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

Meritage Homes Reports Results for the Third Quarter of 2014
Orders up 15%, backlog value grows 30% with 16% increase in average active communities
Home closing revenue grew 13% on higher home closings and average prices


SCOTTSDALE, Ariz., October 29, 2014 - Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced third quarter results for the period ended September 30, 2014.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 
    
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
%Chg
 
2014
 
2013
 
%Chg
Homes closed (units)
 
1,522

 
1,418

 
7
 %
 
3,999

 
3,791

 
5
%
Home closing revenue
 
$
545,524

 
$
483,147

 
13
 %
 
$
1,454,103

 
$
1,249,897

 
16
%
Average sales price - closings
 
$
358

 
$
341

 
5
 %
 
$
364

 
$
330

 
10
%
Home orders (units)
 
1,500

 
1,300

 
15
 %
 
4,672

 
4,484

 
4
%
Home order value
 
$
573,643

 
$
473,924

 
21
 %
 
$
1,747,118

 
$
1,567,719

 
11
%
Average sales price - orders
 
$
382

 
$
365

 
5
 %
 
$
374

 
$
350

 
7
%
Ending backlog (units)
 
 
 
 
 
 
 
2,705

 
2,190

 
24
%
Ending backlog value
 
 
 
 
 
 
 
$
1,043,741

 
$
805,580

 
30
%
Average sales price - backlog
 


 


 

 
$
386

 
$
368

 
5
%
Net earnings
 
$
32,577

 
$
38,191

 
(15
)%
 
$
93,033

 
$
78,375

 
19
%
Diluted EPS
 
$
0.79

 
$
0.99

 
(20
)%
 
$
2.27

 
$
2.05

 
11
%




1



MANAGEMENT COMMENTS
“We were pleased to achieve year-over-year growth in closing volumes, orders and backlog, with even greater expansion in our home closing revenue, order value and backlog value as a result of higher average selling prices compared to last year,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “Home closing revenue growth of 31% and 53% in our Central and East regions, respectively, more than offset the year-over-year declines in Arizona and California, where sales have slowed from 2013 and home prices are no longer outpacing the increased cost of land, reducing our gross margins in those states.
"The combined effects of revenue and margin declines in Arizona and California pulled our overall home closing gross margin and net earnings down in the third quarter of 2014 compared to last year's third quarter, when we reported the highest quarterly earnings per share we had generated in the last five years,” explained Mr. Hilton. “Our home closing margin was also reduced by the short-term effects of purchase accounting associated with home closings from our acquisition of Legendary Communities in August. However, our home closing gross margin of 21.6% for the first three quarters of 2014 was in line with 21.5% for the first three quarters of 2013.
“More importantly for the longer term, our divisions did an excellent job of getting new communities opened, exceeding our projected target of 190 communities within existing markets before adding those from Legendary, which brought our total actively selling communities to 225 as of September 30, 2014. We are enthusiastic about the opportunities for continued growth represented by those additional communities.
“As the U.S. housing market continues to improve overall, we are confident in our ability to leverage our strengths and the Meritage Homes brand to further develop our existing markets and penetrate additional markets where we see promising opportunities,” Mr. Hilton continued. “We remain committed to our plan to generate strong revenue and earnings growth in 2015 and beyond. We currently project fourth quarter home closing revenue of $700-725 million and diluted earnings per share of $1.00-1.05.”
THIRD QUARTER RESULTS
Home closing revenue increased 13% over the prior year, combining a 7% increase in home closings and a 5% increase in the average price of homes closed during the quarter. Respective increases of 31% and 53% in home closing revenue from the Central and East regions more than offset an 11% decline from the West region, which resulted from decreases of 15% and 19% in California and Arizona, respectively, partially offset by a 16% increase in Colorado.
Home closing gross profit of $111.2 million for the third quarter of 2014 was essentially flat compared to the prior year’s $110.4 million due to lower margins on higher home closing revenue. Home closing gross margin of 20.4%

2



for the third quarter of 2014 decreased by 240 basis points (bps) from 22.8% in the third quarter of 2013. Gross margin was adversely impacted by higher lot costs, primarily in the West, where land prices have risen most significantly; softness in Arizona markets that led to price reductions; a $1.0 million impairment (20 bps) on two vintage communities in Tucson; and lower margins on Legendary Communities closings (40 bps), due to a stepped-up basis on homes that were completed or under construction at the time of acquisition, which management expects will dissipate as those homes acquired from Legendary are closed over the next couple of quarters.
Land closing gross profit declined by $3.3 million compared to the third quarter of 2013. The $0.5 million loss on land closings in the third quarter of 2014 resulted from the sale of the company's last remaining parcel of land in Nevada, where operations were discontinued in 2012.
Commissions and other sales costs increased to 7.4% of home closing revenue in 2014, compared to 6.9% in the same period of 2013, partially due to costs associated with the opening of 36 new communities during the quarter.
General and administrative expenses for the third quarter increased slightly to 5.2% of total closing revenue in 2014 compared to 5.0% in the third quarter of 2013, and included expenses associated with the acquisition of Legendary Communities and personnel hired to support new divisions.
Interest expense declined $3.0 million year over year to less than 0.1% of third quarter 2014 total closing revenue, compared to 0.7% of third quarter closing revenue in 2013, as a greater percentage of total interest incurred was capitalized to lots and homes under development.
Pre-tax margin was 8.4% in the third quarter of 2014 compared to 11.5% in 2013, primarily due to lower home closing gross margin in 2014.
The effective tax rate of 31% in the third quarter of 2014, compared to 33% in the third quarter of 2013, was due to additional energy tax credits captured in the third quarter of 2014 related to homes closed during 2012 and 2013.
Net earnings of $32.6 million or $0.79 per diluted share decreased by $5.6 million for the third quarter, from $38.2 million or $0.99 per diluted share in the third quarter of 2013, primarily due to lower home closing gross margin, lower land closing gross profit and higher selling, general and administrative costs.
Total order value grew 21% to $573.6 million in the third quarter of 2014 from $473.9 million in 2013, reflecting a 15% increase in homes ordered and a 5% increase in the average selling price. The order value increase came primarily from Colorado, Texas and the expanded East Region, including the newly acquired Legendary Communities, with Arizona being the only negative comparison to the prior year.
Ending community count at September 30, 2014 expanded to 225 active communities from 175 at the beginning of the third quarter, a year-over-year increase of 26% compared to 179 at September 30, 2013. Legendary accounted for 32 communities in addition to 193 within Meritage’s existing markets.

3



Orders per average active community during the quarter were consistent with the prior year at 7.5 in 2014 and 7.6 in 2013, led by Colorado, Florida and Tennessee selling at a faster pace than the company average.
Ending backlog value at September 30 was 30% higher in 2014 than 2013, with 24% more units in backlog and average prices up 5%.
YEAR TO DATE RESULTS
Net earnings of $93.0 million for the first three quarters of 2014 increased 19% compared to net earnings of $78.4 million for the first three quarters of 2013, which included a $3.8 million loss on early extinguishment of debt.
Home closings and closing revenue for the first nine months of the year increased 5% and 16%, respectively, for 2014 over 2013, with a 10% increase in average closing prices.
Year-to-date home closing gross margin of 21.6% for 2014 was in line with 2013's 21.5%.
Year-to-date land closing gross profit swung to a loss of $1.5 million on land sales in Nevada in 2014 from a profit of $4.4 million 2013.
Total commissions and other sales costs increased slightly as a percentage of home closing revenue, at 7.4% year to date in 2014 compared to 7.2% in 2013, while general and administrative expenses declined slightly to 5.1% of total closing revenue in the first nine months of 2014 compared to 5.2% in 2013.
BALANCE SHEET
The company ended the third quarter of 2014 with $94.0 million in cash and cash equivalents, investments and securities, compared to $363.8 million at December 31, 2013, reflecting the acquisition of Legendary Communities in August and additional investment in real estate inventory. The company also had $375.7 million available under its revolving credit facility at September 30, 2014, compared to $135.0 million at September 30, 2013.
Real estate assets increased to $1.86 billion at September 30, 2014, compared to $1.41 billion at December 31, 2013. The largest increases were in homes completed and under construction, and home sites either finished or under development, primarily from the acquisition of Legendary Communities.
Net debt-to-capital ratio at quarter-end was 43.4% compared to 39.1% at December 31, 2013 and 38.1% at September 30, 2013.
Total lot supply at the end of the quarter was approximately 29,500, including approximately 3,700 lots in South Carolina and Georgia from the Legendary Communities acquisition, compared to approximately 25,000 total lots a year earlier. Based on trailing twelve months closings, the September 30, 2014 balance represents a 5.4 years supply of lots.

4




CONFERENCE CALL
Management will host a conference call today to discuss the Company's results at 10:30 a.m. Eastern Time (7:30 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/10052495.
Telephone participants who are unable to pre-register may dial in to 866-226-4948 on the day of the call. International dial-in number is 1-412-902-4125.
A replay of the call will be available until November 15, 2014, beginning at 12:30 p.m. ET on October 29, 2014 on the website noted above, or by dialing 877-344-7529, and referencing conference number 10052495. For more information, visit www.meritagehomes.com.



5




Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(Unaudited)
(In thousands, except per share data)
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
 
2014
 
2013
 
2014
 
2013
Homebuilding:
 
 
 
 
 
 
 
 
 
Home closing revenue
 
$
545,524

 
$
483,147

 
$
1,454,103

 
$
1,249,897

 
Land closing revenue
 
11,252

 
8,933

 
16,622

 
28,568

 
Total closing revenue
 
556,776

 
492,080

 
1,470,725

 
1,278,465

 
Cost of home closings
 
(434,286
)
 
(372,772
)
 
(1,140,305
)
 
(981,557
)
 
Cost of land closings
 
(11,729
)
 
(6,126
)
 
(18,084
)
 
(24,139
)
 
Total cost of closings
 
(446,015
)
 
(378,898
)
 
(1,158,389
)
 
(1,005,696
)
 
Home closing gross profit
 
111,238

 
110,375

 
313,798

 
268,340

 
Land closing gross (loss)/profit
 
(477
)
 
2,807

 
(1,462
)
 
4,429

 
Total closing gross profit
 
110,761

 
113,182

 
312,336

 
272,769

Financial Services:
 
 
 
 
 
 
 
 
 
Revenue
 
2,749

 
1,684

 
7,099

 
3,960

 
Expense
 
(1,238
)
 
(901
)
 
(3,444
)
 
(2,229
)
 
Earnings from financial services unconsolidated entities and other, net
 
2,783

 
3,511

 
7,281

 
9,784

 
Financial services profit
 
4,294

 
4,294

 
10,936

 
11,515

Commissions and other sales costs
 
(40,211
)
 
(33,467
)
 
(107,250
)
 
(90,526
)
General and administrative expenses
 
(29,218
)
 
(24,412
)
 
(75,460
)
 
(66,587
)
(Loss)/earnings from other unconsolidated entities, net
 
(134
)
 
46

 
(364
)
 
(229
)
Interest expense
 
(460
)
 
(3,462
)
 
(4,569
)
 
(13,113
)
Other income, net
 
1,998

 
605

 
6,395

 
1,760

Loss on early extinguishment of debt
 

 

 

 
(3,796
)
Earnings before income taxes
 
47,030

 
56,786

 
142,024

 
111,793

Provision for income taxes
 
(14,453
)
 
(18,595
)
 
(48,991
)
 
(33,418
)
Net earnings
 
$
32,577

 
$
38,191

 
$
93,033

 
$
78,375

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
Earnings per share
 
$
0.83

 
$
1.05

 
$
2.39

 
$
2.17

 
Weighted average shares outstanding
 
39,123

 
36,226

 
38,977

 
36,060

 
Diluted
 
 
 
 
 
 
 
 
 
Earnings per share
 
$
0.79

 
$
0.99

 
$
2.27

 
$
2.05

 
Weighted average shares outstanding
 
41,656

 
38,865

 
41,564

 
38,771





6





Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(unaudited)
 
 
 
September 30, 2014
 
December 31, 2013
Assets:
 
 
 
 
Cash and cash equivalents
 
$
84,105

 
$
274,136

Investments and securities
 
9,857

 
89,687

Other receivables
 
56,178

 
38,983

Real estate (1)
 
1,865,051

 
1,405,299

Real estate not owned
 
4,999

 
289

Deposits on real estate under option or contract
 
80,263

 
51,595

Investments in unconsolidated entities
 
9,900

 
11,638

Property and equipment, net
 
31,979

 
22,099

Deferred tax asset
 
65,538

 
70,404

Prepaids, other assets and goodwill
 
64,942

 
39,231

Total assets
 
$
2,272,812

 
$
2,003,361

Liabilities:
 
 
 
 
Accounts payable
 
$
105,068

 
$
68,018

Accrued liabilities
 
168,584

 
166,611

Home sale deposits
 
33,535

 
21,996

Liabilities related to real estate not owned
 
4,299


289

Senior, convertible senior notes and other borrowings
 
904,629

 
905,055

Total liabilities
 
1,216,115

 
1,161,969

Stockholders' Equity:
 
 
 
 
Preferred stock
 

 

Common stock
 
391

 
362

Additional paid-in capital
 
535,204

 
412,961

Retained earnings
 
521,102

 
428,069

Total stockholders’ equity
 
1,056,697

 
841,392

Total liabilities and stockholders’ equity
 
$
2,272,812

 
$
2,003,361

(1) Real estate – Allocated costs:
 
 
 
 
Homes under contract under construction
 
$
440,033

 
$
262,633

Unsold homes, completed and under construction
 
283,883

 
147,889

Model homes
 
100,027

 
81,541

Finished home sites and home sites under development
 
1,041,108

 
913,236

Total real estate
 
$
1,865,051

 
$
1,405,299







7



Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands – unaudited):
 
    
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Depreciation and amortization
$
2,972

 
$
2,511

 
$
8,154

 
$
7,169

 
 
 
 
 
 
 
 
Summary of Capitalized Interest:
 
 
 
 
 
 
 
Capitalized interest, beginning of period
$
44,355

 
$
26,294

 
$
32,992

 
$
21,600

Interest incurred
14,695

 
12,508

 
43,333

 
37,876

Interest expensed
(460
)
 
(3,462
)
 
(4,569
)
 
(13,113
)
Interest amortized to cost of home and land closings
(8,135
)
 
(6,342
)
 
(21,301
)
 
(17,365
)
Capitalized interest, end of period
$
50,455

 
$
28,998

 
$
50,455

 
$
28,998

 
 
 
 
 
 
 
 
 
September 30, 2014
 
December 31, 2013
 
 
 
 
Notes payable and other borrowings
$
904,629

 
$
905,055

 
 
 
 
Stockholders' equity
1,056,697

 
841,392

 
 
 
 
Total capital
1,961,326

 
1,746,447

 
 
 
 
Debt-to-capital
46.1
%
 
51.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable and other borrowings
$
904,629

 
$
905,055

 
 
 
 
Less: cash and cash equivalents and investments and securities
(93,962
)
 
(363,823
)
 
 
 
 
Net debt
810,667

 
541,232

 
 
 
 
Stockholders’ equity
1,056,697

 
841,392

 
 
 
 
Total net capital
$
1,867,364

 
$
1,382,624

 
 
 
 
Net debt-to-capital
43.4
%
 
39.1
%
 
 
 

 



8



Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows 
(In thousands) (unaudited)
 
 
Nine Months Ended September 30,
 
 
2014
 
2013
Cash flows from operating activities:
 
 
 
 
Net earnings
 
$
93,033

 
$
78,375

Adjustments to reconcile net earnings to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
8,154

 
7,169

Stock-based compensation
 
9,035

 
7,040

Loss on early extinguishment of debt
 

 
3,796

Excess income tax benefit from stock-based awards
 
(2,197
)
 
(1,733
)
Equity in earnings from unconsolidated entities
 
(6,917
)
 
(9,555
)
Deferred tax asset valuation benefit
 

 
(4,614
)
Distribution of earnings from unconsolidated entities
 
8,784

 
10,796

Other
 
8,361

 
3,071

Changes in assets and liabilities:
 
 
 
 
Increase in real estate
 
(350,868
)
 
(221,668
)
Increase in deposits on real estate under option or contract
 
(27,552
)
 
(20,425
)
Increase in receivables and prepaid expenses and other assets
 
(19,502
)
 
(14,224
)
Increase in accounts payable and accrued liabilities
 
34,501

 
106,862

Increase in home sale deposits
 
9,015

 
15,584

Net cash used in operating activities
 
(236,153
)
 
(39,526
)
Cash flows from investing activities:
 
 
 
 
Investments in unconsolidated entities
 
(245
)
 
(107
)
Distributions of capital from unconsolidated entities
 

 
79

Purchases of property and equipment
 
(16,367
)
 
(9,717
)
Proceeds from sales of property and equipment
 
173

 
39

Maturities of investments and securities
 
115,584

 
132,900

Payments to purchase investments and securities
 
(35,697
)
 
(139,672
)
Cash paid for acquisitions
 
(130,677
)
 
(18,379
)
Increase in restricted cash
 

 
(1,966
)
Net cash provided used in investing activities
 
(67,229
)
 
(36,823
)
Cash flows from financing activities:
 
 
 
 
Repayment 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
 
2,197

 
1,733

   Non-controlling interest acquisition
 

 
(257
)
Proceeds from stock option exercises
 
734

 
11,225

Net cash provided by financing activities
 
113,351

 
83,476

Net (decrease)/increase in cash and cash equivalents
 
(190,031
)
 
7,127

Beginning cash and cash equivalents
 
274,136

 
170,457

Ending cash and cash equivalents (2)
 
$
84,105

 
$
177,584

 (2) Ending cash and cash equivalents excludes investments and securities totaling $9.9 million as of September 30, 2014 and excludes investments and securities and restricted cash of $133.8 million as of September 30, 2013.

9



Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
September 30, 2014
 
September 30, 2013
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
236

 
$
77,793

 
301

 
$
96,562

California
 
196

 
97,260

 
259

 
113,954

Colorado
 
114

 
49,792

 
104

 
43,033

Nevada
 

 

 
1

 
245

West Region
 
546

 
224,845

 
665

 
253,794

Texas
 
584

 
178,614

 
509

 
136,249

Central Region
 
584

 
178,614

 
509

 
136,249

Florida
 
164

 
61,713

 
176

 
66,464

Georgia
 
37

 
11,899

 

 

North Carolina
 
104

 
43,413

 
62

 
24,361

South Carolina
 
37

 
11,494

 

 

Tennessee
 
50

 
13,546

 
6

 
2,279

East Region
 
392

 
142,065

 
244

 
93,104

Total
 
1,522

 
$
545,524

 
1,418

 
$
483,147

Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
198

 
$
67,753

 
234

 
$
80,748

California
 
157

 
87,610

 
165

 
84,741

Colorado
 
153

 
66,744

 
96

 
44,178

Nevada
 

 

 

 

West Region
 
508

 
222,107

 
495

 
209,667

Texas
 
537

 
181,127

 
545

 
157,868

Central Region
 
537

 
181,127

 
545

 
157,868

Florida
 
207

 
86,145

 
177

 
74,312

Georgia
 
31

 
9,447

 

 

North Carolina
 
128

 
47,862

 
72

 
28,971

South Carolina
 
44

 
14,225

 

 

Tennessee
 
45

 
12,730

 
11

 
3,106

East Region
 
455

 
170,409

 
260

 
106,389

Total
 
1,500

 
$
573,643

 
1,300

 
$
473,924


10



Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
 
Nine Months Ended
 
 
September 30, 2014
 
September 30, 2013
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
699

 
$
234,181

 
744

 
$
233,447

California
 
546

 
272,254

 
784

 
329,414

Colorado
 
318

 
142,006

 
298

 
112,238

Nevada
 

 

 
38

 
8,900

West Region
 
1,563

 
648,441

 
1,864

 
683,999

Texas
 
1,511

 
456,375

 
1,312

 
343,924

Central Region
 
1,511

 
456,375

 
1,312

 
343,924

Florida
 
482

 
189,542

 
456

 
161,846

Georgia
 
37

 
11,899

 

 

North Carolina
 
248

 
102,119

 
153

 
57,849

South Carolina
 
37

 
11,494

 

 

Tennessee
 
121

 
34,233

 
6

 
2,279

East Region
 
925

 
349,287

 
615

 
221,974

Total
 
3,999

 
$
1,454,103

 
3,791

 
$
1,249,897

Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
665

 
$
220,772

 
886

 
$
284,139

California
 
599

 
315,270

 
730

 
331,933

Colorado
 
417

 
185,993

 
358

 
154,251

Nevada
 

 

 
24

 
5,795

West Region
 
1,681

 
722,035

 
1,998

 
776,118

Texas
 
1,889

 
613,821

 
1,689

 
472,507

Central Region
 
1,889

 
613,821

 
1,689

 
472,507

Florida
 
560

 
218,651

 
568

 
228,527

Georgia
 
31

 
9,447

 

 

North Carolina
 
311

 
124,943

 
218

 
87,461

South Carolina
 
44

 
14,225

 

 

Tennessee
 
156

 
43,996

 
11

 
3,106

East Region
 
1,102

 
411,262

 
797

 
319,094

Total
 
4,672

 
$
1,747,118

 
4,484

 
$
1,567,719

 
 
 
 
 
 
 
 
 
Order Backlog:
 
 
 
 
 
 
 
 
Arizona
 
244

 
$
83,830

 
391

 
$
131,508

California
 
278

 
150,479

 
261

 
127,107

Colorado
 
301

 
136,371

 
202

 
92,102

Nevada
 

 

 

 

West Region
 
823

 
370,680

 
854

 
350,717

Texas
 
1,170

 
403,101

 
877

 
260,900

Central Region
 
1,170

 
403,101

 
877

 
260,900

Florida
 
286

 
118,381

 
315

 
137,691

Georgia
 
65

 
21,322

 

 

North Carolina
 
196

 
77,138

 
114

 
46,953

South Carolina
 
90

 
31,915

 

 

Tennessee
 
75

 
21,204

 
30

 
9,319

East Region
 
712

 
269,960

 
459

 
193,963

Total
 
2,705

 
$
1,043,741

 
2,190

 
$
805,580



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Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
September 30, 2014
 
September 30, 2013
 
 
Beg.
 
End
 
Beg.
 
End
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
42

 
42

 
36

 
39

California
 
15

 
22

 
13

 
18

Colorado
 
13

 
16

 
12

 
12

Nevada
 

 

 

 

West Region
 
70

 
80

 
61

 
69

Texas
 
69

 
65

 
71

 
73

Central Region
 
69

 
65

 
71

 
73

Florida
 
18

 
26

 
20

 
19

Georgia
 

 
11

 

 

North Carolina
 
13

 
20

 
13

 
15

South Carolina
 

 
19

 

 

Tennessee
 
5

 
4

 

 
3

East Region
 
36

 
80

 
33

 
37

Total
 
175

 
225

 
165

 
179

 
 
Nine Months Ended
 
 
September 30, 2014
 
September 30, 2013
 
 
Beg.
 
End
 
Beg.
 
End
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
40

 
42

 
38

 
39

California
 
22

 
22

 
17

 
18

Colorado
 
14

 
16

 
12

 
12

Nevada
 

 

 
1

 

West Region
 
76

 
80

 
68

 
69

Texas
 
70

 
65

 
65

 
73

Central Region
 
70

 
65

 
65

 
73

Florida
 
20

 
26

 
18

 
19

Georgia
 

 
11

 

 

North Carolina
 
17

 
20

 
7

 
15

South Carolina
 

 
19

 

 

Tennessee
 
5

 
4

 

 
3

East Region
 
42

 
80

 
25

 
37

Total
 
188

 
225

 
158

 
179




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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. Meritage builds 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; Greenville-Spartanburg and York County, South Carolina; Nashville, Tennessee and Atlanta, Georgia.
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 and the accompanying comments during our analyst call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include management's expectations for continued recovery and growth in the U.S. housing market, Meritage’s growth opportunities within existing markets and potential new markets, the impacts of the Legendary acquisition on the Company’s future margins, plans for strong revenue and earnings growth in 2015 and beyond, and projected fourth quarter home closing revenue and diluted earnings per share.
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. These 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 develop communities and 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-down or write-off of option deposits; our ability to successfully integrate acquired companies and achieve anticipated benefits from these acquisitions; 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; changes in tax laws; adverse legal rulings; our success in prevailing on contested tax positions; our ability to obtain performance bonds in connection with our development work; the liquidity of our joint

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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; limitations of our geographic diversification; fluctuations in quarterly operating results; our financial leverage 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 most recent 10-Q under the caption "Risk Factors," which can be found on our website.
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