 | 0 | ||
Intercompany payables | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Equity | ||||
William Lyon Homes stockholders’ equity (deficit) | 590,505 | 569,915 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and equity | 590,505 | 569,915 | ||
Delaware Lyon | Subordinated amortizing notes | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Delaware Lyon | 5 3/4% Senior Notes due April 15, 2019 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Delaware Lyon | 8 1/2% Senior Notes due November 15, 2020 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Delaware Lyon | 7% Senior Notes due August 15, 2022 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
California Lyon | ||||
ASSETS | ||||
Cash and cash equivalents | 52,607 | 48,462 | 95,644 | 166,516 |
Restricted cash | 504 | 504 | ||
Receivables | 16,489 | 16,783 | ||
Escrow proceeds receivable | 1,831 | 613 | ||
Real estate inventories | 878,748 | 755,748 | ||
Deferred loan costs, net | 15,088 | 15,988 | ||
Goodwill | 14,209 | 14,209 | ||
Intangibles, net | 293 | 957 | ||
Deferred income taxes, net | 89,825 | 88,039 | ||
Other assets, net | 21,803 | 17,243 | ||
Investments in subsidiaries | (37,425) | (35,961) | ||
Intercompany receivables | 0 | 0 | ||
Total assets | 1,053,972 | 922,585 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable | 58,037 | 28,792 | ||
Accrued expenses | 58,915 | 76,664 | ||
Notes payable | 111,500 | 384 | ||
Intercompany payables | 167,528 | 164,541 | ||
Total liabilities | 1,292,874 | 1,171,247 | ||
Equity | ||||
William Lyon Homes stockholders’ equity (deficit) | (238,902) | (248,662) | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and equity | 1,053,972 | 922,585 | ||
California Lyon | Subordinated amortizing notes | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 17,349 | 20,717 | ||
California Lyon | 5 3/4% Senior Notes due April 15, 2019 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 150,000 | 150,000 | ||
California Lyon | 8 1/2% Senior Notes due November 15, 2020 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 429,545 | 430,149 | ||
California Lyon | 7% Senior Notes due August 15, 2022 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 300,000 | 300,000 | ||
Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 764 | 573 | 61 | 28 |
Restricted cash | 0 | 0 | ||
Receivables | 368 | 878 | ||
Escrow proceeds receivable | 6,422 | 2,302 | ||
Real estate inventories | 566,227 | 554,170 | ||
Deferred loan costs, net | 0 | 0 | ||
Goodwill | 46,678 | 46,678 | ||
Intangibles, net | 6,700 | 6,700 | ||
Deferred income taxes, net | 0 | 0 | ||
Other assets, net | 2,591 | 2,176 | ||
Investments in subsidiaries | (567,502) | (574,129) | ||
Intercompany receivables | 234,741 | 232,895 | ||
Total assets | 296,989 | 272,243 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable | 8,827 | 19,023 | ||
Accrued expenses | 26,257 | 8,610 | ||
Notes payable | 0 | 162 | ||
Intercompany payables | 0 | 0 | ||
Total liabilities | 35,084 | 27,795 | ||
Equity | ||||
William Lyon Homes stockholders’ equity (deficit) | 261,905 | 244,448 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and equity | 296,989 | 272,243 | ||
Guarantor Subsidiaries | Subordinated amortizing notes | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Guarantor Subsidiaries | 5 3/4% Senior Notes due April 15, 2019 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Guarantor Subsidiaries | 8 1/2% Senior Notes due November 15, 2020 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Guarantor Subsidiaries | 7% Senior Notes due August 15, 2022 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Non-Guarantor Subsidiaries | ||||
ASSETS | ||||
Cash and cash equivalents | 7,274 | 3,736 | 7,076 | 5,128 |
Restricted cash | 0 | 0 | ||
Receivables | 3,808 | 3,589 | ||
Escrow proceeds receivable | 0 | 0 | ||
Real estate inventories | 107,276 | 94,721 | ||
Deferred loan costs, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Intangibles, net | 0 | 0 | ||
Deferred income taxes, net | 0 | 0 | ||
Other assets, net | 294 | 358 | ||
Investments in subsidiaries | 0 | 0 | ||
Intercompany receivables | 0 | 0 | ||
Total assets | 118,652 | 102,404 | ||
LIABILITIES AND EQUITY | ||||
Accounts payable | 2,652 | 3,999 | ||
Accrued expenses | 95 | 92 | ||
Notes payable | 57,781 | 38,689 | ||
Intercompany payables | 67,213 | 68,354 | ||
Total liabilities | 127,741 | 111,134 | ||
Equity | ||||
William Lyon Homes stockholders’ equity (deficit) | (37,425) | (35,961) | ||
Noncontrolling interests | 28,336 | 27,231 | ||
Total liabilities and equity | 118,652 | 102,404 | ||
Non-Guarantor Subsidiaries | Subordinated amortizing notes | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Non-Guarantor Subsidiaries | 5 3/4% Senior Notes due April 15, 2019 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Non-Guarantor Subsidiaries | 8 1/2% Senior Notes due November 15, 2020 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Non-Guarantor Subsidiaries | 7% Senior Notes due August 15, 2022 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | 0 | ||
Eliminating Entries | ||||
ASSETS | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Restricted cash | 0 | 0 | ||
Receivables | 0 | 0 | ||
Escrow proceeds receivable | 0 | 0 | ||
Real estate inventories | 0 | 0 | ||
Deferred loan costs, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Intangibles, net | 0 | 0 | ||
Deferred income taxes, net | 0 | 0 | ||
Other assets, net | 0 | 0 | ||
Investments in subsidiaries | 14,422 | 40,175 | ||
Intercompany receivables | (234,741) | (232,895) | ||
Total assets | (220,319) | (192,720) | ||
LIABILITIES AND EQUITY | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses | 0 | 0 | ||
Notes payable | 0 | 0 | ||
Intercompany payables | (234,741) | (232,895) | ||
Total liabilities | (234,741) | (232,895) | ||
Equity | ||||
William Lyon Homes stockholders’ equity (deficit) | 14,422 | 40,175 | ||
Noncontrolling interests | 0 | 0 | ||
Total liabilities and equity | (220,319) | $ (192,720) | ||
Eliminating Entries | Subordinated amortizing notes | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | |||
Eliminating Entries | 5 3/4% Senior Notes due April 15, 2019 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | |||
Eliminating Entries | 8 1/2% Senior Notes due November 15, 2020 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | 0 | $ 0 | ||
Eliminating Entries | 7% Senior Notes due August 15, 2022 | ||||
LIABILITIES AND EQUITY | ||||
Total debt | $ 0 |
Senior Notes, Secured, and Un51
Senior Notes, Secured, and Unsecured Indebtedness - Condensed Consolidating Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating revenue | ||||
Home sales | $ 247,740 | $ 169,868 | $ 437,455 | $ 310,167 |
Construction services | 6,955 | 9,941 | 14,408 | 19,593 |
Management fees | 0 | 0 | 0 | 0 |
Operating revenue | 254,695 | 179,809 | 451,863 | 329,760 |
Operating costs | ||||
Cost of sales - homes | (200,248) | (129,626) | (354,329) | (235,838) |
Construction services | (5,898) | (8,405) | (11,927) | (16,473) |
Sales and marketing | (14,904) | (8,924) | (27,128) | (15,482) |
General and administrative | (13,415) | (11,019) | (27,363) | (23,155) |
Amortization of intangible assets | (462) | (502) | (665) | (1,120) |
Other | 94 | (729) | (194) | (1,291) |
Total operating costs | (234,833) | (159,205) | (421,606) | (293,359) |
Income (loss) from subsidiaries | 0 | 0 | 0 | 0 |
Operating income | 19,862 | 20,604 | 30,257 | 36,401 |
Other income (expense), net | 642 | 354 | 1,423 | 473 |
Income before provision for income taxes | 20,504 | 20,958 | 31,680 | 36,874 |
Provision for income taxes | (7,254) | (6,206) | (10,824) | (10,780) |
Net income (loss) | 13,250 | 14,752 | 20,856 | 26,094 |
Less: Net income attributable to noncontrolling interests | (973) | (2,467) | (1,897) | (5,112) |
Net income (loss) available to common stockholders | 12,277 | 12,285 | 18,959 | 20,982 |
Delaware Lyon | ||||
Operating revenue | ||||
Home sales | 0 | 0 | 0 | 0 |
Construction services | 0 | 0 | 0 | 0 |
Management fees | 0 | 0 | 0 | 0 |
Operating revenue | 0 | 0 | 0 | 0 |
Operating costs | ||||
Cost of sales - homes | 0 | 0 | 0 | 0 |
Construction services | 0 | 0 | 0 | 0 |
Sales and marketing | 0 | 0 | 0 | 0 |
General and administrative | 0 | 0 | 0 | 0 |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Total operating costs | 0 | 0 | 0 | 0 |
Income (loss) from subsidiaries | 12,277 | 12,285 | 18,959 | 20,982 |
Operating income | 12,277 | 12,285 | 18,959 | 20,982 |
Other income (expense), net | 0 | 0 | 0 | 0 |
Income before provision for income taxes | 12,277 | 12,285 | 18,959 | 20,982 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | 12,277 | 12,285 | 18,959 | 20,982 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) available to common stockholders | 12,277 | 12,285 | 18,959 | 20,982 |
California Lyon | ||||
Operating revenue | ||||
Home sales | 104,998 | 136,300 | 194,542 | 242,899 |
Construction services | 6,955 | 9,941 | 14,408 | 19,593 |
Management fees | (195) | 685 | (706) | 1,140 |
Operating revenue | 111,758 | 146,926 | 208,244 | 263,632 |
Operating costs | ||||
Cost of sales - homes | (80,482) | (103,732) | (149,358) | (184,161) |
Construction services | (5,898) | (8,405) | (11,927) | (16,473) |
Sales and marketing | (6,412) | (6,743) | (12,166) | (11,432) |
General and administrative | (10,669) | (10,220) | (21,988) | (21,498) |
Amortization of intangible assets | (462) | (502) | (665) | (1,120) |
Other | (401) | (929) | (1,537) | (1,899) |
Total operating costs | (104,324) | (130,531) | (197,641) | (236,583) |
Income (loss) from subsidiaries | 276 | 1,949 | (6,468) | 4,964 |
Operating income | 7,710 | 18,344 | 4,135 | 32,013 |
Other income (expense), net | 840 | 606 | 5,206 | 875 |
Income before provision for income taxes | 8,550 | 18,950 | 9,341 | 32,888 |
Provision for income taxes | (7,254) | (6,206) | (10,824) | (10,780) |
Net income (loss) | 1,296 | 12,744 | (1,483) | 22,108 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) available to common stockholders | 1,296 | 12,744 | (1,483) | 22,108 |
Guarantor Subsidiaries | ||||
Operating revenue | ||||
Home sales | 136,263 | 23,889 | 219,397 | 42,437 |
Construction services | 0 | 0 | 0 | 0 |
Management fees | 0 | 0 | 0 | 0 |
Operating revenue | 136,263 | 23,889 | 219,397 | 42,437 |
Operating costs | ||||
Cost of sales - homes | (114,216) | (19,466) | (184,600) | (34,523) |
Construction services | 0 | 0 | 0 | 0 |
Sales and marketing | (7,776) | (1,620) | (13,300) | (2,815) |
General and administrative | (2,746) | (797) | (5,375) | (1,655) |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Other | 495 | 19 | 1,343 | 18 |
Total operating costs | (124,243) | (21,864) | (201,932) | (38,975) |
Income (loss) from subsidiaries | 0 | 0 | 0 | 0 |
Operating income | 12,020 | 2,025 | 17,465 | 3,462 |
Other income (expense), net | (14) | (8) | 4,799 | (11) |
Income before provision for income taxes | 12,006 | 2,017 | 22,264 | 3,451 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | 12,006 | 2,017 | 22,264 | 3,451 |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) available to common stockholders | 12,006 | 2,017 | 22,264 | 3,451 |
Non-Guarantor Subsidiaries | ||||
Operating revenue | ||||
Home sales | 6,479 | 9,679 | 23,516 | 24,831 |
Construction services | 0 | 0 | 0 | 0 |
Management fees | 0 | 0 | 0 | 0 |
Operating revenue | 6,479 | 9,679 | 23,516 | 24,831 |
Operating costs | ||||
Cost of sales - homes | (5,355) | (7,113) | (19,665) | (18,294) |
Construction services | 0 | 0 | 0 | 0 |
Sales and marketing | (716) | (561) | (1,662) | (1,235) |
General and administrative | 0 | (2) | 0 | (2) |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Other | 0 | 181 | 0 | 590 |
Total operating costs | (6,071) | (7,495) | (21,327) | (18,941) |
Income (loss) from subsidiaries | 0 | 0 | 0 | 0 |
Operating income | 408 | 2,184 | 2,189 | 5,890 |
Other income (expense), net | (184) | (244) | (8,582) | (391) |
Income before provision for income taxes | 224 | 1,940 | (6,393) | 5,499 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | 224 | 1,940 | (6,393) | 5,499 |
Less: Net income attributable to noncontrolling interests | (973) | (2,467) | (1,897) | (5,112) |
Net income (loss) available to common stockholders | (749) | (527) | (8,290) | 387 |
Eliminating Entries | ||||
Operating revenue | ||||
Home sales | 0 | 0 | 0 | 0 |
Construction services | 0 | 0 | 0 | 0 |
Management fees | 195 | (685) | 706 | (1,140) |
Operating revenue | 195 | (685) | 706 | (1,140) |
Operating costs | ||||
Cost of sales - homes | (195) | 685 | (706) | 1,140 |
Construction services | 0 | 0 | 0 | 0 |
Sales and marketing | 0 | 0 | 0 | 0 |
General and administrative | 0 | 0 | 0 | 0 |
Amortization of intangible assets | 0 | 0 | 0 | 0 |
Other | 0 | 0 | 0 | 0 |
Total operating costs | (195) | 685 | (706) | 1,140 |
Income (loss) from subsidiaries | (12,553) | (14,234) | (12,491) | (25,946) |
Operating income | (12,553) | (14,234) | (12,491) | (25,946) |
Other income (expense), net | 0 | 0 | 0 | 0 |
Income before provision for income taxes | (12,553) | (14,234) | (12,491) | (25,946) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | (12,553) | (14,234) | (12,491) | (25,946) |
Less: Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) available to common stockholders | $ (12,553) | $ (14,234) | $ (12,491) | $ (25,946) |
Senior Notes, Secured, and Un52
Senior Notes, Secured, and Unsecured Indebtedness - Condensed Consolidating Statement of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities | ||
Net cash (used in) provided by operating activities | $ (105,302) | $ (202,541) |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | (1,000) | 0 |
Distributions from unconsolidated joint ventures | 362 | 0 |
Purchases of property and equipment | (247) | (1,640) |
Investments in subsidiaries | 0 | 0 |
Net cash (used in) provided by investing activities | (885) | (1,640) |
Financing activities | ||
Proceeds from borrowings on notes payable | 28,394 | 34,153 |
Principal payments on notes payable | (11,848) | (38,720) |
Proceeds from borrowings on Revolver | 144,000 | 0 |
Payments on Revolver | (40,000) | 0 |
Principal payments on subordinated amortizing notes | (3,368) | 0 |
Payment of deferred loan costs | (799) | (3,560) |
Proceeds from stock options exercised | 106 | 285 |
Shares remitted to, or withheld by the Company for employee tax withholding | (1,632) | (1,414) |
Offering costs related to sale of common stock | 0 | (105) |
Noncontrolling interest contributions | 5,625 | 8,742 |
Noncontrolling interest distributions | (6,417) | (14,091) |
Advances to affiliates | 0 | 0 |
Intercompany receivables/payables | 0 | 0 |
Net cash provided by (used in) financing activities | 114,061 | 135,290 |
Net (decrease) increase in cash and cash equivalents | 7,874 | (68,891) |
Cash and cash equivalents — beginning of period | 52,771 | 171,672 |
Cash and cash equivalents — end of period | 60,645 | 102,781 |
5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | 0 | 150,000 |
Delaware Lyon | ||
Operating activities | ||
Net cash (used in) provided by operating activities | (1,631) | (619) |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | 0 | |
Distributions from unconsolidated joint ventures | 0 | |
Purchases of property and equipment | 0 | 0 |
Investments in subsidiaries | 0 | 0 |
Net cash (used in) provided by investing activities | 0 | 0 |
Financing activities | ||
Proceeds from borrowings on notes payable | 0 | 0 |
Principal payments on notes payable | 0 | 0 |
Proceeds from borrowings on Revolver | 0 | |
Payments on Revolver | 0 | |
Principal payments on subordinated amortizing notes | 0 | |
Payment of deferred loan costs | 0 | 0 |
Proceeds from stock options exercised | 0 | 0 |
Shares remitted to, or withheld by the Company for employee tax withholding | 0 | 0 |
Offering costs related to sale of common stock | 0 | |
Noncontrolling interest contributions | 0 | 0 |
Noncontrolling interest distributions | 0 | 0 |
Advances to affiliates | 0 | 0 |
Intercompany receivables/payables | 1,631 | 619 |
Net cash provided by (used in) financing activities | 1,631 | 619 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents — beginning of period | 0 | 0 |
Cash and cash equivalents — end of period | 0 | 0 |
Delaware Lyon | 5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | 0 | |
California Lyon | ||
Operating activities | ||
Net cash (used in) provided by operating activities | (98,069) | (199,766) |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | (1,000) | |
Distributions from unconsolidated joint ventures | 0 | |
Purchases of property and equipment | (303) | (1,609) |
Investments in subsidiaries | (5,004) | 50,342 |
Net cash (used in) provided by investing activities | (6,307) | 48,733 |
Financing activities | ||
Proceeds from borrowings on notes payable | 0 | 394 |
Principal payments on notes payable | (2,385) | (10,428) |
Proceeds from borrowings on Revolver | 144,000 | |
Payments on Revolver | (40,000) | |
Principal payments on subordinated amortizing notes | (3,368) | |
Payment of deferred loan costs | (799) | (3,560) |
Proceeds from stock options exercised | 106 | 285 |
Shares remitted to, or withheld by the Company for employee tax withholding | (1,632) | (1,414) |
Offering costs related to sale of common stock | (105) | |
Noncontrolling interest contributions | 0 | 0 |
Noncontrolling interest distributions | 0 | 0 |
Advances to affiliates | 0 | 0 |
Intercompany receivables/payables | 12,599 | (55,011) |
Net cash provided by (used in) financing activities | 108,521 | 80,161 |
Net (decrease) increase in cash and cash equivalents | 4,145 | (70,872) |
Cash and cash equivalents — beginning of period | 48,462 | 166,516 |
Cash and cash equivalents — end of period | 52,607 | 95,644 |
California Lyon | 5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | 150,000 | |
Guarantor Subsidiaries | ||
Operating activities | ||
Net cash (used in) provided by operating activities | 13,229 | 5,062 |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | 0 | |
Distributions from unconsolidated joint ventures | 362 | |
Purchases of property and equipment | 41 | (31) |
Investments in subsidiaries | (6,627) | 0 |
Net cash (used in) provided by investing activities | (6,224) | (31) |
Financing activities | ||
Proceeds from borrowings on notes payable | 0 | (394) |
Principal payments on notes payable | (162) | 0 |
Proceeds from borrowings on Revolver | 0 | |
Payments on Revolver | 0 | |
Principal payments on subordinated amortizing notes | 0 | |
Payment of deferred loan costs | 0 | 0 |
Proceeds from stock options exercised | 0 | 0 |
Shares remitted to, or withheld by the Company for employee tax withholding | 0 | 0 |
Offering costs related to sale of common stock | 0 | |
Noncontrolling interest contributions | 0 | 0 |
Noncontrolling interest distributions | 0 | 0 |
Advances to affiliates | (4,807) | 5 |
Intercompany receivables/payables | (1,845) | (4,609) |
Net cash provided by (used in) financing activities | (6,814) | (4,998) |
Net (decrease) increase in cash and cash equivalents | 191 | 33 |
Cash and cash equivalents — beginning of period | 573 | 28 |
Cash and cash equivalents — end of period | 764 | 61 |
Guarantor Subsidiaries | 5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | 0 | |
Non-Guarantor Subsidiaries | ||
Operating activities | ||
Net cash (used in) provided by operating activities | (20,462) | (7,837) |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | 0 | |
Distributions from unconsolidated joint ventures | 0 | |
Purchases of property and equipment | 15 | 0 |
Investments in subsidiaries | 0 | 0 |
Net cash (used in) provided by investing activities | 15 | 0 |
Financing activities | ||
Proceeds from borrowings on notes payable | 28,394 | 34,153 |
Principal payments on notes payable | (9,301) | (28,292) |
Proceeds from borrowings on Revolver | 0 | |
Payments on Revolver | 0 | |
Principal payments on subordinated amortizing notes | 0 | |
Payment of deferred loan costs | 0 | 0 |
Proceeds from stock options exercised | 0 | 0 |
Shares remitted to, or withheld by the Company for employee tax withholding | 0 | 0 |
Offering costs related to sale of common stock | 0 | |
Noncontrolling interest contributions | 5,625 | 8,742 |
Noncontrolling interest distributions | (6,417) | (14,091) |
Advances to affiliates | 6,826 | (45,765) |
Intercompany receivables/payables | (1,142) | 55,038 |
Net cash provided by (used in) financing activities | 23,985 | 9,785 |
Net (decrease) increase in cash and cash equivalents | 3,538 | 1,948 |
Cash and cash equivalents — beginning of period | 3,736 | 5,128 |
Cash and cash equivalents — end of period | 7,274 | 7,076 |
Non-Guarantor Subsidiaries | 5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | 0 | |
Eliminating Entries | ||
Operating activities | ||
Net cash (used in) provided by operating activities | 1,631 | 619 |
Investing activities | ||
Investments in and advances to unconsolidated joint ventures | 0 | |
Distributions from unconsolidated joint ventures | 0 | |
Purchases of property and equipment | 0 | 0 |
Investments in subsidiaries | 11,631 | (50,342) |
Net cash (used in) provided by investing activities | 11,631 | (50,342) |
Financing activities | ||
Proceeds from borrowings on notes payable | 0 | 0 |
Principal payments on notes payable | 0 | 0 |
Proceeds from borrowings on Revolver | 0 | |
Payments on Revolver | 0 | |
Principal payments on subordinated amortizing notes | 0 | |
Payment of deferred loan costs | 0 | 0 |
Proceeds from stock options exercised | 0 | 0 |
Shares remitted to, or withheld by the Company for employee tax withholding | 0 | 0 |
Offering costs related to sale of common stock | 0 | |
Noncontrolling interest contributions | 0 | 0 |
Noncontrolling interest distributions | 0 | 0 |
Advances to affiliates | (2,019) | 45,760 |
Intercompany receivables/payables | (11,243) | 3,963 |
Net cash provided by (used in) financing activities | (13,262) | 49,723 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents — beginning of period | 0 | 0 |
Cash and cash equivalents — end of period | $ 0 | 0 |
Eliminating Entries | 5 3/4% Senior Notes due April 15, 2019 | ||
Financing activities | ||
Proceeds from issuance of 5 3/4% senior notes | $ 0 |
Fair Value of Financial Instr53
Fair Value of Financial Instruments - Schedule of Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Financial liabilities: | ||
Notes payable | $ 169,281 | $ 39,235 |
Notes payable, fair value | 169,281 | 39,235 |
Total senior notes | 1,066,175 | 940,101 |
Subordinated amortizing notes | ||
Financial liabilities: | ||
Total senior notes | 17,349 | 20,717 |
Long-term Debt, Fair Value | 24,004 | 20,717 |
5 3/4% Senior Notes due April 15, 2019 | ||
Financial liabilities: | ||
Total senior notes | 150,000 | 150,000 |
Long-term Debt, Fair Value | $ 151,125 | $ 149,250 |
Stated interest rate | 5.75% | 5.75% |
8 1/2% Senior Notes due November 15, 2020 | ||
Financial liabilities: | ||
Total senior notes | $ 429,545 | $ 430,149 |
Long-term Debt, Fair Value | $ 459,000 | $ 462,410 |
Stated interest rate | 8.50% | 8.50% |
7% Senior Notes due August 15, 2022 | ||
Financial liabilities: | ||
Total senior notes | $ 300,000 | $ 300,000 |
Long-term Debt, Fair Value | $ 310,500 | $ 300,750 |
Stated interest rate | 7.00% | 7.00% |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | Sep. 03, 2009 | Jun. 30, 2015 | Dec. 31, 2014 |
Related Party Transactions [Abstract] | |||
Aggregate purchase price of aircraft | $ 8.3 | ||
Cash paid on sale of aircraft | 2.1 | ||
Promissory note from the affiliate | 6.2 | ||
Adjusted fair value | 5.2 | ||
Semiannual interest payments received | $ 0.1 | ||
Maturity date | Sep. 30, 2016 | ||
Amortized balance | $ 5.9 | $ 5.8 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Income Taxes [Line Items] | |||||
Effective income tax rate | 35.40% | 29.60% | 34.20% | 29.20% | |
Valuation allowance | $ 1,584,000 | $ 1,584,000 | $ 1,626,000 | ||
Testing Period | 5 years | ||||
AMT credit carryovers | 1,400,000 | $ 1,400,000 | |||
Unrecognized tax benefits | 0 | 0 | |||
Federal | |||||
Income Taxes [Line Items] | |||||
Operating loss carry forwards | 3,600,000 | 3,600,000 | |||
Unused built-in losses | 64,200,000 | 64,200,000 | |||
State | |||||
Income Taxes [Line Items] | |||||
Operating loss carry forwards | 79,500,000 | 79,500,000 | |||
Unused built-in losses | $ 10,300,000 | $ 10,300,000 |
Income Per Common Share - Basic
Income Per Common Share - Basic and Diluted Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Basic weighted average number of common shares outstanding (in shares) | 36,565,369 | 31,224,252 | 36,514,962 | 31,159,422 |
Effect of dilutive securities: | ||||
Stock options, unvested common shares, and warrants (in shares) | 1,461,497 | 1,525,856 | 1,361,734 | 1,510,138 |
Diluted average shares outstanding (in shares) | 38,026,866 | 32,750,108 | 37,876,696 | 32,669,560 |
Net income available to common stockholders | $ 12,277 | $ 12,285 | $ 18,959 | $ 20,982 |
Basic income per common share (in USD per share) | $ 0.34 | $ 0.39 | $ 0.52 | $ 0.67 |
Dilutive income per common share (in USD per share) | $ 0.32 | $ 0.38 | $ 0.50 | $ 0.64 |
Unvested Stock Options | ||||
Effect of dilutive securities: | ||||
Antidilutive securities not included in the calculation of diluted income per common share (weighted average): | 240,000 | 0 | 120,000 | 0 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted in period (in shares) | 240,000 | 240,000 | |||
Stock based compensation expense | $ 1,800,000 | $ 900,000 | $ 3,157,000 | $ 1,854,000 | |
2012 Equity Incentive Plan | Vest on March 31st of each of 2018, 2019, 2020 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options expected to vest (in shares) | 120,000 | 120,000 | |||
Vesting period | 3 years | ||||
2012 Equity Incentive Plan | Vest on March 31st 2018 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options expected to vest (in shares) | 120,000 | 120,000 | |||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of stock (in shares) | 0 | 197,614 | |||
Restricted stock | Other Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of stock (in shares) | 177,397 | ||||
Restricted stock | Other Employee | Vest on March 1st of each of 2016, 2017 and 2018 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of stock (in shares) | 141,102 | ||||
Stock awards, vesting percentage | 33.33% | ||||
Restricted stock | Other Employee | Vest on March 1st of each of 2016 and 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of stock (in shares) | 36,295 | ||||
Stock awards, vesting percentage | 50.00% | ||||
Restricted stock | Non Employee Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of stock (in shares) | 20,217 | ||||
Stock awards, vesting percentage | 25.00% | ||||
Performance Based Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of stock (in shares) | 0 | 282,216 | |||
Compensation expense recognized | $ 500,000 | ||||
Common stock, Class A | 2012 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted in period (in shares) | 240,000 | ||||
Exercise price per share (in USD per share) | $ 25.82 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Loss Contingencies [Line Items] | |||||
Rent expense under cancelable and non-cancelable operating leases | $ 0.8 | $ 0.7 | $ 1.7 | $ 1.4 | |
Deposits as collateral for outstanding surety bonds | 0.5 | 0.5 | $ 0.5 | ||
Outstanding performance and surety bonds | 122.5 | 122.5 | |||
Non-refundable deposits | 58 | 58 | |||
Remaining purchase price of land | 535.4 | 535.4 | |||
Project construction commitment | |||||
Loss Contingencies [Line Items] | |||||
Other Commitment | $ 161.1 | $ 161.1 |
Commitments and Contingencies59
Commitments and Contingencies - Schedule of Future Minimum Payments Under Non-Cancelable Operating Leases (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,015 | $ 1,432 |
2,016 | 2,362 |
2,017 | 2,149 |
2,018 | 2,139 |
2,019 | 1,923 |
Thereafter | 4,118 |
Total | $ 14,123 |