Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Feb. 18, 2014 | Jun. 28, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'Meritage Homes CORP | ' | ' |
Entity Central Index Key | '0000833079 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $1,482,360,938 |
Entity Common Stock, Shares Outstanding | ' | 39,074,341 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | |
Cash and cash equivalents | $274,136 | $170,457 | |
Investments and securities | 89,687 | 86,074 | |
Restricted cash | 0 | 38,938 | |
Other receivables | 38,983 | 20,290 | |
Real estate | 1,405,299 | 1,113,187 | |
Real estate not owned | 289 | 0 | |
Deposits on real estate under option or contract | 51,595 | [1],[2] | 14,351 |
Investments in unconsolidated entities | 11,638 | 12,085 | |
Property and equipment, net | 22,099 | 15,718 | |
Deferred tax assets, net | 70,404 | 77,974 | |
Prepaids, other assets and goodwill | 39,231 | 26,488 | |
Total assets | 2,003,361 | 1,575,562 | |
Liabilities | ' | ' | |
Accounts payable | 68,018 | 49,801 | |
Accrued liabilities | 166,611 | 96,377 | |
Home sale deposits | 21,996 | 12,377 | |
Liabilities Related To Inventory Real Estate Not Owned | 289 | 0 | |
Senior, senior subordinated and convertible notes | 905,055 | 722,797 | |
Total liabilities | 1,161,969 | 881,352 | |
Stockholders’ Equity | ' | ' | |
Preferred stock, par value $0.01. Authorized 10,000,000 shares; none issued and outstanding at December 31, 2013 and 2012 | 0 | 0 | |
Common stock, par value $0.01. Authorized 125,000,000 shares; issued 36,244,071 and 35,613,351 shares at December 31, 2013 and 2012, respectively | 362 | 356 | |
Additional paid-in capital | 412,961 | 390,249 | |
Retained earnings | 428,069 | 303,605 | |
Total stockholders’ equity | 841,392 | 694,210 | |
Total liabilities and stockholders’ equity | $2,003,361 | $1,575,562 | |
[1] | (4)Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. | ||
[2] | Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 36,244,071 | 35,613,351 |
Treasury stock, shares | 0 | 0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Home closing revenue | $1,783,389 | $1,184,360 | $860,884 | |||
Land closing revenue | 31,270 | 9,314 | 360 | |||
Total closing revenue | 1,814,659 | [1] | 1,193,674 | [1] | 861,244 | [1] |
Cost of home closings | -1,391,125 | -965,044 | -704,566 | |||
Cost of land closings | -26,129 | -8,422 | -246 | |||
Real estate impairments | -350 | -1,340 | -8,870 | |||
Land impairments | -637 | -669 | -6,454 | |||
Total cost of closings and impairments | -1,418,241 | -975,475 | -720,136 | |||
Home closing gross profit | 391,914 | 217,976 | 147,448 | |||
Land closing gross profit/(loss) | 4,504 | 223 | -6,340 | |||
Total closing gross profit | 396,418 | 218,199 | 141,108 | |||
Revenue | 6,037 | 779 | 0 | |||
Expenses | -3,266 | -981 | 0 | |||
Earnings from financial services unconsolidated entities and other, net | 13,183 | 10,457 | 6,563 | |||
Financial services profit | 15,954 | 10,255 | 6,563 | |||
Commissions and other sales costs | -126,716 | -94,833 | -74,912 | |||
General and administrative expenses | -91,510 | -68,185 | -64,184 | |||
Loss from unconsolidated entities, net | -378 | -224 | -714 | |||
Interest expense | -15,092 | -24,244 | -30,399 | |||
Other income/(loss), net | 2,792 | -6,342 | 2,162 | |||
Loss on early extinguishment of debt | -3,796 | -5,772 | 0 | |||
Earnings/(loss) before income taxes | 177,672 | 28,854 | -20,376 | |||
(Provision for)/benefit from income taxes | -53,208 | 76,309 | -730 | |||
Net earnings/(loss) | $124,464 | $105,163 | ($21,106) | |||
Earnings/(loss) per common share: | ' | ' | ' | |||
Basic (in dollars per share) | $3.45 | $3.09 | ($0.65) | |||
Diluted (in dollars per share) | $3.25 | [2],[3] | $3 | [2],[3] | ($0.65) | [2],[3] |
Weighted average number of shares: | ' | ' | ' | |||
Basic (in shares) | 36,105 | 34,057 | 32,382 | |||
Diluted (in shares) | 38,801 | 35,172 | 32,382 | |||
[1] | Revenue includes the following land closing revenue, by segment: 2013 – $11.6 million in the West Region, $16.2 million in the Central Region and $3.5 million in the East Region; 2012 – $6.5 million in the West Region, $2.0 million in the Central Region and $790,000 in the East Region; 2011 – $360,000 in the Central Region. | |||||
[2] | For periods with a net loss, no options or non-vested shares are included in the dilution calculation as all options and non-vested shares outstanding are considered anti-dilutive. | |||||
[3] | In accordance with ASC 260-10, Earnings Per Share, ("ASC 260-10") we calculate the dilutive effect of convertible securities using the "if-converted" method. |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2012 | $694,210 | $356 | $390,249 | $303,605 | $0 |
Balance, shares at Dec. 31, 2012 | 35,613,351 | 35,613,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net earnings/(loss) | 124,464 | 0 | 0 | 124,464 | 0 |
Exercise of equity awards (Shares) | ' | 631,000 | ' | ' | ' |
Exercise of equity awards (Value) | 11,601 | 6 | 11,595 | 0 | 0 |
Excess income tax benefit from stock-based awards | ' | 0 | ' | 0 | 0 |
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation | 1,891 | ' | 1,891 | ' | ' |
Equity award compensation expense | 9,483 | 0 | 9,483 | 0 | 0 |
Non-controlling interest acquisition | -257 | 0 | -257 | 0 | 0 |
Balance at Dec. 31, 2013 | 841,392 | 362 | 412,961 | 428,069 | 0 |
Balance, shares at Dec. 31, 2013 | 36,244,071 | 36,244,000 | ' | ' | ' |
Balance at Dec. 31, 2010 | 499,995 | 400 | 468,820 | 219,548 | -188,773 |
Balance, shares at Dec. 31, 2010 | ' | 40,030,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net earnings/(loss) | -21,106 | 0 | 0 | -21,106 | 0 |
Exercise of equity awards (Shares) | ' | 347,000 | ' | ' | ' |
Exercise of equity awards (Value) | 2,613 | 4 | 2,609 | 0 | 0 |
Equity award compensation expense | 7,410 | 0 | 7,410 | 0 | 0 |
Balance at Dec. 31, 2011 | 488,912 | 404 | 478,839 | 198,442 | -188,773 |
Balance, shares at Dec. 31, 2011 | ' | 40,377,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' |
Net earnings/(loss) | 105,163 | 0 | 0 | 105,163 | 0 |
Exercise of equity awards (Shares) | ' | 482,000 | ' | ' | ' |
Exercise of equity awards (Value) | 4,267 | 5 | 4,262 | 0 | 0 |
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation | 436 | ' | 436 | ' | ' |
Equity award compensation expense | 8,319 | 0 | 8,319 | 0 | 0 |
Issuance of restricted stock | 87,113 | 26 | 87,087 | 0 | 0 |
Issuance of stock, shares | ' | 2,645,000 | ' | ' | ' |
Cancellation of treasury shares | 0 | -79 | -188,694 | 0 | 188,773 |
Cancellation of treasury shares (shares) | -7,891,000 | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | $694,210 | $356 | $390,249 | $303,605 | $0 |
Balance, shares at Dec. 31, 2012 | 35,613,351 | 35,613,000 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net earnings/(loss) | $124,464 | $105,163 | ($21,106) |
Adjustments to reconcile net earnings/(loss) to net cash used in operating activities: | ' | ' | ' |
Depreciation and amortization | 9,934 | 8,196 | 7,178 |
Real estate-related impairments | 987 | 2,009 | 15,324 |
Stock-based compensation | 9,483 | 8,319 | 7,410 |
Loss on early extinguishment of debt | 3,796 | 5,772 | 0 |
Equity in earnings of unconsolidated entities | -12,805 | -10,233 | -5,849 |
Distributions of earnings from unconsolidated entities | 13,013 | 9,648 | 6,497 |
Deferred tax asset valuation reversal | -8,666 | -77,974 | 0 |
Other | 14,864 | 371 | 1,357 |
Changes in assets and liabilities: | ' | ' | ' |
Increase in real estate | -281,944 | -299,185 | -89,659 |
(Increase)/decrease in deposits on real estate under option or contract | -36,974 | 824 | -6,038 |
(Increase)/decrease in receivables and prepaid expenses and other assets | -18,429 | -6,301 | 3,247 |
Increase in accounts payable and accrued liabilities | 86,604 | 29,385 | 5,542 |
Increase in home sale deposits | 9,397 | 3,519 | 1,961 |
Net cash used in operating activities | -86,276 | -220,487 | -74,136 |
Cash flows from investing activities: | ' | ' | ' |
Purchases of property and equipment | -15,783 | -10,863 | -7,082 |
Payments to purchase investments and securities | -166,619 | -136,823 | -196,401 |
Payments to Acquire Businesses, Net of Cash Acquired | -18,624 | 0 | 0 |
Proceeds from sales and maturities of investment securities | 163,012 | 198,201 | 348,105 |
Decrease/(increase) in restricted cash | 38,938 | -26,792 | -2,802 |
Payments for (Proceeds from) Other Investing Activities | 107 | 121 | -638 |
Net cash provided by investing activities | 1,031 | 23,844 | 141,182 |
Cash flows from financing activities: | ' | ' | ' |
Proceeds from issuance of senior notes | 281,699 | 426,500 | 0 |
Repayment of senior notes | -102,822 | -315,080 | 0 |
Proceeds from issuance of common stock, net | 0 | 87,113 | 0 |
Proceeds from (Payments for) Other Financing Activities | 10,047 | -5,045 | 2,613 |
Net cash provided by financing activities | 188,924 | 193,488 | 2,613 |
Net increase/(decrease) in cash and cash equivalents | 103,679 | -3,155 | 69,659 |
Cash and cash equivalents, beginning of year | 170,457 | 173,612 | 103,953 |
Cash and cash equivalents, end of year | $274,136 | $170,457 | $173,612 |
Business_and_Summary_of_Signif
Business and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
NOTE 1 — BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Organization. Meritage Homes is a leading designer and builder of single-family detached homes based on the number of home closings. We primarily build in the historically high-growth regions of the southern and western United States and offer a variety of homes that are designed to appeal to a wide range of homebuyers, including first-time, move-up, active adult and luxury. We have homebuilding operations in three regions: West, Central and East, which are comprised of eight states: Arizona, Texas, California, Colorado, Florida, North Carolina, South Carolina and Tennessee. Operations within the Carolinas include the Raleigh and Charlotte metropolitan areas, with some Charlotte communities located across the border into South Carolina. In August 2013, we entered the Nashville, Tennessee market through the acquisition of the assets and operations of Phillips Builders LLC and selected assets of Phillips Development LLC ("Phillips Builders"). With this acquisition, we acquired approximately 500 lots. Through our successors, we commenced our homebuilding operations in 1985. In 2012, we commenced limited operations of our wholly-owned title company, Carefree Title Agency, Inc. ("Carefree Title"). Carefree Title's core business lines include title insurance and closing/settlement services we offer to our homebuyers. Carefree Title became fully operational in most of our markets during 2013. Meritage Homes Corporation was incorporated in 1988 in the State of Maryland. | |||||||||||||||||
Our homebuilding and marketing activities are conducted under the name of Meritage Homes in each of our markets, other than Tennessee, where we operate under the Phillips Builders brand. We also operate as Monterey Homes in some markets. At December 31, 2013, we were actively selling homes in 188 communities, with base prices ranging from approximately $130,000 to $1,000,000. | |||||||||||||||||
Basis of Presentation. 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”). Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior year to conform to the current year presentation, including the dis-aggregation of our financial services segment, which includes both our Carefree Title operations, as well as the net earnings of our mortgage and title joint ventures. | |||||||||||||||||
Cash and Cash Equivalents. Liquid investments with an initial maturity of three months or less are classified as cash equivalents. Amounts in transit from title companies for home closings of approximately $26.4 million and $30.4 million are included in cash and cash equivalents at December 31, 2013 and 2012, respectively. Included in our balance as of December 31, 2013 is $68.3 million of money market funds that are invested in short term (three months or less) government securities. | |||||||||||||||||
Restricted Cash. Prior to November 2013, restricted cash consisted of amounts held in restricted accounts as collateral for our letter of credit arrangements. Our restricted cash accounts were invested in money market accounts and United States Government securities, and were $38.9 million at December 31, 2012. In connection with the capacity expansion of our revolving credit facility in November 2013, we transferred our secured letters of credit under our credit facility, thereby returning all restricted cash into unrestricted accounts. | |||||||||||||||||
Investments and Securities. Our investments and securities are comprised of both treasury securities and deposits with money center banks that are FDIC-insured and secured by treasury-backed investments (see additional discussion regarding such deposits in Note 11 to these consolidated financial statements). All of our investments are classified as held-to-maturity and are recorded at amortized cost as we have both the ability and intent to hold them until their respective maturities. The contractual lives of these investments are greater than three months but not exceeding 18 months. Due to their short duration and low contractual interest rates, the amortized cost of the investments approximates fair value with no unrecognized gains and losses or other-than-temporary impairments. | |||||||||||||||||
Real Estate. Real estate is stated at cost unless the asset is determined to be impaired, at which point the inventory is written down to fair value as required by Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment (“ASC 360-10”). Inventory includes the costs of land acquisition, land development, home construction, capitalized interest, real estate taxes, capitalized direct overhead costs incurred during development and home construction that benefit the entire community, less impairments, if any. Land and development costs are typically allocated and transferred to homes under construction when construction begins. Home construction costs are accumulated on a per-home basis, while selling costs are expensed as incurred. 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 the community or phase. When a home closes, we may have incurred costs for goods and services that have not yet been paid. Therefore, an accrued liability to capture such obligations is recorded in connection with the home closing and charged directly to cost of sales. | |||||||||||||||||
We rely on certain estimates to determine our construction and land development costs. Construction and land costs are comprised of direct and allocated costs, including estimated future costs. 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. It is possible that actual results could differ from budgeted amounts for various reasons, including construction delays, labor or material shortages, increases in costs that have not yet been committed, changes in governmental requirements, or other unanticipated issues encountered during construction and development and other factors beyond our control. 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 construction and land costs. | |||||||||||||||||
Typically, a community's life cycle ranges from three to five years, commencing with the acquisition of the land, continuing through the land development phase, if applicable, and concluding with the sale, construction and closing of the homes. Actual community lives will vary based on the size of the community, the sales absorption rate and whether the land purchased was raw, partially-developed or in finished status. Master-planned communities encompassing several phases and super-block land parcels may have significantly longer lives and projects involving smaller finished lot purchases may be shorter. | |||||||||||||||||
All of our land inventory and related real estate assets are reviewed for recoverability quarterly, as our inventory is considered “long-lived” in accordance with GAAP. Our determination of fair value is based on projections and estimates. 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. Our analysis is completed on a quarterly basis with each community or land parcel evaluated individually. For those assets deemed to be impaired, the impairment recognized is measured as the amount by which the assets' carrying amount exceeds their fair value. The impairment of a community is allocated to each lot on a straight-line basis and charged to cost of home closings in the period during which it is determined that the fair value is less than the assets' carrying amount. | |||||||||||||||||
Existing and continuing communities. When projections for the remaining income expected to be earned from existing communities are no longer positive, the underlying real estate assets are not deemed fully recoverable, and further analysis is performed to determine the required impairment. The fair value of the community's assets is determined using either a discounted cash flow model for projects we intend to build out or a market-based approach for projects to be sold. If a market-based approach is used, we determine fair value based on recent comparable sales activity in the local market, adjusted for variances as determined by our knowledge of the region and general real estate expertise. If a discounted cash flow approach is used, we compute our fair value based on a proprietary model. Our key estimates in deriving fair value under our cash flow model are (i) home selling prices in the community adjusted for current and expected sales discounts and incentives, (ii) costs related to the community - both land development and home construction - including costs spent to date and budgeted remaining costs to spend, (iii) projected sales absorption rates, reflecting any product mix change strategies implemented ,or to be implemented, to stimulate the orders pace and expected cancellation rates, (iv) alternative land uses including disposition of all or a portion of the land owned and (v) our discount rate, which is currently 14-16% and varies based on the perceived risk inherent in the community's other cash flow assumptions. These assumptions vary widely across different communities and geographies and are largely dependent on local market conditions. Community-level factors that may impact our key estimates include: | |||||||||||||||||
• | The presence and significance of local competitors, including their offered product type, comparable lot size, and competitive actions; | ||||||||||||||||
• | Economic and related demographic conditions for the population of the surrounding community; | ||||||||||||||||
• | Desirability of the particular community, including unique amenities or other favorable or unfavorable attributes; and | ||||||||||||||||
• | Existing home inventory supplies, including foreclosures and short sales. | ||||||||||||||||
These local circumstances may significantly impact our assumptions and the resulting computation of fair value and are, therefore, closely evaluated by our division personnel in their generation of the discounted cash flow models. The models are also evaluated by regional and corporate personnel for consistency and integration, as decisions that affect pricing or absorption at one community may have resulting consequences for neighboring communities. We typically do not project market improvements in our discounted cash flow models, but may do so in limited circumstances in the latter years of a long-lived community. | |||||||||||||||||
Mothball communities. In certain cases, we may elect to stop development (mothball) of an existing community if we believe the economic performance of the community would be maximized by deferring development for a period of time to allow market conditions to improve. When a community is initially placed into mothball status, it is management's belief that the community is affected by local market conditions that are expected to improve within the next 1-5 years. Therefore, a temporary postponement of construction and development work is expected to yield better overall future returns. The decision may be based on financial and/or operational metrics. If we decide to mothball a community, we will impair it to its fair value as discussed above and then cease future development activity until such a time when management believes that market conditions have improved and economic performance will be maximized. No interest or other costs are capitalized to communities that are designated as mothballed. | |||||||||||||||||
In addition to our quarterly impairment analysis, which is conducted to determine if any current impairments exist, we also conduct a thorough quarterly review of our mothballed communities to determine if they are at risk of future impairment. The financial and operational status and expectations of these communities are analyzed as well as any unique attributes that could be viewed as indicators for future impairments. Adjustments are made accordingly and incremental impairments, if any, are recorded at each re-evaluation. Based on the facts and circumstances available as of December 31, 2013, we do not believe that any of our underperforming or mothballed communities will incur material impairments in the future. Changes in market and/or economic conditions could materially impact the conclusions of this analysis, and there can be no assurances that future impairments will not occur. | |||||||||||||||||
Inventory assessments on inactive assets. For our mothballed communities as well as our land held for future development, our inventory assessments typically include highly subjective estimates for future performance, including the timing of development, the product to be offered, sales rates and selling prices of the product when the community is anticipated to open for sales, and the projected costs to develop and construct the community. We evaluate various factors to develop our forecasts, including the availability of and demand for homes and finished lots within the marketplace, historical, current and future sales trends, and third-party data, if available. Based on these factors, we reach conclusions for future performance based on our judgment. | |||||||||||||||||
Option deposits and pre-acquisition costs. We also evaluate assets associated with future communities for impairments on a quarterly basis. Using similar techniques described in the "Existing and continuing communities" section above, we determine if the income to be generated by our future communities is acceptable to us. If the projections indicate that a community is still meeting our internal investment guidelines and is generating a profit, those assets are determined to be fully recoverable and no impairments are required. In cases where we decide to abandon a project, we will fully impair all assets related to such project and will expense and accrue any additional costs that we are contractually obligated to incur. In certain circumstances, we may elect to continue with a project because it is expected to generate positive cash flows, even though it may not be generating an accounting profit. In such cases, we will impair our pre-acquisition costs and deposits, as necessary, and record an impairment to bring the carrying value to fair value. Refer to Note 2 of these consolidated financial | |||||||||||||||||
statements for further information regarding our impairments. | |||||||||||||||||
Deposits. Deposits paid related to purchase contracts and land options are recorded and classified as Deposits on real estate under contract or option until the related land is purchased. Deposits are reclassified as a component of real estate inventory at the time the deposit is used to offset the acquisition price of the lots based on the terms of the underlying agreements. To the extent they are non-refundable, deposits are charged to expense if the land acquisition is terminated or no longer considered probable. Since the acquisition contracts typically do not require specific performance, we do not consider such contracts to be contractual obligations to purchase the land and our total exposure under such contracts is limited to the loss of the non-refundable deposits and any ancillary capitalized costs. The review of the likelihood of the acquisition of contracted lots is completed quarterly in conjunction with the real estate impairment analysis noted above and therefore, if impaired, the deposits are recorded at the lower of cost or fair value. Our deposits were $51.6 million and $14.4 million as of December 31, 2013 and December 31, 2012, respectively. | |||||||||||||||||
Property and Equipment, net. Property and equipment, net consists of computer and office equipment and model home furnishings. Depreciation is generally calculated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 7 years. Maintenance and repair costs are expensed as incurred. At December 31, 2013 and 2012, property and equipment, net consisted of the following (in thousands): | |||||||||||||||||
At December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Computer and office equipment | $ | 25,221 | $ | 21,948 | |||||||||||||
Model home furnishings | 27,894 | 22,317 | |||||||||||||||
Gross property and equipment | 53,115 | 44,265 | |||||||||||||||
Accumulated depreciation | (31,016 | ) | (28,547 | ) | |||||||||||||
Total | $ | 22,099 | $ | 15,718 | |||||||||||||
Deferred Costs. At December 31, 2013 and 2012, deferred costs representing debt issuance costs totaled approximately $12.2 million and $11.7 million, net of accumulated amortization of approximately $11.2 million and $8.5 million, respectively, and are included on our consolidated balance sheets within Prepaid expenses and other assets. The costs are primarily amortized to interest expense using the straight line method which approximates the effective interest method. | |||||||||||||||||
Investments in Unconsolidated Entities. We use the equity method of accounting for investments in unconsolidated entities over which we exercise significant influence but do not have a controlling interest. Under the equity method, our share of the unconsolidated entities’ earnings or loss is included in Loss from unconsolidated entities, net, or Earnings from financial services, unconsolidated entities and other, net, in our statements of operations. We use the cost method of accounting for investments in unconsolidated entities over which we do not have significant influence. We track cumulative earnings and distributions from each of our ventures. For cash flow classification, to the extent distributions do not exceed earnings, we designate such distributions as return on capital. Distributions in excess of cumulative earnings are treated as return of capital. We evaluate our investments in unconsolidated entities for impairment when events that trigger an evaluation of recoverability present themselves. | |||||||||||||||||
Accrued Liabilities. Accrued liabilities at December 31, 2013 and 2012 consisted of the following (in thousands): | |||||||||||||||||
At December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Accruals related to real estate development and construction activities | $ | 29,992 | $ | 19,954 | |||||||||||||
Payroll and other benefits | 36,232 | 11,871 | |||||||||||||||
Accrued taxes | 22,902 | 3,407 | |||||||||||||||
Warranty reserves | 21,971 | 22,064 | |||||||||||||||
Legal reserves | 16,463 | 16,067 | |||||||||||||||
Real estate note payable (1) | 15,993 | 6,288 | |||||||||||||||
Other accruals | 23,058 | 16,726 | |||||||||||||||
Total | $ | 166,611 | $ | 96,377 | |||||||||||||
(1) Reflects balance of non-recourse notes payable in connection with land purchases | |||||||||||||||||
Revenue Recognition. Revenue from closings of residential real estate is recognized when closings have occurred, the buyer has made the required minimum down payment, obtained necessary financing, the risks and rewards of ownership are transferred to the buyer, and we have no continuing involvement with the property, which is generally the close of escrow. Revenue is reported net of any discounts and incentives. | |||||||||||||||||
Cost of Home Closings. Cost of home closings includes direct home construction costs, closing costs, land acquisition and development costs, development period interest and common costs. Direct construction costs are accumulated during the period of construction and charged to cost of closings under specific identification methods, as are closing costs. Estimates of costs incurred or to be incurred but not paid are accrued and expensed at the time of closing. Land development, acquisition and common costs are allocated to each lot based on the number of lots remaining to close. | |||||||||||||||||
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. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted. | |||||||||||||||||
We record deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available objectively verifiable positive and negative evidence, including scheduled reversals of deferred tax liabilities, whether we are in a cumulative loss position, projected future taxable income, tax planning strategies and recent financial operations. If we determine that we will not be able to realize our deferred tax assets in the future, we will record a valuation allowance, which increases the provision for income taxes. | |||||||||||||||||
We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. | |||||||||||||||||
Advertising Costs. We expense advertising costs as they are incurred. Advertising expense was approximately $7.8 million, $5.5 million and $6.3 million in fiscal 2013, 2012 and 2011, respectively. | |||||||||||||||||
Earnings/(Loss) Per Share. We compute basic earnings/(loss) per share by dividing net earnings/(loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share gives effect to the potential dilution that could occur if securities or contracts to issue common stock that are dilutive were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. In periods of net losses, no dilution is computed. | |||||||||||||||||
Stock-Based Compensation. We account for stock-based compensation in accordance with ASC 718-10, Compensation—Stock Compensation. We use the Black-Scholes model to value stock options granted or modified after January 1, 2006, under this guidance. This guidance also requires us to estimate forfeitures in calculating the expense related to stock-based compensation and to reflect the benefits of tax deductions in excess of recognized compensation expense as both a financing inflow and an operating cash outflow. Awards with either a graded or cliff vesting are expensed on a straight-line basis over the life of the award. See Note 8 for additional discussion. | |||||||||||||||||
401(k) Retirement Plan. We have a 401(k) plan for all full-time Meritage employees (the “Plan”). We match portions of employees’ voluntary contributions, and contributed to the Plan approximately $1.3 million, $1.0 million and $0.7 million for the years ended 2013, 2012 and 2011, respectively. | |||||||||||||||||
Off-Balance Sheet Arrangements - Joint Ventures. In the past, we have participated in land development joint ventures as a means of accessing larger parcels of land and lot positions, expanding our market opportunities, managing our risk profile and leveraging our capital base; however, in recent years, such ventures have not been a significant avenue for us to access lots. See Note 4 for additional discussion of our investments in unconsolidated entities. | |||||||||||||||||
Off-Balance Sheet Arrangements - Other. In the normal course of business, we may acquire lots from various development entities pursuant to option and purchase agreements. The purchase price generally approximates the market price at the date the contract is executed (with possible future escalators). See Note 3 for further discussion. | |||||||||||||||||
We provide letters of credit in support of our obligations relating to the development of our projects and other corporate purposes. Surety bonds to guarantee our performance of certain development and construction activities are generally posted in lieu of letters of credit or cash deposits. The amount of these obligations outstanding at any time varies depending on the stage and level of our development activities, as bonds are generally not released until all development activities under the bond are complete. In the event a bond or letter of credit is drawn upon, we would be obligated to reimburse the issuer. We believe it is unlikely that any significant amounts of these bonds or letters of credit will be drawn upon. The table below outlines our surety bond and letter of credit obligations (in thousands): | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Outstanding | Estimated work | Outstanding | Estimated work | ||||||||||||||
remaining to | remaining to | ||||||||||||||||
complete | complete | ||||||||||||||||
Sureties: | |||||||||||||||||
Sureties related to joint ventures | $ | 87 | $ | 87 | $ | 87 | $ | 87 | |||||||||
Sureties related to owned projects and lots under contract | 191,742 | 86,115 | 87,305 | 38,936 | |||||||||||||
Total Sureties | $ | 191,829 | $ | 86,202 | $ | 87,392 | $ | 39,023 | |||||||||
Letters of Credit (“LOCs”): | |||||||||||||||||
LOCs in lieu of deposits for contracted lots | $ | 1,685 | N/A | $ | — | N/A | |||||||||||
LOCs for land development | 35,883 | N/A | 32,475 | N/A | |||||||||||||
LOCs for general corporate operations | 4,500 | N/A | 4,991 | N/A | |||||||||||||
Total LOCs | $ | 42,068 | N/A | $ | 37,466 | N/A | |||||||||||
Warranty Reserves. We provide home purchasers with limited warranties against certain building defects and have certain obligations related to those post-construction warranties for closed homes. The specific terms and conditions of these limited warranties vary by state, but overall the nature of the warranties include a complete workmanship and materials warranty typically during the first year after the close of the home and a structural warranty that typically extends up to 10 years subsequent to the close of the home. With the assistance of an actuary, we have estimated these reserves for the structural warranty based on the number of homes still under warranty and historical data and trends for our communities. We also use industry data with respect to similar product types and geographic areas in markets where our experience is incomplete to draw a meaningful conclusion. We regularly review our warranty reserves and adjust them, as necessary, to reflect changes in trends as information becomes available. Based on our most recent reviews of warranty costs incurred and increased spending in certain of our markets, we recorded an unfavorable $1.3 million adjustment to our warranty reserve balance in 2013, which increased our cost of sales. No such adjustments were recorded in 2012. A summary of changes in our warranty reserves follows (in thousands): | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Balance, beginning of year | $ | 22,064 | $ | 23,136 | |||||||||||||
Additions to reserve from new home deliveries | 10,939 | 8,047 | |||||||||||||||
Warranty claims | (12,343 | ) | (9,119 | ) | |||||||||||||
Adjustments to pre-existing reserves | 1,311 | — | |||||||||||||||
Balance, end of year | $ | 21,971 | $ | 22,064 | |||||||||||||
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 statements of operations. These reserves are intended to cover costs associated with our contractual and statutory warranty obligations, which include, among other items, claims involving defective workmanship and materials. We believe that our total reserves, coupled with our contractual relationships and rights with our trades and the general liability insurance we maintain, are sufficient to cover our general warranty obligations. However, as unanticipated changes in legal, weather, environmental or other conditions could have an impact on our actual warranty costs, future costs could differ significantly from our estimates. | |||||||||||||||||
Recently Issued Accounting Pronouncements. In April 2013, the Financial Accounting Standards Board ("FASB") issued ASU 2013-04, Liabilities ("ASU 2013-04"), which provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. ASU 2013-04 is effective for us beginning January 1, 2014. We do not anticipate the adoption of ASU 2013-04 to have an effect on our consolidated financial statements or disclosures. |
Real_Estate_and_Capitalized_In
Real Estate and Capitalized Interest | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Inventory Disclosure [Abstract] | ' | ||||||||||||
REAL ESTATE AND CAPITALIZED INTEREST | ' | ||||||||||||
NOTE 2 — REAL ESTATE AND CAPITALIZED INTEREST | |||||||||||||
Real estate consists of the following (in thousands): | |||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||
Homes under contract under construction (1) | $ | 262,633 | $ | 192,948 | |||||||||
Unsold homes, completed and under construction (1) | 147,889 | 107,466 | |||||||||||
Model homes (1) | 81,541 | 62,411 | |||||||||||
Finished home sites and home sites under development | 813,135 | 634,106 | |||||||||||
Land held for development (2) | 52,100 | 56,118 | |||||||||||
Land held for sale | 19,112 | 21,650 | |||||||||||
Communities in mothball status (3) | 28,889 | 38,488 | |||||||||||
$ | 1,405,299 | $ | 1,113,187 | ||||||||||
-1 | Includes the allocated land and land development costs associated with each lot for these homes. | ||||||||||||
-2 | Land held for development primarily reflects land and land development costs related to land where development activity is not currently underway but is expected to begin in the future. In these cases, we may have chosen not to currently develop certain land holdings as they typically represent a portion of a large land parcel that we plan to build out over several years. | ||||||||||||
-3 | Represents communities where we have decided to cease operations (mothball) as we have determined that their economic performance would be maximized by deferring development. In the future, some of these communities may be re-opened while others may be sold to third parties. If we deem our carrying value to not be fully recoverable, we adjust our carrying value for these assets to fair value at the time they are placed into mothball status. As of December 31, 2013, we had five mothballed communities with a carrying value of $26.1 million in our West Region and one mothballed community with a carrying value of $2.8 million in our Central Region. During 2013, we placed one additional community into mothball status and removed five communities totaling $9.6 million out of mothball status. We do not capitalize interest for such mothballed assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are also expensed as incurred. | ||||||||||||
As previously noted, in accordance with ASC 360-10, each of our land inventory and related real estate assets is reviewed for recoverability when impairment indicators are present, as our inventory is considered “long-lived” in accordance with GAAP. Due to the current environment, we evaluate all of our real estate assets for impairment on a quarterly basis. ASC 360-10 requires impairment charges to be recorded if the asset is not deemed recoverable and the fair value of such asset is less than its carrying amounts. Our determination of fair value is based on projections and estimates. We also evaluate alternative product offerings in communities where impairment indicators are present and other strategies for the land exist, such as selling or holding the land for sale. Based on these reviews of all our communities, we recorded $1.0 million, $2.0 million, and $15.3 million in real-estate impairment charges during the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
In the latter part of 2011, we announced our intent to wind-down operations in the Las Vegas, Nevada market. We do not have any remaining operations in Nevada as of December 31, 2013; however, we still own 174 lots that we are marketing for sale or have mothballed. The carrying value of those lots was $11.8 million as of December 31, 2013. | |||||||||||||
Subject to sufficient qualifying assets, we capitalize our development period interest costs incurred in connection with the development and construction of real estate. Capitalized interest is allocated to active real estate when incurred and charged to cost of closings when the related property is delivered. A summary of our capitalized interest is as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Capitalized interest, beginning of year | $ | 21,600 | $ | 14,810 | $ | 11,679 | |||||||
Interest incurred | 51,152 | 46,135 | 43,393 | ||||||||||
Interest expensed | (15,092 | ) | (24,244 | ) | (30,399 | ) | |||||||
Interest amortized to cost of home and land closings | (24,668 | ) | (15,101 | ) | (9,863 | ) | |||||||
Capitalized interest, end of year (1) | $ | 32,992 | $ | 21,600 | $ | 14,810 | |||||||
-1 | Approximately $511,000, $539,000, and $750,000 of the capitalized interest is related to our joint venture investments and is a component of “Investments in unconsolidated entities” in our consolidated balance sheet as of December 31, 2013, 2012 and 2011 respectively. |
Variable_Interest_Entities_and
Variable Interest Entities and Consolidated Real Estate Not Owned | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Variable Interest Entities and Consolidated Real Estate Not Owned [Abstract] | ' | |||||||||||||
VARIABLE INTEREST ENTITIES AND CONSOLIDATED REAL ESTATE NOT OWNED | ' | |||||||||||||
NOTE 3 — VARIABLE INTEREST ENTITIES AND CONSOLIDATED REAL ESTATE NOT OWNED | ||||||||||||||
We enter into purchase and option agreements for land or lots as part of the normal course of business. These purchase and option agreements enable us to acquire properties at one or multiple future dates at pre-determined prices. We believe these acquisition structures reduce our financial risk associated with land acquisitions and holdings and allow us to better maximize our cash position. | ||||||||||||||
Based on the provisions of the relevant accounting guidance, we have concluded that when we enter into a purchase agreement to acquire land or lots from an entity, a variable interest entity, or “VIE”, may be created. We evaluate all option and purchase agreements for land to determine whether they are a VIE. ASC 810, Consolidation, requires that for each VIE, we assess whether we are the primary beneficiary and, if we are, we consolidate the VIE in our financial statements and reflect such assets and liabilities as “Real estate not owned.” The liabilities related to consolidated VIEs are excluded from our debt covenant calculations. | ||||||||||||||
In order to determine if we are the primary beneficiary, we must first assess whether we have the ability to control the activities of the VIE that most significantly impact its economic performance. 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 acquire additional land into the VIE or dispose of land in the VIE not under contract with Meritage; and the ability to change or amend the existing option contract with the VIE. If we are not determined to control such activities, we are not considered the primary beneficiary of the VIE. If we do have the ability to control such activities, we will continue our analysis by determining if we are also expected to absorb a potentially significant amount of the VIE’s losses or, if no party absorbs the majority of such losses, if we will benefit from a potentially significant amount of the VIE’s expected gains. | ||||||||||||||
In substantially all cases, creditors of the entities with which we have option agreements have no recourse against us and the maximum exposure to loss in our option agreements is limited to non-refundable option deposits and any capitalized pre-acquisition costs. Often, we are at risk for items over budget related to land development on property we have under option if we are the land developer. In these cases, we have contracted to complete development at a fixed cost on behalf of the land owner and any budget savings or shortfalls are borne by us. Some of our option deposits may be refundable to us if certain contractual conditions are not performed by the party selling the lots. | ||||||||||||||
The table below presents a summary of our lots under option at December 31, 2013 (dollars in thousands): | ||||||||||||||
Projected Number | Purchase | Option/ | ||||||||||||
of Lots | Price | Earnest Money | ||||||||||||
Deposits–Cash | ||||||||||||||
Purchase and option contracts recorded on balance sheet as Real estate not owned | 12 | $ | 289 | $ | — | |||||||||
Option contracts not recorded on balance sheet — non-refundable deposits, committed (1) | 3,673 | 309,028 | 31,369 | |||||||||||
Purchase contracts not recorded on balance sheet — non-refundable deposits, committed (1) | 2,335 | 119,495 | 17,435 | |||||||||||
Purchase contracts not recorded on balance sheet —refundable deposits, committed | 766 | 21,001 | 625 | |||||||||||
Total committed (on and off balance sheet) | 6,786 | 449,813 | 49,429 | |||||||||||
Total purchase and option contracts not recorded on balance sheet — refundable deposits, uncommitted (2) | 3,821 | 105,407 | 2,166 | |||||||||||
Total lots under contract or option | 10,607 | $ | 555,220 | $ | 51,595 | |||||||||
Total option contracts not recorded on balance sheet (3) | 10,595 | $ | 554,931 | $ | 51,595 | -4 | ||||||||
-1 | Deposits are non-refundable except if certain contractual conditions are not performed by the selling party. | |||||||||||||
-2 | Deposits are refundable at our sole discretion. We have not completed our acquisition evaluation process and we have not internally committed to purchase these lots. | |||||||||||||
-3 | Except for our specific performance contracts recorded on our balance sheet as Real estate not owned, none of our option agreements require us to purchase lots. | |||||||||||||
-4 | Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract” as of December 31, 2013. | |||||||||||||
Generally, our options to purchase lots remain effective so long as we purchase a pre-established minimum number of lots each month or quarter, as determined by the respective agreement. Although the pre-established number is typically structured to approximate our expected rate of home construction starts, during a weakened homebuilding market, we may purchase lots at an absorption level that exceeds our sales and home starts pace needed to meet the pre-established minimum number of lots or restructure our original contract to terms that more accurately reflect our revised sales pace expectations. |
Investments_in_Unconsolidated_
Investments in Unconsolidated Entities | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||||||
INVESTMENTS IN UNCONSOLIDATED ENTITIES | ' | |||||||||||
NOTE 4 - INVESTMENTS IN UNCONSOLIDATED ENTITIES | ||||||||||||
In the past, we have entered into land development joint ventures as a means of accessing larger parcels of land and lot positions, expanding our market opportunities, managing our risk profile and leveraging our capital base. In some circumstances, purchasing land through a joint venture can be beneficial, although we do not view joint ventures as critical to the success of our homebuilding operations and have not entered into any new land joint ventures since 2008. Based on the structure of these joint ventures, they may or may not be consolidated into our results. Our joint venture partners generally are other homebuilders, land sellers or other real estate investors. We generally do not have a controlling interest in these ventures, which means our joint venture partners could cause the venture to take actions we disagree with, or fail to take actions we believe should be undertaken, including the sale of the underlying property to repay debt or recoup all or part of the partners' investments. As of December 31, 2013, we had two active equity-method land ventures. | ||||||||||||
We also participate in two mortgage and one title business joint ventures. The mortgage joint ventures are engaged in mortgage activities and they provide services to both our clients and other homebuyers. Although some of these ventures originate mortgage loans, we have limited recourse related to any mortgages originated by these ventures. Our investments in mortgage and title joint ventures as of December 31, 2013 and 2012 were $2.9 million and $2.0 million, respectively. | ||||||||||||
For land development joint ventures, we, and in some cases our joint venture partners, usually receive an option or other similar arrangement to purchase portions of the land held by the joint venture. Option prices are generally negotiated prices that approximate market value when we enter into the option contract. For these ventures, our share of the joint venture profit relating to lots we purchase from the joint ventures is deferred until homes are delivered by us and title passes to a homebuyer. Therefore, we allocate the portion of such joint venture profit to the land acquired by us as a reduction in the basis of the property. | ||||||||||||
In connection with our land development joint ventures, we may also provide certain types of guarantees to associated lenders. These guarantees can be classified into two categories: (i) Repayment Guarantees and (ii) Completion Guarantees, described in more detail below. Additionally, we have classified a guarantee related to our minority ownership in the South Edge joint venture separately, as there is pending litigation with the venture's lender group regarding that guarantee. | ||||||||||||
(In thousands) | At December 31, 2013 | At December 31, 2012 | ||||||||||
Repayment guarantees | $ | — | $ | 219 | ||||||||
Completion guarantees (1) | — | — | ||||||||||
South Edge guarantee (2) | 13,243 | 13,243 | ||||||||||
Total guarantees | $ | 13,243 | $ | 13,462 | ||||||||
-1 | As our completion guarantees are typically backed by funding from a third party, we believe these guarantees do not represent a potential cash obligation for us, as they require only non-financial performance. | |||||||||||
-2 | As discussed in Note 13, although we have a reserve for the amounts we believe are appropriate, we dispute the enforceability of this guarantee, and ultimate resolution of this matter will be addressed through litigation and/or arbitration. | |||||||||||
Repayment Guarantees. We and/or our land development joint venture partners occasionally provide limited repayment guarantees on a pro rata basis on the debt of land development joint ventures. If such a guarantee were ever to be called or triggered, the maximum exposure to Meritage would generally be only our pro-rata share of the amount of debt outstanding that was in excess of the fair value of the underlying land securing the debt. Our share of these limited pro rata repayment guarantees as of December 31, 2013 and 2012 is presented in the table above (without considering any potential recoveries from the joint venture's land assets). | ||||||||||||
Completion Guarantees. If there is development work to be completed, we and our joint venture partners may be obligated to the project lender(s) to complete construction of the land development improvements if the joint venture does not perform the required development. Provided we and the other joint venture partners are in compliance with these completion obligations, the project lenders are generally obligated to fund these improvements through any financing commitments available under the applicable joint venture development and construction loans. In addition, we and our joint venture partners have from time to time provided unsecured indemnities to joint venture project lenders. These indemnities generally obligate us to reimburse the project lenders only for claims and losses related to matters for which such lenders are held responsible and our exposure under these indemnities is limited to specific matters such as environmental claims. A part of our project acquisition due diligence process is to determine potential environmental risks and generally we or the joint venture entity obtain an independent environmental review. Per the guidance of ASC 460-10, Guarantees, the table above does not reflect any balance related to the completion guarantees as we believe these guarantees are either not applicable or not material to our financial results. | ||||||||||||
Surety Bonds. We and our joint venture partners also indemnify third party surety providers with respect to performance bonds issued on behalf of certain of our joint ventures. If a joint venture does not perform its obligations, the surety bond could be called. If these surety bonds are called and the joint venture fails to reimburse the surety, we and our joint venture partners would be obligated to make such payments. These surety indemnity arrangements are generally joint and several obligations with our joint venture partners. Although a majority of the required work may have been performed, these bonds are typically not released until all development specifications under the bond have been met. None of these bonds have been called to date and we believe it is unlikely that any of these bonds will be called or if called, that any such amounts would be material to us. See the table below for detail of our surety bonds. | ||||||||||||
The joint venture obligations, guarantees and indemnities discussed above are generally provided by us or one or more of our subsidiaries. In joint ventures involving other homebuilders or developers, support for these obligations is generally provided by the parent companies of the joint venture partners. In connection with our periodic real estate impairment reviews, we may accrue for any such commitments where we believe our obligation to pay is probable and can be reasonably estimated. In such situations, our accrual represents the portion of the total joint venture obligation related to our relative ownership percentage. Except as noted above and in Note 13 to these unaudited consolidated financial statements, as of December 31, 2013 and December 31, 2012, we did not have any such reserves. | ||||||||||||
See Note 13 regarding outstanding litigation related to a joint venture project known as “South Edge” or "Inspirada". | ||||||||||||
Summarized condensed financial information related to unconsolidated joint ventures that are accounted for using the equity method was as follows (in thousands): | ||||||||||||
At December 31, 2013 | At December 31, 2012 | |||||||||||
Assets: (1) | ||||||||||||
Cash | $ | 7,299 | $ | 7,650 | ||||||||
Real estate | 34,949 | 36,626 | ||||||||||
Other assets | 3,067 | 3,478 | ||||||||||
Total assets | $ | 45,315 | $ | 47,754 | ||||||||
Liabilities and equity: | ||||||||||||
Accounts payable and other liabilities | $ | 2,889 | $ | 4,748 | ||||||||
Notes and mortgages payable | 13,453 | 14,001 | ||||||||||
Equity of: | ||||||||||||
Meritage (2) | 10,332 | 9,631 | ||||||||||
Other | 18,641 | 19,374 | ||||||||||
Total liabilities and equity | $ | 45,315 | $ | 47,754 | ||||||||
Years Ended December 31, | ||||||||||||
2013 | -2 | 2012 | 2011 | |||||||||
Revenue | $ | 34,553 | $ | 38,230 | $ | 19,881 | ||||||
Costs and expenses | (12,407 | ) | (21,093 | ) | (11,783 | ) | ||||||
Net earnings of unconsolidated entities | $ | 22,146 | $ | 17,137 | $ | 8,098 | ||||||
Meritage’s share of pre-tax earnings (2)(3) | $ | 12,833 | $ | 10,441 | $ | 5,849 | ||||||
-1 | The joint venture financial statements above represent the most recent information available to us. | |||||||||||
-2 | Balance represents Meritage's interest, as reflected in the financial records of the respective joint ventures. This balance may differ from the balance reflected in our consolidated balance sheets due to the following reconciling items: (i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) income deferrals as discussed in Note (3) below and (iv) the cessation of allocation of losses from joint ventures in which we have previously impaired our investment balance to zero and where we have no commitment to fund additional losses. | |||||||||||
-3 | Our share of pre-tax earnings is recorded in “Losses from unconsolidated entities, net” and "Earnings from financial services unconsolidated entities and other, net" on our consolidated statements of operations and excludes joint venture profit related to lots we purchased from the joint ventures. Such profit is deferred until homes are delivered by us and title passes to a homebuyer. | |||||||||||
Our investments in unconsolidated entities include $0.6 million at December 31, 2013 and $0.8 million at December 31, 2012, related to the difference between the amounts at which our investments are carried and the amount of our portion of the venture's equity. These amounts are amortized as the assets of the respective joint ventures are sold. | ||||||||||||
The joint venture assets and liabilities noted in the table above primarily represent the active land ventures, two mortgage and one title business ventures and various inactive ventures. Our total investment in all of these joint ventures is $11.6 million. As of December 31, 2013, we believe these ventures are in compliance with their respective debt agreements, if applicable, and the joint venture debt reflected above is non recourse to us. |
Senior_Senior_Subordinated_Con
Senior, Senior Subordinated, Convertible Senior Notes | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
SENIOR, SENIOR SUBORDINATED, CONVERTIBLE SENIOR NOTES AND OTHER BORROWINGS | ' | ||||||||
NOTE 5 — SENIOR, SENIOR SUBORDINATED, CONVERTIBLE SENIOR NOTES AND OTHER BORROWINGS | |||||||||
Senior, senior subordinated and convertible senior notes consist of the following (in thousands): | |||||||||
At December 31, 2013 | At December 31, 2012 | ||||||||
7.731% senior subordinated notes due 2017 | $ | — | $ | 99,825 | |||||
4.50% senior notes due 2018 | 175,000 | — | |||||||
7.15% senior notes due 2020. At December 31, 2013 and December 31, 2012 there was approximately $3,555 in unamortized premium, net, and $3,528 in unamortized discount, respectively | 303,555 | 196,472 | |||||||
7.00% senior notes due 2022 | 300,000 | 300,000 | |||||||
1.875% convertible senior notes due 2032 | 126,500 | 126,500 | |||||||
$200 million unsecured revolving credit facility | — | — | |||||||
Total | $ | 905,055 | $ | 722,797 | |||||
The indentures for our 4.50%, 7.15% and 7.00% senior notes contain covenants including, among others, limitations on the amount of secured debt we may incur, and limitations on sale and leaseback transactions and mergers. Our convertible senior notes do not have any financial covenants. | |||||||||
Obligations to pay principal and interest on the senior and convertible notes are guaranteed by 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. 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 will 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 nonguarantor subsidiaries, if any, are, individually and in the aggregate, inconsequential. | |||||||||
In November 2013, we completed a $100.0 million add-on to our existing 7.15% senior notes due 2020. The add-on was issued at 106.699% of par value to yield 5.875%. | |||||||||
In March 2013, we issued $175 million aggregate principal amount of 4.50% senior notes due 2018. These notes were issued at par and the proceeds were partially used to pay off the remaining $99.8 million balance of our 7.731% senior subordinated notes due 2017. The debt redemption resulted in $3.8 million of expense reflected as Loss on early extinguishment of debt in our Consolidated Statements of Operations. | |||||||||
In September 2012, we issued $126.5 million aggregate principal amount of 1.875% Convertible Senior Notes due 2032 (the “Convertible Notes”). The Convertible Notes will initially be convertible into shares of our common stock at a conversion rate of 17.1985 shares of our common stock per $1,000 principal amount of Convertible Notes. This corresponds to an initial conversion price of $58.14 per share and represents a 47.5% conversion premium based on the closing price of our common stock on September 12, 2012. The conversion rate is subject to adjustments upon the occurrence of specific events. The Convertible Notes may be redeemed by the note-holders on the fifth, tenth and fifteenth anniversary dates of the Convertible Notes. We may call the Convertible Notes at any time after the fifth anniversary. | |||||||||
In July 2012, we entered into an unsecured revolving $125.0 million million credit facility ("Credit Facility"). In 2013, we amended the Credit Facility, increasing the capacity to $200.0 million, extending the amount available for letters of credit to $120.0 million and extending the maturity date to July 2016. Borrowings under the Credit Facility are unsecured but availability is subject to, among other things, a borrowing base. The Credit Facility also contains certain financial covenants, including (a) a minimum tangible net worth requirement of $360.0 million (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings), and (b) a maximum leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding 60%. In addition, we are required to maintain either (i) an interest coverage ratio (EBITDA to interest expense, as defined therein) of at least 1.50 to 1.00 or (ii) liquidity (as defined therein) of an amount not less than our consolidated interest incurred during the trailing 12 months. No amounts were drawn under the Credit Facility during 2012 or 2013. As of December 31, 2013 we had outstanding letters of credit issued under the Credit Facility totaling $42.1 million, leaving $157.9 million available under the Credit Facility to be drawn. | |||||||||
In April 2012, we completed an offering of $300.0 million aggregate principal amount of 7.00% Senior Notes due 2022. Concurrent with this offering, we repurchased all $285.0 million outstanding of our 6.25% Senior Notes due 2015. We also repurchased an aggregate principal amount of approximately$26.1 million of our 7.731% Senior Subordinated Notes due 2017. The debt redemption transactions resulted in $5.8 million of expense reflected as Loss on extinguishment of debt in our consolidated statements of operations. | |||||||||
Scheduled principal maturities of our senior, senior subordinated and convertible notes as of December 31, 2013 follow (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2014 | $ | — | |||||||
2015 | — | ||||||||
2016 | — | ||||||||
2017 | — | ||||||||
2018 | 175,000 | ||||||||
Thereafter | 730,055 | ||||||||
Total | $ | 905,055 | |||||||
Fair_Value_Disclosures
Fair Value Disclosures | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||
FAIR VALUE DISCLOSURES | ' | |||||||||||||||||
NOTE 6 — FAIR VALUE DISCLOSURES | ||||||||||||||||||
We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement. This guidance defines fair value, establishes a framework for measuring fair value and addresses required disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the company while unobservable inputs are generally developed internally, utilizing management’s estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows: | ||||||||||||||||||
• | Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities. | |||||||||||||||||
• | Level 2 —Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market. | |||||||||||||||||
• | Level 3 — Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the company’s own estimates about the assumptions that market participants would use to value the asset or liability. | |||||||||||||||||
If the only observable inputs are from inactive markets or for transactions which the company evaluates as “distressed”, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs. Refer to Notes 1 and 2 for additional information regarding the valuation of our non-financial assets. | ||||||||||||||||||
A summary of our non-financial assets re-measured at fair value on December 31, 2013 and 2012 is as follows (in thousands): | ||||||||||||||||||
Year Ended | ||||||||||||||||||
December 31, | ||||||||||||||||||
Hierarchy | 2013 | 2012 | ||||||||||||||||
Description: | ||||||||||||||||||
Adjusted Basis of Long-Lived Real Estate Assets (1) (2) | Level 3 | $ | 6,226 | $ | 12,013 | |||||||||||||
Impairments | 987 | $ | 2,009 | |||||||||||||||
Initial Basis of Long-Lived Real Estate Assets | $ | 7,213 | $ | 14,022 | ||||||||||||||
-1 | The fair values in the table above represent only those real estate assets whose carrying values were adjusted in the respective period. | |||||||||||||||||
-2 | The carrying values for these real-estate assets may have subsequently increased or decreased from the fair value reported due to activities that have occurred since the measurement date. | |||||||||||||||||
Financial Instruments: The fair value of our fixed-rate debt is derived from quoted market prices by independent dealers (level 2 inputs as per the discussion above) and is as follows (in thousands): | ||||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||
Aggregate | Estimated Fair | Aggregate | Estimated Fair | |||||||||||||||
Principal | Value | Principal | Value | |||||||||||||||
7.731% senior subordinated notes | N/A | N/A | $ | 99,825 | $ | 102,950 | ||||||||||||
4.50% senior notes due 2018 | $ | 175,000 | $ | 174,125 | N/A | N/A | ||||||||||||
7.15% senior notes | $ | 300,000 | $ | 325,500 | $ | 200,000 | $ | 220,760 | ||||||||||
7.00% senior notes | $ | 300,000 | $ | 318,750 | $ | 300,000 | $ | 328,500 | ||||||||||
1.875% convertible senior notes | $ | 126,500 | $ | 142,154 | $ | 126,500 | $ | 127,449 | ||||||||||
Due to the short-term nature of other financial assets and liabilities, we consider the carrying amounts of our other short-term financial instruments to approximate fair value. |
Earnings_Loss_Per_Share
Earnings (Loss) Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
EARNINGS/(LOSS) PER SHARE | ' | ||||||||||||
NOTE 7 — EARNINGS/(LOSS) PER SHARE | |||||||||||||
Basic and diluted earnings/(loss) per common share were calculated as follows (in thousands, except per share amounts): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic weighted average number of shares outstanding | 36,105 | 34,057 | 32,382 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Convertible debt (1) | 2,176 | 612 | N/A | ||||||||||
Stock options and unvested restricted stock (2) | 520 | 503 | — | ||||||||||
Diluted average shares outstanding | 38,801 | 35,172 | 32,382 | ||||||||||
Net earnings/(loss) as reported | $ | 124,464 | $ | 105,163 | $ | (21,106 | ) | ||||||
Interest attributable to Convertible Senior Notes, net of income taxes | 1,454 | 418 | — | ||||||||||
Net earnings/(loss) for earnings/(loss) per share | $ | 125,918 | $ | 105,581 | $ | (21,106 | ) | ||||||
Basic earnings/(loss) per share | $ | 3.45 | $ | 3.09 | $ | (0.65 | ) | ||||||
Diluted earnings/(loss) per share (1) (2) | $ | 3.25 | $ | 3 | $ | (0.65 | ) | ||||||
Antidilutive stock options not included in the calculation of diluted earnings per share | 7 | 256 | 1,731 | ||||||||||
-1 | In accordance with ASC 260-10, Earnings Per Share, ("ASC 260-10") we calculate the dilutive effect of convertible securities using the "if-converted" method. Reflects the converted shares and the interest savings (post-tax) of our $126.5 million of 1.875% Convertible Senior Notes. | ||||||||||||
-2 | For periods with a net loss, no options or non-vested shares are included in the dilution calculation as all options and non-vested shares outstanding are considered anti-dilutive. |
Stock_Based_Compensation
Stock Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
STOCK BASED COMPENSATION | ' | ||||||||||||||||
NOTE 8 — STOCK BASED AND DEFERRED COMPENSATION | |||||||||||||||||
We have a stock compensation plan, the Meritage Stock Option Plan (the “Plan”), that was adopted in 2006, which superceded a prior stock compensation plan and which has been amended from time to time. The Plan was approved by our stockholders and is administered by our Board of Directors. The provisions of the Plan allow for the grant of stock appreciation rights, restricted stock awards, performance share awards and performance-based awards in addition to non-qualified and incentive stock options. The Plan authorizes awards to officers, key employees, non-employee directors and consultants for up to 8,950,000 shares of common stock, of which 965,404 shares remain available for grant at December 31, 2013. We believe that such awards provide a means of performance-based compensation to attract and retain qualified employees and better align the interests of our employees with those of our stockholders. Non-vested stock awards and stock options are usually granted with either a three-year or five-year ratable vesting period, with a three-year cliff vesting for performance-based awards. | |||||||||||||||||
We have not granted any stock options since 2009. A summary of remaining stock option activity from stock options granted prior to 2010 is provided below. | |||||||||||||||||
Summary of Stock Option Activity: | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price | Contractual | ||||||||||||||||
Life | |||||||||||||||||
(In thousands) | |||||||||||||||||
Options outstanding at beginning of year | 609,585 | $ | 27.44 | ||||||||||||||
Granted | — | N/A | |||||||||||||||
Exercised | (347,370 | ) | $ | 33.4 | |||||||||||||
Cancelled | (3,400 | ) | $ | 14 | |||||||||||||
Outstanding at end of year | 258,815 | $ | 19.63 | 1.35 | $ | 7,340 | |||||||||||
Vested and expected to vest at end of year | 258,815 | $ | 19.63 | 1.35 | $ | 7,340 | |||||||||||
Exercisable at end of year | 225,415 | $ | 20.36 | 1.22 | $ | 6,229 | |||||||||||
Price range of options exercised | $8.06-$44.44 | ||||||||||||||||
Price range of options outstanding | $11.48-$42.82 | ||||||||||||||||
Total shares reserved for existing or future grants at end of year | 2,283,114 | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2012 | 2011 | ||||||||||||||||
Options | Weighted | Options | Weighted | ||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Price | Price | ||||||||||||||||
Options outstanding at beginning of year: | 897,767 | $ | 23.56 | 1,332,767 | $ | 23.8 | |||||||||||
Granted | — | N/A | — | N/A | |||||||||||||
Exercised | (282,082 | ) | $ | 15.12 | (171,800 | ) | $ | 15.21 | |||||||||
Cancelled | (6,100 | ) | $ | 25.73 | (263,200 | ) | $ | 30.24 | |||||||||
Outstanding at end of year | 609,585 | $ | 27.44 | 897,767 | $ | 23.56 | |||||||||||
Exercisable at end of year | 471,760 | $ | 30.93 | 550,359 | $ | 26.29 | |||||||||||
Price range of options exercised | $ 8.06 - $34.30 | $ 8.06 - $21.10 | |||||||||||||||
Price range of options outstanding | $ 8.06 - $44.44 | $ 8.06 - $44.44 | |||||||||||||||
Stock options Outstanding at December 31, 2013: | |||||||||||||||||
Stock Options Outstanding | Stock Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Number | Weighted | Weighted | Number | Weighted | ||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||
Contractual | Exercise Price | Exercise Price | |||||||||||||||
Life | |||||||||||||||||
$11.48 - $14.00 | 59,453 | 1.73 | $ | 13.8 | 29,953 | $ | 13.75 | ||||||||||
$15.98 - $19.80 | 35,142 | 0.99 | $ | 16.06 | 34,542 | $ | 16.02 | ||||||||||
$19.90 - $19.90 | 139,840 | 1.38 | $ | 19.9 | 139,840 | $ | 19.9 | ||||||||||
$22.11 - $22.11 | 6,300 | 2.61 | $ | 22.11 | 3,000 | $ | 22.11 | ||||||||||
$42.82 - $42.82 | 18,080 | 0.08 | $ | 42.82 | 18,080 | $ | 42.82 | ||||||||||
258,815 | 225,415 | ||||||||||||||||
The total intrinsic value of option exercises for the years ended December 31, 2013, 2012 and 2011 was $4.8 million, $5.4 million and $1.4 million, respectively. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the stock option. | |||||||||||||||||
Summary of Nonvested (Restricted) Shares Activity: | |||||||||||||||||
In addition to the stock options discussed above, we grant time-based and performance-based restricted shares. Performance-based restricted shares are only granted to our senior executive management group. All performance shares only vest upon the attainment of certain financial and operational criteria as established and approved by our Board of Directors. | |||||||||||||||||
Nonvested | Weighted | Nonvested | Weighted | ||||||||||||||
Restricted Share | Average | Restricted | Average | ||||||||||||||
Activity | Grant Date | Share Activity | Grant Date | ||||||||||||||
(time-based) | Fair Value | (performance- | Fair Value | ||||||||||||||
Based) | |||||||||||||||||
Outstanding at January 1, 2011 | 465,251 | $ | 19.01 | 202,500 | $ | 16.91 | |||||||||||
Granted | 357,000 | $ | 25.57 | 56,250 | $ | 25.65 | |||||||||||
Vested (Earned/Released) | (141,335 | ) | $ | 17.76 | (33,750 | ) | $ | 14.27 | |||||||||
Forfeited (1) | (31,400 | ) | $ | 23.23 | (33,750 | ) | 14.27 | ||||||||||
Outstanding as of December 31, 2011 | 649,516 | $ | 22.68 | 191,250 | $ | 20.41 | |||||||||||
Granted | 386,500 | $ | 27.21 | 56,250 | $ | 20.72 | |||||||||||
Vested (Earned/Released) | (166,566 | ) | $ | 18.92 | (33,750 | ) | $ | 14.27 | |||||||||
Forfeited (1) | (43,800 | ) | $ | 25.1 | (33,750 | ) | $ | 14.27 | |||||||||
Outstanding at December 31, 2012 | 825,650 | $ | 25.43 | 180,000 | $ | 22.81 | |||||||||||
Granted | 355,795 | $ | 42.78 | 62,500 | $ | 42.56 | |||||||||||
Vested (Earned/Released) | (215,850 | ) | $ | 41.72 | (67,500 | ) | $ | 41.97 | |||||||||
Forfeited (1) | (81,700 | ) | $ | 31.27 | — | N/A | |||||||||||
Outstanding at December 31, 2013 | 883,895 | $ | 32.22 | 175,000 | $ | 30.1 | |||||||||||
-1 | Forfeitures on time-based nonvested shares are a result of terminations of employment, while forfeitures on performance-based nonvested shares are a result of failing to attain certain goals as outlined in our executive management group's compensation agreements. | ||||||||||||||||
Compensation cost related to time-based restricted stock awards is measured as of the closing price on the date | |||||||||||||||||
of grant and is expensed 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 718-10-25-20, Compensation – Stock Compensation, which requires an assessment of probability of | |||||||||||||||||
attainment of the performance target. As our performance targets are annual in nature, once we determine that the performance | |||||||||||||||||
target outcome is probable, the year-to-date expense is recorded and the remaining expense is recorded on a straight-line basis | |||||||||||||||||
through the end of the award’s vesting period. Below is a summary of compensation expense and stock award activity (in thousands): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Stock-based compensation expense | $ | 9,483 | $ | 8,319 | $ | 7,410 | |||||||||||
Cash received by Company from exercises | $ | 11,601 | $ | 4,267 | $ | 2,613 | |||||||||||
The following table includes additional information regarding our Plan (dollars in thousands): | |||||||||||||||||
As of | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Unrecognized stock-based compensation cost | $ | 17,385 | $ | 13,072 | |||||||||||||
Weighted average years remaining vesting period | 2.18 | 2.17 | |||||||||||||||
Total equity awards outstanding (1) | 1,318 | 1,615 | |||||||||||||||
(1) Includes vested and unvested options outstanding and unvested restricted stock awards. | |||||||||||||||||
In 2013, we began to offer a non-qualified deferred compensation plan ("deferred compensation plan") to highly compensated employees in order to allow them additional pre-tax income deferrals above and beyond the limited caps that qualified plans, such as 401k plans, impose on highly compensated employees. We do not currently offer a contribution match on the deferred compensation plan. All contributions to the plan to date have been funded by the employees and, therefore, we have no associated expense related to the deferred compensation plan for the years ended December 31, 2013, 2012 and 2011. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
INCOME TAXES | ' | ||||||||||||
NOTE 9 — INCOME TAXES | |||||||||||||
Components of income tax expense/(benefit) are as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current taxes: | |||||||||||||
Federal | $ | 43,675 | $ | (589 | ) | $ | — | ||||||
State | 1,345 | 122 | 730 | ||||||||||
45,020 | (467 | ) | 730 | ||||||||||
Deferred taxes: | |||||||||||||
Federal | 10,232 | (62,581 | ) | — | |||||||||
State | (2,044 | ) | (13,261 | ) | — | ||||||||
8,188 | (75,842 | ) | — | ||||||||||
Total | $ | 53,208 | $ | (76,309 | ) | $ | 730 | ||||||
Income taxes differ for the years ended December 31, 2013, 2012 and 2011, from the amounts computed using the expected federal statutory income tax rate of 35% as a result of the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected taxes at current federal statutory income tax rate | $ | 62,185 | $ | 10,099 | $ | (7,132 | ) | ||||||
State income taxes, net of federal tax benefit | 7,967 | 1,878 | 475 | ||||||||||
Change in valuation allowance | (8,666 | ) | (85,460 | ) | 4,126 | ||||||||
Change in state effective tax rate | — | (788 | ) | 1,750 | |||||||||
Manufacturing deduction | (4,910 | ) | — | — | |||||||||
Federal tax credits | (3,614 | ) | (2,064 | ) | — | ||||||||
Net interest adjustments | — | (589 | ) | — | |||||||||
Non-deductible costs and other | 246 | 615 | 1,511 | ||||||||||
Income tax expense/(benefit) | $ | 53,208 | $ | (76,309 | ) | $ | 730 | ||||||
Due to the effects of the deferred tax asset valuation allowance and reversal, carrybacks of net operating losses (“NOLs”), and changes in unrecognized tax benefits, the effective tax rates in 2013, 2012 and 2011 are not meaningful percentages as there is no correlation between the effective tax rates and the amount of pretax income or losses for those periods. | |||||||||||||
Deferred tax assets and liabilities are netted on our balance sheet by tax jurisdiction. Net overall tax assets for all jurisdictions are grouped and included as a separate asset. Net overall deferred tax liabilities for all jurisdictions are grouped and included in other liabilities. At December 31, 2013, we have a net deferred tax asset of $70.4 million. We also have net deferred tax liabilities of $2.8 million. Deferred tax assets and liabilities are comprised of timing differences at December 31 (in thousands) as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Real estate | $ | 23,895 | $ | 27,611 | |||||||||
Goodwill | 8,077 | 10,227 | |||||||||||
Warranty reserve | 8,414 | 8,431 | |||||||||||
Wages payable | 9,956 | 1,092 | |||||||||||
Reserves and allowances | 1,102 | 931 | |||||||||||
Equity-based compensation | 4,995 | 5,449 | |||||||||||
Accrued expenses | 6,235 | 6,079 | |||||||||||
Net operating loss carry-forwards | 11,471 | 27,881 | |||||||||||
Federal tax credits | — | 3,176 | |||||||||||
Other | 279 | 282 | |||||||||||
Total deferred tax assets | 74,424 | 91,159 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Deferred revenue | 3,670 | 3,668 | |||||||||||
Prepaids | 690 | 586 | |||||||||||
Fixed assets | (340 | ) | 265 | ||||||||||
Total deferred tax liabilities | 4,020 | 4,519 | |||||||||||
Net total deferred tax assets | 70,404 | 86,640 | |||||||||||
Valuation allowance | — | (8,666 | ) | ||||||||||
Deferred tax assets, net | 70,404 | 77,974 | |||||||||||
Other deferred tax liability - state franchise taxes | 2,750 | 2,132 | |||||||||||
Net deferred tax assets and liabilities | $ | 67,654 | $ | 75,842 | |||||||||
At December 31, 2013 and December 31, 2012, we have no unrecognized tax benefits due to the lapse of the statute of limitations and completion of audits for prior years. We believe that our current income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change. Our policy is to accrue interest and penalties on unrecognized tax benefits and include them in federal income tax expense. | |||||||||||||
In accordance with ASC 740-10, Income Taxes ("ASC 740"), we determine our deferred tax assets and liabilities by taxing jurisdiction. We evaluate our deferred tax assets, including the benefit from NOLs, by jurisdiction to determine if a valuation allowance is required. Companies must assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more likely than not” standard with significant weight being given to evidence that can be objectively verified. This assessment considers, among other matters, the nature, frequency and severity of cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, experiences with operating losses and experiences of utilizing tax credit carryforwards and tax planning alternatives. | |||||||||||||
We recorded a full non-cash valuation allowance against all of our deferred tax assets during 2008 due to economic conditions and the weight of negative evidence at that time. During the second quarter of 2012, we determined that the positive evidence exceeded the negative evidence in the tax jurisdiction of Florida and that it was more likely than not that most of the deferred tax assets and NOL carryovers for the Florida tax jurisdiction would be realized. In the fourth quarter of 2012, we reversed the valuation allowance against our federal deferred tax assets and those in most of our state jurisdictions because the weight of the positive evidence in those jurisdictions exceeded that of the negative evidence. During 2013, we reversed and utilized $8.7 million of additional state allowances. At December 31, 2013, we have no remaining non-cash valuation allowance. | |||||||||||||
In evaluating the need for a non-cash valuation allowance against our deferred tax assets at December 31, 2013, we considered all available and objectively verifiable positive and negative evidence. The remaining valuation allowance at December 31, 2012 was for certain state jurisdictions which have a shorter NOL carryforward utilization period or a large NOL carryforward relative to their current earnings. In 2013, the remaining valuation allowance for these state jurisdictions was evaluated for additional positive evidence. Based on strong current and expected earnings, it was determined that if was more likely than not that our state NOL carryforwards would be utilized, and the valuation allowance was reversed. | |||||||||||||
At December 31, 2013 and December 31, 2012, we had a valuation allowance against deferred tax assets as follows (in thousands): | |||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||
State | — | 8,666 | |||||||||||
Total Valuation Allowance | $ | — | $ | 8,666 | |||||||||
Our future NOL and deferred tax asset realization depends on sufficient taxable income in the carryforward periods under existing tax laws. Federal NOL carryforwards may be used to offset future taxable income for 20 years. State NOL carryforwards may be used to offset future taxable income for a period of time ranging from 5 to 20 years, depending on the state jurisdiction. At December 31, 2013, we had no remaining un-utilized federal NOL carryforward or federal tax credits. At December 31, 2013, we also had tax benefits for state NOL carryforwards of $11.5 million that begin to expire in 2014 depending on the state jurisdiction. | |||||||||||||
At December 31, 2013, we have income taxes payable of $18.2 million, which primarily consists of current federal and state tax accruals as well as interest that we expect to pay within one year for having amended prior-year state tax returns. This amount is recorded in accrued liabilities in the accompanying balance sheet at December 31, 2013. | |||||||||||||
We conduct business and are subject to tax in the U.S. and several states. With few exceptions, we are no longer subject to U.S. federal, state, or local income tax examinations by taxing authorities for years prior to 2009. We are not subject to any federal or state income tax examination at this time. | |||||||||||||
The tax benefits from our NOLs, built-in losses, and tax credits would be materially reduced or potentially eliminated if we experience an “ownership change” as defined under Internal Revenue Code (“IRC”) §382. Based on our analysis performed as of December 31, 2013 we do not believe that we have experienced an ownership change. As a protective measure, our stockholders held a Special Meeting of Stockholders on February 16, 2009 and approved an amendment to our Articles of Incorporation that restricts certain transfers of our common stock. The amendment is intended to help us avoid an unintended ownership change and thereby preserve the value of our tax benefits for future utilization. | |||||||||||||
On January 1, 2013, Congress passed the American Taxpayer Relief Act of 2012 (the “Act”), which the President signed into law on January 2, 2013. The Act extended certain tax provisions which have a retroactive effect on 2012. Among other things, the Act extended for two years the availability of a business tax credit under IRC §45L for building new energy efficient homes which originally was set to expire at the end of 2011. Under ASC 740, the effects of new legislation are recognized in the period that includes the date of enactment, regardless of the retroactive benefit. In accordance with this guidance, we recorded a tax effected benefit of approximately $1.7 million in 2013 related to the extension of the IRC §45L tax credit for the qualifying new energy efficient homes that we sold in 2012. Additional IRC §45L credits for qualifying homes sold in 2013 produced a net benefit of $2.0 million. | |||||||||||||
On September 13, 2013, the Internal Revenue Service issued final regulations regarding capitalization of tangible personal property. Under ASC 740, this is considered to be a change in tax law. Although the final regulations are generally effective beginning on or after January 1, 2014, ASC 740 requires that the effect of a change in tax law be recognized as of the enactment date. Our review and analysis indicates that there was no impact on our deferred tax balances for 2013. |
Supplemental_Disclosure_of_Cas
Supplemental Disclosure of Cash Flow Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ' | ||||||||||||
NOTE 10 — SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||
The following table presents certain supplemental cash flow information (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Cash paid during the year for: | |||||||||||||
Interest, net of interest capitalized | $ | 9,444 | $ | 21,276 | $ | 28,871 | |||||||
Income taxes | $ | 25,688 | $ | 402 | $ | 759 | |||||||
Non-cash operating activities decrease: | |||||||||||||
Real estate not owned | $ | 289 | $ | — | $ | (866 | ) | ||||||
Real estate acquired through notes payable | $ | (9,705 | ) | $ | (6,288 | ) | $ | — | |||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 11 — RELATED PARTY TRANSACTIONS | |
From time to time, in the normal course of business, we have transacted with related or affiliated companies and with certain of our officers and directors. We believe that the terms and fees negotiated for all transactions listed below are no less favorable than those that could be negotiated in arm’s length transactions. | |
We charter aircraft services from companies in which Steve Hilton, our Chairman and CEO, has a significant ownership interest. Payments made to these companies were approximately $359,000 , $330,000 and $288,000 for the years ended December 31, 2013 , 2012 and 2011 , respectively. | |
During 2009, we entered into an FDIC insured bank deposit account agreement with Alliance Bank of Arizona (“Alliance Bank”) through the Certificate of Deposit Account Registry Service (“CDARS”). In 2012, we entered into an additional FDIC insured bank deposit account agreement with Alliance Bank through the Insured Cash Sweep Service ("ICS"). CDARS and ICS are accepted and recognized services through which participating banks may accept and provide FDIC insurance coverage for large deposits that would otherwise exceed FDIC insurance limits (currently $250,000) by placing, as custodian for the deposit customer (Meritage), that portion of the deposit exceeding FDIC insurance limits with other CDARS and ICS banks participating in the programs such that for FDIC insurance purposes, the deposit is divided into insured amounts and deposited with other network banks to allow for full FDIC coverage. CDARS and ICS deposits differ in that ICS deposits may offer "on demand" withdrawals whereas CDARS are certificates of deposits with pre-determined maturity dates and interest rates. At December 31, 2013 and 2012, we had cash deposits in the aggregate amount of $89.5 million and $102.1 million, respectively, through Alliance Bank as the CDARS custodian or relationship bank and $157.5 million and $84.2 million, respectively, through Alliance Bank as the ICS custodian or relationship bank. Alliance Bank has divided these amounts into FDIC insured amounts deposited with other CDARS and ICS participating FDIC insured institutions. We do not pay any separate fees to Alliance Bank for these programs. Rather, Alliance Bank receives a small fee from the other CDARS and ICS institutions for certain funds placed. Robert Sarver, a Meritage director, is a director and the chief executive officer of Western Alliance Bancorporation ("Western Alliance"), the parent company of Alliance Bank. In addition, Steven Hilton, our Chairman and CEO is also a director of Western Alliance. We earned market-rate interest on deposits placed with Western Alliance pursuant to the CDARS and ICS programs of $654,000, $687,000, and $767,000 in 2013, 2012, and 2011, respectively. |
Operating_and_Reporting_Segmen
Operating and Reporting Segments | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||
OPERATING AND REPORTING SEGMENTS | ' | ||||||||||||||||||||||||
NOTE 12 — OPERATING AND REPORTING SEGMENTS | |||||||||||||||||||||||||
We operate with two principal business segments: homebuilding and financial services. As defined in ASC 280-10, Segment Reporting, we have seven homebuilding operating segments. These segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes and providing warranty and customer services. We aggregate our homebuilding operating segments into a reporting segment based on similar long-term economic characteristics and geographical proximity. Our current reportable homebuilding segments are as follows: | |||||||||||||||||||||||||
West: Arizona, California and Colorado (1) | |||||||||||||||||||||||||
Central: Texas | |||||||||||||||||||||||||
East: Florida, the Carolinas and Tennessee | |||||||||||||||||||||||||
(1) Activity for our wind-down Nevada operations is reflected in the West Region's results. | |||||||||||||||||||||||||
Management’s evaluation of segment performance is based on segment operating income, which we define as homebuilding and land revenues less cost of home construction, commissions and other sales costs, land development and other land sales costs and other costs incurred by or allocated to each segment, including impairments. 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, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Revenue (1): | |||||||||||||||||||||||||
West | $ | 937,050 | $ | 600,227 | $ | 366,265 | |||||||||||||||||||
Central | 508,961 | 392,678 | 395,638 | ||||||||||||||||||||||
East | 368,648 | 200,769 | 99,341 | ||||||||||||||||||||||
Consolidated total | 1,814,659 | 1,193,674 | 861,244 | ||||||||||||||||||||||
Homebuilding segment operating income: | |||||||||||||||||||||||||
West | 131,352 | 44,727 | 5,037 | ||||||||||||||||||||||
Central | 38,499 | 17,790 | 11,042 | ||||||||||||||||||||||
East | 39,557 | 15,283 | 6,858 | ||||||||||||||||||||||
Total homebuilding segment operating income (2) | 209,408 | 77,800 | 22,937 | ||||||||||||||||||||||
Financial services segment profit | 15,954 | 10,255 | 6,563 | ||||||||||||||||||||||
Corporate and unallocated costs (3) | (31,216 | ) | (22,619 | ) | (20,925 | ) | |||||||||||||||||||
Loss from unconsolidated entities, net | (378 | ) | (224 | ) | (714 | ) | |||||||||||||||||||
Interest expense | (15,092 | ) | (24,244 | ) | (30,399 | ) | |||||||||||||||||||
Loss on early extinguishment of debt | (3,796 | ) | (5,772 | ) | — | ||||||||||||||||||||
Other income/(loss), net | 2,792 | $ | (6,342 | ) | 2,162 | ||||||||||||||||||||
Net earnings/(loss) before income taxes | $ | 177,672 | $ | 28,854 | $ | (20,376 | ) | ||||||||||||||||||
-1 | Revenue includes the following land closing revenue, by segment: 2013 – $11.6 million in the West Region, $16.2 million in the Central Region and $3.5 million in the East Region; 2012 – $6.5 million in the West Region, $2.0 million in the Central Region and $790,000 in the East Region; 2011 – $360,000 in the Central Region. | ||||||||||||||||||||||||
-2 | Operating income includes the following real-estate related and joint venture related impairments: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
West | $ | 514 | $ | 1,618 | $ | 11,333 | |||||||||||||||||||
Central | 235 | 219 | 2,896 | ||||||||||||||||||||||
East | 238 | 172 | 1,095 | ||||||||||||||||||||||
Total | $ | 987 | $ | 2,009 | $ | 15,324 | |||||||||||||||||||
-3 | Balance consists primarily of corporate costs and numerous shared service functions such as finance and treasury that are not allocated to the homebuilding or financial reporting segments. | ||||||||||||||||||||||||
At December 31, 2013 | |||||||||||||||||||||||||
West | Central | East | Financial Services | Corporate and | Total | ||||||||||||||||||||
Unallocated (1) | |||||||||||||||||||||||||
Deposits on real estate under option or contract | $ | 26,415 | $ | 12,198 | $ | 12,982 | $ | — | $ | — | $ | 51,595 | |||||||||||||
Real estate | 800,288 | 369,464 | 235,547 | — | — | 1,405,299 | |||||||||||||||||||
Investments in unconsolidated entities | 204 | 8,941 | 50 | — | 2,443 | 11,638 | |||||||||||||||||||
Other assets (2) | 26,900 | 165,403 | 31,372 | 497 | 310,657 | 534,829 | |||||||||||||||||||
Total assets | $ | 853,807 | $ | 556,006 | $ | 279,951 | $ | 497 | $ | 313,100 | $ | 2,003,361 | |||||||||||||
At December 31, 2012 | |||||||||||||||||||||||||
West | Central | East | Financial Services | Corporate and | Total | ||||||||||||||||||||
Unallocated (3) | |||||||||||||||||||||||||
Deposits on real estate under option or contract | $ | 4,419 | $ | 7,168 | $ | 2,764 | $ | — | $ | — | $ | 14,351 | |||||||||||||
Real estate | 647,316 | 305,100 | 160,771 | — | — | 1,113,187 | |||||||||||||||||||
Investments in unconsolidated entities | 365 | 10,645 | 16 | — | 1,059 | 12,085 | |||||||||||||||||||
Other assets (4) | 24,935 | 132,546 | 25,914 | 297 | 252,247 | 435,939 | |||||||||||||||||||
Total assets | $ | 677,035 | $ | 455,459 | $ | 189,465 | $ | 297 | $ | 253,306 | $ | 1,575,562 | |||||||||||||
(1)(3)Balance consists primarily of cash and other corporate assets not allocated to the reporting segments. | |||||||||||||||||||||||||
(2)(4) Balance consists primarily of cash and securities and our deferred tax asset. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
COMMITMENTS AND CONTINGENCIES | ' | |||
NOTE 13 — COMMITMENTS AND CONTINGENCIES | ||||
We are involved in various routine legal proceedings incidental to our business, some of which are covered by insurance. With respect to most pending litigation matters, our ultimate legal and financial responsibility, if any, cannot be estimated with certainty and our actual future expenditure to resolve those matters could prove to be different from the amount that we accrued or reserved. On a quarterly basis, our senior management and legal team conduct an in-depth review of all active legal claims and litigation matters and we record a legal or warranty accrual representing the estimated total expense required to resolve each such matter. We have reserved approximately $16.5 million related to non-warranty related litigation and asserted claims. In addition, our $22.0 million warranty reserve includes accruals for all construction defect claims that are similarly recorded in an amount we believe will be necessary to resolve those construction defect claims. Except as may be specifically disclosed herein, we currently believe that any reasonably possible additional losses from existing claims and litigation in excess of our existing reserves and accruals would be immaterial, individually and in the aggregate, to our financial results. | ||||
Joint Venture Litigation | ||||
We are a defendant in a lawsuit filed by the lenders related to a project known as “South Edge” or “Inspirada”. We are also a party to a demand for arbitration made by an entity controlled by certain co-venturers, which demand was made by that entity as Estate Representative of bankrupt South Edge, LLC. The project involves a large master-planned community located in Henderson, Nevada, which was acquired by an unconsolidated joint venture with capital supplied by us and our co-venturers, and a syndicated loan for the project. In connection with the loan obtained by the venture, we provided a narrowly crafted repayment guarantee that could only be triggered upon a “bankruptcy event”. That guarantee covers our 3.53% pro rata share of the project financing. | ||||
On December 9, 2010, three of the lenders filed a petition seeking to place the venture into an involuntary bankruptcy. On June 6, 2011, we received a demand letter from the lenders, requesting full payment of $13.2 million, including past-due interest and penalties, the lenders claimed to be owed under the springing repayment guarantee. The lenders claim that the involuntary bankruptcy filed by three of the lenders triggered the “springing” repayment guarantee. We do not believe the lenders have an enforceable position associated with their $13.2 million claim and do not believe we should be required to pay such amount because, among other reasons, the lenders breached their contract with us by refusing to accept the April 2008 full tender of our performance and by refusing to release their lien in connection with our second and final takedown in this project and we do not believe the repayment guarantee was triggered by the lenders’ filing of the involuntary bankruptcy. As a result, on August 19, 2011, we filed a lawsuit against JP Morgan Chase Bank, NA (“JP Morgan”) in the Court of Common Pleas in Franklin County, Ohio (Case No. 11CVH0810353) regarding the repayment guarantee. In reaction to that lawsuit, on August 25, 2011, JP Morgan filed a lawsuit against us in the US District Court of Nevada, which is currently being prosecuted in the name of JP Morgan's agent, ISG Insolvency Group, Inc. regarding the same issues addressed in the Ohio litigation. The Ohio action and the Nevada action have been consolidated. On October 26, 2011, the Bankruptcy Court approved a Plan pursuant to which (i) the lenders have received all payments to which they are entitled, (ii) the project has been conveyed to Inspirada Builders, LLC, which is an entity owned by four of the co-venturers in the South Edge entity (KB Home, Toll Brothers, Pardee Homes and Beazer Homes), and (iii) the four co-venturer builders claim to have succeeded to the lenders' repayment guarantee claim against Meritage. | ||||
On September 4, 2012, the Court ruled on a motion for summary judgment that JP Morgan has standing to pursue its repayment guarantee claims against Meritage, that Meritage was liable thereunder to JP Morgan and that the parties should be permitted to conduct discovery with respect to the amount of damages to which JP Morgan is entitled under the repayment guarantee. Following limited discovery, JP Morgan filed a motion for summary judgment with respect to damages, and on June 17, 2013 the Court granted the motion, ruling that Meritage owes JP Morgan $15,053,857. Later, on July 8, 2013, the Court entered Judgment in favor of JP Morgan in the amount of $15,753,344, which included an additional $699,487 for pre-judgment interest that accrued between December 6, 2012 and the date of the Judgment. We immediately appealed the Court's rulings, which is currently pending. On July 17, 2013 we posted a supersedeas bond in the amount of $16,050,604 staying enforcement of the Judgment, which was approved by the Court on July 17, 2013. Pursuant to a stipulation between the parties, the bond amount included the amount of the Judgment and additional sums for a potential award of post-judgment interest and attorneys' fees on appeal. We disagree with many of the conclusions and findings contained in the Court's order, and have challenged and will continue to challenge the rulings. In addition, we believe that the four above-named builders are liable to Meritage for any amounts that Meritage may ultimately be required to pay under the repayment guarantee, and we have filed claims against those builders to, among other things, recover from them any amounts Meritage may be required to pay under the repayment guarantee. | ||||
In March 2012, Inspirada Builders, LLC, as Estate Representative of South Edge, LLC (the original joint venture) filed demand for arbitration in the United States Bankruptcy Court in the District of Nevada against Meritage Homes of Nevada, Inc. seeking: (1) $13.5 million, relating to alleged breaches of the Operating Agreement of South Edge, LLC, for an alleged failure to pay the amounts Meritage Homes of Nevada fully tendered but South Edge rejected in April 2008; and (2) $9.8 million relating to our supposed pro rata share of alleged future infrastructure improvement costs to be incurred by Inspirada Builders, LLC (the new owner of the project and which is owned by the four builders identified above). The $13.5 million component of this claim represents the same alleged obligation and amount that is the subject of the above described pending repayment guarantee litigation between us and JP Morgan. Meritage filed a response to Inspirada Builders' arbitration claims denying liability, together with cross-claims against each of the four above-named co-venture builders for breach of contract, breach of the implied covenant of good faith and fair dealing, and indemnity. On June 27, 2013, the $9.8 million claim for future infrastructure costs was dismissed. Although the balance of the parties' claims are currently pending and were set to be resolved at a hearing in late 2013, per the parties' stipulation the Arbitration has now been stayed pending resolution of the pending appeal of the Court's rulings in favor of JP Morgan in the federal court action. In connection with these on-going legal proceedings, we have established a reserve in an amount that we believe is appropriate for this matter. Our 3.53% investment in the venture has previously been fully impaired. We do not believe that the ultimate disposition of these matters will have a material adverse effect on our financial condition. | ||||
We lease office facilities, model homes and equipment under various operating lease agreements. Approximate future minimum lease payments for non-cancelable operating leases as of December 31, 2013, are as follows (in thousands): | ||||
Years Ended December 31, | ||||
2014 | $ | 4,394 | ||
2015 | 4,015 | |||
2016 | 3,679 | |||
2017 | 3,562 | |||
2018 | 2,957 | |||
Thereafter | 8,612 | |||
$ | 27,219 | |||
Rent expense was $6.4 million, $5.5 million and $6.1 million in 2013, 2012 and 2011, respectively, and is included within general and administrative expense or in commissions and other sales costs on our consolidated statements of operations. Sublease income was $1.6 million, $2.0 million and $2.3 million in 2013, 2012 and 2011, respectively. Sublease income is included within other income/(loss), net on our consolidated statements of operations. | ||||
See Note 1 for contingencies related to our warranty obligations. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ' | ||||||||||||||||
NOTE 14 — SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||||
Quarterly results for the years ended December 31, 2013 and 2012 follow (in thousands, except per share amounts): | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
2013 | |||||||||||||||||
Total closing revenue | $ | 336,435 | $ | 449,950 | $ | 492,080 | $ | 536,194 | |||||||||
Total closing gross profit | $ | 64,535 | $ | 95,052 | $ | 113,182 | $ | 123,649 | |||||||||
Earnings before income taxes | $ | 16,475 | $ | 38,532 | $ | 56,786 | $ | 65,879 | |||||||||
Net earnings | $ | 12,041 | $ | 28,143 | $ | 38,191 | $ | 46,089 | |||||||||
Per Share Data: | |||||||||||||||||
Basic earnings per share (1) | $ | 0.34 | $ | 0.78 | $ | 1.05 | $ | 1.27 | |||||||||
Diluted earnings per share (1) | $ | 0.32 | $ | 0.74 | $ | 0.99 | $ | 1.19 | |||||||||
2012 | |||||||||||||||||
Total closing revenue | $ | 204,350 | $ | 282,095 | $ | 342,643 | $ | 364,586 | |||||||||
Total closing gross profit | $ | 35,236 | $ | 51,566 | $ | 62,424 | $ | 68,973 | |||||||||
(Loss)/earnings before income taxes (2) | $ | (4,574 | ) | $ | 2,842 | $ | 6,986 | $ | 23,600 | ||||||||
Net (loss)/earnings (3) | $ | (4,754 | ) | $ | 8,005 | $ | 6,784 | $ | 95,128 | ||||||||
Per Share Data: | |||||||||||||||||
Basic (loss)/earnings per share (1) | $ | (0.15 | ) | $ | 0.24 | $ | 0.19 | $ | 2.67 | ||||||||
Diluted (loss)/earnings per share (1) | $ | (0.15 | ) | $ | 0.24 | $ | 0.19 | $ | 2.49 | ||||||||
-1 | Due to the computation of earnings/(loss) per share, the sum of the quarterly amounts may not equal the full-year results. | ||||||||||||||||
-2 | In the third quarter of 2012, we recorded an $8.7 million charge related to a litigation accrual. | ||||||||||||||||
-3 | In the fourth quarter of 2012, we reversed $79.9 million of our deferred tax asset valuation reserve and recorded an $8.4 million tax expense. | ||||||||||||||||
We typically experience seasonal variability in our quarterly operating results and capital requirements. Historically, we sell more homes in the first half of the year, which results in more working capital requirements and home closings in the third and fourth quarters. However, during economic downturns or times of certain government incentives, our results may not follow our historical trends. |
Subsequent_Events_Subsequent_E
Subsequent Events Subsequent Event (Notes) | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
NOTE 15 —SUBSEQUENT EVENTS | |
In January 2014, we issued 2,530,000 shares of our common stock in a public offering at a price to the public of $45.75 per share. We plan to use the proceeds received from this offering for working capital and other general corporate purposes. The net proceeds from this offering were approximately $110.5 million. |
Business_and_Summary_of_Signif1
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation. 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”). Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior year to conform to the current year presentation, including the dis-aggregation of our financial services segment, which includes both our Carefree Title operations, as well as the net earnings of our mortgage and title joint ventures. | ||
Cash and Cash Equivalents | ' | |
Cash and Cash Equivalents. Liquid investments with an initial maturity of three months or less are classified as cash equivalents. Amounts in transit from title companies for home closings of approximately $26.4 million and $30.4 million are included in cash and cash equivalents at December 31, 2013 and 2012, respectively. Included in our balance as of December 31, 2013 is $68.3 million of money market funds that are invested in short term (three months or less) government securities. | ||
Restricted Cash | ' | |
Restricted Cash. Prior to November 2013, restricted cash consisted of amounts held in restricted accounts as collateral for our letter of credit arrangements. Our restricted cash accounts were invested in money market accounts and United States Government securities, and were $38.9 million at December 31, 2012. In connection with the capacity expansion of our revolving credit facility in November 2013, we transferred our secured letters of credit under our credit facility, thereby returning all restricted cash into unrestricted accounts. | ||
Variable Interest Entity | ' | |
Based on the provisions of the relevant accounting guidance, we have concluded that when we enter into a purchase agreement to acquire land or lots from an entity, a variable interest entity, or “VIE”, may be created. We evaluate all option and purchase agreements for land to determine whether they are a VIE. ASC 810, Consolidation, requires that for each VIE, we assess whether we are the primary beneficiary and, if we are, we consolidate the VIE in our financial statements and reflect such assets and liabilities as “Real estate not owned.” The liabilities related to consolidated VIEs are excluded from our debt covenant calculations. | ||
In order to determine if we are the primary beneficiary, we must first assess whether we have the ability to control the activities of the VIE that most significantly impact its economic performance. 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 acquire additional land into the VIE or dispose of land in the VIE not under contract with Meritage; and the ability to change or amend the existing option contract with the VIE. If we are not determined to control such activities, we are not considered the primary beneficiary of the VIE. If we do have the ability to control such activities, we will continue our analysis by determining if we are also expected to absorb a potentially significant amount of the VIE’s losses or, if no party absorbs the majority of such losses, if we will benefit from a potentially significant amount of the VIE’s expected gains. | ||
In substantially all cases, creditors of the entities with which we have option agreements have no recourse against us and the maximum exposure to loss in our option agreements is limited to non-refundable option deposits and any capitalized pre-acquisition costs. Often, we are at risk for items over budget related to land development on property we have under option if we are the land developer. In these cases, we have contracted to complete development at a fixed cost on behalf of the land owner and any budget savings or shortfalls are borne by us. Some of our option deposits may be refundable to us if certain contractual conditions are not performed by the party selling the lots. | ||
Investments and Securities | ' | |
Investments and Securities. Our investments and securities are comprised of both treasury securities and deposits with money center banks that are FDIC-insured and secured by treasury-backed investments (see additional discussion regarding such deposits in Note 11 to these consolidated financial statements). All of our investments are classified as held-to-maturity and are recorded at amortized cost as we have both the ability and intent to hold them until their respective maturities. The contractual lives of these investments are greater than three months but not exceeding 18 months. Due to their short duration and low contractual interest rates, the amortized cost of the investments approximates fair value with no unrecognized gains and losses or other-than-temporary impairments. | ||
Real Estate | ' | |
Real Estate. Real estate is stated at cost unless the asset is determined to be impaired, at which point the inventory is written down to fair value as required by Accounting Standards Codification (“ASC”) 360-10, Property, Plant and Equipment (“ASC 360-10”). Inventory includes the costs of land acquisition, land development, home construction, capitalized interest, real estate taxes, capitalized direct overhead costs incurred during development and home construction that benefit the entire community, less impairments, if any. Land and development costs are typically allocated and transferred to homes under construction when construction begins. Home construction costs are accumulated on a per-home basis, while selling costs are expensed as incurred. 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 the community or phase. When a home closes, we may have incurred costs for goods and services that have not yet been paid. Therefore, an accrued liability to capture such obligations is recorded in connection with the home closing and charged directly to cost of sales. | ||
We rely on certain estimates to determine our construction and land development costs. Construction and land costs are comprised of direct and allocated costs, including estimated future costs. 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. It is possible that actual results could differ from budgeted amounts for various reasons, including construction delays, labor or material shortages, increases in costs that have not yet been committed, changes in governmental requirements, or other unanticipated issues encountered during construction and development and other factors beyond our control. 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 construction and land costs. | ||
Typically, a community's life cycle ranges from three to five years, commencing with the acquisition of the land, continuing through the land development phase, if applicable, and concluding with the sale, construction and closing of the homes. Actual community lives will vary based on the size of the community, the sales absorption rate and whether the land purchased was raw, partially-developed or in finished status. Master-planned communities encompassing several phases and super-block land parcels may have significantly longer lives and projects involving smaller finished lot purchases may be shorter. | ||
All of our land inventory and related real estate assets are reviewed for recoverability quarterly, as our inventory is considered “long-lived” in accordance with GAAP. Our determination of fair value is based on projections and estimates. 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. Our analysis is completed on a quarterly basis with each community or land parcel evaluated individually. For those assets deemed to be impaired, the impairment recognized is measured as the amount by which the assets' carrying amount exceeds their fair value. The impairment of a community is allocated to each lot on a straight-line basis and charged to cost of home closings in the period during which it is determined that the fair value is less than the assets' carrying amount. | ||
Existing and continuing communities. When projections for the remaining income expected to be earned from existing communities are no longer positive, the underlying real estate assets are not deemed fully recoverable, and further analysis is performed to determine the required impairment. The fair value of the community's assets is determined using either a discounted cash flow model for projects we intend to build out or a market-based approach for projects to be sold. If a market-based approach is used, we determine fair value based on recent comparable sales activity in the local market, adjusted for variances as determined by our knowledge of the region and general real estate expertise. If a discounted cash flow approach is used, we compute our fair value based on a proprietary model. Our key estimates in deriving fair value under our cash flow model are (i) home selling prices in the community adjusted for current and expected sales discounts and incentives, (ii) costs related to the community - both land development and home construction - including costs spent to date and budgeted remaining costs to spend, (iii) projected sales absorption rates, reflecting any product mix change strategies implemented ,or to be implemented, to stimulate the orders pace and expected cancellation rates, (iv) alternative land uses including disposition of all or a portion of the land owned and (v) our discount rate, which is currently 14-16% and varies based on the perceived risk inherent in the community's other cash flow assumptions. These assumptions vary widely across different communities and geographies and are largely dependent on local market conditions. Community-level factors that may impact our key estimates include: | ||
• | The presence and significance of local competitors, including their offered product type, comparable lot size, and competitive actions; | |
• | Economic and related demographic conditions for the population of the surrounding community; | |
• | Desirability of the particular community, including unique amenities or other favorable or unfavorable attributes; and | |
• | Existing home inventory supplies, including foreclosures and short sales. | |
These local circumstances may significantly impact our assumptions and the resulting computation of fair value and are, therefore, closely evaluated by our division personnel in their generation of the discounted cash flow models. The models are also evaluated by regional and corporate personnel for consistency and integration, as decisions that affect pricing or absorption at one community may have resulting consequences for neighboring communities. We typically do not project market improvements in our discounted cash flow models, but may do so in limited circumstances in the latter years of a long-lived community. | ||
Mothball communities. In certain cases, we may elect to stop development (mothball) of an existing community if we believe the economic performance of the community would be maximized by deferring development for a period of time to allow market conditions to improve. When a community is initially placed into mothball status, it is management's belief that the community is affected by local market conditions that are expected to improve within the next 1-5 years. Therefore, a temporary postponement of construction and development work is expected to yield better overall future returns. The decision may be based on financial and/or operational metrics. If we decide to mothball a community, we will impair it to its fair value as discussed above and then cease future development activity until such a time when management believes that market conditions have improved and economic performance will be maximized. No interest or other costs are capitalized to communities that are designated as mothballed. | ||
In addition to our quarterly impairment analysis, which is conducted to determine if any current impairments exist, we also conduct a thorough quarterly review of our mothballed communities to determine if they are at risk of future impairment. The financial and operational status and expectations of these communities are analyzed as well as any unique attributes that could be viewed as indicators for future impairments. Adjustments are made accordingly and incremental impairments, if any, are recorded at each re-evaluation. Based on the facts and circumstances available as of December 31, 2013, we do not believe that any of our underperforming or mothballed communities will incur material impairments in the future. Changes in market and/or economic conditions could materially impact the conclusions of this analysis, and there can be no assurances that future impairments will not occur. | ||
Inventory assessments on inactive assets. For our mothballed communities as well as our land held for future development, our inventory assessments typically include highly subjective estimates for future performance, including the timing of development, the product to be offered, sales rates and selling prices of the product when the community is anticipated to open for sales, and the projected costs to develop and construct the community. We evaluate various factors to develop our forecasts, including the availability of and demand for homes and finished lots within the marketplace, historical, current and future sales trends, and third-party data, if available. Based on these factors, we reach conclusions for future performance based on our judgment. | ||
Option deposits and pre-acquisition costs. We also evaluate assets associated with future communities for impairments on a quarterly basis. Using similar techniques described in the "Existing and continuing communities" section above, we determine if the income to be generated by our future communities is acceptable to us. If the projections indicate that a community is still meeting our internal investment guidelines and is generating a profit, those assets are determined to be fully recoverable and no impairments are required. In cases where we decide to abandon a project, we will fully impair all assets related to such project and will expense and accrue any additional costs that we are contractually obligated to incur. In certain circumstances, we may elect to continue with a project because it is expected to generate positive cash flows, even though it may not be generating an accounting profit. In such cases, we will impair our pre-acquisition costs and deposits, as necessary, and record an impairment to bring the carrying value to fair value. Refer to Note 2 of these consolidated financial | ||
statements for further information regarding our impairments. | ||
Deposits | ' | |
Deposits. Deposits paid related to purchase contracts and land options are recorded and classified as Deposits on real estate under contract or option until the related land is purchased. Deposits are reclassified as a component of real estate inventory at the time the deposit is used to offset the acquisition price of the lots based on the terms of the underlying agreements. To the extent they are non-refundable, deposits are charged to expense if the land acquisition is terminated or no longer considered probable. Since the acquisition contracts typically do not require specific performance, we do not consider such contracts to be contractual obligations to purchase the land and our total exposure under such contracts is limited to the loss of the non-refundable deposits and any ancillary capitalized costs. The review of the likelihood of the acquisition of contracted lots is completed quarterly in conjunction with the real estate impairment analysis noted above and therefore, if impaired, the deposits are recorded at the lower of cost or fair value. Our deposits were $51.6 million and $14.4 million as of December 31, 2013 and December 31, 2012, respectively. | ||
Property and Equipment, Net | ' | |
Property and Equipment, net. Property and equipment, net consists of computer and office equipment and model home furnishings. Depreciation is generally calculated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 7 years. Maintenance and repair costs are expensed as incurred. | ||
Deferred Costs | ' | |
The costs are primarily amortized to interest expense using the straight line method which approximates the effective interest method. | ||
Investments in Unconsolidated Entities | ' | |
Investments in Unconsolidated Entities. We use the equity method of accounting for investments in unconsolidated entities over which we exercise significant influence but do not have a controlling interest. Under the equity method, our share of the unconsolidated entities’ earnings or loss is included in Loss from unconsolidated entities, net, or Earnings from financial services, unconsolidated entities and other, net, in our statements of operations. We use the cost method of accounting for investments in unconsolidated entities over which we do not have significant influence. We track cumulative earnings and distributions from each of our ventures. For cash flow classification, to the extent distributions do not exceed earnings, we designate such distributions as return on capital. Distributions in excess of cumulative earnings are treated as return of capital. We evaluate our investments in unconsolidated entities for impairment when events that trigger an evaluation of recoverability present themselves. | ||
Fair Value Measurements | ' | |
We account for non-recurring fair value measurements of our non-financial assets and liabilities in accordance with ASC 820-10 Fair Value Measurement. This guidance defines fair value, establishes a framework for measuring fair value and addresses required disclosures about fair value measurements. This standard establishes a three-level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to the company while unobservable inputs are generally developed internally, utilizing management’s estimates, assumptions and specific knowledge of the assets/liabilities and related markets. The three levels are defined as follows: | ||
• | Level 1 — Valuation is based on quoted prices in active markets for identical assets and liabilities. | |
• | Level 2 —Valuation is determined from quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar instruments in markets that are not active, or by model-based techniques in which all significant inputs are observable in the market. | |
• | Level 3 — Valuation is derived from model-based techniques in which at least one significant input is unobservable and based on the company’s own estimates about the assumptions that market participants would use to value the asset or liability. | |
If the only observable inputs are from inactive markets or for transactions which the company evaluates as “distressed”, the use of Level 1 inputs should be modified by the company to properly address these factors, or the reliance of such inputs may be limited, with a greater weight attributed to Level 3 inputs. Refer to Notes 1 and 2 for additional information regarding the valuation of our non-financial assets. | ||
Revenue Recognition | ' | |
Revenue Recognition. Revenue from closings of residential real estate is recognized when closings have occurred, the buyer has made the required minimum down payment, obtained necessary financing, the risks and rewards of ownership are transferred to the buyer, and we have no continuing involvement with the property, which is generally the close of escrow. Revenue is reported net of any discounts and incentives. | ||
Cost of Home Closings | ' | |
Cost of Home Closings. Cost of home closings includes direct home construction costs, closing costs, land acquisition and development costs, development period interest and common costs. Direct construction costs are accumulated during the period of construction and charged to cost of closings under specific identification methods, as are closing costs. Estimates of costs incurred or to be incurred but not paid are accrued and expensed at the time of closing. Land development, acquisition and common costs are allocated to each lot based on the number of lots remaining to close. | ||
Income Taxes | ' | |
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. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when the changes are enacted. | ||
We record deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available objectively verifiable positive and negative evidence, including scheduled reversals of deferred tax liabilities, whether we are in a cumulative loss position, projected future taxable income, tax planning strategies and recent financial operations. If we determine that we will not be able to realize our deferred tax assets in the future, we will record a valuation allowance, which increases the provision for income taxes. | ||
We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets. | ||
In accordance with ASC 740-10, Income Taxes ("ASC 740"), we determine our deferred tax assets and liabilities by taxing jurisdiction. We evaluate our deferred tax assets, including the benefit from NOLs, by jurisdiction to determine if a valuation allowance is required. Companies must assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more likely than not” standard with significant weight being given to evidence that can be objectively verified. This assessment considers, among other matters, the nature, frequency and severity of cumulative losses, forecasts of future profitability, the length of statutory carryforward periods, experiences with operating losses and experiences of utilizing tax credit carryforwards and tax planning alternatives. | ||
Deferred tax assets and liabilities are netted on our balance sheet by tax jurisdiction. Net overall tax assets for all jurisdictions are grouped and included as a separate asset. Net overall deferred tax liabilities for all jurisdictions are grouped and included in other liabilities. | ||
Advertising Costs | ' | |
Advertising Costs. We expense advertising costs as they are incurred. | ||
Earnings/(Loss) Per Share | ' | |
Earnings/(Loss) Per Share. We compute basic earnings/(loss) per share by dividing net earnings/(loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share gives effect to the potential dilution that could occur if securities or contracts to issue common stock that are dilutive were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. In periods of net losses, no dilution is computed. | ||
Stock-Based Compensation | ' | |
Stock-Based Compensation. We account for stock-based compensation in accordance with ASC 718-10, Compensation—Stock Compensation. We use the Black-Scholes model to value stock options granted or modified after January 1, 2006, under this guidance. This guidance also requires us to estimate forfeitures in calculating the expense related to stock-based compensation and to reflect the benefits of tax deductions in excess of recognized compensation expense as both a financing inflow and an operating cash outflow. Awards with either a graded or cliff vesting are expensed on a straight-line basis over the life of the award. See Note 8 for additional discussion. | ||
Segment Reporting | ' | |
As defined in ASC 280-10, Segment Reporting, we have seven homebuilding operating segments. These segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes and providing warranty and customer services. We aggregate our homebuilding operating segments into a reporting segment based on similar long-term economic characteristics and geographical proximity. Our current reportable homebuilding segments are as follows: | ||
West: Arizona, California and Colorado (1) | ||
Central: Texas | ||
East: Florida, the Carolinas and Tennessee | ||
(1) Activity for our wind-down Nevada operations is reflected in the West Region's results. | ||
Management’s evaluation of segment performance is based on segment operating income, which we define as homebuilding and land revenues less cost of home construction, commissions and other sales costs, land development and other land sales costs and other costs incurred by or allocated to each segment, including impairments. 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. | ||
401(k) Retirement Plan | ' | |
401(k) Retirement Plan. We have a 401(k) plan for all full-time Meritage employees (the “Plan”). We match portions of employees’ voluntary contributions, and contributed to the Plan approximately $1.3 million, $1.0 million and $0.7 million for the years ended 2013, 2012 and 2011, respectively. | ||
Off-Balance Sheet Arrangements | ' | |
Off-Balance Sheet Arrangements - Joint Ventures. In the past, we have participated in land development joint ventures as a means of accessing larger parcels of land and lot positions, expanding our market opportunities, managing our risk profile and leveraging our capital base; however, in recent years, such ventures have not been a significant avenue for us to access lots. See Note 4 for additional discussion of our investments in unconsolidated entities. | ||
Off-Balance Sheet Arrangements - Other. In the normal course of business, we may acquire lots from various development entities pursuant to option and purchase agreements. The purchase price generally approximates the market price at the date the contract is executed (with possible future escalators). See Note 3 for further discussion. | ||
We provide letters of credit in support of our obligations relating to the development of our projects and other corporate purposes. Surety bonds to guarantee our performance of certain development and construction activities are generally posted in lieu of letters of credit or cash deposits. The amount of these obligations outstanding at any time varies depending on the stage and level of our development activities, as bonds are generally not released until all development activities under the bond are complete. In the event a bond or letter of credit is drawn upon, we would be obligated to reimburse the issuer. We believe it is unlikely that any significant amounts of these bonds or letters of credit will be drawn upon. The table below outlines our surety bond and letter of credit obligations (in thousands): | ||
Warranty Reserves | ' | |
Warranty Reserves. We provide home purchasers with limited warranties against certain building defects and have certain obligations related to those post-construction warranties for closed homes. The specific terms and conditions of these limited warranties vary by state, but overall the nature of the warranties include a complete workmanship and materials warranty typically during the first year after the close of the home and a structural warranty that typically extends up to 10 years subsequent to the close of the home. With the assistance of an actuary, we have estimated these reserves for the structural warranty based on the number of homes still under warranty and historical data and trends for our communities. We also use industry data with respect to similar product types and geographic areas in markets where our experience is incomplete to draw a meaningful conclusion. We regularly review our warranty reserves and adjust them, as necessary, to reflect changes in trends as information becomes available. Based on our most recent reviews of warranty costs incurred and increased spending in certain of our markets, we recorded an unfavorable $1.3 million adjustment to our warranty reserve balance in 2013, which increased our cost of sales. No such adjustments were recorded in 2012. A summary of changes in our warranty reserves follows (in thousands): | ||
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 statements of operations. These reserves are intended to cover costs associated with our contractual and statutory warranty obligations, which include, among other items, claims involving defective workmanship and materials. We believe that our total reserves, coupled with our contractual relationships and rights with our trades and the general liability insurance we maintain, are sufficient to cover our general warranty obligations. However, as unanticipated changes in legal, weather, environmental or other conditions could have an impact on our actual warranty costs, future costs could differ significantly from our estimates. | ||
Recently Issued Accounting Pronouncements | ' | |
Recently Issued Accounting Pronouncements. In April 2013, the Financial Accounting Standards Board ("FASB") issued ASU 2013-04, Liabilities ("ASU 2013-04"), which provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. ASU 2013-04 is effective for us beginning January 1, 2014. We do not anticipate the adoption of ASU 2013-04 to have an effect on our consolidated financial statements or disclosures. |
Business_and_Summary_of_Signif2
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||||||||||
Property and equipment, net | ' | ||||||||||||||||
At December 31, 2013 and 2012, property and equipment, net consisted of the following (in thousands): | |||||||||||||||||
At December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Computer and office equipment | $ | 25,221 | $ | 21,948 | |||||||||||||
Model home furnishings | 27,894 | 22,317 | |||||||||||||||
Gross property and equipment | 53,115 | 44,265 | |||||||||||||||
Accumulated depreciation | (31,016 | ) | (28,547 | ) | |||||||||||||
Total | $ | 22,099 | $ | 15,718 | |||||||||||||
Accrued liabilities | ' | ||||||||||||||||
At December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Accruals related to real estate development and construction activities | $ | 29,992 | $ | 19,954 | |||||||||||||
Payroll and other benefits | 36,232 | 11,871 | |||||||||||||||
Accrued taxes | 22,902 | 3,407 | |||||||||||||||
Warranty reserves | 21,971 | 22,064 | |||||||||||||||
Legal reserves | 16,463 | 16,067 | |||||||||||||||
Real estate note payable (1) | 15,993 | 6,288 | |||||||||||||||
Other accruals | 23,058 | 16,726 | |||||||||||||||
Total | $ | 166,611 | $ | 96,377 | |||||||||||||
Letter of credit and surety bond obligations | ' | ||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Outstanding | Estimated work | Outstanding | Estimated work | ||||||||||||||
remaining to | remaining to | ||||||||||||||||
complete | complete | ||||||||||||||||
Sureties: | |||||||||||||||||
Sureties related to joint ventures | $ | 87 | $ | 87 | $ | 87 | $ | 87 | |||||||||
Sureties related to owned projects and lots under contract | 191,742 | 86,115 | 87,305 | 38,936 | |||||||||||||
Total Sureties | $ | 191,829 | $ | 86,202 | $ | 87,392 | $ | 39,023 | |||||||||
Letters of Credit (“LOCs”): | |||||||||||||||||
LOCs in lieu of deposits for contracted lots | $ | 1,685 | N/A | $ | — | N/A | |||||||||||
LOCs for land development | 35,883 | N/A | 32,475 | N/A | |||||||||||||
LOCs for general corporate operations | 4,500 | N/A | 4,991 | N/A | |||||||||||||
Total LOCs | $ | 42,068 | N/A | $ | 37,466 | N/A | |||||||||||
Warranty reserves | ' | ||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Balance, beginning of year | $ | 22,064 | $ | 23,136 | |||||||||||||
Additions to reserve from new home deliveries | 10,939 | 8,047 | |||||||||||||||
Warranty claims | (12,343 | ) | (9,119 | ) | |||||||||||||
Adjustments to pre-existing reserves | 1,311 | — | |||||||||||||||
Balance, end of year | $ | 21,971 | $ | 22,064 | |||||||||||||
Real_Estate_and_Capitalized_In1
Real Estate and Capitalized Interest (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Inventory Disclosure [Abstract] | ' | ||||||||||||
Asset Impairment Charges [Table Text Block] | ' | ||||||||||||
Real estate properties | ' | ||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||
Homes under contract under construction (1) | $ | 262,633 | $ | 192,948 | |||||||||
Unsold homes, completed and under construction (1) | 147,889 | 107,466 | |||||||||||
Model homes (1) | 81,541 | 62,411 | |||||||||||
Finished home sites and home sites under development | 813,135 | 634,106 | |||||||||||
Land held for development (2) | 52,100 | 56,118 | |||||||||||
Land held for sale | 19,112 | 21,650 | |||||||||||
Communities in mothball status (3) | 28,889 | 38,488 | |||||||||||
$ | 1,405,299 | $ | 1,113,187 | ||||||||||
-1 | Includes the allocated land and land development costs associated with each lot for these homes. | ||||||||||||
-2 | Land held for development primarily reflects land and land development costs related to land where development activity is not currently underway but is expected to begin in the future. In these cases, we may have chosen not to currently develop certain land holdings as they typically represent a portion of a large land parcel that we plan to build out over several years. | ||||||||||||
-3 | Represents communities where we have decided to cease operations (mothball) as we have determined that their economic performance would be maximized by deferring development. In the future, some of these communities may be re-opened while others may be sold to third parties. If we deem our carrying value to not be fully recoverable, we adjust our carrying value for these assets to fair value at the time they are placed into mothball status. As of December 31, 2013, we had five mothballed communities with a carrying value of $26.1 million in our West Region and one mothballed community with a carrying value of $2.8 million in our Central Region. During 2013, we placed one additional community into mothball status and removed five communities totaling $9.6 million out of mothball status. We do not capitalize interest for such mothballed assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are also expensed as incurred. | ||||||||||||
Summary of capitalized interest | ' | ||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Capitalized interest, beginning of year | $ | 21,600 | $ | 14,810 | $ | 11,679 | |||||||
Interest incurred | 51,152 | 46,135 | 43,393 | ||||||||||
Interest expensed | (15,092 | ) | (24,244 | ) | (30,399 | ) | |||||||
Interest amortized to cost of home and land closings | (24,668 | ) | (15,101 | ) | (9,863 | ) | |||||||
Capitalized interest, end of year (1) | $ | 32,992 | $ | 21,600 | $ | 14,810 | |||||||
-1 | Approximately $511,000, $539,000, and $750,000 of the capitalized interest is related to our joint venture investments and is a component of “Investments in unconsolidated entities” in our consolidated balance sheet as of December 31, 2013, 2012 and 2011 respectively. | ||||||||||||
Number of Communities Impaired Fair Value and Impairment Charges [Table Text Block] | ' | ||||||||||||
Variable_Interest_Entities_and1
Variable Interest Entities and Consolidated Real Estate Not Owned (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Variable Interest Entities and Consolidated Real Estate Not Owned [Abstract] | ' | |||||||||||||
Summary of lots under option or contract | ' | |||||||||||||
Projected Number | Purchase | Option/ | ||||||||||||
of Lots | Price | Earnest Money | ||||||||||||
Deposits–Cash | ||||||||||||||
Purchase and option contracts recorded on balance sheet as Real estate not owned | 12 | $ | 289 | $ | — | |||||||||
Option contracts not recorded on balance sheet — non-refundable deposits, committed (1) | 3,673 | 309,028 | 31,369 | |||||||||||
Purchase contracts not recorded on balance sheet — non-refundable deposits, committed (1) | 2,335 | 119,495 | 17,435 | |||||||||||
Purchase contracts not recorded on balance sheet —refundable deposits, committed | 766 | 21,001 | 625 | |||||||||||
Total committed (on and off balance sheet) | 6,786 | 449,813 | 49,429 | |||||||||||
Total purchase and option contracts not recorded on balance sheet — refundable deposits, uncommitted (2) | 3,821 | 105,407 | 2,166 | |||||||||||
Total lots under contract or option | 10,607 | $ | 555,220 | $ | 51,595 | |||||||||
Total option contracts not recorded on balance sheet (3) | 10,595 | $ | 554,931 | $ | 51,595 | -4 | ||||||||
-1 | Deposits are non-refundable except if certain contractual conditions are not performed by the selling party. | |||||||||||||
-2 | Deposits are refundable at our sole discretion. We have not completed our acquisition evaluation process and we have not internally committed to purchase these lots. | |||||||||||||
-3 | Except for our specific performance contracts recorded on our balance sheet as Real estate not owned, none of our option agreements require us to purchase lots. | |||||||||||||
-4 | Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract” as of December 31, 2013. |
Investments_in_Unconsolidated_1
Investments in Unconsolidated Entities (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | ' | |||||||||||
Repayment and completion guarantees | ' | |||||||||||
In connection with our land development joint ventures, we may also provide certain types of guarantees to associated lenders. These guarantees can be classified into two categories: (i) Repayment Guarantees and (ii) Completion Guarantees, described in more detail below. Additionally, we have classified a guarantee related to our minority ownership in the South Edge joint venture separately, as there is pending litigation with the venture's lender group regarding that guarantee. | ||||||||||||
(In thousands) | At December 31, 2013 | At December 31, 2012 | ||||||||||
Repayment guarantees | $ | — | $ | 219 | ||||||||
Completion guarantees (1) | — | — | ||||||||||
South Edge guarantee (2) | 13,243 | 13,243 | ||||||||||
Total guarantees | $ | 13,243 | $ | 13,462 | ||||||||
-1 | As our completion guarantees are typically backed by funding from a third party, we believe these guarantees do not represent a potential cash obligation for us, as they require only non-financial performance. | |||||||||||
-2 | As discussed in Note 13, although we have a reserve for the amounts we believe are appropriate, we dispute the enforceability of this guarantee, and ultimate resolution of this matter will be addressed through litigation and/or arbitration. | |||||||||||
Financial information related to unconsolidated joint ventures, Balance sheets | ' | |||||||||||
At December 31, 2013 | At December 31, 2012 | |||||||||||
Assets: (1) | ||||||||||||
Cash | $ | 7,299 | $ | 7,650 | ||||||||
Real estate | 34,949 | 36,626 | ||||||||||
Other assets | 3,067 | 3,478 | ||||||||||
Total assets | $ | 45,315 | $ | 47,754 | ||||||||
Liabilities and equity: | ||||||||||||
Accounts payable and other liabilities | $ | 2,889 | $ | 4,748 | ||||||||
Notes and mortgages payable | 13,453 | 14,001 | ||||||||||
Equity of: | ||||||||||||
Meritage (2) | 10,332 | 9,631 | ||||||||||
Other | 18,641 | 19,374 | ||||||||||
Total liabilities and equity | $ | 45,315 | $ | 47,754 | ||||||||
Financial information related to unconsolidated joint ventures, operations | ' | |||||||||||
Years Ended December 31, | ||||||||||||
2013 | -2 | 2012 | 2011 | |||||||||
Revenue | $ | 34,553 | $ | 38,230 | $ | 19,881 | ||||||
Costs and expenses | (12,407 | ) | (21,093 | ) | (11,783 | ) | ||||||
Net earnings of unconsolidated entities | $ | 22,146 | $ | 17,137 | $ | 8,098 | ||||||
Meritage’s share of pre-tax earnings (2)(3) | $ | 12,833 | $ | 10,441 | $ | 5,849 | ||||||
-1 | The joint venture financial statements above represent the most recent information available to us. | |||||||||||
-2 | Balance represents Meritage's interest, as reflected in the financial records of the respective joint ventures. This balance may differ from the balance reflected in our consolidated balance sheets due to the following reconciling items: (i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) income deferrals as discussed in Note (3) below and (iv) the cessation of allocation of losses from joint ventures in which we have previously impaired our investment balance to zero and where we have no commitment to fund additional losses. | |||||||||||
-3 | Our share of pre-tax earnings is recorded in “Losses from unconsolidated entities, net” and "Earnings from financial services unconsolidated entities and other, net" on our consolidated statements of operations and excludes joint venture profit related to lots we purchased from the joint ventures. Such profit is deferred until homes are delivered by us and title passes to a homebuyer. |
Senior_Senior_Subordinated_Con1
Senior, Senior Subordinated, Convertible Senior Notes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Components of senior and senior subordinated notes | ' | ||||||||
At December 31, 2013 | At December 31, 2012 | ||||||||
7.731% senior subordinated notes due 2017 | $ | — | $ | 99,825 | |||||
4.50% senior notes due 2018 | 175,000 | — | |||||||
7.15% senior notes due 2020. At December 31, 2013 and December 31, 2012 there was approximately $3,555 in unamortized premium, net, and $3,528 in unamortized discount, respectively | 303,555 | 196,472 | |||||||
7.00% senior notes due 2022 | 300,000 | 300,000 | |||||||
1.875% convertible senior notes due 2032 | 126,500 | 126,500 | |||||||
$200 million unsecured revolving credit facility | — | — | |||||||
Total | $ | 905,055 | $ | 722,797 | |||||
Scheduled principal maturities of senior, senior subordinated and convertible notes | ' | ||||||||
Scheduled principal maturities of our senior, senior subordinated and convertible notes as of December 31, 2013 follow (in thousands): | |||||||||
Year Ended December 31, | |||||||||
2014 | $ | — | |||||||
2015 | — | ||||||||
2016 | — | ||||||||
2017 | — | ||||||||
2018 | 175,000 | ||||||||
Thereafter | 730,055 | ||||||||
Total | $ | 905,055 | |||||||
Fair_Value_Disclosures_Tables
Fair Value Disclosures (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||
Summary of long lived real estate assets | ' | |||||||||||||||||
Year Ended | ||||||||||||||||||
December 31, | ||||||||||||||||||
Hierarchy | 2013 | 2012 | ||||||||||||||||
Description: | ||||||||||||||||||
Adjusted Basis of Long-Lived Real Estate Assets (1) (2) | Level 3 | $ | 6,226 | $ | 12,013 | |||||||||||||
Impairments | 987 | $ | 2,009 | |||||||||||||||
Initial Basis of Long-Lived Real Estate Assets | $ | 7,213 | $ | 14,022 | ||||||||||||||
-1 | The fair values in the table above represent only those real estate assets whose carrying values were adjusted in the respective period. | |||||||||||||||||
-2 | The carrying values for these real-estate assets may have subsequently increased or decreased from the fair value reported due to activities that have occurred since the measurement date. | |||||||||||||||||
Fair value of our fixed-rate debt | ' | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | |||||||||||||||||
Aggregate | Estimated Fair | Aggregate | Estimated Fair | |||||||||||||||
Principal | Value | Principal | Value | |||||||||||||||
7.731% senior subordinated notes | N/A | N/A | $ | 99,825 | $ | 102,950 | ||||||||||||
4.50% senior notes due 2018 | $ | 175,000 | $ | 174,125 | N/A | N/A | ||||||||||||
7.15% senior notes | $ | 300,000 | $ | 325,500 | $ | 200,000 | $ | 220,760 | ||||||||||
7.00% senior notes | $ | 300,000 | $ | 318,750 | $ | 300,000 | $ | 328,500 | ||||||||||
1.875% convertible senior notes | $ | 126,500 | $ | 142,154 | $ | 126,500 | $ | 127,449 | ||||||||||
Earnings_Loss_Per_Share_Tables
Earnings (Loss) Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||
Basic and diluted (loss)/earnings per common share | ' | ||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Basic weighted average number of shares outstanding | 36,105 | 34,057 | 32,382 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Convertible debt (1) | 2,176 | 612 | N/A | ||||||||||
Stock options and unvested restricted stock (2) | 520 | 503 | — | ||||||||||
Diluted average shares outstanding | 38,801 | 35,172 | 32,382 | ||||||||||
Net earnings/(loss) as reported | $ | 124,464 | $ | 105,163 | $ | (21,106 | ) | ||||||
Interest attributable to Convertible Senior Notes, net of income taxes | 1,454 | 418 | — | ||||||||||
Net earnings/(loss) for earnings/(loss) per share | $ | 125,918 | $ | 105,581 | $ | (21,106 | ) | ||||||
Basic earnings/(loss) per share | $ | 3.45 | $ | 3.09 | $ | (0.65 | ) | ||||||
Diluted earnings/(loss) per share (1) (2) | $ | 3.25 | $ | 3 | $ | (0.65 | ) | ||||||
Antidilutive stock options not included in the calculation of diluted earnings per share | 7 | 256 | 1,731 | ||||||||||
-1 | In accordance with ASC 260-10, Earnings Per Share, ("ASC 260-10") we calculate the dilutive effect of convertible securities using the "if-converted" method. Reflects the converted shares and the interest savings (post-tax) of our $126.5 million of 1.875% Convertible Senior Notes. | ||||||||||||
-2 | For periods with a net loss, no options or non-vested shares are included in the dilution calculation as all options and non-vested shares outstanding are considered anti-dilutive. |
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Summary of stock options activity | ' | ||||||||||||||||
Summary of Stock Option Activity: | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Options | Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price | Contractual | ||||||||||||||||
Life | |||||||||||||||||
(In thousands) | |||||||||||||||||
Options outstanding at beginning of year | 609,585 | $ | 27.44 | ||||||||||||||
Granted | — | N/A | |||||||||||||||
Exercised | (347,370 | ) | $ | 33.4 | |||||||||||||
Cancelled | (3,400 | ) | $ | 14 | |||||||||||||
Outstanding at end of year | 258,815 | $ | 19.63 | 1.35 | $ | 7,340 | |||||||||||
Vested and expected to vest at end of year | 258,815 | $ | 19.63 | 1.35 | $ | 7,340 | |||||||||||
Exercisable at end of year | 225,415 | $ | 20.36 | 1.22 | $ | 6,229 | |||||||||||
Price range of options exercised | $8.06-$44.44 | ||||||||||||||||
Price range of options outstanding | $11.48-$42.82 | ||||||||||||||||
Total shares reserved for existing or future grants at end of year | 2,283,114 | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2012 | 2011 | ||||||||||||||||
Options | Weighted | Options | Weighted | ||||||||||||||
Average | Average | ||||||||||||||||
Exercise | Exercise | ||||||||||||||||
Price | Price | ||||||||||||||||
Options outstanding at beginning of year: | 897,767 | $ | 23.56 | 1,332,767 | $ | 23.8 | |||||||||||
Granted | — | N/A | — | N/A | |||||||||||||
Exercised | (282,082 | ) | $ | 15.12 | (171,800 | ) | $ | 15.21 | |||||||||
Cancelled | (6,100 | ) | $ | 25.73 | (263,200 | ) | $ | 30.24 | |||||||||
Outstanding at end of year | 609,585 | $ | 27.44 | 897,767 | $ | 23.56 | |||||||||||
Exercisable at end of year | 471,760 | $ | 30.93 | 550,359 | $ | 26.29 | |||||||||||
Price range of options exercised | $ 8.06 - $34.30 | $ 8.06 - $21.10 | |||||||||||||||
Price range of options outstanding | $ 8.06 - $44.44 | $ 8.06 - $44.44 | |||||||||||||||
Stock options by exercise price range | ' | ||||||||||||||||
Stock options Outstanding at December 31, 2013: | |||||||||||||||||
Stock Options Outstanding | Stock Options Exercisable | ||||||||||||||||
Range of Exercise Prices | Number | Weighted | Weighted | Number | Weighted | ||||||||||||
Outstanding | Average | Average | Exercisable | Average | |||||||||||||
Contractual | Exercise Price | Exercise Price | |||||||||||||||
Life | |||||||||||||||||
$11.48 - $14.00 | 59,453 | 1.73 | $ | 13.8 | 29,953 | $ | 13.75 | ||||||||||
$15.98 - $19.80 | 35,142 | 0.99 | $ | 16.06 | 34,542 | $ | 16.02 | ||||||||||
$19.90 - $19.90 | 139,840 | 1.38 | $ | 19.9 | 139,840 | $ | 19.9 | ||||||||||
$22.11 - $22.11 | 6,300 | 2.61 | $ | 22.11 | 3,000 | $ | 22.11 | ||||||||||
$42.82 - $42.82 | 18,080 | 0.08 | $ | 42.82 | 18,080 | $ | 42.82 | ||||||||||
258,815 | 225,415 | ||||||||||||||||
Summary of nonvested (restricted) shares activity | ' | ||||||||||||||||
Summary of Nonvested (Restricted) Shares Activity: | |||||||||||||||||
In addition to the stock options discussed above, we grant time-based and performance-based restricted shares. Performance-based restricted shares are only granted to our senior executive management group. All performance shares only vest upon the attainment of certain financial and operational criteria as established and approved by our Board of Directors. | |||||||||||||||||
Nonvested | Weighted | Nonvested | Weighted | ||||||||||||||
Restricted Share | Average | Restricted | Average | ||||||||||||||
Activity | Grant Date | Share Activity | Grant Date | ||||||||||||||
(time-based) | Fair Value | (performance- | Fair Value | ||||||||||||||
Based) | |||||||||||||||||
Outstanding at January 1, 2011 | 465,251 | $ | 19.01 | 202,500 | $ | 16.91 | |||||||||||
Granted | 357,000 | $ | 25.57 | 56,250 | $ | 25.65 | |||||||||||
Vested (Earned/Released) | (141,335 | ) | $ | 17.76 | (33,750 | ) | $ | 14.27 | |||||||||
Forfeited (1) | (31,400 | ) | $ | 23.23 | (33,750 | ) | 14.27 | ||||||||||
Outstanding as of December 31, 2011 | 649,516 | $ | 22.68 | 191,250 | $ | 20.41 | |||||||||||
Granted | 386,500 | $ | 27.21 | 56,250 | $ | 20.72 | |||||||||||
Vested (Earned/Released) | (166,566 | ) | $ | 18.92 | (33,750 | ) | $ | 14.27 | |||||||||
Forfeited (1) | (43,800 | ) | $ | 25.1 | (33,750 | ) | $ | 14.27 | |||||||||
Outstanding at December 31, 2012 | 825,650 | $ | 25.43 | 180,000 | $ | 22.81 | |||||||||||
Granted | 355,795 | $ | 42.78 | 62,500 | $ | 42.56 | |||||||||||
Vested (Earned/Released) | (215,850 | ) | $ | 41.72 | (67,500 | ) | $ | 41.97 | |||||||||
Forfeited (1) | (81,700 | ) | $ | 31.27 | — | N/A | |||||||||||
Outstanding at December 31, 2013 | 883,895 | $ | 32.22 | 175,000 | $ | 30.1 | |||||||||||
-1 | Forfeitures on time-based nonvested shares are a result of terminations of employment, while forfeitures on performance-based nonvested shares are a result of failing to attain certain goals as outlined in our executive management group's compensation agreements. | ||||||||||||||||
Summary of compensation expense and stock award activity | ' | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||
Stock-based compensation expense | $ | 9,483 | $ | 8,319 | $ | 7,410 | |||||||||||
Cash received by Company from exercises | $ | 11,601 | $ | 4,267 | $ | 2,613 | |||||||||||
Summary of stock based compensation agreements | ' | ||||||||||||||||
As of | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Unrecognized stock-based compensation cost | $ | 17,385 | $ | 13,072 | |||||||||||||
Weighted average years remaining vesting period | 2.18 | 2.17 | |||||||||||||||
Total equity awards outstanding (1) | 1,318 | 1,615 | |||||||||||||||
(1) Includes vested and unvested options outstanding and unvested restricted stock awards. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Components of income tax provision | ' | ||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current taxes: | |||||||||||||
Federal | $ | 43,675 | $ | (589 | ) | $ | — | ||||||
State | 1,345 | 122 | 730 | ||||||||||
45,020 | (467 | ) | 730 | ||||||||||
Deferred taxes: | |||||||||||||
Federal | 10,232 | (62,581 | ) | — | |||||||||
State | (2,044 | ) | (13,261 | ) | — | ||||||||
8,188 | (75,842 | ) | — | ||||||||||
Total | $ | 53,208 | $ | (76,309 | ) | $ | 730 | ||||||
Schedule of income tax reconciliation | ' | ||||||||||||
Income taxes differ for the years ended December 31, 2013, 2012 and 2011, from the amounts computed using the expected federal statutory income tax rate of 35% as a result of the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Expected taxes at current federal statutory income tax rate | $ | 62,185 | $ | 10,099 | $ | (7,132 | ) | ||||||
State income taxes, net of federal tax benefit | 7,967 | 1,878 | 475 | ||||||||||
Change in valuation allowance | (8,666 | ) | (85,460 | ) | 4,126 | ||||||||
Change in state effective tax rate | — | (788 | ) | 1,750 | |||||||||
Manufacturing deduction | (4,910 | ) | — | — | |||||||||
Federal tax credits | (3,614 | ) | (2,064 | ) | — | ||||||||
Net interest adjustments | — | (589 | ) | — | |||||||||
Non-deductible costs and other | 246 | 615 | 1,511 | ||||||||||
Income tax expense/(benefit) | $ | 53,208 | $ | (76,309 | ) | $ | 730 | ||||||
Schedule of deferred tax assets and liabilities | ' | ||||||||||||
Deferred tax assets and liabilities are comprised of timing differences at December 31 (in thousands) as follows: | |||||||||||||
2013 | 2012 | ||||||||||||
Deferred tax assets: | |||||||||||||
Real estate | $ | 23,895 | $ | 27,611 | |||||||||
Goodwill | 8,077 | 10,227 | |||||||||||
Warranty reserve | 8,414 | 8,431 | |||||||||||
Wages payable | 9,956 | 1,092 | |||||||||||
Reserves and allowances | 1,102 | 931 | |||||||||||
Equity-based compensation | 4,995 | 5,449 | |||||||||||
Accrued expenses | 6,235 | 6,079 | |||||||||||
Net operating loss carry-forwards | 11,471 | 27,881 | |||||||||||
Federal tax credits | — | 3,176 | |||||||||||
Other | 279 | 282 | |||||||||||
Total deferred tax assets | 74,424 | 91,159 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Deferred revenue | 3,670 | 3,668 | |||||||||||
Prepaids | 690 | 586 | |||||||||||
Fixed assets | (340 | ) | 265 | ||||||||||
Total deferred tax liabilities | 4,020 | 4,519 | |||||||||||
Net total deferred tax assets | 70,404 | 86,640 | |||||||||||
Valuation allowance | — | (8,666 | ) | ||||||||||
Deferred tax assets, net | 70,404 | 77,974 | |||||||||||
Other deferred tax liability - state franchise taxes | 2,750 | 2,132 | |||||||||||
Net deferred tax assets and liabilities | $ | 67,654 | $ | 75,842 | |||||||||
Valuation allowance against deferred tax assets | ' | ||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||
State | — | 8,666 | |||||||||||
Total Valuation Allowance | $ | — | $ | 8,666 | |||||||||
Supplemental_Disclosure_of_Cas1
Supplemental Disclosure of Cash Flow Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Supplemental Cash Flow Elements [Abstract] | ' | ||||||||||||
Supplemental cash flow information | ' | ||||||||||||
Years Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Cash paid during the year for: | |||||||||||||
Interest, net of interest capitalized | $ | 9,444 | $ | 21,276 | $ | 28,871 | |||||||
Income taxes | $ | 25,688 | $ | 402 | $ | 759 | |||||||
Non-cash operating activities decrease: | |||||||||||||
Real estate not owned | $ | 289 | $ | — | $ | (866 | ) | ||||||
Real estate acquired through notes payable | $ | (9,705 | ) | $ | (6,288 | ) | $ | — | |||||
Operating_and_Reporting_Segmen1
Operating and Reporting Segments (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||||||
Segment information on operating results | ' | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
Revenue (1): | |||||||||||||||||||||||||
West | $ | 937,050 | $ | 600,227 | $ | 366,265 | |||||||||||||||||||
Central | 508,961 | 392,678 | 395,638 | ||||||||||||||||||||||
East | 368,648 | 200,769 | 99,341 | ||||||||||||||||||||||
Consolidated total | 1,814,659 | 1,193,674 | 861,244 | ||||||||||||||||||||||
Homebuilding segment operating income: | |||||||||||||||||||||||||
West | 131,352 | 44,727 | 5,037 | ||||||||||||||||||||||
Central | 38,499 | 17,790 | 11,042 | ||||||||||||||||||||||
East | 39,557 | 15,283 | 6,858 | ||||||||||||||||||||||
Total homebuilding segment operating income (2) | 209,408 | 77,800 | 22,937 | ||||||||||||||||||||||
Financial services segment profit | 15,954 | 10,255 | 6,563 | ||||||||||||||||||||||
Corporate and unallocated costs (3) | (31,216 | ) | (22,619 | ) | (20,925 | ) | |||||||||||||||||||
Loss from unconsolidated entities, net | (378 | ) | (224 | ) | (714 | ) | |||||||||||||||||||
Interest expense | (15,092 | ) | (24,244 | ) | (30,399 | ) | |||||||||||||||||||
Loss on early extinguishment of debt | (3,796 | ) | (5,772 | ) | — | ||||||||||||||||||||
Other income/(loss), net | 2,792 | $ | (6,342 | ) | 2,162 | ||||||||||||||||||||
Net earnings/(loss) before income taxes | $ | 177,672 | $ | 28,854 | $ | (20,376 | ) | ||||||||||||||||||
-1 | Revenue includes the following land closing revenue, by segment: 2013 – $11.6 million in the West Region, $16.2 million in the Central Region and $3.5 million in the East Region; 2012 – $6.5 million in the West Region, $2.0 million in the Central Region and $790,000 in the East Region; 2011 – $360,000 in the Central Region. | ||||||||||||||||||||||||
-2 | Operating income includes the following real-estate related and joint venture related impairments: | ||||||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||
West | $ | 514 | $ | 1,618 | $ | 11,333 | |||||||||||||||||||
Central | 235 | 219 | 2,896 | ||||||||||||||||||||||
East | 238 | 172 | 1,095 | ||||||||||||||||||||||
Total | $ | 987 | $ | 2,009 | $ | 15,324 | |||||||||||||||||||
-3 | Balance consists primarily of corporate costs and numerous shared service functions such as finance and treasury that are not allocated to the homebuilding or financial reporting segments. | ||||||||||||||||||||||||
Total assets from segment | ' | ||||||||||||||||||||||||
At December 31, 2013 | |||||||||||||||||||||||||
West | Central | East | Financial Services | Corporate and | Total | ||||||||||||||||||||
Unallocated (1) | |||||||||||||||||||||||||
Deposits on real estate under option or contract | $ | 26,415 | $ | 12,198 | $ | 12,982 | $ | — | $ | — | $ | 51,595 | |||||||||||||
Real estate | 800,288 | 369,464 | 235,547 | — | — | 1,405,299 | |||||||||||||||||||
Investments in unconsolidated entities | 204 | 8,941 | 50 | — | 2,443 | 11,638 | |||||||||||||||||||
Other assets (2) | 26,900 | 165,403 | 31,372 | 497 | 310,657 | 534,829 | |||||||||||||||||||
Total assets | $ | 853,807 | $ | 556,006 | $ | 279,951 | $ | 497 | $ | 313,100 | $ | 2,003,361 | |||||||||||||
At December 31, 2012 | |||||||||||||||||||||||||
West | Central | East | Financial Services | Corporate and | Total | ||||||||||||||||||||
Unallocated (3) | |||||||||||||||||||||||||
Deposits on real estate under option or contract | $ | 4,419 | $ | 7,168 | $ | 2,764 | $ | — | $ | — | $ | 14,351 | |||||||||||||
Real estate | 647,316 | 305,100 | 160,771 | — | — | 1,113,187 | |||||||||||||||||||
Investments in unconsolidated entities | 365 | 10,645 | 16 | — | 1,059 | 12,085 | |||||||||||||||||||
Other assets (4) | 24,935 | 132,546 | 25,914 | 297 | 252,247 | 435,939 | |||||||||||||||||||
Total assets | $ | 677,035 | $ | 455,459 | $ | 189,465 | $ | 297 | $ | 253,306 | $ | 1,575,562 | |||||||||||||
(1)(3)Balance consists primarily of cash and other corporate assets not allocated to the reporting segments. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of future minimum rental payments for operating leases | ' | |||
We lease office facilities, model homes and equipment under various operating lease agreements. Approximate future minimum lease payments for non-cancelable operating leases as of December 31, 2013, are as follows (in thousands): | ||||
Years Ended December 31, | ||||
2014 | $ | 4,394 | ||
2015 | 4,015 | |||
2016 | 3,679 | |||
2017 | 3,562 | |||
2018 | 2,957 | |||
Thereafter | 8,612 | |||
$ | 27,219 | |||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of quarterly financial information | ' | ||||||||||||||||
Quarterly results for the years ended December 31, 2013 and 2012 follow (in thousands, except per share amounts): | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
2013 | |||||||||||||||||
Total closing revenue | $ | 336,435 | $ | 449,950 | $ | 492,080 | $ | 536,194 | |||||||||
Total closing gross profit | $ | 64,535 | $ | 95,052 | $ | 113,182 | $ | 123,649 | |||||||||
Earnings before income taxes | $ | 16,475 | $ | 38,532 | $ | 56,786 | $ | 65,879 | |||||||||
Net earnings | $ | 12,041 | $ | 28,143 | $ | 38,191 | $ | 46,089 | |||||||||
Per Share Data: | |||||||||||||||||
Basic earnings per share (1) | $ | 0.34 | $ | 0.78 | $ | 1.05 | $ | 1.27 | |||||||||
Diluted earnings per share (1) | $ | 0.32 | $ | 0.74 | $ | 0.99 | $ | 1.19 | |||||||||
2012 | |||||||||||||||||
Total closing revenue | $ | 204,350 | $ | 282,095 | $ | 342,643 | $ | 364,586 | |||||||||
Total closing gross profit | $ | 35,236 | $ | 51,566 | $ | 62,424 | $ | 68,973 | |||||||||
(Loss)/earnings before income taxes (2) | $ | (4,574 | ) | $ | 2,842 | $ | 6,986 | $ | 23,600 | ||||||||
Net (loss)/earnings (3) | $ | (4,754 | ) | $ | 8,005 | $ | 6,784 | $ | 95,128 | ||||||||
Per Share Data: | |||||||||||||||||
Basic (loss)/earnings per share (1) | $ | (0.15 | ) | $ | 0.24 | $ | 0.19 | $ | 2.67 | ||||||||
Diluted (loss)/earnings per share (1) | $ | (0.15 | ) | $ | 0.24 | $ | 0.19 | $ | 2.49 | ||||||||
-1 | Due to the computation of earnings/(loss) per share, the sum of the quarterly amounts may not equal the full-year results. | ||||||||||||||||
-2 | In the third quarter of 2012, we recorded an $8.7 million charge related to a litigation accrual. | ||||||||||||||||
-3 | In the fourth quarter of 2012, we reversed $79.9 million of our deferred tax asset valuation reserve and recorded an $8.4 million tax expense. |
Business_and_Summary_of_Signif3
Business and Summary of Significant Accounting Policies (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Gross property and equipment | $53,115 | $44,265 |
Accumulated depreciation | -31,016 | -28,547 |
Property and equipment, net | 22,099 | 15,718 |
Computer and office equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Gross property and equipment | 25,221 | 21,948 |
Model home furnishings [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Gross property and equipment | $27,894 | $22,317 |
Business_and_Summary_of_Signif4
Business and Summary of Significant Accounting Policies (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Accrued Liabilities | ' | ' | ' |
Accruals related to real-estate development and construction activities | $29,992 | $19,954 | ' |
Payroll and other benefits | 36,232 | 11,871 | ' |
Accrued taxes | 22,902 | 3,407 | ' |
Warranty reserves | 21,971 | 22,064 | 23,136 |
Legal reserves | 16,463 | 16,067 | ' |
Real Estate Notes Payable | 15,993 | 6,288 | ' |
Other accruals | 23,058 | 16,726 | ' |
Total | $166,611 | $96,377 | ' |
Business_and_Summary_of_Signif5
Business and Summary of Significant Accounting Policies (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Sureties: | ' | ' |
Outstanding | $191,829 | $87,392 |
Estimated work remaining to complete | 86,202 | 39,023 |
Letters of Credit ("LOCs"): | ' | ' |
Total LOCs | 42,068 | 37,466 |
Sureties related to joint ventures [Member] | ' | ' |
Sureties: | ' | ' |
Outstanding | 87 | 87 |
Estimated work remaining to complete | 87 | 87 |
Sureties related to owned projects and lots under contract [Member] | ' | ' |
Sureties: | ' | ' |
Outstanding | 191,742 | 87,305 |
Estimated work remaining to complete | 86,115 | 38,936 |
Letter of Credit in lieu of deposit for contracted lots [Member] [Domain] | ' | ' |
Letters of Credit ("LOCs"): | ' | ' |
Total LOCs | 1,685 | 0 |
LOCs for land development [Member] | ' | ' |
Letters of Credit ("LOCs"): | ' | ' |
Total LOCs | 35,883 | 32,475 |
LOCs for general corporate operations [Member] | ' | ' |
Letters of Credit ("LOCs"): | ' | ' |
Total LOCs | $4,500 | $4,991 |
Business_and_Summary_of_Signif6
Business and Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Warranty Reserves | ' | ' |
Balance, beginning of year | $22,064 | $23,136 |
Additions to reserve from new home deliveries | 10,939 | 8,047 |
Warranty claims | -12,343 | -9,119 |
Adjustments to pre-existing reserves | 1,311 | 0 |
Balance, end of year | $21,971 | $22,064 |
Business_and_Summary_of_Signif7
Business and Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Communities | ||||
State | ||||
Region | ||||
Organization and Presentation [Line Items] | ' | ' | ' | |
Liquid Investment Maturity Period To Be Classified As Cash Equivalent Maximum | '3 months | ' | ' | |
Entity operations in number of regions | 3 | ' | ' | |
Number of states in regions | 8 | ' | ' | |
Number of communities to which homes are sold | 188 | ' | ' | |
Amounts in transit from title companies for home closings | $26,400,000 | $30,400,000 | ' | |
Money market funds invested in short term government securities | 68,300,000 | ' | ' | |
Restricted cash | 0 | 38,938,000 | ' | |
Deposits on real estate under option or contract | 51,595,000 | [1],[2] | 14,351,000 | ' |
Deferred costs representing debt issuance costs, net | 12,200,000 | 11,700,000 | ' | |
Accumulated amortization of debt issuance costs | 11,200,000 | 8,500,000 | ' | |
Advertising cost | 7,800,000 | 5,500,000 | 6,300,000 | |
Contribution to the 401(K) Retirement Plan | 1,300,000 | 1,000,000 | 700,000 | |
Warranty period following home closings | '10 years | ' | ' | |
Adjustment to warranty reserve balance | 1,311,000 | 0 | ' | |
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Held-to-maturity Securities | 0 | ' | ' | |
Minimum [Member] | ' | ' | ' | |
Organization and Presentation [Line Items] | ' | ' | ' | |
Base price per house for sale range | 130,000 | ' | ' | |
Investment Maturity Period | '3 months | ' | ' | |
Community life cycle range | '3 years | ' | ' | |
Property and equipment useful life | '3 years | ' | ' | |
Fair Value Inputs, Discount Rate | 14.00% | ' | ' | |
Maximum [Member] | ' | ' | ' | |
Organization and Presentation [Line Items] | ' | ' | ' | |
Base price per house for sale range | $1,000,000 | ' | ' | |
Investment Maturity Period | '18 months | ' | ' | |
Community life cycle range | '5 years | ' | ' | |
Property and equipment useful life | '7 years | ' | ' | |
Fair Value Inputs, Discount Rate | 16.00% | ' | ' | |
Nashville Acquisition [Member] | ' | ' | ' | |
Organization and Presentation [Line Items] | ' | ' | ' | |
Lots Acquired | 500 | ' | ' | |
[1] | (4)Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. | |||
[2] | Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. |
Real_Estate_and_Capitalized_In2
Real Estate and Capitalized Interest (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Real Estate Properties | ' | ' | ||
Homes under contract under construction | $262,633 | [1] | $192,948 | [1] |
Unsold homes, completed and under construction | 147,889 | [1] | 107,466 | [1] |
Model homes | 81,541 | [1] | 62,411 | [1] |
Finished home sites and home sites under development | 813,135 | 634,106 | ||
Land held for development | 52,100 | [2] | 56,118 | [2] |
Land held for sale | 19,112 | 21,650 | ||
Communities in mothball status | 28,889 | [3] | 38,488 | [3] |
Real estate | $1,405,299 | $1,113,187 | ||
[1] | Includes the allocated land and land development costs associated with each lot for these homes | |||
[2] | Land held for development primarily reflects land and land development costs related to land where development activity is not currently underway but is expected to begin in the future. In these cases, we may have chosen not to currently develop certain land holdings as they typically represent a portion of a large land parcel that we plan to build out over several years. | |||
[3] | Represents communities where we have decided to cease operations (mothball) as we have determined that their economic performance would be maximized by deferring development. In the future, some of these communities may be re-opened while others may be sold to third parties. If we deem our carrying value to not be fully recoverable, we adjust our carrying value for these assets to fair value at the time they are placed into mothball status. As of December 31, 2013, we had five mothballed communities with a carrying value of $26.1 million in our West Region and one mothballed community with a carrying value of $2.8 million in our Central Region. During 2013, we placed one additional community into mothball status and removed five communities totaling $9.6 million out of mothball status. We do not capitalize interest for such mothballed assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are also expensed as incurred. |
Real_Estate_and_Capitalized_In3
Real Estate and Capitalized Interest (Details 3) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Summary of capitalized interest | ' | ' | ' | |||
Capitalized interest, beginning of year | $21,600 | [1] | $14,810 | [1] | $11,679 | |
Interest incurred | 51,152 | 46,135 | 43,393 | |||
Interest expense | -15,092 | -24,244 | -30,399 | |||
Interest amortized to cost of home and land closings | -24,668 | -15,101 | -9,863 | |||
Capitalized interest, end of year (1) | $32,992 | [1] | $21,600 | [1] | $14,810 | [1] |
[1] | Approximately $511,000, $539,000, and $750,000 of the capitalized interest is related to our joint venture investments and is a component of “Investments in unconsolidated entities†in our consolidated balance sheet as of December 31, 2013, 2012 and 2011 respectively. |
Real_Estate_and_Capitalized_In4
Real Estate and Capitalized Interest (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Communities | |||
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Change in Amount of properties in mothball Status | $9,600,000 | ' | ' |
Number of communities to which homes are sold | 188 | ' | ' |
Land held for sale | 19,112,000 | 21,650,000 | ' |
Capitalized interest related to joint venture investments | 511,000 | 539,000 | 750,000 |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | 987,000 | 2,009,000 | 15,324,000 |
Additions [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Change in Number of properties in mothball Status | 1 | ' | ' |
Removed [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Change in Number of properties in mothball Status | 5 | ' | ' |
Central [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | 235,000 | 219,000 | 2,896,000 |
Central [Member] | Mothballed [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Number of mothball communities | 1 | ' | ' |
Carrying value of the community | 2,800,000 | ' | ' |
West [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | 514,000 | 1,618,000 | 11,333,000 |
West [Member] | Mothballed [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Number of mothball communities | 5 | ' | ' |
Carrying value of the community | 26,100,000 | ' | ' |
Las Vegas Wind-down [Member] | ' | ' | ' |
Real Estate and Capitalized Interest [Line Items] | ' | ' | ' |
Real estate held for development or sale | 174 | ' | ' |
Value of remaining lots and associated home inventory | $11,800,000 | ' | ' |
Variable_Interest_Entities_and2
Variable Interest Entities and Consolidated Real Estate Not Owned (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | Lot | ||
Summary of lots under option or contract | ' | ' | |
Number of lots of Option contracts recorded on balance sheet as Real estate not owned | 12 | ' | |
Purchase Price of Option contracts recorded on balance sheet as Real estate not owned | $289 | ' | |
Option/Earnest money Deposits Cash Option contracts recorded on balance sheet as Real estate not owned | 0 | ' | |
Number of lots not recorded | 10,595 | [1] | ' |
Purchase Price not recorded | 554,931 | [1] | ' |
Option/Earnest Money Deposits Cash | 51,595 | [1],[2] | 14,351 |
Number of lots recorded and unrecorded | 10,607 | ' | |
Purchase Price recorded and unrecorded | 555,220 | ' | |
Option/Earnest Money Deposits Cash recorded and unrecorded | 51,595 | ' | |
Option Contracts Not Recorded On Balance Sheet Non Refundable Deposits Committed [Member] [Member] | ' | ' | |
Summary of lots under option or contract | ' | ' | |
Number of lots not recorded | 3,673 | [3] | ' |
Purchase Price not recorded | 309,028 | [3] | ' |
Option/Earnest Money Deposits Cash | 31,369 | [3] | ' |
Purchase Contracts Not Recorded On Balance Sheet Non Refundable Deposits Committed [Member] [Member] | ' | ' | |
Summary of lots under option or contract | ' | ' | |
Number of lots not recorded | 2,335 | [3] | ' |
Purchase Price not recorded | 119,495 | [3] | ' |
Option/Earnest Money Deposits Cash | 17,435 | [3] | ' |
Purchase Contracts not recorded as refundable deposits committed [Member] | ' | ' | |
Summary of lots under option or contract | ' | ' | |
Number of lots not recorded | 766 | ' | |
Purchase Price not recorded | 21,001 | ' | |
Option/Earnest Money Deposits Cash | 625 | ' | |
Total committed (on and off balance sheet) [Member] | ' | ' | |
Summary of lots under option or contract | ' | ' | |
Number of lots recorded and unrecorded | 6,786 | ' | |
Purchase Price recorded and unrecorded | 449,813 | ' | |
Option/Earnest Money Deposits Cash recorded and unrecorded | 49,429 | ' | |
Option and Purchase contracts not recorded on balance sheet - refundable deposits, uncommitted [Member] | ' | ' | |
Summary of lots under option or contract | ' | ' | |
Number of lots not recorded | 3,821 | [4] | ' |
Purchase Price not recorded | 105,407 | [4] | ' |
Option/Earnest Money Deposits Cash | $2,166 | [4] | ' |
[1] | Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. | ||
[2] | (4)Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. | ||
[3] | Deposits are non-refundable except if certain contractual conditions are not performed by the selling party. | ||
[4] | Deposits are refundable at our sole discretion. We have not completed our acquisition evaluation process and we have not internally committed to purchase these lots. |
Investments_in_Unconsolidated_2
Investments in Unconsolidated Entities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Guarantor Obligations [Line Items] | ' | ' | ||
Maximum pro rata exposure under the guarantee | $13,243 | $13,462 | ||
Repayment guarantees [Member] | ' | ' | ||
Guarantor Obligations [Line Items] | ' | ' | ||
Maximum pro rata exposure under the guarantee | 0 | 219 | ||
Completion guarantees [Member] | ' | ' | ||
Guarantor Obligations [Line Items] | ' | ' | ||
Maximum pro rata exposure under the guarantee | 0 | [1] | 0 | [1] |
South Edge guarantee [Member] | ' | ' | ||
Guarantor Obligations [Line Items] | ' | ' | ||
Maximum pro rata exposure under the guarantee | $13,243 | [2] | $13,243 | [2] |
[1] | As our completion guarantees are typically backed by funding from a third party, we believe these guarantees do not represent a potential cash obligation for us, as they require only non-financial performance. | |||
[2] | As discussed in Note 13, although we have a reserve for the amounts we believe are appropriate, we dispute the enforceability of this guarantee, and ultimate resolution of this matter will be addressed through litigation and/or arbitration. |
Investments_in_Unconsolidated_3
Investments in Unconsolidated Entities (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets: | ' | ' |
Cash | $7,299 | $7,650 |
Real estate | 34,949 | 36,626 |
Other assets | 3,067 | 3,478 |
Total assets | 45,315 | 47,754 |
Liabilities and equity: | ' | ' |
Accounts payable and other liabilities | 2,889 | 4,748 |
Notes and mortgages payable | 13,453 | 14,001 |
Total liabilities and equity | $45,315 | $47,754 |
Investments_in_Unconsolidated_4
Investments in Unconsolidated Entities (Details 2) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Financial information related to unconsolidated joint ventures, Operations | ' | ' | ' | |
Revenue | $34,553 | $38,230 | $19,881 | |
Costs and expenses | -12,407 | -21,093 | -11,783 | |
Net earnings of unconsolidated entities | 22,146 | 17,137 | 8,098 | |
Meritage's share of pre-tax earnings | 12,833 | [1],[2] | 10,441 | 5,849 |
JV Partners [Member] | ' | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | |
Equity Method Investment Summarized Financial Information, Equity | 18,641 | 19,374 | ' | |
Meritage Homes [Member] | ' | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | |
Equity Method Investment Summarized Financial Information, Equity | $10,332 | $9,631 | ' | |
[1] | Our share of pre-tax earnings is recorded in “Losses from unconsolidated entities, net†and "Earnings from financial services unconsolidated entities and other, net" on our consolidated statements of operations and excludes joint venture profit related to lots we purchased from the joint ventures. Such profit is deferred until homes are delivered by us and title passes to a homebuyer. | |||
[2] | Balance represents Meritage's interest, as reflected in the financial records of the respective joint ventures. This balance may differ from the balance reflected in our consolidated balance sheets due to the following reconciling items: (i) timing differences for revenue and distributions recognition, (ii) step-up basis and corresponding amortization, (iii) income deferrals as discussed in Note (3) below and (iv) the cessation of allocation of losses from joint ventures in which we have previously impaired our investment balance to zero and where we have no commitment to fund additional losses. |
Investments_in_Unconsolidated_5
Investments in Unconsolidated Entities (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Equity method investment difference between carrying amount and underlying equity | $579,000 | $756,000 |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | 11,638,000 | 12,085,000 |
Equity method land ventures [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Number of joint ventures | 2 | ' |
Mortgage joint ventures | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Number of joint ventures | 2 | ' |
Title business joint ventures [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Number of joint ventures | 1 | ' |
Mortgage and title business joint ventures [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Investments in mortgage and title joint ventures | $2,900,000 | $2,000,000 |
Senior_Senior_Subordinated_Con2
Senior, Senior Subordinated, Convertible Senior Notes (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Components of senior and senior subordinated notes | ' | ' |
Senior, senior subordinated and convertible notes | $905,055 | $722,797 |
7.731% senior subordinated notes due 2017 [Member] | ' | ' |
Components of senior and senior subordinated notes | ' | ' |
Senior, senior subordinated and convertible notes | 0 | 99,825 |
Senior Notes Due Two Thousand Eighteen [Member] [Domain] | ' | ' |
Components of senior and senior subordinated notes | ' | ' |
Senior, senior subordinated and convertible notes | 175,000 | 0 |
7.15% senior notes due 2020 [Member] | ' | ' |
Components of senior and senior subordinated notes | ' | ' |
Senior, senior subordinated and convertible notes | 303,555 | 196,472 |
7.00% senior notes due 2022 [Member] | ' | ' |
Components of senior and senior subordinated notes | ' | ' |
Senior, senior subordinated and convertible notes | 300,000 | 300,000 |
1.875% convertible senior notes due 2032 [Member] | ' | ' |
Components of senior and senior subordinated notes | ' | ' |
Senior, senior subordinated and convertible notes | 126,500 | 126,500 |
Revolving Credit Facility [Member] | ' | ' |
Components of senior and senior subordinated notes | ' | ' |
Line of credit facility, amount outstanding | $0 | $0 |
Senior_Senior_Subordinated_Con3
Senior, Senior Subordinated, Convertible Senior Notes (Details 1) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Long-term Debt, Fiscal Year Maturity [Abstract] | ' |
2013 | $0 |
2014 | 0 |
2015 | 0 |
2016 | 0 |
2017 | 175,000 |
Thereafter | 730,055 |
Total | $905,055 |
Senior_Senior_Subordinated_Con4
Senior, Senior Subordinated, Convertible Senior Notes (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 24, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |
6.25% senior notes due 2015 [Member] | 6.25% senior notes due 2015 [Member] | 7.731% senior subordinated notes due 2017 [Member] | 7.731% senior subordinated notes due 2017 [Member] | 7.731% senior subordinated notes due 2017 [Member] | Senior Notes Due Two Thousand Eighteen [Member] [Domain] | Senior Notes Due Two Thousand Eighteen [Member] [Domain] | 7.00% senior notes due 2022 [Member] | 7.00% senior notes due 2022 [Member] | 7.00% senior notes due 2022 [Member] | 7.15% senior notes due 2020 [Member] | 7.15% senior notes due 2020 [Member] | 1.875% convertible senior notes due 2032 [Member] | 1.875% convertible senior notes due 2032 [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Consolidated EBITDA [Member] | Consolidated Interest Incurred [Member] | ||||
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | |||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, stated rate | ' | ' | ' | 6.25% | ' | 7.73% | 7.73% | ' | 4.50% | ' | 7.00% | 7.00% | ' | 7.15% | 7.15% | 1.88% | 1.88% | ' | ' | ' | ' | ' |
Debt Instrument, Unamortized Premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,555,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of wholly owned subsidiary | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Add-on to existing 7.15% senior notes due 2020 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of offering | ' | ' | ' | ' | ' | ' | ' | ' | 175,000,000 | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount repurchased | ' | ' | ' | ' | 285,000,000 | 99,800,000 | ' | 26,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on early extinguishment of debt | -3,796,000 | -5,772,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior, senior subordinated and convertible notes | 905,055,000 | 722,797,000 | ' | ' | ' | 0 | 99,825,000 | ' | 175,000,000 | 0 | 300,000,000 | 300,000,000 | ' | 303,555,000 | 196,472,000 | 126,500,000 | 126,500,000 | ' | ' | ' | ' | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | ' | 125,000,000 | ' | ' |
Available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,000,000 | ' | ' | ' |
Minimum net worth required for compliance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 360,000,000 | ' | ' | ' | ' |
Leverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60.00% | ' | ' | ' | ' |
Interest coverage ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.5 | 1 |
Letters of Credit Outstanding, Amount | 42,068,000 | 37,466,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Remaining Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 157,900,000 | ' | ' | ' | ' |
Line of credit facility, amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' |
Senior notes unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,528,000 | ' | ' | ' | ' | ' | ' | ' |
Year in which senior and senior subordinated notes due | ' | ' | ' | '2015 | ' | ' | '2017 | ' | '2018 | ' | ' | '2022 | ' | '2020 | '2020 | '2032 | '2032 | '2016 | ' | ' | ' | ' |
Percent of debt instrument par value issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 106.70% | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Effective Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, convertible, conversion ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17.1985 | ' | ' | ' | ' | ' | ' |
Conversion Principal Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | ' | ' | ' | ' | ' | ' |
Debt instrument, convertible, conversion price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $58.14 | ' | ' | ' | ' | ' |
Conversion premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 47.50% | ' | ' | ' | ' | ' |
Restricted Cash and Cash Equivalents | $0 | $38,938,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Disclosures_Details
Fair Value Disclosures (Details) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Summary of long lived real estate assets | ' | ' | ' | ||
Impairments | $987 | $2,009 | $15,324 | ||
Real Estate [Member] | Level 3 [Member] | ' | ' | ' | ||
Summary of long lived real estate assets | ' | ' | ' | ||
Adjusted Basis of Long-Lived Real Estate Assets | 6,226 | [1],[2] | 12,013 | [1],[2] | ' |
Impairments | 987 | 2,009 | ' | ||
Initial Basis of Long-Lived Real Estate Assets | $7,213 | $14,022 | ' | ||
[1] | The carrying values for these real-estate assets may have subsequently increased or decreased from the fair value reported due to activities that have occurred since the measurement date. | ||||
[2] | The fair values in the table above represent only those real estate assets whose carrying values were adjusted in the respective period. |
Fair_Value_Disclosures_Details1
Fair Value Disclosures (Details 1) (USD $) | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | 7.731% senior subordinated notes due 2017 [Member] | Senior Notes Due Two Thousand Eighteen [Member] [Domain] | Senior Notes Due Two Thousand Eighteen [Member] [Domain] | 7.15% senior notes due 2020 [Member] | 7.15% senior notes due 2020 [Member] | 7.00% senior notes due 2022 [Member] | 7.00% senior notes due 2022 [Member] | 7.00% senior notes due 2022 [Member] | 1.875% convertible senior notes due 2032 [Member] | 1.875% convertible senior notes due 2032 [Member] |
Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | Level 2 [Member] | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate Principal | $99,825 | $175,000 | $175,000 | $300,000 | $200,000 | $300,000 | $300,000 | $300,000 | $126,500 | $126,500 |
Fair value of fixed-rate debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated Fair Value | $102,950 | ' | $174,125 | $325,500 | $220,760 | ' | $318,750 | $328,500 | $142,154 | $127,449 |
Fair_Value_Disclosures_Details2
Fair Value Disclosures (Details Textual) | Dec. 31, 2013 | Dec. 31, 2012 |
6.25% senior notes due 2015 [Member] | ' | ' |
Fair Value Disclosures (Textual) [Abstract] | ' | ' |
Debt instrument, stated rate | ' | 6.25% |
7.731% senior subordinated notes due 2017 [Member] | ' | ' |
Fair Value Disclosures (Textual) [Abstract] | ' | ' |
Debt instrument, stated rate | 7.73% | 7.73% |
Senior Notes Due Two Thousand Eighteen [Member] [Domain] | ' | ' |
Fair Value Disclosures (Textual) [Abstract] | ' | ' |
Debt instrument, stated rate | 4.50% | ' |
7.15% senior notes due 2020 [Member] | ' | ' |
Fair Value Disclosures (Textual) [Abstract] | ' | ' |
Debt instrument, stated rate | 7.15% | 7.15% |
7.00% senior notes due 2022 [Member] | ' | ' |
Fair Value Disclosures (Textual) [Abstract] | ' | ' |
Debt instrument, stated rate | 7.00% | 7.00% |
1.875% convertible senior notes due 2032 [Member] | ' | ' |
Fair Value Disclosures (Textual) [Abstract] | ' | ' |
Debt instrument, stated rate | 1.88% | 1.88% |
Earnings_Loss_Per_Share_Detail
Earnings (Loss) Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
Share data in Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||||||
Basic and Diluted (Loss)/Earnings Per Common Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Basic weighted average number of shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 36,105 | 34,057 | 32,382 | |||||||||||
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Convertible debt | ' | ' | ' | ' | ' | ' | ' | ' | 2,176 | [1] | 612 | [1] | ' | |||||||||
Stock options and unvested restricted stock | ' | ' | ' | ' | ' | ' | ' | ' | 520 | [2] | 503 | [2] | 0 | [2] | ||||||||
Diluted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 38,801 | 35,172 | 32,382 | |||||||||||
Net earnings/(loss) as reported | $46,089,000 | $38,191,000 | $28,143,000 | $12,041,000 | $95,128,000 | [3] | $6,784,000 | [3] | $8,005,000 | [3] | ($4,754,000) | [3] | $124,464,000 | $105,163,000 | ($21,106,000) | |||||||
Interest attributable to Convertible Senior Notes, net of income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 1,454,000 | 418,000 | 0 | |||||||||||
Net Income/(Loss) for earnings/(loss) per share | ' | ' | ' | ' | ' | ' | ' | ' | $125,918,000 | $105,581,000 | ($21,106,000) | |||||||||||
Basic earnings/(loss) per share (in dollars per share) | $1.27 | [4] | $1.05 | [4] | $0.78 | [4] | $0.34 | [4] | $2.67 | [4] | $0.19 | [4] | $0.24 | [4] | ($0.15) | [4] | $3.45 | $3.09 | ($0.65) | |||
Diluted earnings/(loss) per share (in dollars per share) | $1.19 | [4] | $0.99 | [4] | $0.74 | [4] | $0.32 | [4] | $2.49 | [4] | $0.19 | [4] | $0.24 | [4] | ($0.15) | [4] | $3.25 | [1],[2] | $3 | [1],[2] | ($0.65) | [1],[2] |
Antidilutive stock options not included in the calculation of diluted earnings per share | ' | ' | ' | ' | ' | ' | ' | ' | 7 | 256 | 1,731 | |||||||||||
[1] | In accordance with ASC 260-10, Earnings Per Share, ("ASC 260-10") we calculate the dilutive effect of convertible securities using the "if-converted" method. | |||||||||||||||||||||
[2] | For periods with a net loss, no options or non-vested shares are included in the dilution calculation as all options and non-vested shares outstanding are considered anti-dilutive. | |||||||||||||||||||||
[3] | (3)In the fourth quarter of 2012, we reversed $79.9 million of our deferred tax asset valuation reserve and recorded an $8.4 million tax expense. | |||||||||||||||||||||
[4] | (1)Due to the computation of earnings/(loss) per share, the sum of the quarterly amounts may not equal the full-year results. |
Earnings_Loss_Per_Share_Detail1
Earnings (Loss) Per Share (Details Textual) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Conversion principal amount | $905,055 | $722,797 |
1.875% convertible senior notes due 2032 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt instrument, interest rate, stated percentage | 1.88% | 1.88% |
Debt instrument, convertible, conversion ratio | 17.1985 | ' |
Conversion principal amount | $126,500 | $126,500 |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Options | ' | ' | ' |
Options outstanding at beginning of year (shares) | 609,585 | 897,767 | 1,332,767 |
Granted (shares) | 0 | 0 | 0 |
Exercised (shares) | -347,370 | -282,082 | -171,800 |
Cancelled (shares) | -3,400 | -6,100 | -263,200 |
Outstanding at end of year (shares) | 258,815 | 609,585 | 897,767 |
Weighted Average Exercise Price | ' | ' | ' |
Options outstanding at beginning of year (shares) | $27.44 | $23.56 | $23.80 |
Exercised (shares) | $33.40 | $15.12 | $15.21 |
Cancelled (shares) | $14 | $25.73 | $30.24 |
Outstanding at end of year (shares) | $19.63 | $27.44 | $23.56 |
Options outstanding at end of year, additional disclosures | ' | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 4 months 7 days | ' | ' |
Aggregate Intrinsic Value | $7,340 | ' | ' |
Vested and expected to vest at end of year | ' | ' | ' |
Vested and expected to vest at end of year (shares) | 258,815 | ' | ' |
Weighted Average Exercise Price (shares) | $19.63 | ' | ' |
Weighted Average Remaining Contractual Life | '1 year 4 months 7 days | ' | ' |
Aggregate Intrinsic Value | 7,340 | ' | ' |
Exercisable at end of year | ' | ' | ' |
Options (shares) | 225,415 | 471,760 | 550,359 |
Weighted Average Exercise Price (shares) | $20.36 | $30.93 | $26.29 |
Weighted Average Remaining Contractual Life | '1 year 2 months 19 days | ' | ' |
Aggregate Intrinsic Value | $6,229 | ' | ' |
Price range of options exercised - lower range limit | $8.06 | $8.06 | $8.06 |
Price range of options exercised - upper range limit | $44.44 | $34.30 | $21.10 |
Price range of options outstanding - lower range limit | $11.48 | $8.06 | $8.06 |
Price range of options outstanding - upper range limit | $42.82 | $44.44 | $44.44 |
Total shares reserved for existing or future grants at end of year | 2,283,114 | ' | ' |
Stock_Based_Compensation_Detai1
Stock Based Compensation (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Range of Exercise Price - Lower Range Limit | $11.48 | $8.06 | $8.06 |
Range of Exercise Price - Upper Range Limit | $42.82 | $44.44 | $44.44 |
Stock Options Outstanding | ' | ' | ' |
Number Outstanding (shares) | 258,815 | ' | ' |
Stock Options Exercisable | ' | ' | ' |
Number Exercisable (shares) | 225,415 | ' | ' |
$8.06 - $15.98 [Member] | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Range of Exercise Price - Lower Range Limit | $11.48 | ' | ' |
Range of Exercise Price - Upper Range Limit | $14 | ' | ' |
Stock Options Outstanding | ' | ' | ' |
Number Outstanding (shares) | 59,453 | ' | ' |
Weighted Average Contractual Life | '1 year 8 months 22 days | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $13.80 | ' | ' |
Stock Options Exercisable | ' | ' | ' |
Number Exercisable (shares) | 29,953 | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $13.75 | ' | ' |
$17.98 - $19.80 [Member] | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Range of Exercise Price - Lower Range Limit | $15.98 | ' | ' |
Range of Exercise Price - Upper Range Limit | $19.80 | ' | ' |
Stock Options Outstanding | ' | ' | ' |
Number Outstanding (shares) | 35,142 | ' | ' |
Weighted Average Contractual Life | '0 years 11 months 25 days | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $16.06 | ' | ' |
Stock Options Exercisable | ' | ' | ' |
Number Exercisable (shares) | 34,542 | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $16.02 | ' | ' |
$19.90 - $19.90 [Member] | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Range of Exercise Price - Lower Range Limit | $19.90 | ' | ' |
Range of Exercise Price - Upper Range Limit | $19.90 | ' | ' |
Stock Options Outstanding | ' | ' | ' |
Number Outstanding (shares) | 139,840 | ' | ' |
Weighted Average Contractual Life | '1 year 4 months 16 days | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $19.90 | ' | ' |
Stock Options Exercisable | ' | ' | ' |
Number Exercisable (shares) | 139,840 | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $19.90 | ' | ' |
$21.10 - $40.55 [Member] | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Range of Exercise Price - Lower Range Limit | $22.11 | ' | ' |
Range of Exercise Price - Upper Range Limit | $22.11 | ' | ' |
Stock Options Outstanding | ' | ' | ' |
Number Outstanding (shares) | 6,300 | ' | ' |
Weighted Average Contractual Life | '2 years 7 months 11 days | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $22.11 | ' | ' |
Stock Options Exercisable | ' | ' | ' |
Number Exercisable (shares) | 3,000 | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $22.11 | ' | ' |
$42.82 - $44.44 [Member] | ' | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' | ' | ' |
Range of Exercise Price - Lower Range Limit | $42.82 | ' | ' |
Range of Exercise Price - Upper Range Limit | $42.82 | ' | ' |
Stock Options Outstanding | ' | ' | ' |
Number Outstanding (shares) | 18,080 | ' | ' |
Weighted Average Contractual Life | '0 years 0 months 28 days | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $42.82 | ' | ' |
Stock Options Exercisable | ' | ' | ' |
Number Exercisable (shares) | 18,080 | ' | ' |
Weighted Average Exercise Price (in dollars per share) | $42.82 | ' | ' |
Stock_Based_Compensation_Detai2
Stock Based Compensation (Details 2) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Nonvested Restricted Share Activity (time-based) [Member] | ' | ' | ' | |||
Nonvested Restricted Share Activity (time-based and performance-based), Number of Shares [Roll Forward] | ' | ' | ' | |||
Outstanding at Beginning of the Year (shares) | 825,650 | 649,516 | 465,251 | |||
Granted (shares) | 355,795 | 386,500 | 357,000 | |||
Vested (Earned/Released) (shares) | -215,850 | -166,566 | -141,335 | |||
Forfeited (shares) | -81,700 | [1] | -43,800 | [1] | -31,400 | [1] |
Outstanding at End of the Year (shares) | 883,895 | 825,650 | 649,516 | |||
Nonvested Restricted Share Activity (time-based and performance-based), Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' | ' | |||
Outstanding at Beginning of the Year (in dollars per share) | $25.43 | $22.68 | $19.01 | |||
Granted (in dollars per share) | $42.78 | $27.21 | $25.57 | |||
Vested (Earned/Released) (in dollars per share) | $41.72 | $18.92 | $17.76 | |||
Forfeited (in dollars per share) | $31.27 | [1] | $25.10 | [1] | $23.23 | [1] |
Outstanding at End of the Year (in dollars per share) | $32.22 | $25.43 | $22.68 | |||
Nonvested Restricted Share Activity (performance- based) [Member] | ' | ' | ' | |||
Nonvested Restricted Share Activity (time-based and performance-based), Number of Shares [Roll Forward] | ' | ' | ' | |||
Outstanding at Beginning of the Year (shares) | 180,000 | 191,250 | 202,500 | |||
Granted (shares) | 62,500 | 56,250 | 56,250 | |||
Vested (Earned/Released) (shares) | -67,500 | -33,750 | -33,750 | |||
Forfeited (shares) | 0 | [1] | -33,750 | [1] | -33,750 | [1] |
Outstanding at End of the Year (shares) | 175,000 | 180,000 | 191,250 | |||
Nonvested Restricted Share Activity (time-based and performance-based), Weighted Average Grant Date Fair Value [Roll Forward] | ' | ' | ' | |||
Outstanding at Beginning of the Year (in dollars per share) | $22.81 | $20.41 | $16.91 | |||
Granted (in dollars per share) | $42.56 | $20.72 | $25.65 | |||
Vested (Earned/Released) (in dollars per share) | $41.97 | $14.27 | $14.27 | |||
Forfeited (in dollars per share) | ' | $14.27 | [1] | $14.27 | [1] | |
Outstanding at End of the Year (in dollars per share) | $30.10 | $22.81 | $20.41 | |||
[1] | Forfeitures on time-based nonvested shares are a result of terminations of employment, while forfeitures on performance-based nonvested shares are a result of failing to attain certain goals as outlined in our executive management group's compensation agreements. |
Stock_Based_Compensation_Detai3
Stock Based Compensation (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Summary of compensation expense and stock award activity | ' | ' | ' |
Stock-based compensation expense | $9,483 | $8,319 | $7,410 |
Cash received by Company from exercises | $11,601 | $4,267 | $2,613 |
Stock_Based_Compensation_Detai4
Stock Based Compensation (Details 4) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Summary of stock based compensation agreements | ' | ' | ||
Unrecognized stock-based compensation cost | $17,385 | $13,072 | ||
Weighted average years remaining vesting period | '2 years 2 months 5 days | '2 years 2 months 2 days | ||
Total equity awards outstanding | 1,318 | [1] | 1,615 | [1] |
[1] | (1) Includes vested and unvested options outstanding and unvested restricted stock awards. |
Stock_Based_Compensation_Detai5
Stock Based Compensation (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares of common stock authorized under stock compensation plan | 8,950,000 | ' | ' |
Remaining shares available for grant | 965,404 | ' | ' |
Total intrinsic value of options exercises | $4.80 | $5.40 | $1.40 |
Performance based awards [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Vesting period for non-vested stock awards and stock options | '3 years | ' | ' |
Minimum [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Vesting period for non-vested stock awards and stock options | '3 years | ' | ' |
Maximum [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Vesting period for non-vested stock awards and stock options | '5 years | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current taxes: | ' | ' | ' | ' |
Federal | ' | $43,675 | ($589) | $0 |
State | ' | 1,345 | 122 | 730 |
Current income taxes | ' | 45,020 | -467 | 730 |
Deferred taxes: | ' | ' | ' | ' |
Federal | ' | 10,232 | -62,581 | 0 |
State | ' | -2,044 | -13,261 | 0 |
Deferred income taxes | ' | 8,188 | -75,842 | 0 |
Income tax expense (benefit) | 8,400 | 53,208 | -76,309 | 730 |
Income tax expense/(benefit) | $8,400 | $53,208 | ($76,309) | $730 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ' | ' | ' | ' |
Expected taxes at current federal statutory income tax rate | ' | $62,185 | $10,099 | ($7,132) |
State income taxes, net of federal tax benefit | ' | 7,967 | 1,878 | 475 |
Change in valuation allowance | ' | -8,666 | -85,460 | 4,126 |
Change in state effective tax rate | ' | 0 | -788 | 1,750 |
Effective income tax reconciliation, manufacturing deduction, amount | ' | -4,910 | 0 | 0 |
Federal tax credits | ' | -3,614 | -2,064 | 0 |
Net interest adjustments | ' | 0 | -589 | 0 |
Non-deductible costs and other | ' | 246 | 615 | 1,511 |
Income tax expense/(benefit) | $8,400 | $53,208 | ($76,309) | $730 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Real estate | $23,895,000 | $27,611,000 |
Goodwill | 8,077,000 | 10,227,000 |
Warranty reserve | 8,414,000 | 8,431,000 |
Wages payable | 9,956,000 | 1,092,000 |
Reserves and allowances | 1,102,000 | 931,000 |
Equity-based compensation | 4,995,000 | 5,449,000 |
Accrued expenses | 6,235,000 | 6,079,000 |
Net operating loss carry-forwards | 11,471,000 | 27,881,000 |
Tax credit carryforward | ' | 3,176,000 |
Other | 279,000 | 282,000 |
Total deferred tax assets | 74,424,000 | 91,159,000 |
Deferred tax liabilities: | ' | ' |
Deferred revenue | 3,670,000 | 3,668,000 |
Prepaids | 690,000 | 586,000 |
Fixed assets | -340,000 | 265,000 |
Total deferred tax liabilities | 4,020,000 | 4,519,000 |
Net total deferred tax assets | 70,404,000 | 86,640,000 |
Valuation allowance | 0 | -8,666,000 |
Deferred tax assets, net | 70,404,000 | 77,974,000 |
Other tax liabilities by timing difference: | ' | ' |
Other deferred tax liability - state franchise taxes | 2,750,000 | 2,132,000 |
Net deferred tax assets and liabilities | 67,654,000 | 75,842,000 |
Internal Revenue Service (IRS) [Member] | ' | ' |
Deferred tax assets: | ' | ' |
Net operating loss carry-forwards | 0 | ' |
Tax credit carryforward | $0 | ' |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Valuation allowance against deferred tax assets | ' | ' |
Valuation allowance | $0 | $8,666 |
State [Member] | ' | ' |
Valuation allowance against deferred tax assets | ' | ' |
Valuation allowance | $0 | $8,666 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Operating Loss Carryforwards [Line Items] | ' | ' | ' |
Deferred Tax Assets, Net | $70,404,000 | $77,974,000 | ' |
Change in valuation allowance | -8,666,000 | -85,460,000 | 4,126,000 |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
Net total deferred tax assets | 70,404,000 | 86,640,000 | ' |
Deferred tax assets, net | 70,404,000 | 77,974,000 | ' |
Other deferred tax liability - state franchise taxes | 2,750,000 | 2,132,000 | ' |
Tax credit carryforward | ' | 3,176,000 | ' |
NOL carryforwards, State | 11,471,000 | 27,881,000 | ' |
Income taxes payable | 18,200,000 | ' | ' |
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 0 | 0 | ' |
Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Period range when NOL carryforwards can be used | '20 years | ' | ' |
Tax credit carryforward | 0 | ' | ' |
NOL carryforwards, State | 0 | ' | ' |
Tax Credit Carryforward, Amount | 0 | ' | ' |
State [Member] | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
NOL carryforwards, State | 11,500,000 | ' | ' |
Minimum [Member] | State [Member] | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Period range when NOL carryforwards can be used | '5 years | ' | ' |
Maximum [Member] | State [Member] | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Period range when NOL carryforwards can be used | '20 years | ' | ' |
Homes sold during 2012 [Member] | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Tax benefit expected to be recognized in Q1 of fiscal year 2013 due to the provisions of American Taxpayer Relief Act of 2012 | 1,700,000 | ' | ' |
Homes sold during 2013 [Member] [Member] | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' |
Tax benefit expected to be recognized in Q1 of fiscal year 2013 due to the provisions of American Taxpayer Relief Act of 2012 | $2,000,000 | ' | ' |
Supplemental_Disclosure_of_Cas2
Supplemental Disclosure of Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash paid during the period for: | ' | ' | ' |
Interest, net of interest capitalized | $9,444 | $21,276 | $28,871 |
Income taxes | 25,688 | 402 | 759 |
Increase/(Decrease) in Real Estate Not Owned | 289 | 0 | -866 |
Non-cash investing activities: | ' | ' | ' |
Increase/(Decrease) in Real Estate Acquired Through Notes Payable | ($9,705) | ($6,288) | $0 |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Related Party Transaction [Line Items] | ' | ' | ' |
Related Party Transaction, Amounts of Transaction | $359,000 | $330,000 | $288,000 |
Alliance Bank [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Interest income on cash deposits placed with affiliated entity | 654,000 | 687,000 | 767,000 |
Alliance Bank [Member] | Affiliate Entity, a Custodian of CDARS [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Cash deposits with related party | 89,500,000 | 102,100,000 | ' |
Alliance Bank [Member] | Affiliate Entity, a Custodian of ICS [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Cash deposits with related party | $157,500,000 | $84,200,000 | ' |
Operating_and_Reporting_Segmen2
Operating and Reporting Segments (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Land closing revenue | ' | ' | ' | ' | ' | ' | ' | ' | $31,270,000 | $9,314,000 | $360,000 | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | 536,194,000 | 492,080,000 | 449,950,000 | 336,435,000 | 364,586,000 | 342,643,000 | 282,095,000 | 204,350,000 | 1,814,659,000 | [1] | 1,193,674,000 | [1] | 861,244,000 | [1] | ||||
Segment operating income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Total homebuilding segment operating income (2) | ' | ' | ' | ' | ' | ' | ' | ' | 209,408,000 | [2] | 77,800,000 | [2] | 22,937,000 | [2] | ||||
Financial Services Operating Profit | ' | ' | ' | ' | ' | ' | ' | ' | 15,954,000 | 10,255,000 | 6,563,000 | |||||||
Corporate and unallocated | ' | ' | ' | ' | ' | ' | ' | ' | -31,216,000 | [3] | -22,619,000 | [3] | -20,925,000 | [3] | ||||
Loss from unconsolidated entities, net | ' | ' | ' | ' | ' | ' | ' | ' | -378,000 | -224,000 | -714,000 | |||||||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -15,092,000 | -24,244,000 | -30,399,000 | |||||||
Loss on early extinguishment of debt | ' | ' | ' | ' | ' | ' | ' | ' | -3,796,000 | -5,772,000 | 0 | |||||||
Other (expense)/income, net | ' | ' | ' | ' | ' | ' | ' | ' | 2,792,000 | -6,342,000 | 2,162,000 | |||||||
Earnings/(loss) before income taxes | 65,879,000 | 56,786,000 | 38,532,000 | 16,475,000 | 23,600,000 | [4] | 6,986,000 | [4] | 2,842,000 | [4] | -4,574,000 | [4] | 177,672,000 | 28,854,000 | -20,376,000 | |||
West [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Land closing revenue | ' | ' | ' | ' | ' | ' | ' | ' | 11,600,000 | 6,500,000 | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 937,050,000 | [1] | 600,227,000 | [1] | 366,265,000 | [1] | ||||
Segment operating income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Total homebuilding segment operating income (2) | ' | ' | ' | ' | ' | ' | ' | ' | 131,352,000 | [2] | 44,727,000 | [1] | 5,037,000 | [1] | ||||
Central [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Land closing revenue | ' | ' | ' | ' | ' | ' | ' | ' | 16,200,000 | 2,000,000 | 360,000 | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 508,961,000 | [1] | 392,678,000 | [1] | 395,638,000 | [1] | ||||
Segment operating income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Total homebuilding segment operating income (2) | ' | ' | ' | ' | ' | ' | ' | ' | 38,499,000 | [2] | 17,790,000 | [1] | 11,042,000 | [1] | ||||
East [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Land closing revenue | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 | 790,000 | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 368,648,000 | [1] | 200,769,000 | [1] | 99,341,000 | [1] | ||||
Segment operating income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Total homebuilding segment operating income (2) | ' | ' | ' | ' | ' | ' | ' | ' | $39,557,000 | [2] | $15,283,000 | [1] | $6,858,000 | [1] | ||||
[1] | Revenue includes the following land closing revenue, by segment: 2013 – $11.6 million in the West Region, $16.2 million in the Central Region and $3.5 million in the East Region; 2012 – $6.5 million in the West Region, $2.0 million in the Central Region and $790,000 in the East Region; 2011 – $360,000 in the Central Region. | |||||||||||||||||
[2] | (2)Operating income includes the following real-estate related and joint venture related impairments: Years Ended December 31, 2013 2012 2011West $514 $1,618 $11,333Central 235 219 2,896East 238 172 1,095Total $987 $2,009 $15,324 | |||||||||||||||||
[3] | Balance consists primarily of corporate costs and numerous shared service functions such as finance and treasury that are not allocated to the homebuilding or financial reporting segments. | |||||||||||||||||
[4] | In the third quarter of 2012, we recorded an $8.7 million charge related to a litigation accrual. |
Operating_and_Reporting_Segmen3
Operating and Reporting Segments (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Segment information on assets | ' | ' | |
Deposits on real estate under option or contract | $51,595 | [1],[2] | $14,351 |
Real estate | 1,405,299 | 1,113,187 | |
Investments in unconsolidated entities | 11,638 | 12,085 | |
Other assets | 534,829 | 435,939 | |
Total assets | 2,003,361 | 1,575,562 | |
Corporate and Unallocated [Member] | ' | ' | |
Segment information on assets | ' | ' | |
Deposits on real estate under option or contract | 0 | 0 | |
Real estate | 0 | 0 | |
Investments in unconsolidated entities | 2,443 | 1,059 | |
Other assets | 310,657 | 252,247 | |
Total assets | 313,100 | 253,306 | |
West [Member] | ' | ' | |
Segment information on assets | ' | ' | |
Deposits on real estate under option or contract | 26,415 | 4,419 | |
Real estate | 800,288 | 647,316 | |
Investments in unconsolidated entities | 204 | 365 | |
Other assets | 26,900 | 24,935 | |
Total assets | 853,807 | 677,035 | |
Central [Member] | ' | ' | |
Segment information on assets | ' | ' | |
Deposits on real estate under option or contract | 12,198 | 7,168 | |
Real estate | 369,464 | 305,100 | |
Investments in unconsolidated entities | 8,941 | 10,645 | |
Other assets | 165,403 | 132,546 | |
Total assets | 556,006 | 455,459 | |
East [Member] | ' | ' | |
Segment information on assets | ' | ' | |
Deposits on real estate under option or contract | 12,982 | 2,764 | |
Real estate | 235,547 | 160,771 | |
Investments in unconsolidated entities | 50 | 16 | |
Other assets | 31,372 | 25,914 | |
Total assets | 279,951 | 189,465 | |
Financial Services [Member] | ' | ' | |
Segment information on assets | ' | ' | |
Deposits on real estate under option or contract | 0 | 0 | |
Real estate | 0 | 0 | |
Investments in unconsolidated entities | 0 | 0 | |
Other assets | 497 | 297 | |
Total assets | $497 | $297 | |
[1] | (4)Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. | ||
[2] | Amount is reflected in our consolidated balance sheet in the line item “Deposits on real estate under option or contract†as of December 31, 2013. |
Operating_and_Reporting_Segmen4
Operating and Reporting Segments (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
operating_segment | |||
State | |||
Operating and Reporting Segments (Textual) [Abstract] | ' | ' | ' |
Number of operating segments | 7 | ' | ' |
Number of states in which Company operates | 8 | ' | ' |
Land closing revenue | $31,270,000 | $9,314,000 | $360,000 |
West [Member] | ' | ' | ' |
Operating and Reporting Segments (Textual) [Abstract] | ' | ' | ' |
Land closing revenue | 11,600,000 | 6,500,000 | ' |
Central [Member] | ' | ' | ' |
Operating and Reporting Segments (Textual) [Abstract] | ' | ' | ' |
Land closing revenue | 16,200,000 | 2,000,000 | 360,000 |
East [Member] | ' | ' | ' |
Operating and Reporting Segments (Textual) [Abstract] | ' | ' | ' |
Land closing revenue | $3,500,000 | $790,000 | ' |
Operating_and_Reporting_Segmen5
Operating and Reporting Segments Operating and Reporting Segments (Details 2) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Segment Reporting Information [Line Items] | ' | ' | ' |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | $987 | $2,009 | $15,324 |
West [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | 514 | 1,618 | 11,333 |
Central [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | 235 | 219 | 2,896 |
East [Member] | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' |
Impairment Of Real Estate And Joint Venture And Other Real Estate Related Impairments | $238 | $172 | $1,095 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' |
2013 | $4,394 |
2014 | 4,015 |
2015 | 3,679 |
2016 | 3,562 |
2017 | 2,957 |
Thereafter | 8,612 |
Total future minimum lease payments due | $27,219 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |||||||||||||
Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 06, 2011 | Oct. 26, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |||
lender | South Edge guarantee [Member] | South Edge guarantee [Member] | South Edge guarantee [Member] | South Edge guarantee [Member] | South Edge [Member] | Summary Judgment Including Interest [Member] [Member] | Summary Judgment Interest [Member] | Summary Judgment Excluding Interest [Member] [Member] | |||||||
JointVenture | |||||||||||||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Sublease income | ' | $1,600,000 | $2,000,000 | $2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Rent expense | ' | 6,400,000 | 5,500,000 | 6,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Reserved for litigation and asserted claims | ' | 16,463,000 | 16,067,000 | ' | ' | ' | ' | 8,700,000 | ' | ' | ' | ' | ' | ||
Joint venture ownership percentage | ' | ' | ' | ' | ' | 3.53% | ' | ' | ' | ' | ' | ' | ' | ||
Number of co-ventures in joint venture | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ||
Maximum pro rata exposure under the guarantee | ' | 13,243,000 | 13,462,000 | ' | ' | 13,243,000 | [1] | 13,243,000 | [1] | ' | ' | ' | ' | ' | ' |
Supersedeas Bond | ' | 16,050,604 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Litigation Judgment Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,753,344 | 699,487 | 15,053,857 | ||
Springing Repayment Guarantee_Original Demand Letter | ' | ' | ' | ' | ' | ' | ' | ' | 13,200,000 | ' | ' | ' | ' | ||
Warranty reserve | ' | 21,971,000 | 22,064,000 | 23,136,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Number of lenders filing petition for involuntary bankruptcy | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amount requested in demand for arbitration related to alleged breaches | 13,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Additional amount requested in demand for arbitration related to pro rata future infrastructure improvement costs | ' | ' | ' | ' | $9,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||
[1] | As discussed in Note 13, although we have a reserve for the amounts we believe are appropriate, we dispute the enforceability of this guarantee, and ultimate resolution of this matter will be addressed through litigation and/or arbitration. |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||||||||
Selected Quarterly Financial Information [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Total closing revenue | $536,194 | $492,080 | $449,950 | $336,435 | $364,586 | $342,643 | $282,095 | $204,350 | $1,814,659 | [1] | $1,193,674 | [1] | $861,244 | [1] | ||||||||
Total closing gross profit | 123,649 | 113,182 | 95,052 | 64,535 | 68,973 | 62,424 | 51,566 | 35,236 | 396,418 | 218,199 | 141,108 | |||||||||||
Earnings before income taxes | 65,879 | 56,786 | 38,532 | 16,475 | 23,600 | [2] | 6,986 | [2] | 2,842 | [2] | -4,574 | [2] | 177,672 | 28,854 | -20,376 | |||||||
Net earnings | $46,089 | $38,191 | $28,143 | $12,041 | $95,128 | [3] | $6,784 | [3] | $8,005 | [3] | ($4,754) | [3] | $124,464 | $105,163 | ($21,106) | |||||||
Per Share Data: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||||||
Basic earnings/(loss) per share (in dollars per share) | $1.27 | [4] | $1.05 | [4] | $0.78 | [4] | $0.34 | [4] | $2.67 | [4] | $0.19 | [4] | $0.24 | [4] | ($0.15) | [4] | $3.45 | $3.09 | ($0.65) | |||
Diluted earnings/(loss) per share (in dollars per share) | $1.19 | [4] | $0.99 | [4] | $0.74 | [4] | $0.32 | [4] | $2.49 | [4] | $0.19 | [4] | $0.24 | [4] | ($0.15) | [4] | $3.25 | [5],[6] | $3 | [5],[6] | ($0.65) | [5],[6] |
[1] | Revenue includes the following land closing revenue, by segment: 2013 – $11.6 million in the West Region, $16.2 million in the Central Region and $3.5 million in the East Region; 2012 – $6.5 million in the West Region, $2.0 million in the Central Region and $790,000 in the East Region; 2011 – $360,000 in the Central Region. | |||||||||||||||||||||
[2] | In the third quarter of 2012, we recorded an $8.7 million charge related to a litigation accrual. | |||||||||||||||||||||
[3] | (3)In the fourth quarter of 2012, we reversed $79.9 million of our deferred tax asset valuation reserve and recorded an $8.4 million tax expense. | |||||||||||||||||||||
[4] | (1)Due to the computation of earnings/(loss) per share, the sum of the quarterly amounts may not equal the full-year results. | |||||||||||||||||||||
[5] | For periods with a net loss, no options or non-vested shares are included in the dilution calculation as all options and non-vested shares outstanding are considered anti-dilutive. | |||||||||||||||||||||
[6] | In accordance with ASC 260-10, Earnings Per Share, ("ASC 260-10") we calculate the dilutive effect of convertible securities using the "if-converted" method. |
Selected_Quarterly_Financial_D3
Selected Quarterly Financial Data (Unaudited) (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2012 |
South Edge guarantee [Member] | |||||
Selected Quarterly Financial Information [Line Items] | ' | ' | ' | ' | ' |
Legal reserves | $16,067 | $16,463 | $16,067 | ' | $8,700 |
Income tax expense (benefit) | 8,400 | 53,208 | -76,309 | 730 | ' |
Deferred tax asset valuation reversal | ($79,900) | $8,666 | $77,974 | $0 | ' |
Subsequent_Events_Statement
Subsequent Events Statement (USD $) | 3 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2014 | Jan. 09, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Subsequent Event [Line Items] | ' | ' | ' | ' |
Common Stock, Shares, Issued | ' | 2,530,000 | 36,244,071 | 35,613,351 |
Sale of Stock, Price Per Share | ' | $45.75 | ' | ' |
Proceeds from Issuance of Common Stock | $110.50 | ' | ' | ' |