3 unchanged sentences
(in thousands, except share amounts)
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
Cash and cash equivalents $ 562,291 $ 745,621
16 unchanged sentences
Authorized 10,000,000 shares;
−Removed: none issued and outstanding at June 30, 2021 and December 31, 2020
+Added: none issued and outstanding at September 30, 2021 and December 31, 2020
Common stock, par value $ 0.01 .
Authorized 125,000,000 shares;
−Removed: 37,646,856 and 37,512,127 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively
+Added: 37,555,010 and 37,512,127 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
Additional paid-in capital 433,179 455,762
6 unchanged sentences
(in thousands, except per share amounts)
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
7 unchanged sentences
Home closing gross profit 371,676 243,567 983,632 642,623
−Removed: Land closing gross (loss)/profit ( 332 ) ( 1,448 ) 215 ( 1,065 )
+Added: Land closing gross profit/(loss) 764 510 979 ( 555 )
Total closing gross profit 372,440 244,077 984,611 642,068
23 unchanged sentences
(in thousands)
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Cash flows from operating activities:
9 unchanged sentences
(Increase)/decrease in real estate ( 810,731 ) 9,080
−Removed: (Increase)/decrease in deposits on real estate under option or contract ( 14,863 ) 2,225
+Added: Increase in deposits on real estate under option or contract ( 18,453 ) ( 12,910 )
(Increase)/decrease in other receivables, prepaids and other assets ( 51,611 ) 4,933
Increase in accounts payable and accrued liabilities 67,301 60,039
−Removed: Increase/(decrease) in home sale deposits 8,884 ( 999 )
+Added: Increase in home sale deposits 14,928 1,263
Net cash (used in)/provided by operating activities ( 248,706 ) 373,082
24 unchanged sentences
Meritage Homes is a leading designer and builder of single-family homes.
−Removed: We primarily build in historically high-growth regions of the United States and offer a variety of homes that are designed for the entry-level and first move-up buyers.
+Added: We primarily build in historically high-growth regions of the United States and offer a variety of homes that are designed for the first-time and first move-up buyers.
We have homebuilding operations in three regions:
15 unchanged sentences
Our homebuilding activities are conducted under the name of Meritage Homes in each of our homebuilding markets.
−Removed: At June 30, 2021, we were actively selling homes in 226 communities, with base prices ranging from approximately $ 229,000 to $ 869,000 .
+Added: At September 30, 2021, we were actively selling homes in 236 communities, with base prices ranging from approximately $ 200,000 to $ 889,000 .
Basis of Presentation .
8 unchanged sentences
Liquid investments with an initial maturity of three months or less are classified as cash equivalents.
−Removed: Amounts in transit from title companies or closing agents for home closings of approximately $ 77.0 million and $ 61.3 million are included in cash and cash equivalents at June 30, 2021 and December 31, 2020, respectively.
+Added: Amounts in transit from title companies or closing agents for home closings of approximately $ 94.3 million and $ 61.3 million are included in cash and cash equivalents at September 30, 2021 and December 31, 2020, respectively.
Real estate is stated at cost unless the community or land is determined to be impaired, at which point the inventory is written down to fair value as required by Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment (“ASC 360-10”) .
12 unchanged sentences
Typically, a community's life cycle ranges from three to five years , commencing with the acquisition of the land, continuing through the land development phase, if applicable, and concluding with the sale, construction and closing of the homes.
−Removed: Actual community lives will vary based on the size of the community, the sales absorption rate and whether the land purchased was raw, partially-developed or in finished status.
+Added: Actual community lives will vary based on the size of the community, the orders absorption rate and whether the land purchased was raw, partially-developed or in finished status.
Master-planned communities encompassing several phases and super-block land parcels may have significantly longer lives and projects involving smaller finished lot purchases may be significantly shorter.
All of our land inventory and related real estate assets are periodically reviewed for recoverability when certain criteria are met, but at least annually, as our inventory is considered “long-lived” in accordance with GAAP.
−Removed: Impairment charges are recorded to write down an asset to its estimated fair value if the undiscounted cash flows expected to be generated by the asset are lower than its carrying amount.
+Added: If the undiscounted cash flows expected to be generated by an asset are lower than its carrying amount, impairment charges are recorded to write down the asset to its estimated fair value.
Our determination of fair value is based on projections and estimates.
4 unchanged sentences
Deposits paid related to land option and purchase contracts are recorded and classified as Deposits on real estate under option or contract until the related land is purchased.
−Removed: Deposits are reclassified as a component of real estate inventory at the time the deposit is used to offset the acquisition price of the lots based on the terms of the underlying agreements.
+Added: Deposits are reclassified as a component of real estate inventory at the time the deposit is used to offset the acquisition price of the land based on the terms of the underlying agreements.
To the extent they are non-refundable, deposits are charged to expense if the land acquisition is terminated or no longer considered probable.
Since our acquisition contracts typically do not require specific performance, we do not consider such contracts to be contractual obligations to purchase the land and our total exposure under such contracts is limited to the loss of any nonrefundable deposits and any ancillary capitalized costs.
−Removed: Our Deposits on real estate under option or contract were $ 74.4 million and $ 59.5 million as of June 30, 2021 and December 31, 2020, respectively.
+Added: Our Deposits on real estate under option or contract were $ 78.0 million and $ 59.5 million as of September 30, 2021 and December 31, 2020, respectively.
In accordance with ASC 350, Intangibles, Goodwill and Other ("ASC 350"), we analyze goodwill on an annual basis (or whenever indication of impairment exists) through a qualitative assessment to determine whether it is necessary to perform a goodwill impairment test.
9 unchanged sentences
Leases that meet the criteria of ASC 842 are recorded on our unaudited consolidated balance sheets as right-of-use ("ROU") assets and lease liabilities.
−Removed: ROU assets are classified within Prepaids, other assets and goodwill on our unaudited consolidated balance sheets, while lease liabilities are classified within Accrued liabilities on our unaudited consolidated balance sheets.
+Added: ROU assets are classified within Prepaids, other assets and goodwill on the accompanying unaudited consolidated balance sheets, while lease liabilities are classified within Accrued liabilities on the accompanying unaudited consolidated balance sheets.
The table below outlines our ROU assets and lease liabilities (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
ROU assets $ 17,159 $ 21,624
1 unchanged sentence
Off-Balance Sheet Arrangements - Joint Ventures .
−Removed: We may participate in land development joint ventures as a means of accessing larger parcels of land and lot positions, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital base, although our participation in such ventures is currently very limited.
+Added: We may participate in land development joint ventures as a means of accessing larger parcels of land and lot positions, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital base, although our participation in such ventures is currently limited.
See Note 4 for additional discussion of our investments in unconsolidated entities .
10 unchanged sentences
The table below outlines our surety bond and letter of credit obligations (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
Outstanding Estimated work
7 unchanged sentences
Accrued Liabilities .
−Removed: Accrued liabilities at June 30, 2021 and December 31, 2020 consisted of the following (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: Accrued liabilities at September 30, 2021 and December 31, 2020 consisted of the following (in thousands):
+Added: September 30, 2021 December 31, 2020
Accruals related to real estate development and construction activities $ 116,351 $ 92,701
13 unchanged sentences
adjust them, as necessary, to reflect changes in trends as information becomes available.
−Removed: Based on such reviews of warranty costs incurred, we did not adjust the warranty reserve balance in the three or six months ended June 30, 2021 or 2020.
−Removed: Included in the warranty reserve balances at June 30, 2021 and December 31, 2020 reflected in the table below are case-specific reserves for a warranty matter related to alleged stucco defects in certain Florida homes we constructed between 2006 and 2016 and water drainage issues in a single community in Florida.
+Added: Based on such reviews of warranty costs incurred, we did not adjust the warranty reserve balance in the three or nine months ended September 30, 2021 or 2020.
+Added: Included in the warranty reserve balances at September 30, 2021 and December 31, 2020 reflected in the table below are case-specific reserves for a warranty matter related to alleged stucco defects in certain homes we constructed between 2006 and 2017 and water drainage issues in a single community in Florida that we developed in 2016.
See Note 15 for additional information regarding these case-specific reserves.
A summary of changes in our warranty reserves follows (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
5 unchanged sentences
Warranty reserves are included in Accrued liabilities on the accompanying unaudited consolidated balance sheets, and additions and adjustments to the reserves are included in Cost of home closings within the accompanying unaudited consolidated income statements.
−Removed: These reserves are intended to cover costs associated with our contractual and statutory warranty obligations, which include, among other items, claims involving defective workmanship and materials, as discussed previously.
+Added: These reserves are intended to cover costs associated with our contractual and statutory warranty obligations, which include, among other items, claims involving defective workmanship and materials.
We believe that our total reserves, coupled with our contractual relationships and rights with our trades and the insurance we and our trades maintain, are sufficient to cover our general warranty obligations.
14 unchanged sentences
Revenue from financial services includes estimated future insurance policy renewal commissions as our performance obligations are satisfied upon issuance of the initial policy with a third party broker.
−Removed: The related contract assets for these estimated future renewal commissions are no t material at June 30, 2021 and December 31, 2020.
+Added: The related contract assets for these estimated future renewal commissions are no t material at September 30, 2021 and December 31, 2020.
Our three sources of revenue are disaggregated by type in the accompanying unaudited consolidated income statements.
2 unchanged sentences
2019-12, Income Taxes (Topic 740):
−Removed: Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which simplifies the accounting for income taxes by eliminating certain exceptions within Accounting Standards Codification Topic 740, Income Taxes, and clarifying other areas of existing guidance.
+Added: Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which simplifies the accounting for income taxes by eliminating certain exceptions within ASC Topic 740, Income Taxes , and clarifying other areas of existing guidance.
ASU 2019-12 was effective for us on January 1, 2021, and the adoption did not have a material impact on our financial statements or financial statement disclosures.
1 unchanged sentence
Real estate consists of the following (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
Homes under contract under construction (1)
13 unchanged sentences
property taxes, homeowner association dues, etc.) are expensed as incurred.
−Removed: (3) Includes land held for sale of $ 29.9 million and $ 72.7 million as of June 30, 2021 and December 31, 2020, respectively.
+Added: (3) Includes land held for sale of $ 47.8 million and $ 72.7 million as of September 30, 2021 and December 31, 2020, respectively .
Subject to sufficient qualifying assets, we capitalize our development period interest costs incurred to applicable qualifying assets in connection with our real estate development and construction activities.
1 unchanged sentence
A summary of our capitalized interest is as follows (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
7 unchanged sentences
These purchase and option agreements enable us to acquire properties at one or multiple future dates at pre-determined prices.
−Removed: We believe these acquisition structures reduce our financial risk associated with land acquisitions and allow us to better leverage our balance sheet.
+Added: We believe these acquisition structures allow us to better leverage our balance sheet and reduce our financial risk associated with land acquisitions.
In accordance with ASC 810, Consolidation , we evaluate all purchase and option agreements for land to determine whether they are a variable interest entity ("VIE"), and if so, whether we are the primary beneficiary.
Although we do not have legal title to the underlying land, if we are the primary beneficiary we are required to consolidate the VIE in our financial statements and reflect such assets and liabilities as Real estate not owned.
−Removed: As a result of our analyses, we determined that as of June 30, 2021 and December 31, 2020, we were not the primary beneficiary of any VIEs from which we have acquired rights to land or lots under option contracts.
−Removed: The table below presents a summary of our lots under option at June 30, 2021 (dollars in thousands):
+Added: As a result of our analyses, we determined that as of September 30, 2021 and December 31, 2020, we were not the primary beneficiary of any VIEs from which we have acquired rights to land or lots under option contracts.
+Added: The table below presents a summary of our lots under option at September 30, 2021 (dollars in thousands):
Projected Number
17 unchanged sentences
We have not completed our acquisition evaluation process and we have not internally committed to purchase these lots.
−Removed: (3) Except for our specific performance contracts recorded on our unaudited consolidated balance sheets as Real estate not owned (if any), none of our purchase or option contracts require us to purchase lots.
−Removed: (4) Amount is reflected on our unaudited consolidated balance sheets in Deposits on real estate under option or contract as of June 30, 2021.
+Added: (3) Except for our specific performance contracts recorded on the accompanying unaudited consolidated balance sheets as Real estate not owned (if any), none of our purchase or option contracts require us to purchase lots.
+Added: (4) Amount is reflected on the accompanying unaudited consolidated balance sheets in Deposits on real estate under option or contract as of September 30, 2021.
Generally, our options to purchase lots remain effective so long as we purchase a pre-established minimum number of lots each month or quarter, as determined by the respective agreement.
5 unchanged sentences
Our joint venture partners are generally other homebuilders, land sellers or other real estate investors.
−Removed: We generally do not have a controlling interest in these ventures, which means our joint venture partners could cause the venture to take actions we disagree with or fail to take actions we believe should be undertaken, including the sale of the underlying property to repay debt or recoup all or part of the partners' investments.
+Added: We do not always have a controlling interest in these ventures, which means our joint venture partners could cause the venture to take actions we disagree with or fail to take actions we believe should be undertaken, including the sale of the underlying property to repay debt or recoup all or part of the partners' investments.
Based on the structure of each joint venture, it may or may not be consolidated into our results.
−Removed: As of June 30, 2021, we had one active equity-method land joint venture with limited operations.
−Removed: As of June 30, 2021, we also participated in one mortgage joint venture, which is engaged in mortgage activities and primarily provides services to our homebuyers.
−Removed: Our investment in this mortgage joint venture as of June 30, 2021 and December 31, 2020 was $ 0.7 million and $ 1.0 million, respectively.
+Added: As of September 30, 2021, we had one active equity-method land joint venture with limited operations, and one mortgage joint venture, which is engaged in mortgage activities and primarily provides services to our homebuyers.
Summarized condensed combined financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
$ 3,985 $ 4,656
4 unchanged sentences
Total liabilities and equity $ 14,372 $ 15,519
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
5 unchanged sentences
(1) Balance represents Meritage’s interest, as reflected in the financial records of the respective joint ventures.
−Removed: This balance may differ from the balance reported in our unaudited consolidated financial statements due to the following reconciling items:
+Added: This balance may differ from the balance reported in the accompanying unaudited 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.
−Removed: (2) Our share of pre-tax earnings is recorded in Earnings from financial services unconsolidated entities and other, net and Other income, net on our unaudited consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures, if any.
+Added: (2) Our share of pre-tax earnings is recorded in Earnings from financial services unconsolidated entities and other, net and Other income, net on the accompanying unaudited consolidated income statements and excludes joint venture profit related to lots we purchased from the joint ventures, if any.
Such profit is deferred until homes are delivered by us and title passes to a homebuyer.
1 unchanged sentence
Loans payable and other borrowings consist of the following (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
Other borrowings, real estate notes payable (1)
$ 18,985 $ 23,094
−Removed: $ 780.0 million unsecured revolving credit facility with interest approximating LIBOR (approximately 0.10 % at June 30, 2021) plus 1.375 % or Prime ( 3.25 % at June 30, 2021) plus 0.375 %
+Added: $ 780.0 million unsecured revolving credit facility with interest approximating LIBOR (approximately 0.08 % at September 30, 2021) plus 1.375 % or Prime ( 3.25 % at September 30, 2021) plus 0.375 %
Total $ 18,985 $ 23,094
1 unchanged sentence
The Company entered into an amended and restated unsecured revolving credit facility ("Credit Facility") in 2014 that has been amended from time to time.
−Removed: In December 2020, the Credit Facility was amended to extend the maturity date to December 22, 2025 and provide for the replacement of LIBOR in the event such reference rate is no longer available.
+Added: In December 2020, the Credit Facility was amended to extend the maturity date to December
+Added: 22, 2025 and provide for the replacement of LIBOR in the event such reference rate is no longer available.
The Credit Facility's aggregate commitment is $ 780.0 million with an accordion feature permitting the size of the facility to increase to a maximum of $ 880.0 million, subject to certain conditions, including the availability of additional bank commitments.
2 unchanged sentences
In addition, we are required to maintain either (i) an interest coverage ratio (EBITDA to interest expense, as defined therein) of at least 1.50 to 1.00 or (ii) liquidity (as defined therein) of an amount not less than our consolidated interest incurred during the trailing 12 months.
−Removed: We were in compliance with all Credit Facility covenants as of June 30, 2021.
−Removed: We had no outstanding borrowings under the Credit Facility as of June 30, 2021 and December 31, 2020.
−Removed: There were no borrowings or repayments during the three and six months ended June 30, 2021.
+Added: We were in compliance with all Credit Facility covenants as of September 30, 2021.
+Added: We had no outstanding borrowings under the Credit Facility as of September 30, 2021 and December 31, 2020.
+Added: There were no borrowings or repayments during the three and nine months ended September 30, 2021.
During the first quarter of 2020 we borrowed $ 500.0 million on our Credit Facility in connection with the perceived potential instability of the financial markets around the COVID-19 pandemic, which we repaid in full during the second quarter of 2020.
−Removed: As of June 30, 2021, we had outstanding letters of credit issued under the Credit Facility totaling $ 74.1 million, leaving $ 705.9 million available under the Credit Facility to be drawn.
+Added: As of September 30, 2021, we had outstanding letters of credit issued under the Credit Facility totaling $ 75.0 million, leaving $ 705.0 million available under the Credit Facility to be drawn.
NOTE 6 — SENIOR NOTES, NET
Senior notes, net consist of the following (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
7.00 % senior notes due 2022
1 unchanged sentence
6.00 % senior notes due 2025.
−Removed: At June 30, 2021 and December 31, 2020 there was approximately $ 3,204 and $ 3,614 in net unamortized premium, respectively.
+Added: At September 30, 2021 and December 31, 2020 there was approximately $ 3,000 and $ 3,614 in net unamortized premium, respectively.
403,000 403,614
5 unchanged sentences
The indentures for all of our senior notes contain non-financial covenants including, among others, limitations on the amount of secured debt we may incur, and limitations on sale and leaseback transactions and mergers.
−Removed: We were in compliance with all such covenants as of June 30, 2021.
+Added: We were in compliance with all such covenants as of September 30, 2021.
Obligations to pay principal and interest on the senior notes are guaranteed by substantially all of our wholly-owned subsidiaries (each a “Guarantor” and, collectively, the “Guarantor Subsidiaries”), each of which is directly or indirectly 100% owned by Meritage Homes Corporation.
5 unchanged sentences
In April 2021, we completed an offering of $ 450.0 million aggregate principal amount of 3.875 % Senior Notes due 2029.
−Removed: We used a portion of the net proceeds from this offering to redeem all $ 300.0 million aggregate principal outstanding of our 7.00 % Senior Notes due 2022, incurring $ 18.2 million in early debt extinguishment charges in the three and six months ended June 30, 2021, reflected as Loss on early extinguishment of debt in the accompanying unaudited consolidated income statements.
+Added: We used a portion of the net proceeds from this offering to redeem all $ 300.0 million aggregate principal outstanding of our 7.00 % Senior Notes due 2022, incurring $ 18.2 million in early debt extinguishment charges in the nine months ended September 30, 2021, reflected as Loss on early extinguishment of debt in the accompanying unaudited consolidated income statements.
NOTE 7 — FAIR VALUE DISCLOSURES
9 unchanged sentences
The fair value of our fixed-rate debt is derived from quoted market prices by independent dealers (Level 2 inputs as per the discussion above) and is as follows (in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
Principal Estimated Fair
12 unchanged sentences
Basic and diluted earnings per common share were calculated as follows (in thousands, except per share amounts):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
12 unchanged sentences
The purchase price for acquisitions was allocated based on estimated fair value of the assets and liabilities at the date of the acquisition.
−Removed: The combined excess purchase price of our acquisitions over the fair value of the net assets is classified as goodwill and is included on our unaudited consolidated balance sheets in Prepaids, other assets and goodwill.
+Added: The combined excess purchase price of our acquisitions over the fair value of the net assets is classified as goodwill and is included on the accompanying unaudited consolidated balance sheets in Prepaids, other assets and goodwill.
In accordance with ASC 350, we assess the recoverability of goodwill annually, or more frequently, if impairment indicators are present.
3 unchanged sentences
Additions — — — — — —
−Removed: Balance at June 30, 2021 $ — $ — $ 32,962 $ — $ — $ 32,962
+Added: Balance at September 30, 2021 $ — $ — $ 32,962 $ — $ — $ 32,962
NOTE 10 — STOCKHOLDERS’ EQUITY
A summary of changes in stockholders’ equity is presented below (in thousands):
−Removed: Six Months Ended June 30, 2021
+Added: Nine Months Ended September 30, 2021
(In thousands)
13 unchanged sentences
Balance at June 30, 2021 37,647 $ 376 $ 436,805 $ 2,190,963 $ 2,628,144
−Removed: Six Months Ended June 30, 2020
+Added: Net earnings — — — 200,752 200,752
+Added: Stock-based compensation expense — — 5,845 — 5,845
+Added: Issuance of stock 3 — — — —
+Added: Share repurchases ( 95 ) — ( 9,471 ) — ( 9,471 )
+Added: Balance at September 30, 2021 $ 37,555 $ 376 $ 433,179 $ 2,391,715 $ 2,825,270
+Added: Nine Months Ended September 30, 2020
(In thousands)
13 unchanged sentences
Balance at June 30, 2020 37,603 $ 377 $ 454,138 $ 1,630,086 $ 2,084,601
+Added: Net earnings — — — 109,118 109,118
+Added: Stock-based compensation expense — — 6,130 — 6,130
+Added: Issuance of stock 9 — — — —
+Added: Balance at September 30, 2020 37,612 $ 377 $ 460,268 $ 1,739,204 $ 2,199,849
NOTE 11 — STOCK BASED AND DEFERRED COMPENSATION
3 unchanged sentences
The 2018 Plan authorizes awards to officers, key employees, non-employee directors and consultants.
−Removed: The 2018 Plan authorizes 6,600,000 shares of stock to be awarded, of which 1,029,153 shares remain available for grant at June 30, 2021.
+Added: The 2018 Plan authorizes 6,600,000 shares of stock to be awarded, of which 1,050,079 shares remain available for grant at September 30, 2021.
We believe that such awards provide a means of performance-based compensation to attract and retain qualified employees and better align the interests of our employees with those of our stockholders.
6 unchanged sentences
We engage a third party to perform a valuation analysis on the awards containing market conditions and our associated expense with those awards is based on the derived fair value from that analysis and is being expensed straight-line over the service period of the awards.
−Removed: Below is a summary of compensation expense and stock award activity (dollars in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Below is a summary of compensation
+Added: expense and stock award activity (dollars in thousands):
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
7 unchanged sentences
The following table includes additional information regarding our stock compensation plan (dollars in thousands):
−Removed: June 30, 2021 December 31, 2020
+Added: September 30, 2021 December 31, 2020
Unrecognized stock-based compensation cost $ 29,890 $ 22,687
5 unchanged sentences
We do not currently offer a contribution match on the deferred compensation plan.
−Removed: All contributions to the plan to date have been funded by the employees and, therefore, we have no associated expense related to the deferred compensation plan for the three or six months ended June 30, 2021 or 2020, other than minor administrative costs.
+Added: All contributions to the plan to date have been funded by the employees and, therefore, we have no associated expense related to the deferred compensation plan for the three or nine months ended September 30, 2021 or 2020, other than minor administrative costs.
NOTE 12 — INCOME TAXES
Components of the income tax provision are as follows (in thousands):
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
2 unchanged sentences
Total $ 60,957 $ 26,388 $ 143,353 $ 67,253
−Removed: The effective tax rate for the three and six months ended June 30, 2021 was 22.4 % and 21.6 %, and for the three and six months ended June 30, 2020 was 21.7 % and 20.2 %, respectively.
−Removed: The tax rate for the three and six months ended June 30, 2021 reflects credits earned under the Internal Revenue Code ("IRC") §45L new energy efficient homes credit, which was enacted into law under the Taxpayer Certainty and Disaster Tax Relief Act of 2019 and subsequently extended through the end of 2021 by enactment of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.
−Removed: The tax rate at June 30, 2021 also reflects higher non-deductible senior executive officer stock-based compensation.
−Removed: At June 30, 2021 and December 31, 2020, we have no unrecognized tax benefits.
+Added: The effective tax rate for the three and nine months ended September 30, 2021 was 23.3 % and 22.3 %, and for the three and nine months ended September 30, 2020 was 19.5 % and 19.9 %, respectively.
+Added: The higher tax rates for the three and nine months ended September 30, 2021 reflect increased profits in states with higher tax rates and the reduced benefit of credits earned under the Internal Revenue Code ("IRC") §45L new energy efficient homes credit due to greater overall profitability of the Company.
+Added: At September 30, 2021 and December 31, 2020, we have no unrecognized tax benefits.
We believe that our current income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change.
3 unchanged sentences
Companies must assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more likely than not” standard with significant weight being given to evidence that can be objectively verified.
−Removed: This assessment considers, among other matters, the nature, frequency and severity of cumulative losses, forecasts of future profitability, the length of statutory carry forward periods, experiences with operating losses and experiences of utilizing tax credit carry forwards and tax planning alternatives.
−Removed: We have no valuation allowance on our deferred tax assets or NOL carryovers at June 30, 2021.
−Removed: At June 30, 2021, we have income taxes payable of $ 21.0 million and income taxes receivable of $ 0.7 million.
+Added: This assessment considers, among other matters, the nature, frequency and severity of cumulative losses,
+Added: forecasts of future profitability, the length of statutory carry forward periods, experiences with operating losses and experiences of utilizing tax credit carry forwards and tax planning alternatives.
+Added: We have no valuation allowance on our deferred tax assets or NOL carryovers at September 30, 2021.
+Added: At September 30, 2021, we have income taxes payable of $ 15.8 million and income taxes receivable of $ 0.7 million.
The income taxes payable primarily consists of current federal and state tax accruals, net of current energy tax credits and estimated tax payments.
−Removed: This amount is recorded in Accrued liabilities on the accompanying unaudited consolidated balance sheets at June 30, 2021.
−Removed: The income taxes receivable primarily consists of additional energy tax credits claimed by amending prior year tax returns and is recorded in Other receivables on the accompanying unaudited consolidated balance sheets at June 30, 2021.
+Added: This amount is recorded in Accrued liabilities on the accompanying unaudited consolidated balance sheets at September 30, 2021.
+Added: The income taxes receivable primarily consists of additional energy tax credits claimed by amending prior year tax returns and is recorded in Other receivables on the accompanying unaudited consolidated balance sheets at September 30, 2021.
We conduct business and are subject to tax in the U.S.
4 unchanged sentences
The future tax benefits from NOLs, built-in losses, and tax credits would be materially reduced or potentially eliminated if we experience an “ownership change” as defined under IRC §382.
−Removed: Based on our analysis performed as of June 30, 2021 we do not believe that we have experienced an ownership change.
+Added: Based on our analysis performed as of September 30, 2021 we do not believe that we have experienced an ownership change.
As a protective measure, our stockholders held a Special Meeting of Stockholders on February 16, 2009 and approved an amendment to our Articles of Incorporation that restricts certain transfers of our common stock.
2 unchanged sentences
The following table presents certain supplemental cash flow information (in thousands):
−Removed: Six Months Ended June 30,
+Added: Nine Months Ended September 30,
Cash paid during the year for:
15 unchanged sentences
The following segment information is in thousands:
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
17 unchanged sentences
(1) Homebuilding revenue includes the following land closing revenue, by segment, as outlined in the table below:
−Removed: Three Months Ended June 30, Six Months Ended June 30,
+Added: Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
5 unchanged sentences
(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 services reporting segments.
−Removed: At June 30, 2021
+Added: At September 30, 2021
West Central East Financial Services Corporate and
27 unchanged sentences
Historically, most disputes regarding warranty claims are resolved prior to litigation.
−Removed: We believe there are no pending legal or warranty matters as of June 30, 2021 that could have a material adverse impact upon our consolidated financial condition, results of operations or cash flows that have not been sufficiently reserved.
−Removed: As discussed in Note 1 under the heading “Warranty Reserves”, we have case specific reserves within our $ 25.1 million of total warranty reserves related to alleged stucco defects in certain Florida homes we constructed between 2006 and 2016 and for water drainage issues in a single community in Florida that we developed in 2016.
+Added: We believe there are no pending legal or warranty matters as of September 30, 2021 that could have a material adverse impact upon our consolidated financial condition, results of operations or cash flows that have not been sufficiently reserved.
+Added: As discussed in Note 1 under the heading “Warranty Reserves”, we have case specific reserves within our $ 26.6 million of total warranty reserves related to alleged stucco defects in certain homes we constructed between 2006 and 2017 and for water drainage issues in a single community in Florida that we developed in 2016.
Our review and handling of these two matters is ongoing and our estimate of and reserves for resolving these matters is based on internal data, our judgement and various assumptions and estimates.
Due to the degree of judgment and the potential for variability in our underlying assumptions and data, as we obtain additional information, we may revise our estimates and thus our related reserves.
−Removed: As of June 30, 2021, after considering potential recoveries from the consultants and contractors involved and their insurers and the potential recovery under our general liability insurance policies, we believe our reserves are sufficient to cover the above mentioned matters.
+Added: As of September 30, 2021, after considering potential recoveries from the consultants and contractors involved and their insurers and the potential recovery under our general liability insurance policies, we believe our reserves are sufficient to cover the above mentioned matters.
See Note 1 for information related to our warranty obligations.
6 unchanged sentences
statements concerning our expectations for our financial results, business, operations, housing demand and the economy and society in general ;
−Removed: trends and economic factors in the homebuilding industry in general, and our markets and results specifically, including the impact thereon of COVID-19;
+Added: trends and economic factors in the homebuilding industry in general, and our markets and results specifically, including the impact thereon of an epidemic or pandemic (such as COVID-19), the duration, impact and severity of which is highly uncertain;
our goals, strategies and strategic initiatives and the anticipated benefits relating thereto;
−Removed: our intentions and the expected benefits and advantages of our product and land positioning strategies, including with respect to our focus on the entry-level and first move-up buyer and housing demand for affordable homes;
+Added: our intentions and the expected benefits and advantages of our product and land positioning strategies, including with respect to our focus on the first-time and first move-up buyer and housing demand for affordable homes and our spec home strategy;
supply chain constraints and construction cycle times;
43 unchanged sentences
negative publicity that affects our reputation;
−Removed: disruptions to our business by COVID-19, fear of a similar event, and measures that federal, state and local governments and/or health authorities implement to address it;
+Added: disruptions to our business by an epidemic or pandemic (such as COVID-19), and measures that federal, state and local governments and/or health authorities implement to address it;
and other factors identified in documents filed by the Company with the Securities and Exchange Commission, including those set forth in this Form 10-Q and our Form 10-K for the year ended December 31, 2020 under the caption "Risk Factors."
Forward-looking statements express expectations of future events.
−Removed: All forward-looking statements are inherently uncertain, especially with respect to the impact of COVID-19, as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected.
+Added: All forward-looking statements are inherently uncertain, as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected.
Due to these inherent uncertainties, the investment community is urged not to place undue reliance on forward-looking statements.
−Removed: In addition, we disclaim and undertake no obligations to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.
+Added: In addition, we disclaim and undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.