SOURCE: Meritage Homes Corporation

Meritage Homes Corporation

January 28, 2016 08:30 ET

Meritage Homes Reports Fourth Quarter 2015 Results, Including 23% Order Growth, 11% Increase in Home Closing Revenue and 6% Increase in Diluted EPS at $1.26

SCOTTSDALE, AZ--(Marketwired - January 28, 2016) - Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced fourth quarter and full year results for the periods ended December 31, 2015.

 
Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 
    Three Months Ended December 31,   Twelve Months Ended December 31,
    2015   2014   %Chg   2015   2014   %Chg
Homes closed (units)     1,919     1,863   3 %     6,522     5,862   11 %
Home closing revenue   $ 761,372   $ 688,288   11 %   $ 2,531,556   $ 2,142,391   18 %
Average sales price - closings   $ 397   $ 369   8 %   $ 388   $ 365   6 %
Home orders (units)     1,568     1,272   23 %     7,100     5,944   19 %
Home order value   $ 634,181   $ 490,999   29 %   $ 2,822,785   $ 2,238,117   26 %
Average sales price - orders   $ 404   $ 386   5 %   $ 398   $ 377   6 %
Ending backlog (units)                       2,692     2,114   27 %
Ending backlog value                     $ 1,137,681   $ 846,452   34 %
Average sales price - backlog                     $ 423   $ 400   6 %
Net earnings   $ 52,897   $ 49,208   7 %   $ 128,738   $ 142,241   (9 )%
Diluted EPS   $ 1.26   $ 1.19   6 %   $ 3.09   $ 3.46   (11 )%
                                     

MANAGEMENT COMMENTS

"We finished the full year with double-digit growth over 2014 in closings, orders and backlog, with particularly strong performance in our east and west regions," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. "Our full year orders benefitted from significant growth in the fourth quarter -- including a 16% increase in Texas -- reflecting a higher absorption pace within most of our markets, in addition to more actively selling communities.

"We achieved a 15% increase over 2014 in our pretax earnings for the fourth quarter," continued Mr. Hilton. "Our home closing revenue increased 11% as we closed more homes at higher average prices, which in turn provided greater overhead leverage and more than offset a lower gross margin on home closings. We also achieved a 100 basis point improvement in our percentage of selling, general and administrative expenses from cost controls, in addition to higher closing revenue."

Mr. Hilton added, "With continued healthy market conditions as we've been experiencing in most of our divisions, we are confident in our prospects for 2016, especially considering that we entered the year with a backlog valued at over $1.1 billion -- 34% higher than it was a year ago.

"We currently anticipate closing between 7,000 and 7,500 homes in 2016 and growing our community count 5-10% by the end of the year," concluded Mr. Hilton. "Furthermore, considering longer-term growth prospects for our industry, we believe our goal of delivering 10,000 homes in 2018 is achievable."

FOURTH QUARTER RESULTS

  • Net earnings increased 7% to $52.9 million ($1.26 per diluted share) for the fourth quarter of 2015, compared to prior year net earnings of $49.2 million ($1.19 per diluted share), primarily reflecting increased revenue and lower overhead expenses as a percentage of revenue, partially offset by lower home closing gross margin, higher interest expense and a higher effective tax rate.
  • Home closing revenue increased 11% due to a 3% increase in home closings, combined with an 8% increase in average price over the prior year period. The west region (California, Colorado and Arizona) grew home closing revenue by 27% over 2014, followed by the east region's 18% increase (Florida, the Carolinas, Georgia and Tennessee), and a 14% decrease in the central region (Texas) due in part to the impact of lower oil prices on the Houston market.
  • Total value of homes ordered increased 29%, combining a 23% increase in orders with a 5% increase in average sales prices. Orders increased in every state but Colorado, where average community count was down 6%. Total order value was up across the board in the fourth quarter of 2015, including Texas, where orders and order value increased 16% and 29%, respectively, over the fourth quarter of 2014.
  • Total active community count of 254 at year-end 2015 was 11% higher than 2014 year-end, with increases concentrated in the east and central regions, where the average actively selling communities were up 18% and 15% year-over-year in the fourth quarter, respectively. Average orders per community also increased 11% to 6.2 in the fourth quarter of 2015 from 5.6 in the fourth quarter of 2014.
  • Order cancellation rate decreased to 12% in the fourth quarter of 2015 from 17% in the fourth quarter of 2014, reflecting buyer confidence and rising home values.
  • Home closing gross profit increased 5% over the prior year due to higher home closing revenue, partially offset by a decline in home closing gross margin. Fourth quarter 2015 home closing margin was 19.3% compared to 20.3% in the fourth quarter of 2014, due to increases in land prices and overall construction costs exceeding home price appreciation during 2015.
  • Commissions and other sales costs decreased 20 basis points from the prior year to 7.0% of home closing revenue, benefitting from higher closing revenue and tighter cost controls in the fourth quarter of 2015, compared to 7.2% of home closing revenue in the fourth quarter of 2014.
  • General and administrative expenses decreased by 80 basis points to 3.4% of total closing revenue in the fourth quarter of 2015, compared to 4.2% of total closing revenue in the previous year, reflecting greater leverage from higher closing revenue and various cost reductions.
  • Interest expense increased to $4.0 million or 0.5% of total closing revenue in the fourth quarter of 2015, compared to $0.6 million or 0.1% of total closing revenue in the fourth quarter of 2014, mainly due to higher long-term debt balances in 2015.
  • Earnings before income taxes increased 15% to $76.1 million in the fourth quarter of 2015 compared to $66.4 million in the fourth quarter of 2014, equating to pretax margins of 9.7% in 2015 and 9.5% in 2014. The effective tax rate increased to 30% in the fourth quarter of 2015 from 26% in 2014.

FULL YEAR RESULTS

  • Net income for the full year decreased 9% to $128.7 million in 2015 compared to $142.2 million in 2014 as higher revenue was offset by a lower gross margin on home closings, $2.9 million of incremental real estate related impairments compared to 2014, and a $4.1 million litigation-related charge in the third quarter of 2015.
  • Home closings and closing revenue increased 11% and 18%, respectively, for 2015 over 2014, led by higher volumes and average prices in the east region, which grew home closing revenue 45% in 2015, followed by 13% and 3% increases in the west and central (Texas) regions, respectively.
  • Full year home closing gross margin of 19.0% compared to 21.2% in 2014 reflects price inflation in both land and construction costs, which was only partially offset by home price increases. Gross margin was also reduced by $6.6 million of real estate related impairments in 2015, compared to $3.7 million in 2014.
  • Despite lower gross margin, home closing profits increased 6% over 2014 on higher closing revenue in 2015.
  • Financial services profit increased 19% in 2015 to $19.3 million from $16.2 million in 2014.
  • Net orders for the year increased 19% in 2015 over 2014, and total order value increased 26% year over year, aided by a 6% increase in average sales prices in addition to a full year of orders from Legendary Communities, acquired in August 2014.
  • The total value of orders in backlog at year-end 2015 was 34% higher than the prior year's ending backlog, reflecting a 27% increase in units in backlog coupled with a 6% increase in average price.

BALANCE SHEET

  • Cash and cash equivalents at December 31, 2015, totaled $262.2 million, compared to $103.3 million at December 31, 2014, reflecting the issuance of $200 million of new senior notes in early June 2015, a portion of which was deployed during the year to fund the company's growth.
  • Real estate assets increased by $220.6 million during the year, ending at $2.1 billion at December 31, 2015. Approximately 58% of that increase was attributable to additional work-in-process inventory for homes in backlog that were under construction. The company invested a total of approximately $709 million in land and development during 2015, less than originally planned due to high land prices in the west, slowing in the Houston market and repositioning of assets in the east.
  • Meritage ended the year 2015 with approximately 27,800 total lots under control, compared to approximately 30,300 total lots at December 31, 2014, representing 4.3 and 5.2 years' supply of lots, respectively, based on trailing twelve months' closings. Much of the reduction was due to strategic sales of excess assets in certain markets, as well as the termination of certain lot purchase options in southeastern markets.
  • Net debt-to-capital ratio at December 31, 2015 decreased to 40.7% from 42.9% at December 31, 2014.

CONFERENCE CALL

Management will host a conference call today to discuss the Company's results at 1:00 p.m. Eastern Time (11:00 a.m. Arizona Time). The call will be webcast with an accompanying slideshow available on the "Investor Relations" page of the Company's web site at http://investors.meritagehomes.com. Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN.

Conference Call registration link: http://dpregister.com/10078808.

Telephone participants who are unable to pre-register may dial in to 866-226-4948 on the day of the call. International dial-in number is 1-412-902-4125 or 1-855-669-9657 for Canada.

A replay of the call will be available until February 15, beginning at 2:00 p.m. ET on January 29, 2016 on the website noted above, or by dialing 877-344-7529, 1-412-317-0088 for international or 1-855-669-9658 for Canada, and referencing conference number 10078808.

For more information, visit www.meritagehomes.com.

 
Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(Unaudited)
(In thousands, except per share data)
 
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2015     2014     2015     2014  
Homebuilding:                                
  Home closing revenue   $ 761,372     $ 688,288     $ 2,531,556     $ 2,142,391  
  Land closing revenue     20,241       10,630       36,526       27,252  
    Total closing revenue     781,613       698,918       2,568,082       2,169,643  
  Cost of home closings     (614,794 )     (548,371 )     (2,049,637 )     (1,688,676 )
  Cost of land closings     (14,744 )     (10,266 )     (29,736 )     (28,350 )
    Total cost of closings     (629,538 )     (558,637 )     (2,079,373 )     (1,717,026 )
  Home closing gross profit     146,578       139,917       481,919       453,715  
  Land closing gross profit/(loss)     5,497       364       6,790       (1,098 )
    Total closing gross profit     152,075       140,281       488,709       452,617  
Financial Services:                                
  Revenue     3,101       3,022       11,377       10,121  
  Expense     (1,289 )     (1,368 )     (5,203 )     (4,812 )
  Earnings from financial services unconsolidated entities and other, net     3,942       3,588       13,097       10,869  
    Financial services profit     5,754       5,242       19,271       16,178  
Commissions and other sales costs     (53,542 )     (49,492 )     (188,418 )     (156,742 )
General and administrative expenses     (26,775 )     (29,138 )     (112,849 )     (104,598 )
Income/(loss) from other unconsolidated entities, net     77       (83 )     (338 )     (447 )
Interest expense     (4,003 )     (594 )     (15,965 )     (5,163 )
Other income/(loss), net     2,499       177       (946 )     6,572  
Earnings before income taxes     76,085       66,393       189,464       208,417  
Provision for income taxes     (23,188 )     (17,185 )     (60,726 )     (66,176 )
Net earnings   $ 52,897     $ 49,208     $ 128,738     $ 142,241  
                                 
Earnings per share:                                
  Basic                                
    Earnings per share   $ 1.33     $ 1.26     $ 3.25     $ 3.65  
    Weighted average shares outstanding     39,667       39,133       39,593       39,017  
  Diluted                                
    Earnings per share   $ 1.26     $ 1.19     $ 3.09     $ 3.46  
    Weighted average shares outstanding     42,214       41,696       42,164       41,614  
                                     
                                     
                                     
Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(unaudited)
 
    December 31, 2015   December 31, 2014
Assets:            
  Cash and cash equivalents   $ 262,208   $ 103,333
  Other receivables     57,296     56,763
  Real estate (1)     2,098,302     1,877,682
  Real estate not owned     -     4,999
  Deposits on real estate under option or contract     87,839     94,989
  Investments in unconsolidated entities     11,370     10,780
  Property and equipment, net     33,970     32,403
  Deferred tax asset     59,147     64,137
  Prepaids, other assets and goodwill     80,390     71,052
    Total assets   $ 2,690,522   $ 2,316,138
Liabilities:            
  Accounts payable   $ 106,440   $ 83,619
  Accrued liabilities     161,163     154,144
  Home sale deposits     36,197     29,379
  Liabilities related to real estate not owned     -     4,299
  Loans payable and other borrowings     23,867     30,722
  Senior and convertible senior notes     1,103,918     904,486
      Total liabilities     1,431,585     1,206,649
Stockholders' Equity:            
  Preferred stock     -     -
  Common stock     397     391
  Additional paid-in capital     559,492     538,788
  Retained earnings     699,048     570,310
      Total stockholders' equity     1,258,937     1,109,489
    Total liabilities and stockholders' equity   $ 2,690,522   $ 2,316,138
                 
(1) Real estate - Allocated costs:            
  Homes under contract under construction   $ 456,138   $ 328,931
  Unsold homes, completed and under construction     307,425     302,288
  Model homes     138,546     109,614
  Finished home sites and home sites under development     1,196,193     1,136,849
      Total real estate   $ 2,098,302   $ 1,877,682
                   
                   
                   
Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands - unaudited):
 
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2015     2014     2015     2014  
Depreciation and amortization   $ 3,947     $ 3,460     $ 14,241     $ 11,614  
                                 
Summary of Capitalized Interest:                                
Capitalized interest, beginning of period   $ 61,396     $ 50,455     $ 54,060     $ 32,992  
Interest incurred     17,877       15,041       67,542       58,374  
Interest expensed     (4,003 )     (594 )     (15,965 )     (5,163 )
Interest amortized to cost of home and land closings     (14,068 )     (10,842 )     (44,435 )     (32,143 )
Capitalized interest, end of period   $ 61,202     $ 54,060     $ 61,202     $ 54,060  
                         
    December 31, 2015     December 31, 2014              
Notes payable and other borrowings   $ 1,127,785     $ 935,208                  
Stockholders' equity     1,258,937       1,109,489                  
Total capital     2,386,722       2,044,697                  
Debt-to-capital     47.3 %     45.7 %                
                                 
Notes payable and other borrowings   $ 1,127,785     $ 935,208                  
  Less: cash and cash equivalents     (262,208 )     (103,333 )                
Net debt     865,577       831,875                  
Stockholders' equity     1,258,937       1,109,489                  
Total net capital   $ 2,124,514     $ 1,941,364                  
Net debt-to-capital     40.7 %     42.9 %                
                                 
                                 
                                 
Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands) (unaudited)
 
  Twelve Months Ended December 31,  
  2015     2014  
Cash flows from operating activities:              
  Net earnings $ 128,738     $ 142,241  
  Adjustments to reconcile net earnings to net cash used in operating activities:              
    Depreciation and amortization   14,241       11,614  
    Stock-based compensation   15,781       12,211  
    Excess income tax benefit from stock-based awards   (2,043 )     (2,297 )
    Equity in earnings from unconsolidated entities   (12,759 )     (10,422 )
    Distribution of earnings from unconsolidated entities   12,650       11,613  
    Other   11,530       10,149  
  Changes in assets and liabilities:              
    Increase in real estate   (209,407 )     (338,594 )
    Decrease/(Increase) in deposits on real estate under option or contract   6,316       (42,278 )
    Increase in receivables, prepaids and other assets   (7,083 )     (25,032 )
    Increase in accounts payable and accrued liabilities   31,883       14,688  
    Increase in home sale deposits   6,818       4,859  
    Net cash used in operating activities   (3,335 )     (211,248 )
Cash flows from investing activities:              
  Investments in unconsolidated entities   (481 )     (515 )
  Distributions of capital from unconsolidated entities   -       65  
  Purchases of property and equipment   (16,092 )     (20,788 )
  Proceeds from sales of property and equipment   86       262  
  Maturities/sales of investments and securities   1,555       124,599  
  Payments to purchase investments and securities   (1,555 )     (35,813 )
  Cash paid for acquisitions   -       (130,677 )
    Net cash used in by investing activities   (16,487 )     (62,867 )
Cash flows from financing activities:              
  Repayment of loans payable and other borrowings   (23,226 )     (10,447 )
  Proceeds from issuance of senior notes   200,000       -  
  Proceeds from issuance of common stock, net   -       110,420  
  Debt issuance costs   (3,006 )     -  
  Excess income tax benefit from stock-based awards   2,043       2,297  
  Proceeds from stock option exercises   2,886       1,042  
    Net cash provided by financing activities   178,697       103,312  
Net increase/(decrease) in cash and cash equivalents   158,875       (170,803 )
Beginning cash and cash equivalents   103,333       274,136  
Ending cash and cash equivalents $ 262,208     $ 103,333  
               
               
               
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
  Three Months Ended
  December 31, 2015   December 31, 2014
  Homes   Value   Homes   Value
Homes Closed:                  
  Arizona 291   $ 98,004   225   $ 73,101
  California 323     175,601   239     122,851
  Colorado 131     57,211   146     64,696
  West Region 745     330,816   610     260,648
  Texas 559     194,879   713     227,342
  Central Region 559     194,879   713     227,342
  Florida 254     106,520   217     87,503
  Georgia 72     23,735   53     17,734
  North Carolina 162     66,921   138     55,870
  South Carolina 83     24,217   75     24,747
  Tennessee 44     14,284   57     14,444
  East Region 615     235,677   540     200,298
  Total 1,919   $ 761,372   1,863   $ 688,288
Homes Ordered:                  
  Arizona 253   $ 86,887   173   $ 55,489
  California 215     118,370   173     96,335
  Colorado 105     51,033   113     49,958
  West Region 573     256,290   459     201,782
  Texas 465     171,938   401     133,282
  Central Region 465     171,938   401     133,282
  Florida 200     80,929   168     71,692
  Georgia 73     25,704   41     12,996
  North Carolina 159     67,492   127     46,900
  South Carolina 65     20,071   55     18,952
  Tennessee 33     11,757   21     5,395
  East Region 530     205,953   412     155,935
  Total 1,568   $ 634,181   1,272   $ 490,999
                     
                     
                     
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
  Twelve Months Ended
  December 31, 2015   December 31, 2014
  Homes   Value   Homes   Value
Homes Closed:                  
  Arizona 1,008   $ 325,371   924   $ 307,282
  California 888     478,174   785     395,105
  Colorado 495     224,125   464     206,702
  West Region 2,391     1,027,670   2,173     909,089
  Texas 2,025     705,318   2,224     683,717
  Central Region 2,025     705,318   2,224     683,717
  Florida 843     361,127   699     277,045
  Georgia 228     72,913   90     29,633
  North Carolina 551     215,642   386     157,989
  South Carolina 330     101,847   112     36,241
  Tennessee 154     47,039   178     48,677
  East Region 2,106     798,568   1,465     549,585
  Total 6,522   $ 2,531,556   5,862   $ 2,142,391
Homes Ordered:                  
  Arizona 1,133   $ 377,059   838   $ 276,261
  California 965     538,357   772     411,605
  Colorado 559     264,643   530     235,951
  West Region 2,657     1,180,059   2,140     923,817
  Texas 2,109     746,471   2,290     747,103
  Central Region 2,109     746,471   2,290     747,103
  Florida 893     376,563   728     290,343
  Georgia 270     89,755   72     22,443
  North Carolina 626     258,952   438     171,843
  South Carolina 348     105,838   99     33,177
  Tennessee 197     65,147   177     49,391
  East Region 2,334     896,255   1,514     567,197
  Total 7,100   $ 2,822,785   5,944   $ 2,238,117
                   
Order Backlog:                  
  Arizona 317   $ 117,906   192   $ 66,218
  California 289     184,146   212     123,963
  Colorado 332     162,151   268     121,633
  West Region 938     464,203   672     311,814
  Texas 942     350,194   858     309,041
  Central Region 942     350,194   858     309,041
  Florida 287     118,006   237     102,570
  Georgia 95     33,426   53     16,584
  North Carolina 260     111,478   185     68,168
  South Carolina 88     30,111   70     26,120
  Tennessee 82     30,263   39     12,155
  East Region 812     323,284   584     225,597
  Total 2,692   $ 1,137,681   2,114   $ 846,452
                     
                     
                     
Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
 
  Three Months Ended
  December 31, 2015   December 31, 2014
  Ending   Average   Ending   Average
Active Communities:              
  Arizona 41   41.0   41   41.5
  California 24   25.0   24   23.0
  Colorado 16   15.5   17   16.5
  West Region 81   81.5   82   81.0
  Texas 72   71.0   59   62.0
  Central Region 72   71.0   59   62.0
  Florida 31   31.0   29   27.5
  Georgia 17   17.0   13   12.0
  North Carolina 26   25.5   21   20.5
  South Carolina 18   17.5   20   19.5
  Tennessee 9   8.5   5   4.5
  East Region 101   99.5   88   84.0
  Total 254   252.0   229   227.0
   
  Twelve Months Ended
  December 31, 2015   December 31, 2014
  Ending   Average   Ending   Average
Active Communities:              
  Arizona 41   41.0   41   40.5
  California 24   24.0   24   23.0
  Colorado 16   16.5   17   15.5
  West Region 81   81.5   82   79.0
  Texas 72   65.5   59   64.5
  Central Region 72   65.5   59   64.5
  Florida 31   30.0   29   24.5
  Georgia 17   15.0   13   6.5
  North Carolina 26   23.5   21   19.0
  South Carolina 18   19.0   20   10.0
  Tennessee 9   7.0   5   5.0
  East Region 101   94.5   88   65.0
  Total 254   241.5   229   208.5
                 

About Meritage Homes Corporation

Meritage Homes is the seventh-largest public homebuilder in the United States, based on homes closed in 2014. Meritage builds and sells single-family homes for first-time, move-up, luxury and active adult buyers across the Western, Southern and Southeastern United States. Meritage builds in markets including Sacramento, San Francisco Bay area, southern coastal and Inland Empire markets in California; Houston, Dallas-Ft. Worth, Austin and San Antonio, Texas; Phoenix/Scottsdale, Green Valley and Tucson, Arizona; Denver and Fort Collins, Colorado; Orlando and Tampa, Florida; Raleigh and Charlotte, North Carolina; Greenville-Spartanburg and York County, South Carolina; Nashville, Tennessee and Atlanta, Georgia.

Meritage has designed and built more than 90,000 homes in its 30-year history, and has a reputation for its distinctive style, quality construction, and positive customer experience. Meritage is the industry leader in energy-efficient homebuilding and has received the U.S. Environmental Protection Agency's ENERGY STAR Partner of the Year for Sustained Excellence Award in 2013, 2014 and 2015, for innovation and industry leadership in energy efficient homebuilding.

For more information, visit investors.meritagehomes.com.

This press release and the accompanying comments during our analyst call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include management's belief about its prospects for 2016 and beyond, including that the Company will achieve better results in the east region, expectations with respect to community count and closings for 2016, as well as its goal for 2018 deliveries (closings).

Such statements are based upon the current beliefs and expectations of Company management, and current market conditions, which are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Meritage's business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company's stock and note prices may fluctuate dramatically. These risks and uncertainties include, but are not limited to, the following: the availability of finished lots and undeveloped land; interest rates and changes in the availability and pricing of residential mortgages; fluctuations in the availability and cost of labor; changes in tax laws that adversely impact us or our homebuyers; the ability of our potential buyers to sell their existing homes; cancellation rates; fluctuations in home prices in our markets; weakness in the homebuilding market resulting from a setback in the current economic recovery due to lower energy prices or other factors; inflation in the cost of materials used to develop communities and construct homes; the adverse effect of slower order absorption rates; a change to the feasibility of projects under option or contract that could result in the write-down or write-off of option deposits; our ability to successfully integrate acquired companies and achieve anticipated benefits from these acquisitions; our potential exposure to natural disasters or severe weather conditions; competition; construction defect and home warranty claims; adverse legal rulings; our success in prevailing on contested tax positions; our ability to obtain performance bonds in connection with our development work; the loss of key personnel; changes in, or our failure to comply with, laws and regulations; limitations of our geographic diversification; fluctuations in quarterly operating results; our financial leverage and level of indebtedness; our ability to take certain actions because of restrictions contained in the indentures for our senior notes; our ability to raise additional capital when and if needed; our credit ratings; our compliance with government regulations and the effect of legislative or other initiatives that seek to restrain growth of new housing construction or similar measures; expiration or non-renewal of current or anticipated tax credits available to us; acts of war; the replication of our "Green" technologies by our competitors; our exposure to information technology failures and security breaches; and other factors identified in documents filed by the company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2014 and subsequent quarterly reports on Forms 10-Q under the caption "Risk Factors," which can be found on our website.

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