What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-14 · 236 added, 123 removed, 756 unchanged (32% of the section changed)

31 unchanged sentences

The Company’s evaluation included whether indicators of a decline in value of the Company’s land and real estate assets exist and the determination of value to evaluate the recoverability of real estate assets used in the undiscounted cash flows.

This evaluation requires management to make significant projections and estimates, which required a high degree of auditor judgment and an increased extent of audit effort.

evaluation requires management to make significant projections and estimates, which required a high degree of auditor judgment and an increased extent of audit effort.

How the Critical Audit Matter Was Addressed in the Audit

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For certain communities that did not have actual recent home closings, we compared to historical home sales and closings in nearby communities taking into consideration factors such as location, size, and type of community.

We also compared assumptions to current advertised listings of the Company and comparable competitor communities.

In addition, we met with management to understand how recent trends in home sales, closings and market conditions have been considered in the Company’s evaluation of the recoverability of real estate assets.

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Loans payable and other borrowings 29,343 13,526

Senior notes, net 994,689 1,143,590

Senior and convertible senior notes, net 1,306,535 994,689

Total liabilities 2,021,081 1,741,234

10 unchanged sentences

Total liabilities and stockholders’ equity $ 7,162,654 $ 6,353,134

(1) Share amounts have been retroactively adjusted to reflect the 2-for-1 stock split that was effective on January 2, 2025.

See accompanying notes to consolidated financial statements

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Home closing gross profit 1,579,843 1,502,113 1,773,018

Land closing gross profit/(loss) 4,443 11,583 ( 1,083 )

Land closing gross profit 4,017 4,443 11,583

Total closing gross profit 1,583,860 1,506,556 1,784,601

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Diluted 73,332 74,138 74,202

(1) Share and per share amounts have been retroactively adjusted to reflect the 2-for-1 stock split that was effective on January 2, 2025.

See accompanying notes to consolidated financial statements

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(In thousands)

Shares Common

Stock Additional

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Equity award compensation expense — — 22,511 — 22,511

Dividends declared ($ 0.54 per share) (1)

— — — ( 39,534 ) ( 39,534 )

Share repurchases ( 874 ) ( 5 ) ( 59,431 ) — ( 59,436 )

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Share repurchases ( 1,464 ) ( 7 ) ( 126,658 ) — ( 126,665 )

Capped call transactions, net of tax — — ( 47,067 ) — ( 47,067 )

Balance at December 31, 2024 71,922 $ 360 $ 143,036 $ 4,998,177 $ 5,141,573

(1) Share and per share amounts have been retroactively adjusted to reflect the 2-for-1 stock split that was effective on January 2, 2025.

See accompanying notes to consolidated financial statements

6 unchanged sentences

Net earnings $ 786,186 $ 738,748 $ 992,192

Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:

Adjustments to reconcile net earnings to net cash (used in)/provided by operating activities:

Depreciation and amortization 25,959 25,334 24,748

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(Increase)/decrease in deposits on real estate under option or contract ( 81,354 ) ( 36,140 ) 10,463

Increase in receivables, prepaids and other assets ( 64,169 ) ( 102,950 ) ( 65,114 )

Increase in accounts payable and accrued liabilities 22,609 76,985 76,158

(Decrease)/increase in home sale deposits ( 1,356 ) ( 4,649 ) 17,536

Net cash provided by/(used in) operating activities 355,572 405,270 ( 152,092 )

Decrease/(increase) in receivables, prepaids and other assets 39,776 ( 64,169 ) ( 102,950 )

(Decrease)/increase in accounts payable and accrued liabilities ( 41,933 ) 22,609 76,985

Decrease in home sale deposits ( 16,092 ) ( 1,356 ) ( 4,649 )

Net cash (used in)/provided by operating activities ( 227,576 ) 355,572 405,270

Cash flows from investing activities:

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Repayment of senior notes ( 250,695 ) ( 150,884 ) —

Proceeds from issuance of senior notes — — 450,000

Proceeds from issuance of convertible senior notes 575,000 — —

Payment of debt issuance costs ( 17,082 ) — —

Purchase of capped calls related to issuance of convertible senior notes ( 61,790 ) — —

Dividends paid ( 108,590 ) ( 39,534 ) —

Repurchase of shares ( 125,932 ) ( 59,067 ) ( 109,303 )

Net cash (used in)/provided by financing activities ( 252,283 ) ( 129,758 ) 51,627

Net increase/(decrease) in cash and cash equivalents 59,666 243,226 ( 127,286 )

Net cash provided by/(used in) financing activities 1,978 ( 252,283 ) ( 129,758 )

Net (decrease)/increase in cash and cash equivalents ( 269,672 ) 59,666 243,226

Cash and cash equivalents, beginning of year 921,227 861,561 618,335

10 unchanged sentences

We have homebuilding operations in three regions:

West, Central and East, which are comprised of ten states:

Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.

West, Central and East, which are comprised of twelve states:

Arizona, California, Colorado, Utah, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee.

These three regions are our principal homebuilding reporting segments.

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We commenced our homebuilding operations in 1985 through our predecessor company, Monterey Homes.

Meritage Homes Corporation was incorporated in the state of Maryland in 1988 under the name of Homeplex Mortgage Investments Corporation and merged with Monterey Homes in 1996, at which time our name was changed to Monterey Homes Corporation and later ultimately to Meritage Homes Corporation.

Homes Corporation was incorporated in the state of Maryland in 1988 under the name of Homeplex Mortgage Investments Corporation and merged with Monterey Homes in 1996, at which time our name was changed to Monterey Homes Corporation and later ultimately to Meritage Homes Corporation.

Since that time, we have engaged in homebuilding and related activities.

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Its homebuilding construction, development and sales activities are conducted through its subsidiaries.

Our homebuilding activities are conducted under the name of Meritage Homes in each of our homebuilding markets.

Its homebuilding activities are conducted under the name of Meritage Homes in each of our homebuilding markets.

At December 31, 2024, we were actively selling homes in 292 communities, with base prices ranging from approximately $ 203,000 to $ 1,089,000 .

1 unchanged sentence

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of Meritage Homes Corporation and those of our consolidated subsidiaries, partnerships and other entities in which we have a controlling financial interest, and of variable interest entities (see Note 3) in which we are deemed the primary beneficiary (collectively, “us”, “we”, “our” and the “Company”).

Certain reclassifications have been made to prior year footnotes in the accompanying consolidated financial statements to conform to classifications used in the current year.

Intercompany balances and transactions have been eliminated in consolidation.

Effective January 2, 2025, our common stock was split two -for-one (the "Stock Split"), with no adjustment to the number of authorized shares or the par value.

All share and per share amounts in the accompanying consolidated financial statements have been retroactively adjusted to reflect the Stock Split for all periods presented.

See Note 9 for additional information related to the Stock Split.

Cash and Cash Equivalents.

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Cost of home closings includes the specific construction costs of the home and all related allocated land acquisition, land development and other common costs (both incurred and estimated to be incurred) that are allocated based upon the total number of homes expected to be closed in each community or phase.

Any changes to the estimated total development costs of a community or phase are allocated to the remaining homes in that community or phase.

Any changes to the estimated total development costs of a community or phase are allocated to the remaining homes in that

community or phase.

When a home closes, we may have incurred costs for materials and services that have not yet been paid.

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Land held for development primarily represents land and land development costs related to land where development activity is not currently underway but is expected to begin in the future.

For these parcels, we have chosen not to currently develop certain land holdings as they typically represent a portion or phases of a larger land parcel that

we plan to build out over several years.

For these parcels, we have chosen not to currently develop certain land holdings as they typically represent a portion or phases of a larger land parcel that we plan to build out over several years.

We do not capitalize interest for these inactive assets, and all ongoing costs of land ownership (i.e.

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In determining these costs, we compile project budgets that are based on a variety of assumptions, including future construction schedules and costs to be incurred.

Actual results can differ from budgeted amounts for various reasons, including construction delays, labor or material shortages, sales orders absorptions that differ from our expectations, increases in costs that have not yet been contracted, changes in governmental requirements, or other unanticipated issues, encountered during construction and development and other factors beyond our control, including weather.

Actual results can differ from budgeted amounts for various reasons, including construction delays, labor or material shortages, sales orders absorption rates that differ from our expectations, increases in costs that have not yet been contracted, changes in governmental requirements, or other unanticipated issues, encountered during construction and development and other factors beyond our control, including weather.

To address uncertainty in these budgets, we assess, update and revise project budgets on a regular basis, utilizing the most current information available to estimate home construction and land development costs.

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Changes in these expectations may lead to a change in the outcome of our impairment analysis, and actual results may also differ from our assumptions, although if financial metrics improve, we do not reverse impairments once recorded.

See Note 2 for additional information related to Real estate and impairments.

See Note 2 for additional information related to Real estate.

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.

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Deferred Costs.

At December 31, 2023 and 2022, deferred costs representing debt issuance costs related to our revolving credit facility of approximately $ 5.3 million and $ 3.8 million, respectively, net of accumulated amortization, are recorded on our consolidated balance sheets within Prepaids, other assets and goodwill.

At December 31, 2024 and 2023, deferred costs representing debt issuance costs related to our amended and restated unsecured revolving credit facility agreement (the "Credit Facility") of approximately $ 5.5 million and $ 5.3 million, respectively, net of accumulated amortization, are recorded on our consolidated balance sheets within Prepaids, other assets and goodwill.

The costs are amortized to Interest expense using the straight line method which approximates the effective interest method.

See Note 7 for additional information related to net debt issuance costs associated with our senior notes.

See Note 7 for additional information related to net debt issuance costs associated with our senior and convertible senior notes.

Investments in Unconsolidated Entities .

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Contract liabilities include home sale deposit liabilities related to sold but unclosed homes, and are classified as Home sale deposits in our accompanying consolidated balance sheets.

Substantially all of our home sales are scheduled to close and be recorded as revenue within one year from the date of receiving a customer deposit.

Substantially all of our home orders are scheduled to close and be recorded as revenue within one year from the date of receiving a customer deposit.

Home closing and land closing revenue expected to be recognized in any future year related to remaining performance obligations (if any) and the associated contract liabilities expected to be recognized as revenue, excluding revenue pertaining to contracts that have an original expected duration of one year or less, are not material.

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Income Taxes.

We account for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized based on future tax consequences of both temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

We account for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized based on future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or settled.

8 unchanged sentences

We expense advertising costs to Commissions and other sales costs as they are incurred.

Advertising expense was approximately $ 15.1 million, $ 12.1 million and $ 8.2 million in fiscal 2023, 2022 and 2021, respectively.

Advertising expense was approximately $ 17.1 million, $ 15.1 million and $ 12.1 million for the years ending December 31, 2024, 2023 and 2022, respectively.

Earnings Per Share.

1 unchanged sentence

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 (as defined in Note 7) using the "if-converted" method.

As discussed in Note 7, 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.

In periods of net losses, no dilution is computed.

4 unchanged sentences

Awards with either a graded or cliff vesting are expensed on a straight-line basis over the life of the award.

Stock-based compensation expense is included in General and administrative expense.

Stock-based compensation expense is included in General and administrative expenses.

See Note 11 for additional information on stock-based compensation.

1 unchanged sentence

We have a 401(k) plan for all full-time Meritage employees.

We match portions of employees’ voluntary contributions , and contributed to the plan approximately $ 6.5 million, $ 6.0 million and $ 5.3 million for the years ended 2023, 2022 and 2021, respectively.

We match portions of employees’ voluntary contributions , and contributed to the plan approximately $ 7.2 million, $ 6.5 million and $ 6.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Off-Balance Sheet Arrangements - Joint Ventures .

We may participate in land development joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital, although our participation in such ventures is currently limited.

We participate in land development joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital.

See Note 5 for additional discussion of our investments in unconsolidated entities.

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We regularly review our warranty reserves and adjust them, as necessary, to reflect changes in trends as information becomes available.

Based on such reviews of warranty costs incurred, we did not adjust the warranty reserve balance in the year ended December 31, 2023.

We recorded an adjustment to our reserve balance of $10.9 million in the year ended December 31, 2022, primarily related to specific case reserves as discussed in Note 16.

Based on such reviews of warranty costs incurred, we recorded a favorable adjustment to our reserve balance of $ 1.0 million in the year ended December 31, 2024, primarily related to specific case reserves as discussed in Note 16.

A summary of changes in our warranty reserves follows (in thousands):

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Balance, end of year $ 32,693 $ 37,360

(1) Includes recoveries in 2022 for costs incurred over several prior years on a foundation design and performance matter that affected a single community in Texas.

Warranty reserves are included in Accrued liabilities on the accompanying consolidated balance sheets, and additions and adjustments to the reserves are included in Cost of home closings within the accompanying consolidated income statements.

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Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which aligns interim segment disclosure requirements with existing annual requirements and includes updates to segment reporting, most notably through enhanced disclosures about significant segment expenses and various Chief Operating Decision Maker ("CODM")-related disclosures.

ASU 2023-07 is effective for our annual report covering the fiscal year beginning January 1, 2024, and for our interim reports beginning January 1, 2025.

ASU 2023-07 is required to be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact adopting this guidance will have on our financial statement disclosures.

We adopted ASU 2023-07 effective for the fiscal year beginning January 1, 2024, and applied it retrospectively to all prior periods presented in these financial statements.

In December 2023, the FASB issued ASU No.

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We are currently evaluating the impact adopting this guidance will have on our financial statement disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses.

ASU 2024-03 is effective for our annual report covering the fiscal year beginning January 1, 2027, and for our interim reports beginning January 1, 2028.

We are currently evaluating the impact adopting this guidance will have on our financial statement disclosures.

In November 2024, the FASB issued ASU No.

2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments ("ASU 2024-04"), which clarifies the requirements for determining whether certain settlements of cove convertible debt instruments should be accounted for as an induced conversion.

The amendments in ASU 2024-04 are effective for us beginning January 1, 2025, and may be adopted on either a prospective or a retrospective basis.

We will elect the prospective transition approach and apply the amendments in ASU 2024-04 to any settlements of convertible debt instruments that occur after the effective date of the guidance.

NOTE 2 — REAL ESTATE AND CAPITALIZED INTEREST

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At December 31,

Homes under contract under construction (1) $ 704,206 $ 822,428

Unsold homes, completed and under construction (1) 1,260,855 1,155,543

Model homes (1) 118,252 97,198

Homes completed and under construction (1) $ 2,375,639 $ 2,083,313

Finished home sites and home sites under development (2) 3,353,136 2,637,978

$ 4,721,291 $ 4,358,263

(1) Includes the allocated land and land development costs associated with each lot for these homes.

Total $ 5,728,775 $ 4,721,291

(1) Includes the allocated land and land development costs associated with each lot for sold and unsold homes.

(2) Includes raw land, land held for development and land held for sale, less impairments, if any.

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property taxes, homeowner association dues, etc.) are expensed as incurred.

(3) Includes land held for sale of $ 10.7 million and $ 66.8 million as of December 31, 2023 and 2022, respectively.

As previously noted, in accordance with ASC 360-10, each of our land inventory and related real estate assets is reviewed for recoverability when certain criteria are met, but at least annually, as our inventory is considered “long-lived” in accordance with GAAP.

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In communities where impairment indicators are present, we may also evaluate alternative product offerings or other strategies for the land, such as pausing development, selling, or holding the land for sale.

We recorded nominal impairment charges for the years ended December 31, 2023 and 2022, and $ 2.1 million for the year ended December 31, 2021, respectively.

We recorded no impairment charges for the year ended December 31, 2024 and nominal charges for the years ended December 31, 2023 and 2022.

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.

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Such activities include, but are not limited to, the ability to determine the budget and scope of land development work, if any;

the ability to control financing decisions for the VIE;

the ability to control financing decisions for the

the ability to acquire additional land into the VIE or dispose of land in the VIE not under contract with Meritage;

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In accordance with ASC 842, the lease liability is equal to the present value of the remaining lease payments while the right of use ("ROU") asset is based on the lease liability, subject to adjustment, such as for lease incentives.

Our leases do not provide a readily determinable implicit interest rate and therefore, we must estimate our incremental borrowing rate.

Our leases do not provide a readily determinable implicit interest rate and therefore, we

must estimate our incremental borrowing rate.

In determining our incremental borrowing rate, we consider the lease period, market interest rates, current interest rates on our senior notes and the effects of collateralization.

1 unchanged sentence

As allowed by ASC 842, we do not record leases with lease terms of twelve months or less on the consolidated balance sheets.

Lease cost included in our consolidated income statements in General and administrative expenses and Commissions and other sales costs is in the table below (in thousands).

Lease cost included in our consolidated income statements in General and administrative expenses is in the table below (in thousands).

Our short-term lease costs and sublease income are de minimis.

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We may enter into joint ventures as a means of accessing larger parcels of land, expanding our market opportunities, managing our risk profile, optimizing deal structure for the impacted parties and leveraging our capital.

While purchasing land through a joint venture can be beneficial, currently we do not view joint ventures as critical to the success of our homebuilding operations.

Our joint venture partners generally are other homebuilders, land sellers or other real estate investors.

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Based on the structure of these joint ventures, they may or may not be consolidated into our results.

As of December 31, 2023, we had two active equity-method land joint ventures and one mortgage joint venture, which is engaged in mortgage activities and primarily provides services to our homebuyers.

The primary activity of our land joint ventures is the development and sale of lots to joint venture partners and/or unrelated builders.

During 2024, we entered into a new land joint venture from which we expect to purchase lots in the future for home construction.

Our mortgage joint venture is engaged in mortgage activities and primarily provides mortgage services to our homebuyers.

As of December 31, 2024, we had two active equity-method land joint ventures and one mortgage joint venture.

Summarized condensed combined financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands):

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At December 31,

Other borrowings, secured real estate note payable (1) $ 13,526 $ 7,057

$ 835.0 million unsecured revolving credit facility

Other borrowings, secured real estate notes payable (1) $ 29,343 $ 13,526

$ 910.0 million Credit Facility

Total $ 29,343 $ 13,526

(1) Reflects balance of non-recourse notes payable in connection with land purchases.

The Company entered into an amended and restated unsecured revolving credit facility agreement ("Credit Facility") in 2014 that has been amended from time to time.

In June 2023, the Credit Facility was amended to increase the facility size to $ 835.0 million, extend the maturity date to June 2, 2028, amend the accordion feature to permit the facility to increase by up to fifty percent of the facility size, increase the letter of credit sublimit up to the maximum size of the facility, eliminate the

liquidity and interest coverage covenant and adjust certain covenant basket amounts.

The Company entered into the Credit Facility in 2014 that has been amended from time to time.

In June 2024, the Credit Facility was amended to:

increase the facility size;

refresh the accordion feature permitting the facility size to be increased subject to certain conditions;

extend the maturity date to June 12, 2029;

and revise the applicable pricing grid.

The Credit Facility's aggregate commitment is $ 910.0 million with an accordion feature permitting the size of the facility to increase to a maximum of $ 1.4 billion, subject to certain conditions, including the availability of additional bank commitments.

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We had no outstanding borrowings under the Credit Facility as of December 31, 2024 and 2023.

During the year ended December 31, 2023, we had no borrowings or repayments under the Credit Facility.

During the year ended December 31, 2022 we had $40.0 million of gross borrowings and repayments, and during the year ended December 31, 2021 we had no borrowings or repayments.

During the years ended December 31, 2024 and 2023, we had no borrowings or repayments under the Credit Facility, and during the year ended December 31, 2022 we had $ 40.0 million in borrowings and repayments.

As of December 31, 2024 we had outstanding letters of credit issued under the Credit Facility totaling $ 110.4 million, leaving $ 799.6 million available under the Credit Facility to be drawn.

NOTE 7 — SENIOR NOTES, NET

Senior notes, net consist of the following (in thousands):

NOTE 7 — SENIOR AND CONVERTIBLE SENIOR NOTES, NET

Senior and convertible senior notes, net consist of the following (in thousands):

At December 31,

6.00 % senior notes due 2025.

At December 31, 2023 and 2022 there was approximately $ 994 and $ 1,977 in net unamortized premium, respectively.

250,994 401,977

5.125 % senior notes due 2027

At December 31, 2023 there was approximately $ 994 in net unamortized premium.

5.125 % senior notes due 2027 ("2027 Notes")

300,000 300,000

3.875 % senior notes due 2029

1.750 % convertible senior notes due 2028 ("2028 Convertible Notes")

3.875 % senior notes due 2029 ("2029 Notes")

450,000 450,000

1 unchanged sentence

Total $ 1,306,535 $ 994,689

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.

The indentures for our 2027 Notes and 2029 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.

We were in compliance with all such covenants as of December 31, 2024.

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.

Obligations to pay principal and interest on the senior and convertible 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.

Such guarantees are full and unconditional, and joint and several.

In the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the equity interests of any Guarantor then held by Meritage and its subsidiaries, then that Guarantor may be released and relieved of any obligations under its note guarantee.

There are no significant restrictions on our ability or the ability of any Guarantor to obtain funds from their respective subsidiaries, as applicable, by dividend or loan.

We do not provide separate financial statements of the Guarantor Subsidiaries because Meritage (the parent company) has no independent assets or operations and the guarantees are full and unconditional and joint and several.

Subsidiaries of Meritage Homes Corporation that are non-guarantor subsidiaries are, individually and in the aggregate, minor, and the assets, liabilities and results of operations of Meritage Homes Corporation and the Guarantor Subsidiaries on a combined basis are not materially different than corresponding amounts in the consolidated financial statements.

There are no significant restrictions on our ability or the ability of Meritage Homes or any Guarantor to obtain funds from their respective subsidiaries, as applicable, by dividend or loan.

We do not provide separate financial statements of the Guarantor Subsidiaries because Meritage Homes (the parent company) has no independent assets or operations and the guarantees are full and unconditional and joint and several.

Subsidiaries of Meritage Homes Corporation that are non-guarantor subsidiaries are, individually and in the aggregate, minor.

In June 2015, we completed an offering of $ 200.0 million aggregate principal amount of 6.00 % Senior Notes due 2025 (the "Original 2025 Notes").

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In March 2018, the Company completed an offering of $ 200.0 million aggregate principal amount of additional 2025 Notes (the "Additional Notes").

The Additional Notes were issued as an add-on to the Original 2025 Notes at a premium of 103 % of the principal amount, resulting in a combined $ 400.0

million aggregate principal amount of 6.00 % Senior Notes due 2025 (collectively, the "2025 Notes").

The Additional Notes were issued as an add-on to the Original 2025 Notes at a premium of 103 % of the principal amount, resulting in a combined $ 400.0 million aggregate principal amount of 6.00 % Senior Notes due 2025 (collectively, the "2025 Notes").

In September 2023, we partially redeemed $ 150.0 million of the 2025 Notes, incurring $ 0.9 million in early debt extinguishment charges during the year ended December 31, 2023, reflected as Loss on early extinguishment of debt in the accompanying consolidated income statements.

After the partial redemption, the 2025 Notes have $250.0 million in remaining principal outstanding.

In June 2017, we completed an offering of $ 300.0 million aggregate principal amount of 5.125 % Senior Notes due 2027 (the "2027 Notes").

In May 2024, we redeemed the remaining $ 250.0 million aggregate principal then outstanding of the 2025 Notes for which we incurred $ 0.6 million in early debt extinguishment charges during the year ended December 31, 2024 , reflected as Loss on early extinguishment of debt in the accompanying consolidated income statements.

In June 2017, we completed an offering of $ 300.0 million aggregate principal amount of the 2027 Notes.

The 2027 Notes were issued at par.

Using the proceeds from the 2027 Notes offering, we retired all $ 126.5 million of our then outstanding convertible senior notes through a repurchase of $ 51.9 million in privately negotiated transactions and a redemption of the remaining $ 74.6 million through a combination of holder redemptions and an exercise of our call option at a redemption price equal to 100 % of the principal amount of the notes redeemed, plus accrued and unpaid interest.

In April 2021, we completed an offering of $450.0 million aggregate principal amount of 3.875% Senior Notes due 2029 (the "2029 Notes").

We used a portion of the net proceeds from this offering to redeem all $300.0 million aggregate principal then outstanding of other senior notes, incurring a loss on early debt extinguishment of $18.2 million during the year ended December 31, 2021, reflected as Loss on early extinguishment of debt in the accompanying consolidated income statements.

Scheduled principal maturities of our senior notes as of December 31, 2023 follow (in thousands):

In April 2021, we completed an offering of $ 450.0 million aggregate principal amount of the 2029 Notes.

We used a portion of the net proceeds from this offering to redeem all $ 300.0 million aggregate principal then outstanding of other senior notes.

Convertible Senior Notes due 2028

In May 2024, we issued $ 575.0 million aggregate principal amount of the 2028 Convertible Notes pursuant to an Indenture dated as of May 9, 2024 (the “Indenture”).

The 2028 Convertible Notes were issued at par and will mature on May 15, 2028, unless converted earlier in accordance with their terms prior to such date.

We used a portion of the net proceeds from the offering to pay the cost of entering into the capped calls, as defined and described below, and to redeem the remaining $ 250.0 million aggregate principal then outstanding of our 2025 Notes, as previously discussed.

The 2028 Convertible Notes are convertible into shares of the Company’s common stock at an initial conversion rate of 8.6096 shares of common stock per $1,000 principal amount of the 2028 Convertible Notes, which is equivalent to an initial conversion price of $ 116.15 per share.

The conversion rate will be subject to adjustment upon the occurrence of certain events but will not be adjusted for accrued and unpaid interest or quarterly cash dividends.

In addition, we must provide additional shares upon conversion if there is a "Make-Whole Fundamental Change".

The Company is required to satisfy its conversion obligations 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.

Prior to February 15, 2028, the holders of the 2028 Convertible Notes may convert their notes only under the following conditions:

(1) the sale price of common stock reaches 130 % of the applicable conversion price for a specified period during any fiscal quarter commencing after the fiscal quarter ending on September 30, 2024;

(2) the trading price of the 2028 Convertible Notes falls below 98% of the product of the last reported sale price of common stock and the conversion rate for a specified period;

or (3) upon the occurrence of specified corporate events.

On or after February 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes, holders may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances.

The 2028 Convertible Notes are accounted for in accordance with ASC 470, Debt , and ASC 815, Derivatives and Hedging ("ASC 815") .

The conversion options and the 2028 Convertible Notes are reflected as a single instrument in Senior and convertible senior notes, net on the accompanying consolidated balance sheets and the conversion options are not bifurcated as a derivative.

Capped Call Transactions

Concurrent with the offering of the 2028 Convertible Notes, we used $ 61.8 million of the net proceeds to enter into privately negotiated capped call transactions (the "Capped Calls”) which require the Capped Calls counterparties (the "Counterparties") to provide shares of our common stock to converting debt holders up to a cap price.

The Capped Calls each have an initial strike price of $ 116.15 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2028 Convertible Notes.

The Capped Calls have initial cap prices of $ 175.32 per share, subject to certain adjustments.

The Capped Calls will reduce our obligation to settle, in shares or in cash, conversions when our stock price is between $ 116.15 and $ 175.32 .

The Capped Calls are separate transactions entered into by the Company with each of the Counterparties, are not part of the terms of the 2028 Convertible Notes and do not change the note holders’ rights under the 2028 Convertible Notes or the Indenture.

Holders of the 2028 Convertible Notes do not have any rights with respect to the Capped Calls.

As the Capped Calls are considered indexed to the Company's own stock, they are recorded in stockholders’ equity as a reduction of Additional paid-in capital in the accompanying consolidated balance sheets, and are not accounted for as derivatives under ASC 815-10.

Scheduled principal maturities of our senior and convertible senior notes as of December 31, 2024 follow (in thousands):

Year Ended December 31,

Thereafter 450,000

Total $ 1,325,000

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Principal Estimated Fair

6.00 % senior notes

6.00 % senior notes due 2025

$ — $ — $ 250,000 $ 249,375

5.125 % senior notes

5.125 % senior notes due 2027

$ 300,000 $ 300,330 $ 300,000 $ 295,500

3.875 % senior notes

1.750 % convertible senior notes due 2028

$ 575,000 $ 563,259 $ — $ —

Other financial assets and liabilities, including our Loans payable and other borrowings, are generally shorter term in nature and the longer term balances are not material to our consolidated balance sheet.

3.875 % senior notes due 2029

$ 450,000 $ 420,795 $ 450,000 $ 411,750

Therefore, we consider the carrying amounts of our other financial assets and liabilities to approximate fair value.

Non-Financial Instruments :

Our Real estate assets are Level 3 instruments that are required to be recorded at fair value on non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable.

Our Real estate assets are Level 3 instruments that are required to be recorded at fair value only if events and circumstances indicate that the carrying value may not be recoverable.

Refer to Notes 1 and 2 for information regarding the valuation of these assets.

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Diluted earnings per share $ 10.72 $ 9.96 $ 13.37

During the year ended December 31, 2023, our Board of Directors approved, and we paid, a quarterly cash dividend on common stock of $ 0.27 per share.

Quarterly dividends declared and paid during the year ended December 31, 2023 totaled $ 1.08 per share.

There were no such transactions in the year ended December 31, 2022.

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

During the year ended December 31, 2023, we reflected the applicable excise tax in Additional paid-in capital as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in Accrued liabilities on the accompanying consolidated balance sheets.

On November 21, 2024, our Board of Directors declared a two -for-one stock split of Meritage’s common stock in the form of a stock dividend.

Each stockholder of record at the close of business on December 31, 2024 received one additional share of common stock for each share of common stock held, payable after the close of market on January 2, 2025.

Trading began on a split-adjusted basis on January 3, 2025.

There was no adjustment to the number of authorized shares or the par value.

As required by ASC 260, Earnings Per Share , all share and per share amounts in the accompanying consolidated financial statements have been retroactively adjusted to reflect the Stock Split for all periods presented, inclusive of dividends and share repurchases.

During the years ended December 31, 2024 and 2023, our Board of Directors approved, and we paid, a quarterly cash dividend on common stock of $ 0.375 and $ 0.135 per share, respectively.

Quarterly dividends declared and paid during the years ended December 31, 2024 and 2023 totaled $ 1.50 and $ 0.54 per share, respectively.

Excise Tax on Stock Repurchases

The Inflation Reduction Act of 2022 (the "IRA"), which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

During the years ended December 31, 2024 and 2023, we reflected the applicable excise tax in Additional paid-in capital as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in Accrued liabilities on the accompanying consolidated balance sheets.

NOTE 10 — ACQUISITIONS AND GOODWILL

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We believe that such awards provide a means of long-term compensation to attract and retain qualified employees and better align the interests of our employees with those of our stockholders.

Non-vested stock awards are usually granted with a five-year ratable vesting period for employees, a three-year cliff vesting for both restricted stock and performance-based awards granted to senior executive officers and either a three-year cliff vesting or one-year vesting for non-employee directors, dependent on their start date.

Non-vested stock awards are usually granted with a five-year ratable vesting period for employees, a three-year cliff vesting for both restricted stock units and performance-based awards granted to senior executive officers and either a three-year cliff vesting or one-year vesting for non-employee directors, dependent on their start date.

Summary of Nonvested (Restricted) Shares and Units Activity:

We grant time-based and performance-based restricted shares or units.

Performance-based restricted shares and units are only granted to executive officers.

Except in limited cases, performance-based restricted shares and units are only granted to executive officers.

All performance share awards only vest upon the attainment of certain financial and operational criteria as established and approved by our Board of Directors.

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These shares vested in March 2022.

Performance-based shares granted for the year ended December 31, 2021 also includes 1,670 shares and 696 shares that were issued to our former General Counsel, who retired on December 15, 2021, as a result of the performance achievement exceeding the performance targets related to grants to our executive officers for the years ended December 31, 2019 and 2018, respectively.

These shares vested in December 2021 in accordance with his employment agreement.

(2) Forfeitures on time-based nonvested shares are a result of terminations of employment, while forfeitures on performance-based nonvested shares are the result of failing to attain certain goals as outlined in our executive officers' compensation agreements.

(3) Performance-based shares granted and earned/released for the year ended December 31, 2022 includes 37,146 shares that were issued as a result of the performance achievement exceeding the performance targets related to grants to our executive officers for the year ended December 31, 2019.

These shares vested in March 2022.

(3) Performance-based shares granted and earned/released for the year ended December 31, 2023 includes 52,334 shares that were issued as a result of the performance achievement exceeding the performance targets related to grants to our executive officers for the year ended December 31, 2020.

These shares vested in February 2023.

(4) Performance-based shares granted and earned/released for the year ended December 31, 2024 includes 31,956 shares that were issued as a result of the performance achievement exceeding the performance targets related to grants to our executive officers for the year ended December 31, 2021.

These shares vested in March 2024.

Compensation cost related to time-based restricted stock awards is measured as of the closing price on the date of grant and is expensed, less forfeitures, on a straight-line basis over the vesting period of the award.

Compensation cost related to performance-based restricted stock awards is also measured as of the closing price on the date of grant but is expensed in accordance with ASC 718, which requires an assessment of probability of attainment of the performance target.

Compensation cost related to performance-based restricted stock unit awards is also measured as of the closing price on the date of grant but is expensed in accordance with ASC 718, which requires an assessment of probability of attainment of the performance target.

As our performance targets are dependent on performance over a specified measurement period, once we determine that the performance target outcome is probable, the cumulative expense is recorded immediately with the remaining expense recorded on a straight-line basis through the end of the award vesting period.

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The effective tax rate was 21.6 %, 22.2 %, and 23.0 % for 2024, 2023 and 2022, respectively.

The rate in all three years reflect a benefit from Internal Revenue Code ("IRC") §45L energy efficient homes credits.

The rate in all three years reflect an increasing benefit from Internal Revenue Code ("IRC") §45L energy efficient homes credits.

Deferred tax assets and liabilities are netted on our balance sheet by tax jurisdiction.

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Accrued expenses 94 36

Lease liabilities 13,264 —

Capped Calls cost

Other 8,479 7,393

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We have no NOLs or credit carryovers, and determined that no valuation allowance on our deferred tax assets is necessary at December 31, 2024.

The Taxpayer Certainty and Disaster Relief Act of 2020 extended IRC §45L energy efficient homes credit (the "energy tax credit") through the end of 2021.

On August 16, 2022, the Inflation Reduction Act of 2022 (the "IRA") retroactively extended the energy tax credit to homes delivered from January 1, 2022 through December 31, 2032, modified the energy standards required to qualify for the tax credit and increased the per-home credit amount starting in 2023.

On August 16, 2022, the IRA retroactively extended the energy tax credit to homes delivered from January 1, 2022 through December 31, 2032, modified the energy standards required to qualify for the tax credit and increased the per-home credit amount starting in 2023.

In accordance with these regulations, we recorded a tax benefit of $ 29.1 million, $ 22.7 million, and $ 18.9 million during the years ended December 31, 2024, 2023 and 2022, respectively, based on our estimate for qualifying new energy efficient homes that we closed in those years.

The IRA also created a 15% corporate alternative minimum tax on certain profits and creates a 1% excise tax on stock repurchases.

These provisions were effective for us on January 1, 2023 and did not have a material impact on our financial statements.

These provisions do not have a material impact on our financial statements.

As of December 31, 2024, we have a deferred tax asset of $ 12.5 million related to the Capped Calls cost associated with the 2028 Convertible Notes.

The Capped Calls cost was capitalized under GAAP as an adjustment to Additional paid-in capital.

For tax purposes, we elected to integrate the Capped Calls transactions with the 2028 Convertible Notes under Treasury Regulation § 1.1275-6.

This election allows the upfront cost of the Capped Calls options to be treated as interest expense, resulting in tax deductions over the term of the notes.

Our future deferred tax asset realization depends on sufficient taxable income in the carryforward periods under existing tax laws.

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federal, state, or local income tax examinations by taxing authorities for years prior to 2020.

We have one state income tax examination covering various years pending resolution at this time.

We do not have any Federal or state income tax examinations pending resolution at this time.

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.

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Real estate acquired through notes payable $ 24,750 $ 9,267 $ 9,960

Non-cash investing and financing activities:

Distributions of real estate from unconsolidated joint ventures, net $ 9,594 $ — $ —

NOTE 14 — RELATED PARTY TRANSACTIONS

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homebuilding and financial services.

As defined in ASC 280-10, Segment Reporting , we have ten homebuilding operating segments.

As defined in ASC 280-10, Segment Reporting , we have twelve homebuilding operating segments.

The homebuilding segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes and providing warranty and customer services.

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Arizona, California, Colorado and Utah

Florida, Georgia, North Carolina, South Carolina and Tennessee

Management’s evaluation of segment performance is based on segment operating income, which we define as home and land closing revenue less cost of home and land closings, including land development and other land sales costs, commissions and other sales costs, and other general and administrative costs incurred by or allocated to each segment, including impairments.

Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee

We define our segments based on the way in which internally reported financial information is regularly provided and reviewed by the chief operating decision maker (“CODM”) to analyze financial performance, make decisions, and allocate resources.

Our CODM is the chief executive officer.

The CODM’s evaluation of the homebuilding segment performance is based on segment home closing revenue, home closing gross profit/(loss), home closing gross margin, total gross profit/(loss), commissions and other sales costs, general and administrative costs incurred by or allocated to each segment, including impairments, and operating income/(loss).

The CODM uses these performance metrics predominantly in the annual budget and forecasting process and considers budget-to-actual variances on a quarterly basis for these measures when making decisions about the allocation of operating and capital resources to each segment.

The CODM also uses these data points to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees.

The CODM also reviews financial services profit/(loss) to evaluate the performance of the financial services segment and make decisions about allocation of resources and financial services related product offerings.

Each reportable segment follows the same accounting policies described in Note 1, “Business and Summary of Significant Accounting Policies.” Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented.

The following segment information is in thousands:

Years Ended December 31,

2023 2022 2021

Homebuilding revenue (1):

West $ 2,142,419 $ 2,250,083 $ 1,935,845

Central 1,805,633 1,846,153 1,504,481

East 2,164,961 2,172,491 1,679,784

Consolidated total 6,113,013 6,268,727 5,120,110

The following tables provide financial information about our reportable segments and Corporate and other categories (in thousands):

Year Ended December 31, 2024

West Central East Total

Home closing revenue $ 2,223,876 $ 1,739,553 $ 2,378,117 $ 6,341,546

Land closing revenue — 6,017 16,309 22,326

Total closing revenue 2,223,876 1,745,570 2,394,426 6,363,872

Cost of home closings 1,715,856 1,283,014 1,762,833 4,761,703

Cost of land closings — 4,149 14,160 18,309

Total cost of closings 1,715,856 1,287,163 1,776,993 4,780,012

Home closing gross profit 508,020 456,539 615,284 1,579,843

Land closing gross profit — 1,868 2,149 4,017

Total closing gross profit 508,020 458,407 617,433 1,583,860

Home closing gross margin 22.8 % 26.2 % 25.9 % 24.9 %

Commissions and other sales costs 123,393 127,293 158,383 409,069

General and administrative expenses 52,837 43,921 67,435 164,193

Homebuilding segment operating income 331,790 287,193 391,615 1,010,598

West 265,479 466,916 379,093

Central 307,163 376,734 319,435

East 382,513 465,059 302,487

Total homebuilding segment operating income 955,155 1,308,709 1,001,015

Financial services segment profit 14,410

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Net earnings before income taxes $ 1,002,870

(1) Homebuilding revenue includes the following land closing revenue, by segment:

Years Ended December 31,

(1) Balance consists primarily of corporate costs and shared service functions such as finance and treasury that are not allocated to the homebuilding or financial services reporting segments.

Year Ended December 31, 2023

West Central East Total

Home closing revenue $ 2,107,095 $ 1,798,939 $ 2,150,750 $ 6,056,784

Land closing revenue 35,324 6,694 14,211 56,229

2023 2022 2021

West $ 35,324 $ 47,974 $ 21,426

Central 6,694 10,655 3,799

East 14,211 2,600 12

Total $ 56,229 $ 61,229 $ 25,237

Total closing revenue 2,142,419 1,805,633 2,164,961 6,113,013

Cost of home closings 1,671,330 1,316,692 1,566,649 4,554,671

Cost of land closings 31,963 5,363 14,460 51,786

Total cost of closings 1,703,293 1,322,055 1,581,109 4,606,457

Home closing gross profit 435,765 482,247 584,101 1,502,113

Land closing gross profit/(loss) 3,361 1,331 ( 249 ) 4,443

Total closing gross profit 439,126 483,578 583,852 1,506,556

Home closing gross margin 20.7 % 26.8 % 27.2 % 24.8 %

Commissions and other sales costs 115,020 131,873 138,018 384,911

General and administrative expenses 58,627 44,542 63,321 166,490

Homebuilding segment operating income 265,479 307,163 382,513 955,155

Financial services segment profit 12,466

Corporate and unallocated costs (1) ( 65,232 )

Interest expense —

Other income, net 47,948

Loss on early extinguishment of debt ( 907 )

Net earnings before income taxes $ 949,430

(1) Balance consists primarily of corporate costs and shared service functions such as finance and treasury that are not allocated to the homebuilding or financial services reporting segments.

Year Ended December 31, 2022

West Central East Total

Home closing revenue $ 2,202,109 $ 1,835,498 $ 2,169,891 $ 6,207,498

Land closing revenue 47,974 10,655 2,600 61,229

Total closing revenue 2,250,083 1,846,153 2,172,491 6,268,727

Cost of home closings 1,598,766 1,303,995 1,531,719 4,434,480

Cost of land closings 38,358 9,240 2,048 49,646

Total cost of closings 1,637,124 1,313,235 1,533,767 4,484,126

Home closing gross profit 603,343 531,503 638,172 1,773,018

Land closing gross profit 9,616 1,415 552 11,583

Total closing gross profit 612,959 532,918 638,724 1,784,601

Home closing gross margin 27.4 % 29.0 % 29.4 % 28.6 %

Commissions and other sales costs 95,993 112,658 114,615 323,266

General and administrative expenses 50,050 43,526 59,050 152,626

Homebuilding segment operating income 466,916 376,734 465,059 1,308,709

Financial services segment profit 18,294

Corporate and unallocated costs (1) ( 40,358 )

Interest expense ( 41 )

Other income, net 2,714

Net earnings before income taxes $ 1,289,318

(1) Balance consists primarily of corporate costs and shared service functions such as finance and treasury that are not allocated to the homebuilding or financial services reporting segments.

At December 31, 2024

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Total assets $ 1,930,284 $ 1,668,556 $ 2,739,754 $ 3,049 $ 821,011 $ 7,162,654

(1) Balance consists primarily of cash and cash equivalents, receivables from title companies or closing agents and property and equipment, net.

(2) Balance consists primarily of cash and cash equivalents, development reimbursements from local municipalities and prepaid expenses and other assets.

(3) Balance consists primarily of cash and cash equivalents, goodwill (see Note 10), prepaid expenses and other assets and property and equipment, net.

(1) Balance consists primarily of property and equipment, net, prepaid expenses and other assets, and development receivables.

(2) Balance consists primarily of development reimbursements from local municipalities and prepaid expenses and other assets.

(3) Balance consists primarily of cash and cash equivalents, goodwill (see Note 10), and prepaid expenses and other assets.

(4) Balance consists primarily of cash and cash equivalents, deferred tax assets and prepaid expenses and other assets.

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We believe there are no pending legal or warranty matters as of December 31, 2024 that could have a material adverse impact upon our consolidated financial condition, results of operations or cash flows that have not been sufficiently reserved.

As discussed in Note 1 under the heading “Warranty Reserves”, we have case specific reserves within our $ 37.4 million of total warranty reserves related to alleged stucco defects in certain homes we constructed predominantly between 2006 and 2017 and HVAC condensation issues in limited geographies for homes constructed and delivered in 2021 and the first half of 2022.

We have case specific reserves within our $ 32.7 million of total warranty reserves related to alleged stucco defects in certain homes we constructed predominantly between 2006 and 2017.

Our review and management of these matters is ongoing and our estimate of and reserves for resolving them is based on internal data, historical experience, our judgment 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 estimate and thus our related reserves.

As of December 31, 2023, 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 matter.

As of December 31, 2024, after considering potential recoveries from the consultants and contractors involved and their insurers and the potential recovery under our general liability insurance policies, we recorded a favorable adjustment to our reserve balance of $ 1.0 million in the year ended December 31, 2024 and we believe our reserves are sufficient to cover the above mentioned matters.

See Note 1 for information related to our warranty obligations.

See Note 4 for information related to our leases.

NOTE 17 — SUBSEQUENT EVENTS

As discussed in Notes 1 and 9, on November 21, 2024, our Board of Directors declared a two -for-one stock split of Meritage’s common stock in the form of a stock dividend.

Trading began on a split-adjusted basis on January 3, 2025.

There was no adjustment to the number of authorized shares or the par value.

All share and per share amounts in the accompanying consolidated financial statements have been retroactively adjusted to reflect the Stock Split for all periods presented.

Change in Segment Reporting

Effective the first day of fiscal 2025 (i.e., January 1, 2025), we realigned our internal organizational structure and resources following continued growth and recent entry into new markets.

As a result of the change in our organizational

structure, the Tennessee homebuilding operating segment will be reclassified from the East reporting segment to the Central reporting segment for the purpose of making operational and resource decisions and assessing financial performance.

The segment information presented in this Annual Report on Form 10-K does not reflect this change in the composition of our reportable segments, as the change did not take effect internally until the first quarter of fiscal 2025.

We will begin reporting segment information based on this new segment structure in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2025.

For details on our reportable segments in fiscal 2024, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this Annual Report on Form 10-K.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data