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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Meritage Homes Corp | NYSE:MTH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 165.74 | 0 | 09:01:57 |
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Maryland
|
|
86-0611231
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
|
8800 E. Raintree Drive, Suite 300,
Scottsdale, Arizona
|
|
85260
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(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Items 3-5. Not Applicable
|
|
|
|
|
|
|
|
|
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|
||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
172,175
|
|
|
$
|
262,208
|
|
Other receivables
|
|
60,491
|
|
|
57,296
|
|
||
Real estate
|
|
2,219,169
|
|
|
2,098,302
|
|
||
Deposits on real estate under option or contract
|
|
91,991
|
|
|
87,839
|
|
||
Investments in unconsolidated entities
|
|
10,592
|
|
|
11,370
|
|
||
Property and equipment, net
|
|
34,544
|
|
|
33,970
|
|
||
Deferred tax asset
|
|
58,989
|
|
|
59,147
|
|
||
Prepaids, other assets and goodwill
|
|
66,562
|
|
|
69,645
|
|
||
Total assets
|
|
$
|
2,714,513
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|
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$
|
2,679,777
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|
Liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
122,289
|
|
|
$
|
106,440
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|
Accrued liabilities
|
|
145,883
|
|
|
161,163
|
|
||
Home sale deposits
|
|
42,639
|
|
|
36,197
|
|
||
Loans payable and other borrowings
|
|
25,734
|
|
|
23,867
|
|
||
Senior and convertible senior notes, net
|
|
1,093,659
|
|
|
1,093,173
|
|
||
Total liabilities
|
|
1,430,204
|
|
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1,420,840
|
|
||
Stockholders’ Equity
|
|
|
|
|
||||
Preferred stock, par value $0.01. Authorized 10,000,000 shares; none issued and outstanding at March 31, 2016 and December 31, 2015
|
|
—
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|
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—
|
|
||
Common stock, par value $0.01. Authorized 125,000,000 shares; issued 39,985,379 and 39,669,094 shares at March 31, 2016 and December 31, 2015, respectively
|
|
400
|
|
|
397
|
|
||
Additional paid-in capital
|
|
563,892
|
|
|
559,492
|
|
||
Retained earnings
|
|
720,017
|
|
|
699,048
|
|
||
Total stockholders’ equity
|
|
1,284,309
|
|
|
1,258,937
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
2,714,513
|
|
|
$
|
2,679,777
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|
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Three Months Ended March 31,
|
||||||
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|
|
||||||
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2016
|
|
2015
|
||||
Homebuilding:
|
|
|
|
|
||||
Home closing revenue
|
|
$
|
595,617
|
|
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$
|
517,273
|
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Land closing revenue
|
|
2,149
|
|
|
1,439
|
|
||
Total closing revenue
|
|
597,766
|
|
|
518,712
|
|
||
Cost of home closings
|
|
(492,270
|
)
|
|
(421,786
|
)
|
||
Cost of land closings
|
|
(1,700
|
)
|
|
(1,285
|
)
|
||
Total cost of closings
|
|
(493,970
|
)
|
|
(423,071
|
)
|
||
Home closing gross profit
|
|
103,347
|
|
|
95,487
|
|
||
Land closing gross profit
|
|
449
|
|
|
154
|
|
||
Total closing gross profit
|
|
103,796
|
|
|
95,641
|
|
||
Financial Services:
|
|
|
|
|
||||
Revenue
|
|
2,500
|
|
|
2,535
|
|
||
Expense
|
|
(1,246
|
)
|
|
(1,299
|
)
|
||
Earnings from financial services unconsolidated entities and other, net
|
|
2,792
|
|
|
2,544
|
|
||
Financial services profit
|
|
4,046
|
|
|
3,780
|
|
||
Commissions and other sales costs
|
|
(46,177
|
)
|
|
(41,612
|
)
|
||
General and administrative expenses
|
|
(29,618
|
)
|
|
(29,650
|
)
|
||
Loss from other unconsolidated entities, net
|
|
(157
|
)
|
|
(123
|
)
|
||
Interest expense
|
|
(3,288
|
)
|
|
(3,154
|
)
|
||
Other income/(loss), net
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|
283
|
|
|
415
|
|
||
Earnings before income taxes
|
|
28,885
|
|
|
25,297
|
|
||
Provision for income taxes
|
|
(7,916
|
)
|
|
(8,897
|
)
|
||
Net earnings
|
|
$
|
20,969
|
|
|
$
|
16,400
|
|
Earnings per common share:
|
|
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|
|
||||
Basic
|
|
$
|
0.53
|
|
|
$
|
0.42
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Diluted
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
Weighted average number of shares:
|
|
|
|
|
||||
Basic
|
|
39,839
|
|
|
39,390
|
|
||
Diluted
|
|
42,363
|
|
|
41,948
|
|
|
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Three Months Ended March 31,
|
||||||
|
|
|
|
|
||||
|
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2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net earnings
|
|
$
|
20,969
|
|
|
$
|
16,400
|
|
Adjustments to reconcile net earnings to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
3,402
|
|
|
3,211
|
|
||
Stock-based compensation
|
|
4,758
|
|
|
4,630
|
|
||
Excess income tax provision/(benefit) from stock-based awards
|
|
516
|
|
|
(1,935
|
)
|
||
Equity in earnings from unconsolidated entities
|
|
(2,635
|
)
|
|
(2,421
|
)
|
||
Distributions of earnings from unconsolidated entities
|
|
3,477
|
|
|
3,035
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|
||
Other
|
|
1,048
|
|
|
(490
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Increase in real estate
|
|
(116,035
|
)
|
|
(58,906
|
)
|
||
(Increase)/decrease in deposits on real estate under option or contract
|
|
(4,046
|
)
|
|
3,767
|
|
||
Increase in receivables, prepaids and other assets
|
|
(168
|
)
|
|
(5,695
|
)
|
||
Increase/(decrease) in accounts payable and accrued liabilities
|
|
455
|
|
|
(3,179
|
)
|
||
Increase in home sale deposits
|
|
6,442
|
|
|
3,392
|
|
||
Net cash used in operating activities
|
|
(81,817
|
)
|
|
(38,191
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
(63
|
)
|
|
(104
|
)
|
||
Purchases of property and equipment
|
|
(3,940
|
)
|
|
(4,589
|
)
|
||
Proceeds from sales of property and equipment
|
|
35
|
|
|
44
|
|
||
Maturities/sales of investments and securities
|
|
645
|
|
|
—
|
|
||
Payments to purchase investments and securities
|
|
(645
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(3,968
|
)
|
|
(4,649
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from Credit Facility, net
|
|
—
|
|
|
27,000
|
|
||
Repayment of loans payable and other borrowings
|
|
(3,893
|
)
|
|
(3,017
|
)
|
||
Excess income tax (provision)/benefit from stock-based awards
|
|
(516
|
)
|
|
1,935
|
|
||
Proceeds from stock option exercises
|
|
161
|
|
|
2,834
|
|
||
Net cash (used in)/provided by financing activities
|
|
(4,248
|
)
|
|
28,752
|
|
||
Net decrease in cash and cash equivalents
|
|
(90,033
|
)
|
|
(14,088
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
262,208
|
|
|
103,333
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
172,175
|
|
|
$
|
89,245
|
|
|
|
As of
|
||||||||||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Outstanding
|
|
Estimated work
remaining to
complete
|
|
Outstanding
|
|
Estimated work
remaining to
complete
|
||||||||
Sureties:
|
|
|
|
|
|
|
|
|
||||||||
Sureties related to joint ventures
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
87
|
|
|
$
|
87
|
|
Sureties related to owned projects and lots under contract
|
|
242,117
|
|
|
87,276
|
|
|
250,639
|
|
|
103,200
|
|
||||
Total Sureties
|
|
$
|
242,117
|
|
|
$
|
87,276
|
|
|
$
|
250,726
|
|
|
$
|
103,287
|
|
Letters of Credit (“LOCs”):
|
|
|
|
|
|
|
|
|
||||||||
LOCs in lieu of deposits for contracted lots
|
|
$
|
—
|
|
|
N/A
|
|
|
$
|
—
|
|
|
N/A
|
|
||
LOCs for land development
|
|
24,308
|
|
|
N/A
|
|
|
23,934
|
|
|
N/A
|
|
||||
LOCs for general corporate operations
|
|
3,750
|
|
|
N/A
|
|
|
3,750
|
|
|
N/A
|
|
||||
Total LOCs
|
|
$
|
28,058
|
|
|
N/A
|
|
|
$
|
27,684
|
|
|
N/A
|
|
|
|
As of
|
||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Accruals related to real estate development and construction activities
|
|
$
|
44,406
|
|
|
$
|
37,509
|
|
Payroll and other benefits
|
|
24,499
|
|
|
41,240
|
|
||
Accrued taxes
|
|
10,386
|
|
|
9,950
|
|
||
Warranty reserves
|
|
22,308
|
|
|
21,615
|
|
||
Legal reserves
|
|
2,117
|
|
|
18,812
|
|
||
Other accruals
|
|
42,167
|
|
|
32,037
|
|
||
Total
|
|
$
|
145,883
|
|
|
$
|
161,163
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Balance, beginning of period
|
$
|
21,615
|
|
|
$
|
22,080
|
|
Additions to reserve from new home deliveries
|
3,094
|
|
|
2,628
|
|
||
Warranty claims
|
(2,842
|
)
|
|
(2,869
|
)
|
||
Adjustments to pre-existing reserves
|
441
|
|
|
—
|
|
||
Balance, end of period
|
$
|
22,308
|
|
|
$
|
21,839
|
|
|
|
As of
|
||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Homes under contract under construction
(1)
|
|
$
|
580,194
|
|
|
$
|
456,138
|
|
Unsold homes, completed and under construction
(1)
|
|
269,353
|
|
|
307,425
|
|
||
Model homes
(1)
|
|
138,109
|
|
|
138,546
|
|
||
Finished home sites and home sites under development
(2)
|
|
1,231,513
|
|
|
1,196,193
|
|
||
Total
|
|
$
|
2,219,169
|
|
|
$
|
2,098,302
|
|
(1)
|
Includes the allocated land and land development costs associated with each lot for these homes.
|
(2)
|
Includes raw land, land held for development and land held for sale. Land held for development primarily reflects land and land development costs related to land where development activity is not currently underway but is expected to begin in the future. For these parcels, we may have chosen not to currently develop certain land holdings as they typically represent a portion or phases of a larger land parcel that we plan to build out over several years. We do not capitalize interest for inactive assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are expensed as incurred.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Capitalized interest, beginning of period
|
$
|
61,202
|
|
|
$
|
54,060
|
|
Interest incurred
|
17,559
|
|
|
15,282
|
|
||
Interest expensed
|
(3,288
|
)
|
|
(3,154
|
)
|
||
Interest amortized to cost of home and land closings
|
(11,347
|
)
|
|
(9,345
|
)
|
||
Capitalized interest, end of period
(1)
|
$
|
64,126
|
|
|
$
|
56,843
|
|
(1)
|
Approximately
$445,000
of the capitalized interest is related to our joint venture investments and is a component of Investments in unconsolidated entities in our consolidated balance sheet as of
March 31, 2016
and
December 31, 2015
.
|
|
|
Projected Number
of Lots
|
|
Purchase
Price
|
|
Option/
Earnest Money
Deposits–Cash
|
|
|||||
Purchase and option contracts recorded on balance sheet as Real estate not owned
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Option contracts not recorded on balance sheet — non-refundable deposits, committed
(1)
|
|
5,655
|
|
|
543,886
|
|
|
73,559
|
|
|
||
Purchase contracts not recorded on balance sheet — non-refundable deposits, committed
(1)
|
|
2,896
|
|
|
176,528
|
|
|
7,615
|
|
|
||
Purchase contracts not recorded on balance sheet —refundable deposits, committed
|
|
494
|
|
|
58,030
|
|
|
4,225
|
|
|
||
Total committed (on and off balance sheet)
|
|
9,045
|
|
|
778,444
|
|
|
85,399
|
|
|
||
Total purchase and option contracts not recorded on balance sheet — refundable deposits, uncommitted
(2)
|
|
4,814
|
|
|
239,320
|
|
|
6,592
|
|
|
||
Total lots under contract or option
|
|
13,859
|
|
|
$
|
1,017,764
|
|
|
$
|
91,991
|
|
|
Total purchase and option contracts not recorded on balance sheet
(3)
|
|
13,859
|
|
|
$
|
1,017,764
|
|
|
$
|
91,991
|
|
(4)
|
(1)
|
Deposits are non-refundable except if certain contractual conditions are not performed by the selling party.
|
(2)
|
Deposits are refundable at our sole discretion. We have not completed our acquisition evaluation process and we have not internally committed to purchase these lots.
|
(3)
|
Except for our specific performance contracts recorded on our balance sheet as Real estate not owned, if any, none of our option agreements require us to purchase lots.
|
(4)
|
Amount is reflected in our consolidated balance sheet in the line item "Deposits on real estate under option or contract" as of
March 31, 2016
.
|
|
As of
|
||||||
|
March 31, 2016
|
|
December 31, 2015
|
||||
Assets:
|
|
|
|
||||
Cash
|
$
|
9,687
|
|
|
$
|
7,888
|
|
Real estate
|
32,488
|
|
|
33,366
|
|
||
Other assets
|
3,936
|
|
|
4,514
|
|
||
Total assets
|
$
|
46,111
|
|
|
$
|
45,768
|
|
Liabilities and equity:
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
5,631
|
|
|
$
|
7,331
|
|
Notes and mortgages payable
|
13,345
|
|
|
13,345
|
|
||
Equity of:
|
|
|
|
||||
Meritage
(1)
|
8,104
|
|
|
8,194
|
|
||
Other
|
19,031
|
|
|
16,898
|
|
||
Total liabilities and equity
|
$
|
46,111
|
|
|
$
|
45,768
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Revenue
|
$
|
11,071
|
|
|
$
|
6,741
|
|
Costs and expenses
|
(4,976
|
)
|
|
(3,195
|
)
|
||
Net earnings of unconsolidated entities
|
$
|
6,095
|
|
|
$
|
3,546
|
|
Meritage’s share of pre-tax earnings
(1) (2)
|
$
|
2,635
|
|
|
$
|
2,421
|
|
(1)
|
Balance represents Meritage’s interest, as reflected in the financial records of the respective joint ventures. This balance may differ from the balance reported in our consolidated financial statements due to the following reconciling items: (i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) capitalization of interest on qualified assets, (iv) income deferrals as discussed in Note (2) below and (v) the cessation of allocation of losses from joint ventures in which we have previously written down our investment balance to
zero
and where we have
no
commitment to fund additional losses. As discussed in Note 2 to these unaudited combined financial statements, balances do not include
$445,000
of capitalized interest that is a component of our investment balances at
March 31, 2016
and
December 31, 2015
.
|
(2)
|
Our share of pre-tax earnings is recorded in Earnings from financial services unconsolidated entities and other, net and Loss from other unconsolidated entities, net on our consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures. Such profit is deferred until homes are delivered by us and title passes to a homebuyer.
|
|
|
As of
|
||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Other borrowings, real estate note payable
(1)
|
|
$
|
25,734
|
|
|
$
|
23,867
|
|
$500 million unsecured revolving credit facility, maturing July 2019, with interest approximating LIBOR (approximately 0.44% at March 31, 2016) plus 1.75% or Prime (3.50% at March 31, 2016) plus 0.75%
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
25,734
|
|
|
$
|
23,867
|
|
(1)
|
Reflects balance of non-recourse notes payable in connection with land purchases, with interest rates ranging from
0%
to
6%
.
|
|
|
As of
|
||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
4.50% senior notes due 2018
|
|
$
|
175,000
|
|
|
$
|
175,000
|
|
7.15% senior notes due 2020. At March 31, 2016 and December 31, 2015 there was approximately $2,275 and $2,418 in net unamortized premium, respectively
|
|
302,275
|
|
|
302,418
|
|
||
7.00% senior notes due 2022
|
|
300,000
|
|
|
300,000
|
|
||
6.00% senior notes due 2025
|
|
200,000
|
|
|
200,000
|
|
||
1.875% convertible senior notes due 2032
(1)
|
|
126,500
|
|
|
126,500
|
|
||
Net debt issuance costs
(2)
|
|
$
|
(10,116
|
)
|
|
$
|
(10,745
|
)
|
Total
|
|
$
|
1,093,659
|
|
|
$
|
1,093,173
|
|
(1)
|
The Convertible Notes may be redeemed by the note-holders on the fifth, tenth and fifteenth anniversary dates of the issuance date of the Convertible Notes (September 18, 2012).
|
(2)
|
As discussed in Note 1, the adoption of ASU 2015-03 resulted in a retrospective reclassification of our debt costs from Prepaids, other assets and goodwill to Senior and convertible senior notes, net on our
December 31, 2015
balance sheet in the amount of
$10.7 million
.
|
•
|
Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2 — Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market.
|
•
|
Level 3 — Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the company’s own estimates about the assumptions that market participants would use to value the asset or liability.
|
|
|
As of
|
||||||||||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Aggregate
Principal
|
|
Estimated Fair
Value
|
|
Aggregate
Principal
|
|
Estimated Fair
Value
|
||||||||
4.50% senior notes
|
|
$
|
175,000
|
|
|
$
|
176,750
|
|
|
$
|
175,000
|
|
|
$
|
175,000
|
|
7.15% senior notes
|
|
$
|
300,000
|
|
|
$
|
316,500
|
|
|
$
|
300,000
|
|
|
$
|
315,750
|
|
7.00% senior notes
|
|
$
|
300,000
|
|
|
$
|
319,500
|
|
|
$
|
300,000
|
|
|
$
|
313,500
|
|
6.00% senior notes
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
|
$
|
197,500
|
|
1.875% convertible senior notes
|
|
$
|
126,500
|
|
|
$
|
124,761
|
|
|
$
|
126,500
|
|
|
$
|
124,128
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Basic weighted average number of shares outstanding
|
|
39,839
|
|
|
39,390
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Convertible debt
(1)
|
|
2,176
|
|
|
2,176
|
|
||
Stock options and unvested restricted stock
|
|
348
|
|
|
382
|
|
||
Diluted average shares outstanding
|
|
42,363
|
|
|
41,948
|
|
||
Net earnings as reported
|
|
$
|
20,969
|
|
|
$
|
16,400
|
|
Interest attributable to convertible senior notes, net of income taxes
|
|
400
|
|
|
385
|
|
||
Net earnings for diluted earnings per share
|
|
$
|
21,369
|
|
|
$
|
16,785
|
|
Basic earnings per share
|
|
$
|
0.53
|
|
|
$
|
0.42
|
|
Diluted earnings per share
(1)
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
Antidilutive stock options not included in the calculation of diluted earnings per share
|
|
68
|
|
|
7
|
|
(1)
|
In accordance with ASC 260-10, Earnings Per Share, ("ASC 260-10") we calculate the dilutive effect of convertible securities using the "if-converted" method.
|
|
West
|
|
Central
|
|
East
|
|
Financial Services
|
|
Corporate
|
|
Total
|
||||||||||||
Balance at December 31, 2015
|
|
|
|
|
|
|
$
|
32,962
|
|
|
|
|
|
|
|
|
$
|
32,962
|
|
||||
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at March 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,962
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,962
|
|
|
|||||||||||||||||||
|
|
Three Months Ended March 31, 2016
|
|||||||||||||||||
|
|
(In thousands)
|
|||||||||||||||||
|
|
Number of
Shares
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Total
|
|||||||||
Balance at December 31, 2015
|
|
39,669
|
|
|
$
|
397
|
|
|
$
|
559,492
|
|
|
$
|
699,048
|
|
|
$
|
1,258,937
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,969
|
|
|
20,969
|
|
||||
Exercise/vesting of equity awards
|
|
316
|
|
|
3
|
|
|
158
|
|
|
—
|
|
|
161
|
|
||||
Excess income tax provision from stock-based awards
|
|
—
|
|
|
—
|
|
|
(516
|
)
|
|
—
|
|
|
(516
|
)
|
||||
Equity award compensation expense
|
|
—
|
|
|
—
|
|
|
4,758
|
|
|
—
|
|
|
4,758
|
|
||||
Balance at March 31, 2016
|
|
39,985
|
|
|
$
|
400
|
|
|
$
|
563,892
|
|
|
$
|
720,017
|
|
|
$
|
1,284,309
|
|
|
|
Three Months Ended March 31, 2015
|
|||||||||||||||||
|
|
(In thousands)
|
|||||||||||||||||
|
|
Number of
Shares
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Total
|
|||||||||
Balance at December 31, 2014
|
|
39,147
|
|
|
$
|
391
|
|
|
$
|
538,788
|
|
|
$
|
570,310
|
|
|
$
|
1,109,489
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,400
|
|
|
16,400
|
|
||||
Exercise/vesting of equity awards
|
|
470
|
|
|
5
|
|
|
2,829
|
|
|
—
|
|
|
2,834
|
|
||||
Excess income tax benefit from stock-based awards
|
|
—
|
|
|
—
|
|
|
1,935
|
|
|
—
|
|
|
1,935
|
|
||||
Equity award compensation expense
|
|
—
|
|
|
—
|
|
|
4,630
|
|
|
—
|
|
|
4,630
|
|
||||
Balance at March 31, 2015
|
|
39,617
|
|
|
$
|
396
|
|
|
$
|
548,182
|
|
|
$
|
586,710
|
|
|
$
|
1,135,288
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Stock-based compensation expense
|
$
|
4,758
|
|
|
$
|
4,630
|
|
Non-vested shares granted
|
493,865
|
|
|
388,787
|
|
||
Performance-based non-vested shares granted
|
66,698
|
|
|
66,187
|
|
||
Stock options exercised
|
11,200
|
|
|
143,440
|
|
||
Restricted stock awards vested (includes performance-based awards)
|
305,085
|
|
|
326,070
|
|
|
|
As of
|
||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Unrecognized stock-based compensation cost
|
|
$
|
29,053
|
|
|
$
|
18,545
|
|
Weighted average years expense recognition period
|
|
3.34
|
|
|
2.34
|
|
||
Total equity awards outstanding
(1)
|
|
1,271,515
|
|
|
1,078,877
|
|
(1)
|
Includes options outstanding and unvested restricted stock and performance-based awards and restricted stock units.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Federal
|
$
|
6,541
|
|
|
$
|
8,093
|
|
State
|
1,375
|
|
|
804
|
|
||
Total
|
$
|
7,916
|
|
|
$
|
8,897
|
|
|
|
Three Months Ended March 31,
|
|||||||
|
|
2016
|
|
2015
|
|
||||
Interest capitalized, net
|
|
$
|
(8,811
|
)
|
|
$
|
(5,995
|
)
|
|
Income taxes paid
|
|
$
|
7,420
|
|
|
$
|
8,710
|
|
|
Non-cash operating activities:
|
|
|
|
|
|
||||
Real estate not owned decrease
|
|
$
|
—
|
|
|
$
|
(4,999
|
)
|
|
Real estate acquired through notes payable
|
|
$
|
5,358
|
|
|
$
|
6,701
|
|
|
|
West:
|
Arizona, California and Colorado
(1)
|
|
|
Central:
|
Texas
|
|
|
East:
|
Florida, Georgia, North Carolina, South Carolina and Tennessee
|
|
(1)
|
Activity for our wind-down Nevada operations is reflected in the West Region's results.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Homebuilding revenue
(1)
:
|
|
|
|
||||
West
|
$
|
261,046
|
|
|
$
|
206,878
|
|
Central
|
161,889
|
|
|
154,026
|
|
||
East
|
174,831
|
|
|
157,808
|
|
||
Consolidated total
|
$
|
597,766
|
|
|
$
|
518,712
|
|
Homebuilding segment operating income:
|
|
|
|
||||
West
|
$
|
16,063
|
|
|
$
|
14,197
|
|
Central
|
13,894
|
|
|
14,105
|
|
||
East
|
5,859
|
|
|
5,619
|
|
||
Total homebuilding segment operating income
|
35,816
|
|
|
33,921
|
|
||
Financial services segment profit
|
4,046
|
|
|
3,780
|
|
||
Corporate and unallocated costs
(2)
|
(7,815
|
)
|
|
(9,542
|
)
|
||
Loss from unconsolidated entities, net
|
(157
|
)
|
|
(123
|
)
|
||
Interest expense
|
(3,288
|
)
|
|
(3,154
|
)
|
||
Other income, net
|
283
|
|
|
415
|
|
||
Net earnings before income taxes
|
$
|
28,885
|
|
|
$
|
25,297
|
|
(1)
|
Homebuilding revenue includes the following land closing revenue, by segment, as outlined in the table below.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Land closing revenue:
|
|
|
|
||||
West
|
$
|
—
|
|
|
$
|
—
|
|
Central
|
1,918
|
|
|
1,439
|
|
||
East
|
231
|
|
|
—
|
|
||
Total
|
$
|
2,149
|
|
|
$
|
1,439
|
|
(2)
|
Balance consists primarily of corporate costs and numerous shared service functions such as finance and treasury that are not allocated to the homebuilding or financial reporting segments.
|
|
|
At March 31, 2016
|
||||||||||||||||||||||
|
|
West
|
|
Central
|
|
East
|
|
Financial Services
|
|
Corporate and
Unallocated
|
|
Total
|
||||||||||||
Deposits on real estate under option or contract
|
|
$
|
30,035
|
|
|
$
|
31,517
|
|
|
$
|
30,439
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
91,991
|
|
Real estate
|
|
1,039,716
|
|
|
540,039
|
|
|
639,414
|
|
|
—
|
|
|
—
|
|
|
2,219,169
|
|
||||||
Investments in unconsolidated entities
|
|
205
|
|
|
8,609
|
|
|
—
|
|
|
—
|
|
|
1,778
|
|
|
10,592
|
|
||||||
Other assets
|
|
49,434
|
|
|
81,570
|
|
(1)
|
81,567
|
|
(2)
|
1,271
|
|
|
178,919
|
|
(3)
|
392,761
|
|
||||||
Total assets
|
|
$
|
1,119,390
|
|
|
$
|
661,735
|
|
|
$
|
751,420
|
|
|
$
|
1,271
|
|
|
$
|
180,697
|
|
|
$
|
2,714,513
|
|
|
|
At December 31, 2015
|
||||||||||||||||||||||
|
|
West
|
|
Central
|
|
East
|
|
Financial Services
|
|
Corporate and
Unallocated
|
|
Total
|
||||||||||||
Deposits on real estate under option or contract
|
|
$
|
28,488
|
|
|
$
|
30,241
|
|
|
$
|
29,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
87,839
|
|
Real estate
|
|
1,008,457
|
|
|
505,954
|
|
|
583,891
|
|
|
—
|
|
|
—
|
|
|
2,098,302
|
|
||||||
Investments in unconsolidated entities
|
|
204
|
|
|
8,704
|
|
|
—
|
|
|
—
|
|
|
2,462
|
|
|
11,370
|
|
||||||
Other assets
|
|
55,112
|
|
|
87,313
|
|
(1)
|
77,548
|
|
(2)
|
898
|
|
|
261,395
|
|
(3)
|
482,266
|
|
||||||
Total assets
|
|
$
|
1,092,261
|
|
|
$
|
632,212
|
|
|
$
|
690,549
|
|
|
$
|
898
|
|
|
$
|
263,857
|
|
|
$
|
2,679,777
|
|
(1)
|
Balance consists primarily of development reimbursements from local municipalities and cash.
|
(2)
|
Balance consists primarily of goodwill (see Note 9), prepaid permits and fees to local municipalities and cash.
|
(3)
|
Balance consists primarily of cash and our deferred tax asset.
|
•
|
Continuing to actively acquire and develop lots in key markets in order to maintain and moderately grow our lot supply and active community count;
|
•
|
Expanding market share in our smaller markets;
|
•
|
Introducing our newest collection of product offerings that targets the growing first-time homebuyer segment;
|
•
|
Managing cost increases through national and regional vendor relationships with a focus on quality construction and warranty management;
|
•
|
Generating additional revenue and improving overhead operating leverage in all of our markets;
|
•
|
Generating additional working capital and maintaining adequate liquidity;
|
•
|
Increasing orders pace through the use of our consumer and market research to build homes that offer our buyers their desired features and amenities;
|
•
|
Continuing to innovate and promote our energy efficiency program to drive sales;
|
•
|
Adapting sales and marketing efforts to increase traffic and compete with both resale and new homes;
|
•
|
Actively monitoring and adjusting our sales, construction and closing processes through customer satisfaction survey scores; and
|
•
|
Promoting a positive environment for our employees in order to retain our employees and minimize turnover.
|
|
|
Three Months Ended March 31,
|
|
Quarter over Quarter
|
|||||||||||
|
|
2016
|
|
2015
|
|
Chg $
|
|
Chg %
|
|||||||
Home Closing Revenue
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
595,617
|
|
|
$
|
517,273
|
|
|
$
|
78,344
|
|
|
15.1
|
%
|
Homes closed
|
|
1,488
|
|
|
1,335
|
|
|
153
|
|
|
11.5
|
%
|
|||
Average sales price
|
|
$
|
400.3
|
|
|
$
|
387.5
|
|
|
$
|
12.8
|
|
|
3.3
|
%
|
West Region
|
|
|
|
|
|
|
|
|
|||||||
Arizona
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
74,999
|
|
|
$
|
62,601
|
|
|
$
|
12,398
|
|
|
19.8
|
%
|
Homes closed
|
|
217
|
|
|
186
|
|
|
31
|
|
|
16.7
|
%
|
|||
Average sales price
|
|
$
|
345.6
|
|
|
$
|
336.6
|
|
|
$
|
9.0
|
|
|
2.7
|
%
|
California
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
120,720
|
|
|
$
|
86,423
|
|
|
$
|
34,297
|
|
|
39.7
|
%
|
Homes closed
|
|
207
|
|
|
153
|
|
|
54
|
|
|
35.3
|
%
|
|||
Average sales price
|
|
$
|
583.2
|
|
|
$
|
564.9
|
|
|
$
|
18.3
|
|
|
3.2
|
%
|
Colorado
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
65,327
|
|
|
$
|
57,854
|
|
|
$
|
7,473
|
|
|
12.9
|
%
|
Homes closed
|
|
138
|
|
|
128
|
|
|
10
|
|
|
7.8
|
%
|
|||
Average sales price
|
|
$
|
473.4
|
|
|
$
|
452.0
|
|
|
$
|
21.4
|
|
|
4.7
|
%
|
West Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
261,046
|
|
|
$
|
206,878
|
|
|
$
|
54,168
|
|
|
26.2
|
%
|
Homes closed
|
|
562
|
|
|
467
|
|
|
95
|
|
|
20.3
|
%
|
|||
Average sales price
|
|
$
|
464.5
|
|
|
$
|
443.0
|
|
|
$
|
21.5
|
|
|
4.9
|
%
|
Central Region - Texas
|
|
|
|
|
|
|
|
|
|||||||
Central Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
159,971
|
|
|
$
|
152,587
|
|
|
$
|
7,384
|
|
|
4.8
|
%
|
Homes closed
|
|
465
|
|
|
440
|
|
|
25
|
|
|
5.7
|
%
|
|||
Average sales price
|
|
$
|
344.0
|
|
|
$
|
346.8
|
|
|
$
|
(2.8
|
)
|
|
(0.8
|
)%
|
East Region
|
|
|
|
|
|
|
|
|
|||||||
Florida
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
63,322
|
|
|
$
|
72,831
|
|
|
$
|
(9,509
|
)
|
|
(13.1
|
)%
|
Homes closed
|
|
156
|
|
|
177
|
|
|
(21
|
)
|
|
(11.9
|
)%
|
|||
Average sales price
|
|
$
|
405.9
|
|
|
$
|
411.5
|
|
|
$
|
(5.6
|
)
|
|
(1.4
|
)%
|
Georgia
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
22,014
|
|
|
$
|
15,458
|
|
|
$
|
6,556
|
|
|
42.4
|
%
|
Homes closed
|
|
65
|
|
|
52
|
|
|
13
|
|
|
25.0
|
%
|
|||
Average sales price
|
|
$
|
338.7
|
|
|
$
|
297.3
|
|
|
$
|
41.4
|
|
|
13.9
|
%
|
North Carolina
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
50,377
|
|
|
$
|
34,975
|
|
|
$
|
15,402
|
|
|
44.0
|
%
|
Homes closed
|
|
118
|
|
|
89
|
|
|
29
|
|
|
32.6
|
%
|
|||
Average sales price
|
|
$
|
426.9
|
|
|
$
|
393.0
|
|
|
$
|
33.9
|
|
|
8.6
|
%
|
South Carolina
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
21,171
|
|
|
$
|
24,560
|
|
|
$
|
(3,389
|
)
|
|
(13.8
|
)%
|
Homes closed
|
|
67
|
|
|
76
|
|
|
(9
|
)
|
|
(11.8
|
)%
|
|||
Average sales price
|
|
$
|
316.0
|
|
|
$
|
323.2
|
|
|
$
|
(7.2
|
)
|
|
(2.2
|
)%
|
Tennessee
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
17,716
|
|
|
$
|
9,984
|
|
|
$
|
7,732
|
|
|
77.4
|
%
|
Homes closed
|
|
55
|
|
|
34
|
|
|
21
|
|
|
61.8
|
%
|
|||
Average sales price
|
|
$
|
322.1
|
|
|
$
|
293.6
|
|
|
$
|
28.5
|
|
|
9.7
|
%
|
East Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
174,600
|
|
|
$
|
157,808
|
|
|
$
|
16,792
|
|
|
10.6
|
%
|
Homes closed
|
|
461
|
|
|
428
|
|
|
33
|
|
|
7.7
|
%
|
|||
Average sales price
|
|
$
|
378.7
|
|
|
$
|
368.7
|
|
|
$
|
10.0
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Quarter over Quarter
|
|||||||||||
|
|
2016
|
|
2015
|
|
Chg $
|
|
Chg %
|
|||||||
Home Orders
(1)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
804,600
|
|
|
$
|
782,812
|
|
|
$
|
21,788
|
|
|
2.8
|
%
|
Homes ordered
|
|
1,987
|
|
|
1,979
|
|
|
8
|
|
|
0.4
|
%
|
|||
Average sales price
|
|
$
|
404.9
|
|
|
$
|
395.6
|
|
|
$
|
9.3
|
|
|
2.4
|
%
|
West Region
|
|
|
|
|
|
|
|
|
|||||||
Arizona
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
90,180
|
|
|
$
|
90,591
|
|
|
$
|
(411
|
)
|
|
(0.5
|
)%
|
Homes ordered
|
|
259
|
|
|
288
|
|
|
(29
|
)
|
|
(10.1
|
)%
|
|||
Average sales price
|
|
$
|
348.2
|
|
|
$
|
314.6
|
|
|
$
|
33.6
|
|
|
10.7
|
%
|
California
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
151,012
|
|
|
$
|
178,097
|
|
|
$
|
(27,085
|
)
|
|
(15.2
|
)%
|
Homes ordered
|
|
270
|
|
|
310
|
|
|
(40
|
)
|
|
(12.9
|
)%
|
|||
Average sales price
|
|
$
|
559.3
|
|
|
$
|
574.5
|
|
|
$
|
(15.2
|
)
|
|
(2.6
|
)%
|
Colorado
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
86,626
|
|
|
$
|
85,407
|
|
|
$
|
1,219
|
|
|
1.4
|
%
|
Homes ordered
|
|
169
|
|
|
189
|
|
|
(20
|
)
|
|
(10.6
|
)%
|
|||
Average sales price
|
|
$
|
512.6
|
|
|
$
|
451.9
|
|
|
$
|
60.7
|
|
|
13.4
|
%
|
West Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
327,818
|
|
|
$
|
354,095
|
|
|
$
|
(26,277
|
)
|
|
(7.4
|
)%
|
Homes ordered
|
|
698
|
|
|
787
|
|
|
(89
|
)
|
|
(11.3
|
)%
|
|||
Average sales price
|
|
$
|
469.7
|
|
|
$
|
449.9
|
|
|
$
|
19.8
|
|
|
4.4
|
%
|
Central Region - Texas
|
|
|
|
|
|
|
|
|
|||||||
Central Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
216,065
|
|
|
$
|
185,132
|
|
|
$
|
30,933
|
|
|
16.7
|
%
|
Homes ordered
|
|
591
|
|
|
557
|
|
|
34
|
|
|
6.1
|
%
|
|||
Average sales price
|
|
$
|
365.6
|
|
|
$
|
332.4
|
|
|
$
|
33.2
|
|
|
10.0
|
%
|
East Region
|
|
|
|
|
|
|
|
|
|||||||
Florida
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
92,594
|
|
|
$
|
108,857
|
|
|
$
|
(16,263
|
)
|
|
(14.9
|
)%
|
Homes ordered
|
|
227
|
|
|
248
|
|
|
(21
|
)
|
|
(8.5
|
)%
|
|||
Average sales price
|
|
$
|
407.9
|
|
|
$
|
438.9
|
|
|
$
|
(31.0
|
)
|
|
(7.1
|
)%
|
Georgia
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
35,195
|
|
|
$
|
24,218
|
|
|
$
|
10,977
|
|
|
45.3
|
%
|
Homes ordered
|
|
105
|
|
|
77
|
|
|
28
|
|
|
36.4
|
%
|
|||
Average sales price
|
|
$
|
335.2
|
|
|
$
|
314.5
|
|
|
$
|
20.7
|
|
|
6.6
|
%
|
North Carolina
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
77,081
|
|
|
$
|
61,625
|
|
|
$
|
15,456
|
|
|
25.1
|
%
|
Homes ordered
|
|
189
|
|
|
148
|
|
|
41
|
|
|
27.7
|
%
|
|||
Average sales price
|
|
$
|
407.8
|
|
|
$
|
416.4
|
|
|
$
|
(8.6
|
)
|
|
(2.1
|
)%
|
South Carolina
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
34,221
|
|
|
$
|
29,528
|
|
|
$
|
4,693
|
|
|
15.9
|
%
|
Homes ordered
|
|
107
|
|
|
96
|
|
|
11
|
|
|
11.5
|
%
|
|||
Average sales price
|
|
$
|
319.8
|
|
|
$
|
307.6
|
|
|
$
|
12.2
|
|
|
4.0
|
%
|
Tennessee
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
21,626
|
|
|
$
|
19,357
|
|
|
$
|
2,269
|
|
|
11.7
|
%
|
Homes ordered
|
|
70
|
|
|
66
|
|
|
4
|
|
|
6.1
|
%
|
|||
Average sales price
|
|
$
|
308.9
|
|
|
$
|
293.3
|
|
|
$
|
15.6
|
|
|
5.3
|
%
|
East Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
260,717
|
|
|
$
|
243,585
|
|
|
$
|
17,132
|
|
|
7.0
|
%
|
Homes ordered
|
|
698
|
|
|
635
|
|
|
63
|
|
|
9.9
|
%
|
|||
Average sales price
|
|
$
|
373.5
|
|
|
$
|
383.6
|
|
|
$
|
(10.1
|
)
|
|
(2.6
|
)%
|
|
|
|
|
|
|
|
|
|
(1)
|
Home orders for any period represent the aggregate sales price of all homes ordered, net of cancellations. We do not include orders contingent upon the sale of a customer’s existing home as a sales contract until the contingency is removed.
|
|
Three Months Ended March 31,
|
|||||||
|
2016
|
|
2015
|
|||||
|
Ending
|
|
Average
|
|
Ending
|
|
Average
|
|
Active Communities
|
|
|
|
|
|
|
|
|
Total
|
243
|
|
247.0
|
|
229
|
|
|
229.0
|
West Region
|
|
|
|
|
|
|
|
|
Arizona
|
42
|
|
41.5
|
|
44
|
|
|
42.5
|
California
|
24
|
|
24.0
|
|
21
|
|
|
22.5
|
Colorado
|
14
|
|
15.0
|
|
16
|
|
|
16.5
|
West Region Totals
|
80
|
|
80.5
|
|
81
|
|
|
81.5
|
Central Region - Texas
|
|
|
|
|
|
|
|
|
Central Region Totals
|
70
|
|
71.0
|
|
61
|
|
|
60.0
|
East Region
|
|
|
|
|
|
|
|
|
Florida
|
26
|
|
27.0
|
|
26
|
|
|
27.5
|
Georgia
|
18
|
|
17.5
|
|
13
|
|
|
13.0
|
North Carolina
|
24
|
|
25.0
|
|
23
|
|
|
22.0
|
South Carolina
|
16
|
|
17.0
|
|
20
|
|
|
20.0
|
Tennessee
|
9
|
|
9.0
|
|
5
|
|
|
5.0
|
East Region Totals
|
93
|
|
95.5
|
|
87
|
|
|
87.5
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||
|
|
2016
|
|
2015
|
||
Cancellation Rates
(1)
|
|
|
|
|
||
Total
|
|
11
|
%
|
|
11
|
%
|
West Region
|
|
|
|
|
||
Arizona
|
|
11
|
%
|
|
7
|
%
|
California
|
|
11
|
%
|
|
7
|
%
|
Colorado
|
|
9
|
%
|
|
8
|
%
|
West Region Totals
|
|
11
|
%
|
|
7
|
%
|
Central Region - Texas
|
|
|
|
|
||
Central Region Totals
|
|
13
|
%
|
|
16
|
%
|
East Region
|
|
|
|
|
||
Florida
|
|
11
|
%
|
|
17
|
%
|
Georgia
|
|
14
|
%
|
|
8
|
%
|
North Carolina
|
|
6
|
%
|
|
9
|
%
|
South Carolina
|
|
4
|
%
|
|
5
|
%
|
Tennessee
|
|
8
|
%
|
|
4
|
%
|
East Region Totals
|
|
9
|
%
|
|
11
|
%
|
(1)
|
Cancellation rates are computed as the number of canceled units for the period divided by the gross sales units for the same period.
|
|
|
At March 31,
|
|
Quarter over Quarter
|
|||||||||||
|
|
2016
|
|
2015
|
|
Chg $
|
|
Chg %
|
|||||||
Order Backlog
(1)
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
1,346,664
|
|
|
$
|
1,111,991
|
|
|
$
|
234,673
|
|
|
21.1
|
%
|
Homes in backlog
|
|
3,191
|
|
|
2,758
|
|
|
433
|
|
|
15.7
|
%
|
|||
Average sales price
|
|
$
|
422.0
|
|
|
$
|
403.2
|
|
|
$
|
18.8
|
|
|
4.7
|
%
|
West Region
|
|
|
|
|
|
|
|
|
|||||||
Arizona
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
133,087
|
|
|
$
|
94,208
|
|
|
$
|
38,879
|
|
|
41.3
|
%
|
Homes in backlog
|
|
359
|
|
|
294
|
|
|
65
|
|
|
22.1
|
%
|
|||
Average sales price
|
|
$
|
370.7
|
|
|
$
|
320.4
|
|
|
$
|
50.3
|
|
|
15.7
|
%
|
California
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
214,438
|
|
|
$
|
215,637
|
|
|
$
|
(1,199
|
)
|
|
(0.6
|
)%
|
Homes in backlog
|
|
352
|
|
|
369
|
|
|
(17
|
)
|
|
(4.6
|
)%
|
|||
Average sales price
|
|
$
|
609.2
|
|
|
$
|
584.4
|
|
|
$
|
24.8
|
|
|
4.2
|
%
|
Colorado
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
183,450
|
|
|
$
|
149,186
|
|
|
$
|
34,264
|
|
|
23.0
|
%
|
Homes in backlog
|
|
363
|
|
|
329
|
|
|
34
|
|
|
10.3
|
%
|
|||
Average sales price
|
|
$
|
505.4
|
|
|
$
|
453.5
|
|
|
$
|
51.9
|
|
|
11.4
|
%
|
West Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
530,975
|
|
|
$
|
459,031
|
|
|
$
|
71,944
|
|
|
15.7
|
%
|
Homes in backlog
|
|
1,074
|
|
|
992
|
|
|
82
|
|
|
8.3
|
%
|
|||
Average sales price
|
|
$
|
494.4
|
|
|
$
|
462.7
|
|
|
$
|
31.7
|
|
|
6.9
|
%
|
Central Region - Texas
|
|
|
|
|
|
|
|
|
|||||||
Central Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
406,288
|
|
|
$
|
341,586
|
|
|
$
|
64,702
|
|
|
18.9
|
%
|
Homes in backlog
|
|
1,068
|
|
|
975
|
|
|
93
|
|
|
9.5
|
%
|
|||
Average sales price
|
|
$
|
380.4
|
|
|
$
|
350.3
|
|
|
$
|
30.1
|
|
|
8.6
|
%
|
East Region
|
|
|
|
|
|
|
|
|
|||||||
Florida
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
147,278
|
|
|
$
|
138,596
|
|
|
$
|
8,682
|
|
|
6.3
|
%
|
Homes in backlog
|
|
358
|
|
|
308
|
|
|
50
|
|
|
16.2
|
%
|
|||
Average sales price
|
|
$
|
411.4
|
|
|
$
|
450.0
|
|
|
$
|
(38.6
|
)
|
|
(8.6
|
)%
|
Georgia
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
46,607
|
|
|
$
|
25,344
|
|
|
$
|
21,263
|
|
|
83.9
|
%
|
Homes in backlog
|
|
135
|
|
|
78
|
|
|
57
|
|
|
73.1
|
%
|
|||
Average sales price
|
|
$
|
345.2
|
|
|
$
|
324.9
|
|
|
$
|
20.3
|
|
|
6.2
|
%
|
North Carolina
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
138,182
|
|
|
$
|
94,818
|
|
|
$
|
43,364
|
|
|
45.7
|
%
|
Homes in backlog
|
|
331
|
|
|
244
|
|
|
87
|
|
|
35.7
|
%
|
|||
Average sales price
|
|
$
|
417.5
|
|
|
$
|
388.6
|
|
|
$
|
28.9
|
|
|
7.4
|
%
|
South Carolina
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
43,161
|
|
|
$
|
31,088
|
|
|
$
|
12,073
|
|
|
38.8
|
%
|
Homes in backlog
|
|
128
|
|
|
90
|
|
|
38
|
|
|
42.2
|
%
|
|||
Average sales price
|
|
$
|
337.2
|
|
|
$
|
345.4
|
|
|
$
|
(8.2
|
)
|
|
(2.4
|
)%
|
Tennessee
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
34,173
|
|
|
$
|
21,528
|
|
|
$
|
12,645
|
|
|
58.7
|
%
|
Homes in backlog
|
|
97
|
|
|
71
|
|
|
26
|
|
|
36.6
|
%
|
|||
Average sales price
|
|
$
|
352.3
|
|
|
$
|
303.2
|
|
|
$
|
49.1
|
|
|
16.2
|
%
|
East Region Totals
|
|
|
|
|
|
|
|
|
|||||||
Dollars
|
|
$
|
409,401
|
|
|
$
|
311,374
|
|
|
$
|
98,027
|
|
|
31.5
|
%
|
Homes in backlog
|
|
1,049
|
|
|
791
|
|
|
258
|
|
|
32.6
|
%
|
|||
Average sales price
|
|
$
|
390.3
|
|
|
$
|
393.6
|
|
|
$
|
(3.3
|
)
|
|
(0.8
|
)%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Dollars
|
|
Percent of Home Closing Revenue
|
|
Dollars
|
|
Percent of Home Closing Revenue
|
||||||
Home Closing Gross Profit
(1)
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
103,347
|
|
|
17.4
|
%
|
|
$
|
95,487
|
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
||||||
West
|
$
|
43,314
|
|
|
16.6
|
%
|
|
$
|
37,644
|
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
||||||
Central
|
$
|
32,102
|
|
|
20.1
|
%
|
|
$
|
31,630
|
|
|
20.7
|
%
|
|
|
|
|
|
|
|
|
||||||
East
|
$
|
27,931
|
|
|
16.0
|
%
|
|
$
|
26,213
|
|
|
16.6
|
%
|
(1)
|
Home closing gross profit represents home closing revenue less cost of home closings, including impairments. Cost of home closings includes land and lot development costs, direct home construction costs, an allocation of common community costs (such as model complex costs and architectural, legal and zoning costs), interest, sales tax, impact fees, warranty, construction overhead and closing costs.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Financial services profit
|
$
|
4,046
|
|
|
$
|
3,780
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
Commissions and Other Sales Costs
|
|
|
|
||||
Dollars
|
$
|
46,177
|
|
|
$
|
41,612
|
|
Percent of home closing revenue
|
7.8
|
%
|
|
8.0
|
%
|
||
General and Administrative Expenses
|
|
|
|
||||
Dollars
|
$
|
29,618
|
|
|
$
|
29,650
|
|
Percent of total closing revenue
|
5.0
|
%
|
|
5.7
|
%
|
||
Loss from Other Unconsolidated Entities, Net
|
|
|
|
||||
Dollars
|
$
|
157
|
|
|
$
|
123
|
|
Interest Expense
|
|
|
|
||||
Dollars
|
$
|
3,288
|
|
|
$
|
3,154
|
|
Other Income, Net
|
|
|
|
||||
Dollars
|
$
|
(283
|
)
|
|
$
|
(415
|
)
|
Provision for Income Taxes
|
|
|
|
||||
Dollars
|
$
|
7,916
|
|
|
$
|
8,897
|
|
|
|
As of
|
||||||
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Notes payable and other borrowings
|
|
$
|
1,119,393
|
|
|
$
|
1,117,040
|
|
Stockholders’ equity
|
|
1,284,309
|
|
|
1,258,937
|
|
||
Total capital
|
|
$
|
2,403,702
|
|
|
$
|
2,375,977
|
|
Debt-to-capital
(1)
|
|
46.6
|
%
|
|
47.0
|
%
|
||
Notes payable and other borrowings
|
|
$
|
1,119,393
|
|
|
$
|
1,117,040
|
|
Less: cash and cash equivalents
|
|
(172,175
|
)
|
|
(262,208
|
)
|
||
Net debt
|
|
947,218
|
|
|
854,832
|
|
||
Stockholders’ equity
|
|
1,284,309
|
|
|
1,258,937
|
|
||
Total net capital
|
|
$
|
2,231,527
|
|
|
$
|
2,113,769
|
|
Net debt-to-capital
(2)
|
|
42.4
|
%
|
|
40.4
|
%
|
(1)
|
Debt-to-capital is computed as senior and convertible senior notes and other borrowings divided by the aggregate of total senior and convertible senior notes and other borrowings and stockholders' equity.
|
(2)
|
Net debt-to-capital is computed as net debt divided by the aggregate of net debt and stockholders' equity. The most directly comparable GAAP financial measure is the ratio of debt to total capital. We believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing.
|
Financial Covenant (dollars in thousands):
|
Covenant Requirement
|
|
Actual
|
Minimum Tangible Net Worth
|
$805,323
|
|
$1,247,936
|
Leverage Ratio
|
<60%
|
|
40%
|
Interest Coverage Ratio
(1)
|
>1.50
|
|
4.20
|
Minimum Liquidity
(1)
|
>$69,819
|
|
$644,117
|
Investments other than defined permitted investments
|
<$374,381
|
|
$10,592
|
(1)
|
We are required to meet either the Interest Coverage Ratio or Minimum Liquidity, but not both.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
Page or Method of Filing
|
|
3.1
|
|
Restated Articles of Incorporation of Meritage Homes Corporation
|
Incorporated by reference to Exhibit 3 of Form 8-K dated June 20, 2002.
|
|
|
|
|
3.1.1
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
Incorporated by reference to Exhibit 3.1 of Form 8-K dated September 15, 2004.
|
|
|
|
|
3.1.2
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
Incorporated by reference to Appendix A of the Proxy Statement for the 2006 Annual Meeting of Stockholders.
|
|
|
|
|
3.1.3
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
Incorporated by reference to Appendix B of Proxy Statement for the 2008 Annual Meeting of Stockholders.
|
|
|
|
|
3.1.4
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
Incorporated by reference to Appendix A of the Definitive Proxy Statement filed with the Securities and Exchange Commission on January 9, 2009.
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Meritage Homes Corporation
|
Incorporated by reference to Exhibit 3.1 of Form 8-K dated November 24, 2014.
|
|
|
|
|
10.1*
|
|
Addendum to Phillippe Lord Employment Letter
|
Incorporated by reference to Exhibit 10.1 of Form 8-K dated February 16, 2016
|
|
|
|
|
10.2*
|
|
Hilla Sferruzza Employment Letter
|
Incorporated by reference to Exhibit 10.1 of Form 8-K dated March 31, 2016
|
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Steven J. Hilton, Chief Executive Officer
|
Filed herewith.
|
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Hilla Sferruzza, Chief Financial Officer
|
Filed herewith.
|
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
|
Filed herewith.
|
|
|
|
|
101.0
|
|
The following financial statements from Meritage Homes Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, were formatted in XBRL (Extensible Business Reporting Language); (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Income Statements, (iii) Unaudited Consolidated Statements of Cash Flows, and (iv) the Notes to Unaudited Consolidated Financial Statements.
|
|
|
|
|
|
MERITAGE HOMES CORPORATION,
a Maryland Corporation
|
|
|
|
|
||
By:
|
/s/ HILLA SFERRUZZA
|
|
|
|
Hilla Sferruzza
Chief Financial Officer and Chief Accounting Officer
(Duly Authorized Officer and Principal Financial Officer)
|
|
3.1
|
|
Restated Articles of Incorporation of Meritage Homes Corporation
|
|
|
|
3.1.1
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
|
|
|
3.1.2
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
|
|
|
3.1.3
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
|
|
|
3.1.4
|
|
Amendment to Articles of Incorporation of Meritage Homes Corporation
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Meritage Homes Corporation
|
|
|
|
10.1
|
|
Addendum to Phillippe Lord Employment Letter
|
|
|
|
10.2
|
|
Hilla Sferruzza Employment Letter
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Steven J. Hilton, Chief Executive Officer
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Hilla Sferruzza, Chief Financial Officer
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
|
|
|
|
101.0
|
|
The following financial statements from Meritage Homes Corporation Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, were formatted in XBRL (Extensible Business Reporting Language); (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Income Statements, (iii) Unaudited Consolidated Statements of Cash Flows, and (iv) Notes to Unaudited Consolidated Financial Statements.
|
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