Cacée 2:04—cv —OO384—F
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G However, for Meritage, or for that matter any other homebuilder, to grow its business
through home sales, it needs land and to develop lots. In a deposition taken in 2004, Greg
Hancock explained how builders make money by having a sufficient number of lots to
overcome the start-up costs of opening a developmentl. As of ]une 2001, there were 934 lots
available-for-sale as part of the Hancock communities that Meritage purchased. Fifteen (15) l
months later, the available lots Meritage had-to sell had dropped in half, to 449; The graph
below demonstrates the number of lots that Meritage had available to sell within its _
Hancock business from june 2001 through 2003. ‘ ‘ .
_ ~Hancocl<-MTH Lots Available for Sale
V 2*100 12/31/01 l l 1281/02
,,,0,,
. 2,000 ‘
· ,,,,,,, | _
1,400 l *
g ,,,0,, III II
. »-T ' _
800
,0,, I IIIIIIIIII I
l=|=|=|=I=|=| u ·|=|=l=it=|=|=l=ll=l=|=|=l‘l‘ ' l ' l "
200 V U
. _ _ |I l I E I I I lI I E I IH I lI| T
s'*s"¤â€>¤*¤â€Â¤'â€Â¤'â€s'â€n'*¤'*§°sâ€Â°Â§â€™Â§Â°Â§Â° ¤°°
x~*" y»°°" Oi <>°*°‘ sf si wi" s~*°" 6* of sf if ·e" sib G'} <>°·° . .
This graph shows the declinelin Meritage’s inventory of future home sales and closings, '
immediately after its acquisition of the Hancock businesses. From 2001 until Greg
- Hancock’s resignation in March 2003, there were several land acquisitions that increased lot
availability. However, as of March 2003 the net lot growth during his twenty—two (22)
month em lo ent was zero. The lar e increase in lots available after lul 2003 relate to the
P Ym 8 Y
Sundance property that was part of the land acreage Meritage acquired from Hancock in
2001, but until later in 2003 was not developed sufficiently to begin selling.
I
_ ‘. l Deposition of Gregory Hancock, dated April 6, 2004, page 47. ` . A
l · page 7 ·`,. Confidential l f °
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Case 2:04-cv-00384-ROS
Document 413-19
Filed 12/18/2006
Page 1 of 2
Case 2:04-cv-00384-ROS
Document 413-19
Filed 12/18/2006
Page 2 of 2
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