Meritage Homes Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

EARNINGS PER SHARE

EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2024

Basic and diluted earnings per common share were calculated as follows (in thousands, except per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Basic weighted average number of shares outstanding	36,322		36,765		36,317		36,715
Effect of dilutive securities:

Unvested restricted stock	396		426		421		434
Diluted average shares outstanding	36,718		37,191		36,738		37,149
Net earnings	$	231,555	$	186,836	$	417,571	$	318,137


Basic earnings per share	$	6.38	$	5.08	$	11.50	$	8.67
Diluted earnings per share	$	6.31	$	5.02	$	11.37	$	8.56

We compute basic earnings per share by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share gives effect to the potential dilution that could occur if securities or contracts to issue common stock that are dilutive were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. In accordance with ASC 260-10, Earnings Per Share, we calculate the dilutive effect of the 2028 Convertible Notes using the "if-converted" method. As discussed in Note 6, the Company will settle any convertible note conversions by paying cash up to the principal amount of notes and settle any additional value in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election. As the Company will settle the principal amount of convertible notes in cash upon conversion, the convertible notes only have a dilutive impact when the average share price of the Company’s common stock exceeds the conversion price, in any applicable period.