PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited consolidated financial statements for June 30, 2021, reflect substantial asset and net earnings growth, with operating cash flow turning negative due to real estate investments [Unaudited Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets reached **$4.32 billion**, driven by real estate inventory, while liabilities and stockholders' equity also increased Consolidated Balance Sheet Highlights (in thousands USD) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$4,321,553** | **$3,864,398** | | Cash and cash equivalents | $684,374 | $745,621 | | Real estate | $3,251,787 | $2,778,039 | | **Total Liabilities** | **$1,693,409** | **$1,516,530** | | Senior notes, net | $1,141,934 | $996,991 | | **Total Stockholders' Equity** | **$2,628,144** | **$2,347,868** | [Unaudited Consolidated Income Statements](index=4&type=section&id=Unaudited%20Consolidated%20Income%20Statements) Q2 2021 saw total closing revenue rise to **$1.28 billion** and net earnings surge to **$167.4 million**, despite an **$18.2 million** loss on early debt extinguishment Q2 and H1 2021 vs 2020 Performance (in thousands USD, except per share) | Metric | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | Total closing revenue | $1,277,599 | $1,033,079 | $2,361,380 | $1,934,092 | | Home closing gross profit | $345,301 | $220,696 | $611,956 | $399,056 | | Earnings before income taxes | $215,651 | $115,862 | $381,628 | $202,695 | | Net earnings | $167,389 | $90,678 | $299,232 | $161,830 | | Diluted EPS | $4.36 | $2.38 | $7.80 | $4.20 | - The company incurred a loss on early extinguishment of debt of **$18.2 million** in the second quarter and first half of 2021, with no similar charge in 2020[13](index=13&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities for H1 2021 was **$143.5 million**, a reversal from the prior year, primarily due to increased real estate investment Six Months Ended June 30 Cash Flow Summary (in thousands USD) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | $(143,472) | $237,445 | | Net cash used in investing activities | $(10,679) | $(9,087) | | Net cash provided by/(used in) financing activities | $92,904 | $(63,202) | | **Net (decrease)/increase in cash** | **$(61,247)** | **$165,156** | [Notes to Unaudited Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail business operations, accounting policies, debt structure including a **$450 million** senior note issuance, and segment performance across nine states - The company designs and builds single-family homes for entry-level and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee[18](index=18&type=chunk) - In April 2021, the company issued **$450.0 million** of 3.875% Senior Notes due 2029 and used the proceeds to redeem all **$300.0 million** of its 7.00% Senior Notes due 2022, resulting in an **$18.2 million** loss on early debt extinguishment[52](index=52&type=chunk) Homebuilding Segment Operating Income (in thousands USD) | Segment | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | West | $78,938 | $44,742 | $143,189 | $86,600 | | Central | $84,965 | $37,895 | $141,958 | $66,800 | | East | $73,477 | $37,791 | $123,656 | $59,500 | | **Total** | **$237,380** | **$120,428** | **$408,803** | **$213,000** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported strong Q2 2021 results with record gross margins and closing volume, driven by robust housing demand despite supply chain disruptions - Housing market conditions in Q2 2021 remained strong, driven by low interest rates, limited supply, and increased desire for space to accommodate work/school from home needs[84](index=84&type=chunk) - The company achieved its highest quarterly home closing gross margin in history at **27.3%**, a **590 basis point** increase year-over-year[86](index=86&type=chunk) - Pandemic-related supply chain disruptions resulted in construction cycle delays of approximately **four weeks**, impacting both orders and closings[85](index=85&type=chunk) Q2 2021 Key Performance Indicators vs Q2 2020 | Metric | Q2 2021 | Q2 2020 | % Change | | :--- | :--- | :--- | :--- | | Home Closing Revenue (Billions USD) | $1.26 | $1.03 | +22.6% | | Homes Closed | 3,273 | 2,770 | +18.2% | | Home Orders (Units) | 3,542 | 3,597 | -1.5% | | Home Order Value (Billions USD) | $1.50 | $1.29 | +16.2% | | Backlog Value (Billions USD) | $2.3 | $1.6 | +40.6% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity, as rising mortgage rates could negatively impact housing demand and financing, despite fixed-rate senior notes - The company's operations are sensitive to interest rates, as rising rates can negatively affect housing demand and homebuyers' financing ability[144](index=144&type=chunk) - The company's fixed-rate debt consists mainly of **$1.2 billion** in senior notes, while its revolving credit facility is subject to variable interest rates based on LIBOR or Prime[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of June 30, 2021, the company's disclosure controls and procedures were effective[145](index=145&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[146](index=146&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) Routine legal proceedings, primarily construction defect claims, are not expected to have a material adverse impact, as management believes sufficient reserves exist - The company is involved in routine legal proceedings, primarily construction defect claims, which are generally covered by subcontractor warranties or insurance[78](index=78&type=chunk)[148](index=148&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) A key risk factor is supply chain constraints for building materials, causing construction delays and potential cost increases that could erode margins - A key risk factor is supply chain constraints for building materials, which have delayed construction cycle times in 2021[150](index=150&type=chunk) - These delays can impact the timing of home closings and lead to cost increases that may not be fully passed on to customers, potentially eroding margins[150](index=150&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **200,000 shares** in Q2 2021, with **$86.8 million** remaining in its stock repurchase program, retaining cash for business development - During Q2 2021, the company purchased **200,000 shares** of its common stock for a total of approximately **$19.16 million**[152](index=152&type=chunk)[153](index=153&type=chunk) - As of June 30, 2021, **$86.8 million** remained available under the authorized stock repurchase program[152](index=152&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, officer certifications, and financial data in Inline XBRL format

Financial Data and Key Metrics Changes - The company reported a 23% year-over-year increase in home closing revenue to $1.2 billion, driven by an 18% increase in home closings and a 4% increase in average selling price (ASP) [28][40] - Home closing gross margin improved by 590 basis points to 27.3% from 21.4% a year ago, reflecting higher ASPs and leveraging of fixed costs [41][46] - Diluted EPS increased by 83% year-over-year to $4.36, with net earnings up 85% [46] Business Line Data and Key Metrics Changes - The average absorption pace increased to 5.5 net orders per month, up from 5.0 the previous year, despite a tightly controlled order pace [10][29] - Entry-level homes accounted for over 80% of total orders, up from 70% in the same quarter last year, indicating a strategic shift towards more affordable housing [31][22] - The company achieved its highest quarterly home-closing gross margin in history at 27.3% [12] Market Data and Key Metrics Changes - The East region saw a 78% increase in order volume year-over-year, attributed to a 25% growth in average absorption pace [32] - The Central region's average absorption pace grew 8% year-over-year to 6.0 per month, the highest in the company, despite a 16% decline in average community count [33] - The West region experienced a 10% decrease in order volume, but a 22% increase in order ASP due to strong demand and pricing power [34] Company Strategy and Development Direction - The company aims to grow its community count to 300, which is expected to generate 15,000 orders at a normalized run rate of 50 orders per store [16] - The focus remains on entry-level and first move-up markets, with a commitment to affordability and quality in home offerings [22][24] - The company plans to spend approximately $1.75 billion to $2 billion on land acquisition and development in 2021 to support its growth strategy [55] Management's Comments on Operating Environment and Future Outlook - Management noted that while the current demand and pricing dynamics are strong, they are not sustainable indefinitely, and a normalization of sales pace is expected in the coming quarters [19][20] - The company is monitoring affordability indicators and has not seen significant pushback on pricing, although some consumer feedback suggests a preference to wait due to rising prices [76][77] - Management expressed confidence in achieving the 300 community goal by mid-2022, supported by a strong backlog and increased spec counts [63] Other Important Information - The company has maintained a strong balance sheet, with a cash balance of $684 million and a net debt to capital ratio of 15.4% [48] - The company has a backlog of over 5,500 units, providing good visibility into future margin trends [59] - The company is committed to a 100% spec building strategy focused on entry-level products to maintain affordability [24] Q&A Session Summary Question: Comments on normalization of absorption rates and impact on gross margins - Management acknowledged that while margins are currently strong, normalization of absorption rates may impact future gross margin trends, but they expect to maintain a solid margin profile due to favorable land costs [66][68][72] Question: Indicators of affordability being stretched in some markets - Management noted that while FICO scores and debt-to-income ratios remain stable, there has been qualitative feedback indicating some consumers are hesitant to buy due to rising prices [74][76] Question: Impact of falling lumber prices on margins - Management indicated that while lumber prices peaked in Q2, the benefits of falling prices will be more pronounced in 2022 rather than the second half of 2021 [82][84][89] Question: Incentives and their relationship with ASP increases - Management clarified that traditional incentives are currently low, and while they expect some return of incentives as supply increases, they anticipate ASPs will continue to rise in a normalized market [90][92][94] Question: Loan limits and affordability strategies - Management emphasized the importance of monitoring both loan limits and overall affordability, with a focus on positioning products below FHA limits to enhance accessibility for buyers [97][100]

Financial Data and Key Metrics Changes - The company reported a 25% year-over-year increase in home closings, totaling 2,890 homes, with home closing revenue reaching $1.1 billion, a 21% increase compared to 2020 [26][40] - The home closing gross margin improved to 24.7%, up 470 basis points from 20% in the prior year [26][40] - Diluted EPS increased by 88% year-over-year to $3.44 [44] Business Line Data and Key Metrics Changes - Entry-level homes comprised over 76% of total orders for the quarter, up from 61% in the first quarter last year [27] - The absorption pace for entry-level homes was 5.8 per month, up from 4.3 per month in the prior year, marking the strongest first quarter absorption pace since 2005 [11][26] - The first move-up communities also saw a 45% increase in absorption year-over-year [27] Market Data and Key Metrics Changes - The East region led in absorption growth with a 67% improvement year-over-year, while orders in the East region increased by 39% [28] - Tennessee had the highest absorption pace at 6.6 per month, reflecting a recovery from previous storms [29] - The West region experienced a 13% increase in absorption despite a 6% decrease in orders [30] Company Strategy and Development Direction - The company aims to continue gaining market share by focusing on affordable entry-level and first move-up markets [23] - Meritage Homes is committed to building energy-efficient homes and has been recognized as the 2021 ENERGY STAR Partner of the Year for Sustained Excellence [15] - The company plans to enter new markets, specifically expanding operations into Charleston and Myrtle Beach, South Carolina, with new affordable entry-level communities set to open in 2022 [19][20] Management's Comments on Operating Environment and Future Outlook - Management believes the current housing market demand will persist throughout the year, supported by favorable mortgage rates and strong demographic trends [12][14] - The company anticipates continued pricing power to offset commodity cost increases, projecting total closings for 2021 to be between 11,700 and 12,700 units [55] - Management expressed confidence in sustaining strong margins despite rising commodity costs, with expectations for an effective tax rate of about 23% [44][55] Other Important Information - The company ended the quarter with over 2,200 spec homes in inventory, with a backlog of 5,240 units, reflecting a 47% increase year-over-year [33] - Meritage Homes plans to spend over $1.5 billion annually on land acquisition and development to support its growth strategy [51] - The company has a strong balance sheet, with a cash balance of $716 million and a net debt-to-cap ratio of 10.9% [47] Q&A Session Summary Question: What is the current start pace running at? - The start pace is running almost the same as the sales pace, with limitations due to production issues, but the company is comfortable with its current pace [64] Question: How realistic is it that margins can be sustained as new communities open? - Management believes they can sustain margins through 2021, as new communities were acquired at favorable prices [67] Question: How many markets are selling above FHA limits? - The company is pushing above FHA limits in hot markets like Phoenix and California, but is generally focused on staying below those limits [70] Question: What is the impact of resin shortages in Texas? - There was a temporary disruption due to weather, but regular production times have resumed [75] Question: How are pricing moves being managed in the current market? - The company uses a robust community-by-community pricing strategy to remain competitive and manage pricing effectively [82] Question: What percentage of buyers are utilizing FHA loans? - Less than 25% of buyers are using FHA loans, indicating a strong capital position among buyers [71] Question: How does the company manage costs in a highly inflationary environment? - The company has streamlined its product offerings to manage costs effectively, allowing for better sourcing and vendor relationships [108]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Address of Principal Executive Offices) (Zip Code) (480) 515-8100 For the transition period from to Commission File Number 1-9977 Meritage Homes Corporation (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification No.) 8800 E. Raintree Dr ...

Financial Performance - Home closing revenue increased by 21% to $1080 million in 1Q21 compared to $8904 million in 1Q20[23] - Home closing gross profit increased by 50% to $2667 million in 1Q21 compared to $1784 million in 1Q20[23] - Net earnings increased by 85% to $1318 million in 1Q21 compared to $712 million in 1Q20[23] - Diluted EPS increased by 88% to $344 in 1Q21 compared to $183 in 1Q20[23] - The company anticipates home closing revenue between $455 billion and $485 billion for the full year 2021[33] Sales and Closings - Home closings increased by 25% to 2890 in 1Q21 compared to 2316 in 1Q20[23] - Orders increased significantly, with entry-level orders up 61% and first move-up orders up 35%[14] - Absorption growth was led by the East region, up 67% year-over-year[15] - The company projects 2800-3100 home closings for 2Q21[33] - The company anticipates 11700-12700 home closings for the full year 2021[33] Land and Development - Land and development spending increased to $370 million in 1Q21 compared to $246 million in 1Q20[31] - Total lots controlled increased to 58085, with 60% owned and 40% optioned[31] Balance Sheet - Net debt-to-capital ratio was 109% as of March 31, 2021[27]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-9977 Meritage Homes Corporation (Exact Name of Registrant as Specified in its Charter) 8800 E. Raintree Drive, Suite 300, Scottsdale, A ...

Financial Data and Key Metrics Changes - In Q4 2020, Meritage Homes achieved home closing revenue of $1.4 billion, a 28% increase year-over-year, driven by a 32% increase in home closings [16][28][35] - The home closing gross margin improved by 420 basis points to 24% from 19.8% in the prior year, marking the best quarterly margin since 2006 [17][28] - The diluted EPS for Q4 2020 was $3.97, reflecting a 50% increase year-over-year compared to $2.65 in Q4 2019 [35] Business Line Data and Key Metrics Changes - The company sold 3,174 homes in Q4 2020, which was 52% higher than the same quarter in 2019 [16] - Entry-level homes comprised almost 70% of total orders for the quarter, up from 55% in Q4 2019 [19] - The absorption rate increased to 5.3 homes per month in Q4 2020, an 87% year-over-year increase [18] Market Data and Key Metrics Changes - The East Region led order growth with a 76% improvement over Q4 2019, while the Central Region saw a 46% increase [20][21] - The West Region experienced a 34% increase in orders, driven by a 65% increase in absorptions [22] - Overall, the housing market remained robust due to low interest rates and limited supply, with a shift in buyer preferences towards single-family homes [20] Company Strategy and Development Direction - The company focuses on entry-level and first move-up markets, aiming to offer affordable yet high-quality homes [15] - Meritage Homes plans to achieve 300 active communities by mid-2022, with a strong emphasis on land acquisition and development [38][41] - The company intends to sustain and replenish its community growth beyond 2022, with anticipated annual spending of over $1.5 billion on land and development [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of the housing market, driven by favorable macroeconomic factors and demographic trends [14][41] - The company is closely monitoring affordability as a key concern, given rising land prices and construction costs [57] - Management expects to maintain strong margins in 2021 despite higher commodity costs [32] Other Important Information - Meritage Homes donated over $0.5 million to non-profits focused on COVID-19 relief and racial equity initiatives [12][13] - The company achieved a net debt-to-capital ratio of 10.5%, reflecting a strong balance sheet [37] Q&A Session Summary Question: Insights on land prices and inflation - Management noted that land prices were flat in 2020 but began to rise modestly in Q4 as demand for housing strengthened [49] Question: Concerns about competition from single-family rentals - Management believes that homeownership remains appealing and does not see significant competition from rental projects in their target markets [54] Question: Confidence in achieving 300 communities by mid-2022 - Management expressed strong confidence in reaching the 300 community goal, supported by land acquisitions and community development plans [60][61] Question: Labor procurement concerns - Management indicated that labor availability is not a major concern, but municipal approvals could pose challenges [64] Question: Pricing strategies and absorption control - Management emphasized the importance of maintaining both pricing power and sales pace, successfully balancing the two [78]

Financial Performance & Growth - Meritage Homes achieved all-time highest annual volume of sales orders and home closings[11] - The company experienced a 47% increase in net earnings in 4Q20, reaching $152.5 million[31] - Home closing revenue for 4Q20 increased by 28% to $1,409.2 million compared to $1,103.7 million in 4Q19[31] - Home closing gross profit for 4Q20 increased by 54% to $337.8 million[31] - Full year 2020 net earnings increased by 70% to $423.5 million[31] - Diluted EPS for 4Q20 increased by 50% to $3.97[31] Operational Highlights - Average absorption pace reached 5.2 per month, the best since 2005[11] - Home closings increased by 32% in 4Q20, with 3,744 closings compared to 2,830 in 4Q19[31] - SG&A expenses as a percentage of home closing revenue decreased by 80 bps to 9.3% in 4Q20[31] - Land and development spending significantly increased to $506 million in 4Q20 from $245 million in 4Q19[39] Balance Sheet & Capital Allocation - Net debt-to-capital ratio decreased to 10.5% as of December 31, 2020, compared to 26.2% the previous year[35] - The company had $746 million in cash and cash equivalents as of December 31, 2020[35, 36] - The company repurchased 100,000 shares totaling $8.8 million in 4Q20[36] Forward Guidance - The company projects 11,500-12,500 home closings for full year 2021[41] - The company projects $4.2-4.6 billion in home closing revenue for full year 2021[41]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-9977 Meritage Homes Corporation (Exact Name of Registrant as Specified in its Charter) Maryland 86-0611231 (State or Other Jur ...

Financial Data and Key Metrics Changes - Meritage Homes reported a 56% year-over-year earnings growth in Q3 2020, with a 21% increase in closing revenue and a 170 basis points improvement in home closing gross margin [35][39][48] - The company achieved record quarterly closing revenue and gross margins, despite high lumber prices, and maintained the lowest net debt to capital ratio in its history at 15.7% [13][44] - Year-to-date results showed an 86% increase in net earnings and a 40% rise in orders [43] Business Line Data and Key Metrics Changes - The company delivered 3,851 homes in Q3 2020, a 71% increase compared to Q3 2019, with entry-level homes representing 60% of average active communities [14][22] - Absorption rates for entry-level communities were 75% higher than the previous year, while first move-up communities saw an 86% increase in absorption [23][30] - The company put approximately 16,000 new lots under control in the first nine months of 2020, translating to about 123 new communities [26] Market Data and Key Metrics Changes - The central region, particularly Texas, led order growth with an 82% increase year-over-year, while California saw a 158% growth in orders [30][32] - All regions experienced solid year-over-year performance, with the East region showing a 63% increase in orders [34] Company Strategy and Development Direction - The company is focused on increasing its community count to 300 by early to mid-2022, with a strategy emphasizing affordable entry-level homes [18][53] - Meritage Homes plans to ramp up land investments, having spent nearly $300 million in Q3 2020, the highest in its history [46][125] - The company aims to maintain a nimble land acquisition strategy to adapt to market conditions [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on current market demand, citing favorable macroeconomic factors such as low mortgage rates and increased demand for new homes [15][52] - The company anticipates continued strength in Q4 2020, but acknowledges potential impacts from election uncertainty and COVID-19 [48] Other Important Information - The effective tax rate for Q3 2020 was 19.5%, down from 24.4% the previous year, contributing to improved earnings per share [42] - The company has a strong liquidity position with $610 million in cash and no drawn credit facility [44] Q&A Session Summary Question: Concerns about builders needing to slow activity pace - Management acknowledged the need for long-term focus, indicating that while short-term fluctuations may occur, the company is well-positioned for future growth [60][64] Question: Community count decline and market growth - Management noted that while community count is a concern, they are focused on backlog and spec counts to drive sales in 2021 [78][82] Question: Gross margin outlook for 2020 - Management indicated that gross margins are expected to improve due to pricing and operational efficiencies, despite some cost pressures from lumber [97][100] Question: LiVE.NOW brand penetration and future opportunities - Management highlighted the importance of maintaining affordability and noted that they are actively pursuing larger land deals to support growth [145][116]