Exhibit 99.1
 
 
 
 
 
FOR IMMEDIATE RELEASE
 
 
 
 
Contacts:
Brent Anderson, VP Investor Relations
 
 
 
 
(972) 580-6360 (office)
 
 
 
 
Brent.Anderson@meritagehomes.com

Meritage Homes Reports Results for the Second Quarter of 2014
Second quarter EPS of $0.85 increased 15% compared to 2013;
Home closing revenue grew 15% and pretax margin increased to 10.9%

SCOTTSDALE, Ariz., July 24, 2014 - Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced second quarter results for the period ended June 30, 2014.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 
    
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
%Chg
 
2014
 
2013
 
%Chg
Homes closed (units)
 
1,368

 
1,321

 
4
%
 
2,477

 
2,373

 
4
 %
Home closing revenue
 
$
502,800

 
$
436,040

 
15
%
 
$
908,579

 
$
766,750

 
18
 %
Average sales price - closings
 
$
368

 
$
330

 
12
%
 
$
367

 
$
323

 
14
 %
Home orders (units)
 
1,647

 
1,637

 
1
%
 
3,172

 
3,184

 
0
 %
Home order value
 
$
618,435

 
$
573,392

 
8
%
 
$
1,173,475

 
$
1,093,795

 
7
 %
Average sales price - orders
 
$
375

 
$
350

 
7
%
 
$
370

 
$
344

 
8
 %
Ending backlog (units)
 
 
 
 
 
 
 
2,548

 
2,283

 
12
 %
Ending backlog value
 
 
 
 
 
 
 
$
951,568

 
$
806,311

 
18
 %
Average sales price - backlog
 


 


 

 
$
373

 
$
353

 
6
 %
Net earnings
 
$
35,079

 
$
28,143

 
25
%
 
$
60,456

 
$
40,184

 
50
 %
Diluted EPS
 
$
0.85

 
$
0.74

 
15
%
 
$
1.48

 
$
1.06

 
40
 %




1


MANAGEMENT COMMENTS
“We are quite pleased to show year-over-year growth in 2014 across nearly every key operating metric, given that market conditions were generally not as strong in the second quarter this year as they were a year ago,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “We increased net earnings by 25% through a combination of higher revenue, margins and operating leverage. Home closings increased 4% and home closing revenue by 15%. We coupled that with a 40 basis point improvement in home closing gross margin and additional operating leverage to produce a pretax margin of 10.9%, compared to 8.5% in last year’s second quarter.
“We also grew new home orders and backlog in both units and total value, benefiting from increases in our average sales prices, while also increasing our average sales per community over 2013 in five of seven states,” said Mr. Hilton. “Texas and the Carolinas generated strong order growth in the second quarter - up 12% and 32% over 2013 respectively - which resulted in 67% and 45% respective increases in their backlog value at June 30. Colorado’s second quarter orders and backlog also grew in 2014, and Tennessee supplemented our total year-over-year increases as an additional market in 2014 that delivered well above our average sales pace.
"Our ending community count of 175 was 6% higher than one year ago and we had 9% more average communities open during the quarter than we did in the second quarter of 2013. We increased the average number of actively selling communities over last year in every state except Florida," he continued. “We plan to open many new communities this quarter within our existing markets, expanding the total to approximately 190 by September 30 and 205-215 active communities by year-end, not including our pending acquisition of Legendary Communities. Considering our June 30 backlog value is up 18% year over year, we are expecting strong revenue and earnings growth in the second half of 2014.”
Mr. Hilton added, “We are enthusiastic about our agreement to acquire Legendary Communities, which will put us into two additional markets with Atlanta and Greenville-Spartanburg, as well as bolster our presence in Charlotte. The acquisition is expected to close in the third quarter and we anticipate it will add approximately 40 actively selling communities to our total. Legendary closed approximately 500 homes in 2013 and generated $156 million in home closing revenue, and we believe that they can grow these by at least twenty percent in 2014 and 2015, with meaningful earnings accretion in 2015. That growth represents a significant potential increase in our long-term earnings power, in addition to the other markets we’ve entered in the last few years.”

SECOND QUARTER RESULTS
•
Net earnings increased by $6.9 million for the second quarter to $35.1 million or $0.85 per diluted share, from $28.1 million or $0.74 per diluted share in the second quarter of 2013, driven by higher home closing revenue and gross margins, assisted by additional operating leverage. Weighted average diluted shares outstanding of 41.6 million for the second quarter of 2014 included our public offering of approximately 2.5 million shares in January, compared to 38.8 million for the second quarter of 2013.
•
Home closing revenue increased 15% over the prior year, combining a 4% increase in home closings and a 12% increase in the average price of homes closed during the quarter, partially due to a greater proportion of larger homes in higher-priced communities. Respective increases of 36% and 54% in the Central and East regions more than offset a 6% decline in home closing revenue for the West region, which reflects a 24% decline in California, partially offset by a 41% increase in Colorado.

2


•
Home closing gross margin increased 40 basis points (bps) to 21.9% in the second quarter of 2014 compared to 21.5% in the second quarter of 2013.
•
General and administrative expenses for the second quarter decreased slightly to 4.9% from 5.0% of total closing revenue in 2014 compared to 2013.
•
Interest expense declined $3.1 million year over year to 0.3% of second quarter 2014 closing revenue, compared to 1.0% of second quarter closing revenue in 2013, as a greater percentage of total interest incurred was capitalized to lots and homes under development.
•
Pre-tax margin increased 240 bps to 10.9% in the second quarter of 2014 from 8.5% in 2013. Our effective tax rate was 36% in 2014 compared to 27% in 2013. Last year’s second quarter included a tax benefit of approximately $2.6 million primarily due to energy tax credits and a partial reversal of the deferred tax asset valuation allowance in California.
•
Total order value grew 8% to $618.4 million. The increase was primarily driven by a $57.0 million (31%) year-over-year increase in Texas’s order value over 2013. Total orders for 1,647 homes were the most for Meritage since the second quarter of 2007. The company’s average selling price of homes ordered increased 7% year over year in the second quarter.
•
Average orders per active community during the quarter slowed to 9.0 in the second quarter of 2014 compared to 9.8 in 2013. California’s sales pace remained the highest in the company at 12.8, followed by Tennessee at 11.5, Colorado at 10.8 and Florida at 10.3. Texas was at 9.8, also above the company average.
•
Ending community count at June 30, 2014 was 175 active communities, compared to 165 at June 30, 2013.
•
Ending backlog value at June 30 was 18% higher in 2014 than 2013, with 12% more units in backlog and average prices up 6%.

YEAR TO DATE RESULTS
•
Net earnings of $60.5 million for the first half of 2014 compared to net earnings of $40.2 million for the first half of 2013, which included a $3.8 million loss on early extinguishment of debt.
•
Home closings and closing revenue for the first half of the year increased 4% and 18%, respectively, for 2014 over 2013, with an increase of 14% in average prices.
•
Year-to-date home closing gross margin improved by 170 basis points to 22.3% for 2014, compared to 20.6% for 2013, as a result of higher selling prices of homes and leverage of certain costs.
•
Total commissions and selling expenses were constant as a percentage of home closing revenue, while general and administrative expenses fell to 5.1% of total closing revenue in the first half of 2014 compared to 5.4% in 2013, reflecting operating leverage.

3


BALANCE SHEET
•
The company ended the second quarter of 2014 with $290.6 million in cash and cash equivalents plus investments and securities, compared to $363.8 million at December 31, 2013 and $310.0 million at June 30, 2013, reflecting increased investment in real estate.
•
Real estate assets increased to $1.64 billion at June 30, 2014, compared to $1.41 billion at December 31, 2013 and $1.23 billion at June 30, 2013. The largest increases were in homes under contract under construction and home sites either finished or under development.
•
Net debt-to-capital ratio at quarter-end was 37.6% compared to 39.1% at December 31, 2013 and 37.2% at June 30, 2013.
•
Total lot supply at the end of the quarter was approximately 25,800, compared to approximately 22,600 a year earlier. Based on trailing twelve months closings, the June 30, 2014 balance represents a 4.8 years supply of lots.
CONFERENCE CALL
Management will host a conference call today to discuss the Company's results at 11:00 a.m. Eastern Time (8:00 a.m. Arizona Time). The call will be webcast with an accompanying slideshow available on the "Investor Relations" page of the Company's web site at http://investors.meritagehomes.com. Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN.
Conference Call registration link: http://dpregister.com/10048558.
Telephone participants who are unable to pre-register may dial in to 888-317-6016 on the day of the call. International dial-in number is 1-412-317-6016.
A replay of the call will be available until August 15, 2014, beginning at 12:30 p.m. ET on July 24, 2014 on the website noted above, or by dialing 877-344-7529, and referencing conference number 10048558. For more information, visit www.meritagehomes.com.



4



Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(Unaudited)
(In thousands, except per share data)
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
2014
 
2013
 
2014
 
2013
Homebuilding:
 
 
 
 
 
 
 
 
 
Home closing revenue
 
$
502,800

 
$
436,040

 
$
908,579

 
$
766,750

 
Land closing revenue
 
2,804

 
13,910

 
5,370

 
19,635

 
Total closing revenue
 
505,604

 
449,950

 
913,949

 
786,385

 
Cost of home closings
 
(392,839
)
 
(342,435
)
 
(706,019
)
 
(608,785
)
 
Cost of land closings
 
(2,762
)
 
(12,463
)
 
(6,355
)
 
(18,013
)
 
Total cost of closings
 
(395,601
)
 
(354,898
)
 
(712,374
)
 
(626,798
)
 
Home closing gross profit
 
109,961

 
93,605

 
202,560

 
157,965

 
Land closing gross profit/(loss)
 
42

 
1,447

 
(985
)
 
1,622

 
Total closing gross profit
 
110,003

 
95,052

 
201,575

 
159,587

Financial Services:
 
 
 
 
 
 
 
 
 
Revenue
 
2,451

 
1,434

 
4,350

 
2,276

 
Expense
 
(1,131
)
 
(755
)
 
(2,206
)
 
(1,328
)
 
Earnings from financial services unconsolidated entities and other, net
 
2,297

 
3,486

 
4,498

 
6,273

 
Financial services profit
 
3,617

 
4,165

 
6,642

 
7,221

Commissions and other sales costs
 
(36,105
)
 
(31,180
)
 
(67,039
)
 
(57,059
)
General and administrative expenses
 
(24,571
)
 
(22,451
)
 
(46,242
)
 
(42,175
)
Loss from other unconsolidated entities, net
 
(61
)
 
(120
)
 
(230
)
 
(275
)
Interest expense
 
(1,396
)
 
(4,523
)
 
(4,109
)
 
(9,651
)
Other income, net
 
3,749

 
685

 
4,397

 
1,155

Loss on early extinguishment of debt
 
—

 
(3,096
)
 
—

 
(3,796
)
Earnings before income taxes
 
55,236

 
38,532

 
94,994

 
55,007

Provision for income taxes
 
(20,157
)
 
(10,389
)
 
(34,538
)
 
(14,823
)
Net earnings
 
$
35,079

 
$
28,143

 
$
60,456

 
$
40,184

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
Earnings per share
 
$
0.90

 
$
0.78

 
$
1.55

 
$
1.12

 
Weighted average shares outstanding
 
39,118

 
36,151

 
38,904

 
35,976

 
Diluted
 
 
 
 
 
 
 
 
 
Earnings per share
 
$
0.85

 
$
0.74

 
$
1.48

 
$
1.06

 
Weighted average shares outstanding
 
41,598

 
38,758

 
41,487

 
38,662









5




Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(unaudited)
 
 
 
June 30, 2014
 
December 31, 2013
Assets:
 
 
 
 
Cash and cash equivalents
 
$
230,630

 
$
274,136

Investments and securities
 
59,944

 
89,687

Other receivables
 
50,695

 
38,983

Real estate (1)
 
1,638,028

 
1,405,299

Real estate not owned
 
4,999

 
289

Deposits on real estate under option or contract
 
58,881

 
51,595

Investments in unconsolidated entities
 
9,903

 
11,638

Property and equipment, net
 
28,828

 
22,099

Deferred tax asset
 
68,289

 
70,404

Prepaids, other assets and goodwill
 
42,481

 
39,231

Total assets
 
$
2,192,678

 
$
2,003,361

Liabilities:
 
 
 
 
Accounts payable
 
$
83,960

 
$
68,018

Accrued liabilities
 
151,796

 
166,611

Home sale deposits
 
27,533

 
21,996

Liabilities related to real estate not owned
 
4,299


289

Senior, convertible senior notes and other borrowings
 
904,771

 
905,055

Total liabilities
 
1,172,359

 
1,161,969

Stockholders' Equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
391

 
362

Additional paid-in capital
 
531,403

 
412,961

Retained earnings
 
488,525

 
428,069

Total stockholders’ equity
 
1,020,319

 
841,392

Total liabilities and stockholders’ equity
 
$
2,192,678

 
$
2,003,361

(1) Real estate – Allocated costs:
 
 
 
 
Homes under contract under construction
 
$
370,626

 
$
262,633

Unsold homes, completed and under construction
 
182,719

 
147,889

Model homes
 
91,509

 
81,541

Finished home sites and home sites under development
 
890,036

 
813,135

Land held for development
 
51,012

 
52,100

Land held for sale
 
28,267

 
19,112

Communities in mothball status
 
23,859

 
28,889

Total real estate
 
$
1,638,028

 
$
1,405,299







6


Supplemental Information and Non-GAAP Financial Disclosures (In thousands – unaudited):
 
    
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Depreciation and amortization
$
2,669

 
$
2,500

 
$
5,182

 
$
4,658

 
 
 
 
 
 
 
 
Summary of Capitalized Interest:
 
 
 
 
 
 
 
Capitalized interest, beginning of period
$
38,701

 
$
24,198

 
$
32,992

 
$
21,600

Interest incurred
14,382

 
12,642

 
28,638

 
25,368

Interest expensed
(1,396
)
 
(4,523
)
 
(4,109
)
 
(9,651
)
Interest amortized to cost of home and land closings
(7,332
)
 
(6,023
)
 
(13,166
)
 
(11,023
)
Capitalized interest, end of period
$
44,355

 
$
26,294

 
$
44,355

 
$
26,294

 
 
 
 
 
 
 
 
 
June 30, 2014
 
December 31, 2013
 
 
 
 
Notes payable and other borrowings
$
904,771

 
$
905,055

 
 
 
 
Stockholders' equity
1,020,319

 
841,392

 
 
 
 
Total capital
1,925,090

 
1,746,447

 
 
 
 
Debt-to-capital
47.0
%
 
51.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable and other borrowings
$
904,771

 
$
905,055

 
 
 
 
Less: cash and cash equivalents and investments and securities
(290,574
)
 
(363,823
)
 
 
 
 
Net debt
614,197

 
541,232

 
 
 
 
Stockholders’ equity
1,020,319

 
841,392

 
 
 
 
Total net capital
$
1,634,516

 
$
1,382,624

 
 
 
 
Net debt-to-capital
37.6
%
 
39.1
%
 
 
 

 



7


Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows 
(In thousands) (unaudited)
 
 
Six Months Ended June 30,
 
 
2014
 
2013
Cash flows from operating activities:
 
 
 
 
Net earnings
 
$
60,456

 
$
40,184

Adjustments to reconcile net earnings to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
5,182

 
4,658

Stock-based compensation
 
5,264

 
3,941

Loss on early extinguishment of debt
 
—

 
3,796

Excess income tax benefit from stock-based awards
 
(2,194
)
 
(1,687
)
Equity in earnings from unconsolidated entities
 
(4,268
)
 
(5,998
)
Deferred tax asset valuation benefit
 
—

 
(3,057
)
Distribution of earnings from unconsolidated entities
 
6,119

 
7,236

Other
 
3,955

 
4,022

Changes in assets and liabilities:
 
 
 
 
Increase in real estate
 
(234,884
)
 
(113,992
)
Increase in deposits on real estate under option or contract
 
(7,986
)
 
(7,361
)
Increase in receivables and prepaid expenses and other assets
 
(15,121
)
 
(13,167
)
Increase in accounts payable and accrued liabilities
 
3,290

 
48,715

Increase in home sale deposits
 
5,537

 
13,189

Net cash used in operating activities
 
(174,650
)
 
(19,521
)
Cash flows from investing activities:
 
 
 
 
Investments in unconsolidated entities
 
(233
)
 
(116
)
Distributions of capital from unconsolidated entities
 
—

 
74

Purchases of property and equipment
 
(11,864
)
 
(5,787
)
Proceeds from sales of property and equipment
 
146

 
32

Maturities of investments and securities
 
65,388

 
71,024

Payments to purchase investments and securities
 
(35,614
)
 
(76,938
)
Increase in restricted cash
 
—

 
(4,327
)
Net cash provided by/(used in) investing activities
 
17,823

 
(16,038
)
Cash flows from financing activities:
 
 
 
 
Repayments of senior subordinated notes
 
—

 
(102,822
)
Proceeds from issuance of senior notes
 
—

 
175,000

Proceeds from issuance of common stock, net
 
110,420

 
—

Debt issuance costs
 
—

 
(1,403
)
Excess income tax benefit from stock-based awards
 
2,194

 
1,687

   Non-controlling interest acquisition
 
—

 
(257
)
Proceeds from stock option exercises
 
707

 
10,916

Net cash provided by financing activities
 
113,321

 
83,121

Net (decrease)/increase in cash and cash equivalents
 
(43,506
)
 
47,562

Beginning cash and cash equivalents
 
274,136

 
170,457

Ending cash and cash equivalents (2)
 
$
230,630

 
$
218,019

 (2) Ending cash and cash equivalents excludes investments and securities totaling $59.9 million as of June 30, 2014 and excludes investments and securities and restricted cash of $135.3 million as of June 30, 2013.

8


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
June 30, 2014
 
June 30, 2013
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
252

 
$
84,606

 
251

 
$
79,736

California
 
185

 
95,067

 
297

 
124,818

Colorado
 
115

 
52,292

 
100

 
37,001

Nevada
 
—

 
—

 
21

 
5,086

West Region
 
552

 
231,965

 
669

 
246,641

Texas
 
524

 
159,562

 
449

 
116,970

Central Region
 
524

 
159,562

 
449

 
116,970

Carolinas
 
89

 
36,127

 
51

 
19,273

Florida
 
155

 
60,732

 
152

 
53,156

Tennessee
 
48

 
14,414

 
—

 
—

East Region
 
292

 
111,273

 
203

 
72,429

Total
 
1,368

 
$
502,800

 
1,321

 
$
436,040

Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
239

 
$
77,372

 
334

 
$
105,683

California
 
205

 
107,608

 
251

 
113,561

Colorado
 
140

 
64,491

 
121

 
53,278

Nevada
 
—

 
—

 
1

 
289

West Region
 
584

 
249,471

 
707

 
272,811

Texas
 
718

 
240,463

 
641

 
183,509

Central Region
 
718

 
240,463

 
641

 
183,509

Carolinas
 
102

 
43,062

 
77

 
31,604

Florida
 
180

 
67,891

 
212

 
85,468

Tennessee
 
63

 
17,548

 
—

 
—

East Region
 
345

 
128,501

 
289

 
117,072

Total
 
1,647

 
$
618,435

 
1,637

 
$
573,392


9


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
 
Six Months Ended
 
 
June 30, 2014
 
June 30, 2013
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
463

 
$
156,388

 
443

 
$
136,885

California
 
350

 
174,994

 
525

 
215,460

Colorado
 
204

 
92,214

 
194

 
69,205

Nevada
 
—

 
—

 
37

 
8,655

West Region
 
1,017

 
423,596

 
1,199

 
430,205

Texas
 
927

 
277,761

 
803

 
207,675

Central Region
 
927

 
277,761

 
803

 
207,675

Carolinas
 
144

 
58,706

 
91

 
33,488

Florida
 
318

 
127,829

 
280

 
95,382

Tennessee
 
71

 
20,687

 
—

 
—

East Region
 
533

 
207,222

 
371

 
128,870

Total
 
2,477

 
$
908,579

 
2,373

 
$
766,750

Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
467

 
$
153,019

 
652

 
$
203,391

California
 
442

 
227,660

 
565

 
247,192

Colorado
 
264

 
119,249

 
262

 
110,073

Nevada
 
—

 
—

 
24

 
5,795

West Region
 
1,173

 
499,928

 
1,503

 
566,451

Texas
 
1,352

 
432,694

 
1,144

 
314,639

Central Region
 
1,352

 
432,694

 
1,144

 
314,639

Carolinas
 
183

 
77,081

 
146

 
58,490

Florida
 
353

 
132,506

 
391

 
154,215

Tennessee
 
111

 
31,266

 
—

 
—

East Region
 
647

 
240,853

 
537

 
212,705

Total
 
3,172

 
$
1,173,475

 
3,184

 
$
1,093,795

 
 
 
 
 
 
 
 
 
Order Backlog:
 
 
 
 
 
 
 
 
Arizona
 
282

 
$
93,870

 
458

 
$
147,322

California
 
317

 
160,129

 
355

 
156,320

Colorado
 
262

 
119,419

 
210

 
90,957

Nevada
 
—

 
—

 
1

 
245

West Region
 
861

 
373,418

 
1,024

 
394,844

Texas
 
1,217

 
400,588

 
841

 
239,281

Central Region
 
1,217

 
400,588

 
841

 
239,281

Carolinas
 
147

 
61,593

 
104

 
42,343

Florida
 
243

 
93,949

 
314

 
129,843

Tennessee
 
80

 
22,020

 
—

 
—

East Region
 
470

 
177,562

 
418

 
172,186

Total
 
2,548

 
$
951,568

 
2,283

 
$
806,311





10


Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
June 30, 2014
 
June 30, 2013
 
 
Beg.
 
End
 
Beg.
 
End
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
41

 
42

 
40

 
36

California
 
17

 
15

 
15

 
13

Colorado
 
13

 
13

 
11

 
12

Nevada
 
—

 
—

 
—

 
—

West Region
 
71

 
70

 
66

 
61

Texas
 
77

 
69

 
69

 
71

Central Region
 
77

 
69

 
69

 
71

Carolinas
 
18

 
13

 
11

 
13

Florida
 
17

 
18

 
22

 
20

Tennessee
 
6

 
5

 
—

 
—

East Region
 
41

 
36

 
33

 
33

Total
 
189

 
175

 
168

 
165

 
 
Six Months Ended
 
 
June 30, 2014
 
June 30, 2013
 
 
Beg.
 
End
 
Beg.
 
End
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
40

 
42

 
38

 
36

California
 
22

 
15

 
17

 
13

Colorado
 
14

 
13

 
12

 
12

Nevada
 
—

 
—

 
1

 
—

West Region
 
76

 
70

 
68

 
61

Texas
 
70

 
69

 
65

 
71

Central Region
 
70

 
69

 
65

 
71

Carolinas
 
17

 
13

 
7

 
13

Florida
 
20

 
18

 
18

 
20

Tennessee
 
5

 
5

 
—

 
—

East Region
 
42

 
36

 
25

 
33

Total
 
188

 
175

 
158

 
165




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About Meritage Homes Corporation
Meritage Homes is the ninth-largest public homebuilder in the United States, based on homes closed in 2013. Meritage builds and sells single-family homes for first-time, move-up, luxury and active adult buyers across the Western, Southern and Southeastern United States. As of June 30, 2014, the company had 175 actively selling communities in markets including Sacramento, San Francisco's East Bay, the Central Valley and Orange County, California; Houston, Dallas-Ft. Worth, Austin and San Antonio, Texas; Phoenix/Scottsdale, Green Valley and Tucson, Arizona; Denver and Fort Collins, Colorado; Orlando and Tampa, Florida; Raleigh and Charlotte, North Carolina; York County, South Carolina and Nashville, Tennessee.
Meritage has designed and built more than 80,000 homes in its 28-year history, and has a reputation for its distinctive style, quality construction, and positive customer experience. Meritage is the industry leader in energy-efficient homebuilding and has received the U.S. Environmental Protection Agency's ENERGY STAR Partner of the Year for Sustained Excellence Award in 2013 and 2014, for innovation and industry leadership in energy efficient homebuilding. Meritage was the first national homebuilder to be 100 percent ENERGY STAR qualified in every home it builds, and far exceeds ENERGY STAR standards today.
For more information, visit meritagehomes.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include management's expectations for community count and strong earnings growth in the second half of 2014, the anticipated closing of the Legendary Communities acquisition and the expected growth rate for closings and revenue from that acquisition with potential earnings accretion.
Such statements are based upon the current beliefs and expectations of Company management, and current market conditions, which are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Meritage's business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company's stock and note prices may fluctuate dramatically. The risks and uncertainties include but are not limited to the following: the availability of finished lots and undeveloped land; interest rates and changes in the availability and pricing of residential mortgages; fluctuations in the availability and cost of labor; changes in tax laws that adversely impact our homebuyers; the ability of our potential buyers to sell their existing homes; cancellation rates and home prices in our markets; weakness in the homebuilding market resulting from an unexpected setback in the current economic recovery; inflation in the cost of materials used to construct homes; the adverse effect of slower order absorption rates; potential write-downs or write-offs of assets, including pre-acquisition costs and deposits; a change to the feasibility of projects under option or contract that could result in the write-off of option deposits; our potential exposure to natural disasters; competition; the adverse impacts of cancellations resulting from relatively small deposits relating to our sales contracts; construction defect and home warranty claims; our success at prevailing in litigation matters and on contested tax positions; our ability to obtain performance bonds in connection with our development work; the liquidity of our joint ventures and the ability of our joint venture partners to meet their obligations to us and the joint venture; the loss of key personnel; our failure to comply with laws and regulations; our lack of geographic diversification; fluctuations in quarterly operating results; our financial leverage

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and level of indebtedness and our ability to take certain actions because of restrictions contained in the indentures for our senior notes and our ability to raise additional capital when and if needed; our credit ratings; successful integration of future acquisitions; our compliance with government regulations and the effect of legislative or other initiatives that seek to restrain growth of new housing construction or similar measures; acts of war; the replication of our "Green" technologies by our competitors; our exposure to information technology failures and security breaches; and other factors identified in documents filed by the company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2013 and our most recent quarterly report on form 10-Q under the caption "Risk Factors," which can be found on our website.




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