ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
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95-3666267
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(State of incorporation)
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(IRS employer identification number)
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
Number
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May 31
, 2013 and November 30, 201
2
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Item 1.
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Financial Statements
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Six Months Ended May 31,
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Three Months Ended May 31,
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||||||||||||
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2013
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2012
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2013
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2012
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||||||||
Total revenues
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$
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929,625
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|
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$
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557,410
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$
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524,406
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$
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302,852
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Homebuilding:
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|
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||||||||
Revenues
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$
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924,604
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$
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552,500
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$
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521,788
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$
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300,605
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Construction and land costs
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(786,263
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)
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(484,873
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)
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(442,998
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)
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(253,041
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)
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||||
Selling, general and administrative expenses
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(129,196
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)
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(114,312
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)
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(70,099
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)
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(63,100
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)
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||||
Operating income (loss)
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9,145
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(46,685
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)
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8,691
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(15,536
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)
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||||
Interest income
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436
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246
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232
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111
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||||
Interest expense
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(29,747
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)
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(30,755
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)
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(14,507
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)
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(14,469
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)
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||||
Equity in loss of unconsolidated joint ventures
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(1,002
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)
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(315
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)
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(567
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)
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(243
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)
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||||
Homebuilding pretax loss
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(21,168
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)
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(77,509
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)
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(6,151
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)
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(30,137
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)
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||||
Financial services:
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||||||||
Revenues
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5,021
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4,910
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2,618
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2,247
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Expenses
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(1,471
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)
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(1,528
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)
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(636
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)
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(693
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)
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||||
Equity in income (loss) of unconsolidated joint ventures
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1,087
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89
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(4
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)
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(53
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)
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Financial services pretax income
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4,637
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3,471
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1,978
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1,501
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Total pretax loss
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(16,531
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)
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(74,038
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)
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(4,173
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)
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(28,636
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)
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||||
Income tax benefit
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1,100
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4,100
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1,200
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4,500
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Net loss
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$
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(15,431
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)
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$
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(69,938
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)
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$
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(2,973
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)
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$
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(24,136
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)
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Basic and diluted loss per share
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$
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(.19
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)
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$
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(.91
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)
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$
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(.04
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)
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$
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(.31
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)
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Basic and diluted average shares outstanding
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81,526
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77,097
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83,605
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77,105
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Cash dividends declared per common share
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$
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.0500
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$
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.0875
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$
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.0250
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$
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.0250
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May 31,
2013 |
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November 30,
2012 |
||||
Assets
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Homebuilding:
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Cash and cash equivalents
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$
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538,571
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$
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524,765
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Restricted cash
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42,322
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42,362
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Receivables
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66,121
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64,821
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Inventories
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2,029,390
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1,706,571
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Investments in unconsolidated joint ventures
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122,800
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123,674
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Other assets
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103,797
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95,050
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2,903,001
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2,557,243
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Financial services
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9,120
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4,455
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Total assets
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$
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2,912,121
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$
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2,561,698
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Liabilities and stockholders’ equity
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Homebuilding:
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Accounts payable
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$
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117,804
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$
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118,544
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Accrued expenses and other liabilities
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378,149
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340,345
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Mortgages and notes payable
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1,943,275
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1,722,815
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2,439,228
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2,181,704
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Financial services
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2,077
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3,188
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Common stock
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115,291
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115,178
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Paid-in capital
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785,385
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888,579
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Retained earnings
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430,682
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450,292
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Accumulated other comprehensive loss
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(27,958
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)
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(27,958
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)
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Grantor stock ownership trust, at cost
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(114,540
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)
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(115,149
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)
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Treasury stock, at cost
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(718,044
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)
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(934,136
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)
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Total stockholders’ equity
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470,816
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376,806
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Total liabilities and stockholders’ equity
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$
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2,912,121
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$
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2,561,698
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Six Months Ended May 31,
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||||||
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2013
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2012
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||||
Cash flows from operating activities:
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Net loss
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$
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(15,431
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)
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$
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(69,938
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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||||
Equity in (income) loss of unconsolidated joint ventures
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(85
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)
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226
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Distributions of earnings from unconsolidated joint ventures
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1,638
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—
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Amortization of discounts and issuance costs
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2,387
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1,347
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Depreciation and amortization
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940
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781
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Loss on early extinguishment of debt
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—
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2,003
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Stock-based compensation
|
2,044
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3,205
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Inventory impairments and land option contract abandonments
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284
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|
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16,509
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|
||
Changes in assets and liabilities:
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||||
Receivables
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(405
|
)
|
|
16,795
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Inventories
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(290,661
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)
|
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(16,131
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)
|
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Accounts payable, accrued expenses and other liabilities
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32,210
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(40,214
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)
|
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Other, net
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(521
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)
|
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(4,464
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)
|
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Net cash used in operating activities
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(267,600
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)
|
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(89,881
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)
|
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Cash flows from investing activities:
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|
|
|
||||
Return of investments in (contributions to) unconsolidated joint ventures
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(5,651
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)
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4,550
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|
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Purchases of property and equipment, net
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(752
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)
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(592
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)
|
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Net cash provided by (used in) investing activities
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(6,403
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)
|
|
3,958
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|
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Cash flows from financing activities:
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|
||||
Change in restricted cash
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40
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|
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1,299
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|
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Proceeds from issuance of debt
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230,000
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|
|
344,831
|
|
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Payment of debt issuance costs
|
(10,086
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)
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(6,751
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)
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Repayment of senior notes
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—
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|
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(340,481
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)
|
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Payments on mortgages and land contracts due to land sellers and other loans
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(37,830
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)
|
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(6,695
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)
|
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Proceeds from issuance of common stock, net
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109,503
|
|
|
—
|
|
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Issuance of common stock under employee stock plans
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2,106
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|
|
353
|
|
||
Payments of cash dividends
|
(4,179
|
)
|
|
(6,746
|
)
|
||
Stock repurchases
|
(33
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
289,521
|
|
|
(14,190
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
15,518
|
|
|
(100,113
|
)
|
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Cash and cash equivalents at beginning of period
|
525,688
|
|
|
418,074
|
|
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Cash and cash equivalents at end of period
|
$
|
541,206
|
|
|
$
|
317,961
|
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1.
|
Basis of Presentation and Significant Accounting Policies
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
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2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(15,431
|
)
|
|
$
|
(69,938
|
)
|
|
$
|
(2,973
|
)
|
|
$
|
(24,136
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted average shares outstanding
|
81,526
|
|
|
77,097
|
|
|
83,605
|
|
|
77,105
|
|
||||
Basic and diluted loss per share
|
$
|
(.19
|
)
|
|
$
|
(.91
|
)
|
|
$
|
(.04
|
)
|
|
$
|
(.31
|
)
|
1.
|
Basis of Presentation and Significant Accounting Policies (continued)
|
2.
|
Stock-Based Compensation
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2.
|
Stock-Based Compensation (continued)
|
|
Options
|
|
Weighted
Average Exercise
Price
|
|||
Options outstanding at beginning of period
|
10,105,546
|
|
|
$
|
21.27
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(112,586
|
)
|
|
13.47
|
|
|
Cancelled
|
—
|
|
|
—
|
|
|
Options outstanding at end of period
|
9,992,960
|
|
|
$
|
21.36
|
|
Options exercisable at end of period
|
8,431,121
|
|
|
$
|
23.88
|
|
3.
|
Segment Information
|
3.
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Segment Information (continued)
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
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2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
West Coast
|
$
|
479,594
|
|
|
$
|
237,884
|
|
|
$
|
273,490
|
|
|
$
|
132,651
|
|
Southwest
|
79,078
|
|
|
59,493
|
|
|
47,247
|
|
|
27,909
|
|
||||
Central
|
226,797
|
|
|
168,030
|
|
|
120,305
|
|
|
87,756
|
|
||||
Southeast
|
139,135
|
|
|
87,093
|
|
|
80,746
|
|
|
52,289
|
|
||||
Total homebuilding revenues
|
924,604
|
|
|
552,500
|
|
|
521,788
|
|
|
300,605
|
|
||||
Financial services
|
5,021
|
|
|
4,910
|
|
|
2,618
|
|
|
2,247
|
|
||||
Total
|
$
|
929,625
|
|
|
$
|
557,410
|
|
|
$
|
524,406
|
|
|
$
|
302,852
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Pretax income (loss):
|
|
|
|
|
|
|
|
||||||||
West Coast
|
$
|
37,862
|
|
|
$
|
(33,454
|
)
|
|
$
|
28,020
|
|
|
$
|
(14,694
|
)
|
Southwest
|
841
|
|
|
(7,182
|
)
|
|
1,590
|
|
|
(2,139
|
)
|
||||
Central
|
2,484
|
|
|
(4,138
|
)
|
|
2,348
|
|
|
(631
|
)
|
||||
Southeast
|
(25,092
|
)
|
|
320
|
|
|
(16,768
|
)
|
|
4,579
|
|
||||
Corporate and other (a)
|
(37,263
|
)
|
|
(33,055
|
)
|
|
(21,341
|
)
|
|
(17,252
|
)
|
||||
Total homebuilding pretax loss
|
(21,168
|
)
|
|
(77,509
|
)
|
|
(6,151
|
)
|
|
(30,137
|
)
|
||||
Financial services
|
4,637
|
|
|
3,471
|
|
|
1,978
|
|
|
1,501
|
|
||||
Total
|
$
|
(16,531
|
)
|
|
$
|
(74,038
|
)
|
|
$
|
(4,173
|
)
|
|
$
|
(28,636
|
)
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Equity in income (loss) of unconsolidated joint ventures:
|
|
|
|
|
|
|
|
||||||||
West Coast
|
$
|
(73
|
)
|
|
$
|
(77
|
)
|
|
$
|
(40
|
)
|
|
$
|
(32
|
)
|
Southwest
|
(1,164
|
)
|
|
(217
|
)
|
|
(639
|
)
|
|
(209
|
)
|
||||
Central
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Southeast
|
235
|
|
|
(21
|
)
|
|
112
|
|
|
(2
|
)
|
||||
Total
|
$
|
(1,002
|
)
|
|
$
|
(315
|
)
|
|
$
|
(567
|
)
|
|
$
|
(243
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Inventory impairments:
|
|
|
|
|
|
|
|
||||||||
West Coast
|
$
|
—
|
|
|
$
|
13,107
|
|
|
$
|
—
|
|
|
$
|
6,535
|
|
Southwest
|
—
|
|
|
2,135
|
|
|
—
|
|
|
2,135
|
|
||||
Central
|
—
|
|
|
1,267
|
|
|
—
|
|
|
1,267
|
|
||||
Southeast
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
—
|
|
|
$
|
16,509
|
|
|
$
|
—
|
|
|
$
|
9,937
|
|
|
|
|
|
|
|
|
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Assets:
|
|
|
|
||||
West Coast
|
$
|
1,109,993
|
|
|
$
|
930,450
|
|
Southwest
|
351,149
|
|
|
319,863
|
|
||
Central
|
417,172
|
|
|
369,294
|
|
||
Southeast
|
401,058
|
|
|
341,460
|
|
||
Corporate and other
|
623,629
|
|
|
596,176
|
|
||
Total homebuilding assets
|
2,903,001
|
|
|
2,557,243
|
|
||
Financial services
|
9,120
|
|
|
4,455
|
|
||
Total
|
$
|
2,912,121
|
|
|
$
|
2,561,698
|
|
|
|
|
|
||||
Investments in unconsolidated joint ventures:
|
|
|
|
||||
West Coast
|
$
|
38,763
|
|
|
$
|
38,372
|
|
Southwest
|
74,919
|
|
|
75,920
|
|
||
Central
|
—
|
|
|
—
|
|
||
Southeast
|
9,118
|
|
|
9,382
|
|
||
Total
|
$
|
122,800
|
|
|
$
|
123,674
|
|
4.
|
Financial Services
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Insurance commissions
|
$
|
2,790
|
|
|
$
|
2,754
|
|
|
$
|
1,487
|
|
|
$
|
1,154
|
|
Title services
|
1,329
|
|
|
878
|
|
|
680
|
|
|
492
|
|
||||
Marketing services fees
|
900
|
|
|
1,275
|
|
|
450
|
|
|
600
|
|
||||
Interest income
|
2
|
|
|
3
|
|
|
1
|
|
|
1
|
|
||||
Total
|
5,021
|
|
|
4,910
|
|
|
2,618
|
|
|
2,247
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
(1,471
|
)
|
|
(1,528
|
)
|
|
(636
|
)
|
|
(693
|
)
|
||||
Operating income
|
3,550
|
|
|
3,382
|
|
|
1,982
|
|
|
1,554
|
|
||||
Equity in income (loss) of unconsolidated joint ventures
|
1,087
|
|
|
89
|
|
|
(4
|
)
|
|
(53
|
)
|
||||
Pretax income
|
$
|
4,637
|
|
|
$
|
3,471
|
|
|
$
|
1,978
|
|
|
$
|
1,501
|
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,635
|
|
|
$
|
923
|
|
Receivables
|
964
|
|
|
1,859
|
|
||
Investments in unconsolidated joint ventures
|
5,503
|
|
|
1,630
|
|
||
Other assets
|
18
|
|
|
43
|
|
||
Total assets
|
$
|
9,120
|
|
|
$
|
4,455
|
|
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
2,077
|
|
|
$
|
3,188
|
|
Total liabilities
|
$
|
2,077
|
|
|
$
|
3,188
|
|
5.
|
Inventories
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Homes under construction
|
$
|
543,858
|
|
|
$
|
454,108
|
|
Land under development
|
851,469
|
|
|
567,470
|
|
||
Land held for future development
|
634,063
|
|
|
684,993
|
|
||
Total
|
$
|
2,029,390
|
|
|
$
|
1,706,571
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Capitalized interest at beginning of period
|
$
|
217,684
|
|
|
$
|
233,461
|
|
|
$
|
217,161
|
|
|
$
|
234,917
|
|
Interest incurred (a)
|
67,911
|
|
|
60,020
|
|
|
34,489
|
|
|
29,609
|
|
||||
Interest expensed (a)
|
(29,747
|
)
|
|
(30,755
|
)
|
|
(14,507
|
)
|
|
(14,469
|
)
|
||||
Interest amortized to construction and land costs
|
(40,271
|
)
|
|
(27,694
|
)
|
|
(21,566
|
)
|
|
(15,025
|
)
|
||||
Capitalized interest at end of period (b)
|
$
|
215,577
|
|
|
$
|
235,032
|
|
|
$
|
215,577
|
|
|
$
|
235,032
|
|
(a)
|
Amounts for the six months ended
May 31, 2012
include a
$2.0 million
loss on the early extinguishment of debt.
|
5.
|
Inventories (continued)
|
(b)
|
Inventory impairment charges are recognized against all inventory costs of a community, such as land, land development, cost of home construction and capitalized interest. Capitalized interest amounts presented in the table reflect the gross amount of capitalized interest as impairment charges recognized are not generally allocated to specific components of inventory.
|
6.
|
Inventory Impairments and Land Option Contract Abandonments
|
6.
|
Inventory Impairments and Land Option Contract Abandonments (continued)
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||
Unobservable Input (a)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Average selling price
|
|
$
|
—
|
|
|
$115,200 - $498,000
|
|
$
|
—
|
|
|
$115,200 - $487,300
|
Deliveries per month
|
|
—
|
|
|
1 - 6
|
|
—
|
|
|
1 - 6
|
||
Discount rate
|
|
—
|
%
|
|
17% - 20%
|
|
—
|
%
|
|
17% - 20%
|
(a)
|
The ranges of inputs used primarily reflect the underlying variability among the various housing markets where each of the impacted communities or land parcels are located, rather than changes in prevailing market conditions.
|
6.
|
Inventory Impairments and Land Option Contract Abandonments (continued)
|
Level 1
|
|
Fair value determined based on quoted prices in active markets for identical assets or liabilities.
|
|
|
|
Level 2
|
|
Fair value determined using significant observable inputs, such as quoted prices for similar assets or liabilities or quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data, by correlation or other means.
|
|
|
|
Level 3
|
|
Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.
|
|
|
Fair Value
|
||||||||
Description
|
|
Hierarchy
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Long-lived assets held and used (a)
|
|
Level 3
|
|
$
|
—
|
|
|
$
|
39,851
|
|
(a)
|
Amounts represent the aggregate fair value for communities or land parcels where we recognized inventory impairment charges during the period, as of the date that the fair value measurements were made. The carrying value for these communities or land parcels may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.
|
|
|
|
May 31, 2013
|
|
November 30, 2012
|
||||||||||||
|
Fair Value
Hierarchy
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
Level 2
|
|
$
|
1,671,194
|
|
|
$
|
1,895,795
|
|
|
$
|
1,670,504
|
|
|
$
|
1,831,596
|
|
Convertible senior notes due February 1, 2019 at 1.375%
|
Level 2
|
|
230,000
|
|
|
265,075
|
|
|
—
|
|
|
—
|
|
8.
|
Variable Interest Entities
|
|
May 31, 2013
|
|
November 30, 2012
|
||||||||||||
|
Cash
Deposits
|
|
Aggregate
Purchase Price
|
|
Cash
Deposits
|
|
Aggregate
Purchase Price
|
||||||||
Unconsolidated VIEs
|
$
|
10,323
|
|
|
$
|
475,665
|
|
|
$
|
8,463
|
|
|
$
|
327,196
|
|
Other land option contracts and other similar contracts
|
12,012
|
|
|
232,097
|
|
|
17,219
|
|
|
298,139
|
|
||||
|
$
|
22,335
|
|
|
$
|
707,762
|
|
|
$
|
25,682
|
|
|
$
|
625,335
|
|
8.
|
Variable Interest Entities (continued)
|
9.
|
Investments in Unconsolidated Joint Ventures
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues
|
$
|
6,356
|
|
|
$
|
—
|
|
|
$
|
6,356
|
|
|
$
|
—
|
|
Construction and land costs
|
(3,928
|
)
|
|
6
|
|
|
(3,928
|
)
|
|
—
|
|
||||
Other expenses, net
|
(1,891
|
)
|
|
(749
|
)
|
|
(1,036
|
)
|
|
(288
|
)
|
||||
Income (loss)
|
$
|
537
|
|
|
$
|
(743
|
)
|
|
$
|
1,392
|
|
|
$
|
(288
|
)
|
9.
|
Investments in Unconsolidated Joint Ventures (continued)
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Assets
|
|
|
|
||||
Cash
|
$
|
19,061
|
|
|
$
|
29,721
|
|
Receivables
|
6,360
|
|
|
6,104
|
|
||
Inventories
|
358,371
|
|
|
352,791
|
|
||
Other assets
|
1,183
|
|
|
1,175
|
|
||
Total assets
|
$
|
384,975
|
|
|
$
|
389,791
|
|
Liabilities and equity
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
87,815
|
|
|
$
|
88,027
|
|
Equity
|
297,160
|
|
|
301,764
|
|
||
Total liabilities and equity
|
$
|
384,975
|
|
|
$
|
389,791
|
|
10.
|
Other Assets
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Cash surrender value of insurance contracts
|
$
|
67,634
|
|
|
$
|
64,757
|
|
Debt issuance costs (a)
|
22,952
|
|
|
14,563
|
|
||
Property and equipment, net
|
7,736
|
|
|
7,920
|
|
||
Prepaid expenses
|
5,475
|
|
|
7,810
|
|
||
Total
|
$
|
103,797
|
|
|
$
|
95,050
|
|
(a)
|
The increase in debt issuance costs as of
May 31, 2013
compared to November 30, 2012 primarily reflected the costs associated with our underwritten public issuance of the
$230 Million
Convertible Senior Notes during the first quarter of 2013 and our entry into a
$200.0 million
unsecured revolving credit facility (the “Credit Facility”) during the second quarter of 2013.
|
11.
|
Accrued Expenses and Other Liabilities
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Employee compensation and related benefits
|
$
|
108,376
|
|
|
$
|
97,189
|
|
Construction defect and other litigation liabilities
|
104,672
|
|
|
107,111
|
|
||
Warranty liability
|
53,475
|
|
|
47,822
|
|
||
Accrued interest payable
|
46,891
|
|
|
47,392
|
|
||
Liabilities related to inventories not owned
|
8,943
|
|
|
4,100
|
|
||
Real estate and business taxes
|
4,251
|
|
|
8,453
|
|
||
Other
|
51,541
|
|
|
28,278
|
|
||
Total
|
$
|
378,149
|
|
|
$
|
340,345
|
|
12.
|
Mortgages and Notes Payable
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Mortgages and land contracts due to land sellers and other loans
|
$
|
42,081
|
|
|
$
|
52,311
|
|
Senior notes due February 1, 2014 at 5 3/4%
|
75,935
|
|
|
75,911
|
|
||
Senior notes due January 15, 2015 at 5 7/8%
|
102,038
|
|
|
101,999
|
|
||
Senior notes due June 15, 2015 at 6 1/4%
|
236,841
|
|
|
236,826
|
|
||
Senior notes due September 15, 2017 at 9.10%
|
261,732
|
|
|
261,430
|
|
||
Senior notes due June 15, 2018 at 7 1/4%
|
299,194
|
|
|
299,129
|
|
||
Senior notes due March 15, 2020 at 8.00%
|
345,454
|
|
|
345,209
|
|
||
Senior notes due September 15, 2022 at 7.50%
|
350,000
|
|
|
350,000
|
|
||
Convertible senior notes due February 1, 2019 at 1.375%
|
230,000
|
|
|
—
|
|
||
Total
|
$
|
1,943,275
|
|
|
$
|
1,722,815
|
|
12.
|
Mortgages and Notes Payable (continued)
|
12.
|
Mortgages and Notes Payable (continued)
|
13.
|
Commitments and Contingencies
|
13.
|
Commitments and Contingencies (continued)
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Balance at beginning of period
|
$
|
47,822
|
|
|
$
|
67,693
|
|
|
$
|
43,333
|
|
|
$
|
64,607
|
|
Warranties issued
|
6,319
|
|
|
2,973
|
|
|
3,553
|
|
|
1,656
|
|
||||
Payments
|
(18,213
|
)
|
|
(8,703
|
)
|
|
(9,284
|
)
|
|
(4,267
|
)
|
||||
Adjustments
|
17,547
|
|
|
(11,097
|
)
|
|
15,873
|
|
|
(11,130
|
)
|
||||
Balance at end of period
|
$
|
53,475
|
|
|
$
|
50,866
|
|
|
$
|
53,475
|
|
|
$
|
50,866
|
|
13.
|
Commitments and Contingencies (continued)
|
13.
|
Commitments and Contingencies (continued)
|
13.
|
Commitments and Contingencies (continued)
|
14.
|
Legal Matters
|
14.
|
Legal Matters (continued)
|
15.
|
Stockholders’ Equity
|
|
|
Six Months Ended May 31, 2013
|
||||||||||||||||||||||||||
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Grantor Stock Ownership Trust
|
|
Treasury Stock
|
|
Total Stockholders’ Equity
|
||||||||||||||
Balance at November 30, 2012
|
|
$
|
115,178
|
|
|
$
|
888,579
|
|
|
$
|
450,292
|
|
|
$
|
(27,958
|
)
|
|
$
|
(115,149
|
)
|
|
$
|
(934,136
|
)
|
|
$
|
376,806
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
(15,431
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,431
|
)
|
|||||||
Dividends on common stock
|
|
—
|
|
|
—
|
|
|
(4,179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,179
|
)
|
|||||||
Employee stock options/other
|
|
113
|
|
|
1,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,517
|
|
|||||||
Restricted stock awards
|
|
—
|
|
|
(325
|
)
|
|
—
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
—
|
|
|||||||
Restricted stock amortization
|
|
—
|
|
|
1,257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,257
|
|
|||||||
Stock-based compensation
|
|
—
|
|
|
787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
787
|
|
|||||||
Issuance of common stock
|
|
—
|
|
|
(106,622
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
216,125
|
|
|
109,503
|
|
|||||||
Grantor stock ownership trust
|
|
—
|
|
|
305
|
|
|
—
|
|
|
—
|
|
|
284
|
|
|
—
|
|
|
589
|
|
|||||||
Stock repurchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(33
|
)
|
|||||||
Balance at May 31, 2013
|
|
$
|
115,291
|
|
|
$
|
785,385
|
|
|
$
|
430,682
|
|
|
$
|
(27,958
|
)
|
|
$
|
(114,540
|
)
|
|
$
|
(718,044
|
)
|
|
$
|
470,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended May 31, 2012
|
||||||||||||||||||||||||||
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Grantor Stock Ownership Trust
|
|
Treasury Stock
|
|
Total Stockholders’ Equity
|
||||||||||||||
Balance at November 30, 2011
|
|
$
|
115,171
|
|
|
$
|
884,190
|
|
|
$
|
519,844
|
|
|
$
|
(26,152
|
)
|
|
$
|
(118,059
|
)
|
|
$
|
(932,337
|
)
|
|
$
|
442,657
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
(69,938
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,938
|
)
|
|||||||
Dividends on common stock
|
|
—
|
|
|
—
|
|
|
(6,746
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,746
|
)
|
|||||||
Restricted stock amortization
|
|
—
|
|
|
821
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
821
|
|
|||||||
Stock-based compensation
|
|
—
|
|
|
2,384
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,384
|
|
|||||||
Grantor stock ownership trust
|
|
—
|
|
|
(133
|
)
|
|
—
|
|
|
—
|
|
|
486
|
|
|
—
|
|
|
353
|
|
|||||||
Balance at May 31, 2012
|
|
$
|
115,171
|
|
|
$
|
887,262
|
|
|
$
|
443,160
|
|
|
$
|
(26,152
|
)
|
|
$
|
(117,573
|
)
|
|
$
|
(932,337
|
)
|
|
$
|
369,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.
|
Stockholders’ Equity (continued)
|
16.
|
Recent Accounting Pronouncements
|
16.
|
Recent Accounting Pronouncements (continued)
|
17.
|
Income Taxes
|
18.
|
Supplemental Disclosure to Consolidated Statements of Cash Flows
|
18.
|
Supplemental Disclosure to Consolidated Statements of Cash Flows (continued)
|
|
Six Months Ended May 31,
|
||||||
|
2013
|
|
2012
|
||||
Summary of cash and cash equivalents at end of period:
|
|
|
|
||||
Homebuilding
|
$
|
538,571
|
|
|
$
|
314,258
|
|
Financial services
|
2,635
|
|
|
3,703
|
|
||
Total
|
$
|
541,206
|
|
|
$
|
317,961
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
30,246
|
|
|
$
|
28,711
|
|
Income taxes paid
|
542
|
|
|
647
|
|
||
Income taxes refunded
|
61
|
|
|
4,376
|
|
||
|
|
|
|
||||
Supplemental disclosures of noncash activities:
|
|
|
|
||||
Increase (decrease) in consolidated inventories not owned
|
$
|
4,842
|
|
|
$
|
(3,611
|
)
|
Cost of inventories acquired through seller financing
|
27,600
|
|
|
—
|
|
19.
|
Supplemental Guarantor Information
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
826,912
|
|
|
$
|
102,713
|
|
|
$
|
—
|
|
|
$
|
929,625
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
826,912
|
|
|
$
|
97,692
|
|
|
$
|
—
|
|
|
$
|
924,604
|
|
Construction and land costs
|
—
|
|
|
(702,036
|
)
|
|
(84,227
|
)
|
|
—
|
|
|
(786,263
|
)
|
|||||
Selling, general and administrative expenses
|
(34,152
|
)
|
|
(79,126
|
)
|
|
(15,918
|
)
|
|
—
|
|
|
(129,196
|
)
|
|||||
Operating income (loss)
|
(34,152
|
)
|
|
45,750
|
|
|
(2,453
|
)
|
|
—
|
|
|
9,145
|
|
|||||
Interest income
|
429
|
|
|
2
|
|
|
5
|
|
|
—
|
|
|
436
|
|
|||||
Interest expense
|
29,607
|
|
|
(56,866
|
)
|
|
(2,488
|
)
|
|
—
|
|
|
(29,747
|
)
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(999
|
)
|
|
(3
|
)
|
|
—
|
|
|
(1,002
|
)
|
|||||
Homebuilding pretax loss
|
(4,116
|
)
|
|
(12,113
|
)
|
|
(4,939
|
)
|
|
—
|
|
|
(21,168
|
)
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
4,637
|
|
|
—
|
|
|
4,637
|
|
|||||
Total pretax loss
|
(4,116
|
)
|
|
(12,113
|
)
|
|
(302
|
)
|
|
—
|
|
|
(16,531
|
)
|
|||||
Income tax benefit
|
300
|
|
|
800
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
|||||
Equity in net loss of subsidiaries
|
(11,615
|
)
|
|
—
|
|
|
—
|
|
|
11,615
|
|
|
—
|
|
|||||
Net loss
|
$
|
(15,431
|
)
|
|
$
|
(11,313
|
)
|
|
$
|
(302
|
)
|
|
$
|
11,615
|
|
|
$
|
(15,431
|
)
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
489,192
|
|
|
$
|
68,218
|
|
|
$
|
—
|
|
|
$
|
557,410
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
489,192
|
|
|
$
|
63,308
|
|
|
$
|
—
|
|
|
$
|
552,500
|
|
Construction and land costs
|
—
|
|
|
(435,800
|
)
|
|
(49,073
|
)
|
|
—
|
|
|
(484,873
|
)
|
|||||
Selling, general and administrative expenses
|
(28,934
|
)
|
|
(66,468
|
)
|
|
(18,910
|
)
|
|
—
|
|
|
(114,312
|
)
|
|||||
Operating loss
|
(28,934
|
)
|
|
(13,076
|
)
|
|
(4,675
|
)
|
|
—
|
|
|
(46,685
|
)
|
|||||
Interest income
|
225
|
|
|
4
|
|
|
17
|
|
|
—
|
|
|
246
|
|
|||||
Interest expense
|
30,930
|
|
|
(59,194
|
)
|
|
(2,491
|
)
|
|
—
|
|
|
(30,755
|
)
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(313
|
)
|
|
(2
|
)
|
|
—
|
|
|
(315
|
)
|
|||||
Homebuilding pretax income (loss)
|
2,221
|
|
|
(72,579
|
)
|
|
(7,151
|
)
|
|
—
|
|
|
(77,509
|
)
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
3,471
|
|
|
—
|
|
|
3,471
|
|
|||||
Total pretax income (loss)
|
2,221
|
|
|
(72,579
|
)
|
|
(3,680
|
)
|
|
—
|
|
|
(74,038
|
)
|
|||||
Income tax benefit (expense)
|
(100
|
)
|
|
4,100
|
|
|
100
|
|
|
—
|
|
|
4,100
|
|
|||||
Equity in net loss of subsidiaries
|
(72,059
|
)
|
|
—
|
|
|
—
|
|
|
72,059
|
|
|
—
|
|
|||||
Net loss
|
$
|
(69,938
|
)
|
|
$
|
(68,479
|
)
|
|
$
|
(3,580
|
)
|
|
$
|
72,059
|
|
|
$
|
(69,938
|
)
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
465,388
|
|
|
$
|
59,018
|
|
|
$
|
—
|
|
|
$
|
524,406
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
465,388
|
|
|
$
|
56,400
|
|
|
$
|
—
|
|
|
$
|
521,788
|
|
Construction and land costs
|
—
|
|
|
(394,639
|
)
|
|
(48,359
|
)
|
|
—
|
|
|
(442,998
|
)
|
|||||
Selling, general and administrative expenses
|
(19,329
|
)
|
|
(42,462
|
)
|
|
(8,308
|
)
|
|
—
|
|
|
(70,099
|
)
|
|||||
Operating income (loss)
|
(19,329
|
)
|
|
28,287
|
|
|
(267
|
)
|
|
—
|
|
|
8,691
|
|
|||||
Interest income
|
228
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
232
|
|
|||||
Interest expense
|
16,098
|
|
|
(28,823
|
)
|
|
(1,782
|
)
|
|
—
|
|
|
(14,507
|
)
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(564
|
)
|
|
(3
|
)
|
|
—
|
|
|
(567
|
)
|
|||||
Homebuilding pretax loss
|
(3,003
|
)
|
|
(1,098
|
)
|
|
(2,050
|
)
|
|
—
|
|
|
(6,151
|
)
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
1,978
|
|
|
—
|
|
|
1,978
|
|
|||||
Total pretax loss
|
(3,003
|
)
|
|
(1,098
|
)
|
|
(72
|
)
|
|
—
|
|
|
(4,173
|
)
|
|||||
Income tax benefit
|
1,000
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
1,200
|
|
|||||
Equity in net loss of subsidiaries
|
(970
|
)
|
|
—
|
|
|
—
|
|
|
970
|
|
|
—
|
|
|||||
Net loss
|
$
|
(2,973
|
)
|
|
$
|
(898
|
)
|
|
$
|
(72
|
)
|
|
$
|
970
|
|
|
$
|
(2,973
|
)
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
265,273
|
|
|
$
|
37,579
|
|
|
$
|
—
|
|
|
$
|
302,852
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
265,273
|
|
|
$
|
35,332
|
|
|
$
|
—
|
|
|
$
|
300,605
|
|
Construction and land costs
|
—
|
|
|
(224,404
|
)
|
|
(28,637
|
)
|
|
—
|
|
|
(253,041
|
)
|
|||||
Selling, general and administrative expenses
|
(14,934
|
)
|
|
(41,384
|
)
|
|
(6,782
|
)
|
|
—
|
|
|
(63,100
|
)
|
|||||
Operating loss
|
(14,934
|
)
|
|
(515
|
)
|
|
(87
|
)
|
|
—
|
|
|
(15,536
|
)
|
|||||
Interest income
|
100
|
|
|
3
|
|
|
8
|
|
|
—
|
|
|
111
|
|
|||||
Interest expense
|
16,810
|
|
|
(29,408
|
)
|
|
(1,871
|
)
|
|
—
|
|
|
(14,469
|
)
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(241
|
)
|
|
(2
|
)
|
|
—
|
|
|
(243
|
)
|
|||||
Homebuilding pretax income (loss)
|
1,976
|
|
|
(30,161
|
)
|
|
(1,952
|
)
|
|
—
|
|
|
(30,137
|
)
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
1,501
|
|
|
—
|
|
|
1,501
|
|
|||||
Total pretax income (loss)
|
1,976
|
|
|
(30,161
|
)
|
|
(451
|
)
|
|
—
|
|
|
(28,636
|
)
|
|||||
Income tax benefit (expense)
|
(200
|
)
|
|
4,600
|
|
|
100
|
|
|
—
|
|
|
4,500
|
|
|||||
Equity in net loss of subsidiaries
|
(25,912
|
)
|
|
—
|
|
|
—
|
|
|
25,912
|
|
|
—
|
|
|||||
Net loss
|
$
|
(24,136
|
)
|
|
$
|
(25,561
|
)
|
|
$
|
(351
|
)
|
|
$
|
25,912
|
|
|
$
|
(24,136
|
)
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
480,655
|
|
|
$
|
49,436
|
|
|
$
|
8,480
|
|
|
$
|
—
|
|
|
$
|
538,571
|
|
Restricted cash
|
42,322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,322
|
|
|||||
Receivables
|
69
|
|
|
64,577
|
|
|
1,475
|
|
|
—
|
|
|
66,121
|
|
|||||
Inventories
|
—
|
|
|
1,849,657
|
|
|
179,733
|
|
|
—
|
|
|
2,029,390
|
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
120,300
|
|
|
2,500
|
|
|
—
|
|
|
122,800
|
|
|||||
Other assets
|
94,314
|
|
|
8,464
|
|
|
1,019
|
|
|
—
|
|
|
103,797
|
|
|||||
|
617,360
|
|
|
2,092,434
|
|
|
193,207
|
|
|
—
|
|
|
2,903,001
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
9,120
|
|
|
—
|
|
|
9,120
|
|
|||||
Intercompany receivables
|
1,853,125
|
|
|
—
|
|
|
—
|
|
|
(1,853,125
|
)
|
|
—
|
|
|||||
Investments in subsidiaries
|
17,545
|
|
|
—
|
|
|
—
|
|
|
(17,545
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
2,488,030
|
|
|
$
|
2,092,434
|
|
|
$
|
202,327
|
|
|
$
|
(1,870,670
|
)
|
|
$
|
2,912,121
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable, accrued expenses and other liabilities
|
$
|
141,130
|
|
|
$
|
230,218
|
|
|
$
|
124,605
|
|
|
$
|
—
|
|
|
$
|
495,953
|
|
Mortgages and notes payable
|
1,876,084
|
|
|
67,191
|
|
|
—
|
|
|
—
|
|
|
1,943,275
|
|
|||||
|
2,017,214
|
|
|
297,409
|
|
|
124,605
|
|
|
—
|
|
|
2,439,228
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
2,077
|
|
|
—
|
|
|
2,077
|
|
|||||
Intercompany payables
|
—
|
|
|
1,795,025
|
|
|
58,100
|
|
|
(1,853,125
|
)
|
|
—
|
|
|||||
Stockholders’ equity
|
470,816
|
|
|
—
|
|
|
17,545
|
|
|
(17,545
|
)
|
|
470,816
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
2,488,030
|
|
|
$
|
2,092,434
|
|
|
$
|
202,327
|
|
|
$
|
(1,870,670
|
)
|
|
$
|
2,912,121
|
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
457,007
|
|
|
$
|
52,933
|
|
|
$
|
14,825
|
|
|
$
|
—
|
|
|
$
|
524,765
|
|
Restricted cash
|
42,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,362
|
|
|||||
Receivables
|
121
|
|
|
63,600
|
|
|
1,100
|
|
|
—
|
|
|
64,821
|
|
|||||
Inventories
|
—
|
|
|
1,572,999
|
|
|
133,572
|
|
|
—
|
|
|
1,706,571
|
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
114,292
|
|
|
9,382
|
|
|
—
|
|
|
123,674
|
|
|||||
Other assets
|
85,901
|
|
|
15,638
|
|
|
(6,489
|
)
|
|
—
|
|
|
95,050
|
|
|||||
|
585,391
|
|
|
1,819,462
|
|
|
152,390
|
|
|
—
|
|
|
2,557,243
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
4,455
|
|
|
—
|
|
|
4,455
|
|
|||||
Intercompany receivables
|
1,559,712
|
|
|
—
|
|
|
—
|
|
|
(1,559,712
|
)
|
|
—
|
|
|||||
Investments in subsidiaries
|
11,411
|
|
|
—
|
|
|
—
|
|
|
(11,411
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
2,156,514
|
|
|
$
|
1,819,462
|
|
|
$
|
156,845
|
|
|
$
|
(1,571,123
|
)
|
|
$
|
2,561,698
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable, accrued expenses and other liabilities
|
$
|
134,314
|
|
|
$
|
207,641
|
|
|
$
|
116,934
|
|
|
$
|
—
|
|
|
$
|
458,889
|
|
Mortgages and notes payable
|
1,645,394
|
|
|
77,421
|
|
|
—
|
|
|
—
|
|
|
1,722,815
|
|
|||||
|
1,779,708
|
|
|
285,062
|
|
|
116,934
|
|
|
—
|
|
|
2,181,704
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
3,188
|
|
|
—
|
|
|
3,188
|
|
|||||
Intercompany payables
|
—
|
|
|
1,534,400
|
|
|
25,312
|
|
|
(1,559,712
|
)
|
|
—
|
|
|||||
Stockholders’ equity
|
376,806
|
|
|
—
|
|
|
11,411
|
|
|
(11,411
|
)
|
|
376,806
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
2,156,514
|
|
|
$
|
1,819,462
|
|
|
$
|
156,845
|
|
|
$
|
(1,571,123
|
)
|
|
$
|
2,561,698
|
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(15,431
|
)
|
|
$
|
(11,313
|
)
|
|
$
|
(302
|
)
|
|
$
|
11,615
|
|
|
$
|
(15,431
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (income) loss of unconsolidated joint ventures
|
—
|
|
|
999
|
|
|
(1,084
|
)
|
|
—
|
|
|
(85
|
)
|
|||||
Land option contract abandonments
|
—
|
|
|
284
|
|
|
—
|
|
|
—
|
|
|
284
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables
|
52
|
|
|
(977
|
)
|
|
520
|
|
|
—
|
|
|
(405
|
)
|
|||||
Inventories
|
—
|
|
|
(249,342
|
)
|
|
(41,319
|
)
|
|
—
|
|
|
(290,661
|
)
|
|||||
Accounts payable, accrued expenses and other liabilities
|
6,816
|
|
|
22,577
|
|
|
2,817
|
|
|
—
|
|
|
32,210
|
|
|||||
Other, net
|
4,473
|
|
|
1,341
|
|
|
674
|
|
|
—
|
|
|
6,488
|
|
|||||
Net cash used in operating activities
|
(4,090
|
)
|
|
(236,431
|
)
|
|
(38,694
|
)
|
|
11,615
|
|
|
(267,600
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contributions to unconsolidated joint ventures
|
—
|
|
|
(659
|
)
|
|
(4,992
|
)
|
|
—
|
|
|
(5,651
|
)
|
|||||
Purchases of property and equipment, net
|
(166
|
)
|
|
(517
|
)
|
|
(69
|
)
|
|
—
|
|
|
(752
|
)
|
|||||
Net cash used in investing activities
|
(166
|
)
|
|
(1,176
|
)
|
|
(5,061
|
)
|
|
—
|
|
|
(6,403
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in restricted cash
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||
Proceeds from issuance of debt
|
230,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230,000
|
|
|||||
Payment of debt issuance costs
|
(10,086
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,086
|
)
|
|||||
Payments on mortgages and land contracts due to land sellers and other loans
|
—
|
|
|
(37,830
|
)
|
|
—
|
|
|
—
|
|
|
(37,830
|
)
|
|||||
Proceeds from issuance of common stock, net
|
109,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109,503
|
|
|||||
Issuance of common stock under employee stock plans
|
2,106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,106
|
|
|||||
Payments of cash dividends
|
(4,179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,179
|
)
|
|||||
Stock repurchases
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||||
Intercompany
|
(299,447
|
)
|
|
271,940
|
|
|
39,122
|
|
|
(11,615
|
)
|
|
—
|
|
|||||
Net cash provided by financing activities
|
27,904
|
|
|
234,110
|
|
|
39,122
|
|
|
(11,615
|
)
|
|
289,521
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
23,648
|
|
|
(3,497
|
)
|
|
(4,633
|
)
|
|
—
|
|
|
15,518
|
|
|||||
Cash and cash equivalents at beginning of period
|
457,007
|
|
|
52,933
|
|
|
15,748
|
|
|
—
|
|
|
525,688
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
480,655
|
|
|
$
|
49,436
|
|
|
$
|
11,115
|
|
|
$
|
—
|
|
|
$
|
541,206
|
|
19.
|
Supplemental Guarantor Information (continued)
|
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(69,938
|
)
|
|
$
|
(68,479
|
)
|
|
$
|
(3,580
|
)
|
|
$
|
72,059
|
|
|
$
|
(69,938
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity in (income) loss of unconsolidated joint ventures
|
—
|
|
|
313
|
|
|
(87
|
)
|
|
—
|
|
|
226
|
|
|||||
Inventory impairments
|
—
|
|
|
11,764
|
|
|
4,745
|
|
|
—
|
|
|
16,509
|
|
|||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables
|
(98
|
)
|
|
(2,605
|
)
|
|
19,498
|
|
|
—
|
|
|
16,795
|
|
|||||
Inventories
|
—
|
|
|
1,287
|
|
|
(17,418
|
)
|
|
—
|
|
|
(16,131
|
)
|
|||||
Accounts payable, accrued expenses and other liabilities
|
(4,198
|
)
|
|
(23,587
|
)
|
|
(12,429
|
)
|
|
—
|
|
|
(40,214
|
)
|
|||||
Other, net
|
(499
|
)
|
|
372
|
|
|
2,999
|
|
|
—
|
|
|
2,872
|
|
|||||
Net cash used in operating activities
|
(74,733
|
)
|
|
(80,935
|
)
|
|
(6,272
|
)
|
|
72,059
|
|
|
(89,881
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Return of investments in (contributions to) unconsolidated joint ventures
|
—
|
|
|
4,552
|
|
|
(2
|
)
|
|
—
|
|
|
4,550
|
|
|||||
Sales (purchases) of property and equipment, net
|
(53
|
)
|
|
(550
|
)
|
|
11
|
|
|
—
|
|
|
(592
|
)
|
|||||
Net cash provided by (used in) investing activities
|
(53
|
)
|
|
4,002
|
|
|
9
|
|
|
—
|
|
|
3,958
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in restricted cash
|
1,293
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
1,299
|
|
|||||
Proceeds from issuance of debt
|
344,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
344,831
|
|
|||||
Payment of debt issuance costs
|
(6,751
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,751
|
)
|
|||||
Repayment of senior notes
|
(340,481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(340,481
|
)
|
|||||
Payments on mortgages and land contracts due to land sellers and other loans
|
—
|
|
|
(6,695
|
)
|
|
—
|
|
|
—
|
|
|
(6,695
|
)
|
|||||
Issuance of common stock under employee stock plans
|
353
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
353
|
|
|||||
Payments of cash dividends
|
(6,746
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,746
|
)
|
|||||
Intercompany
|
14,642
|
|
|
62,739
|
|
|
(5,322
|
)
|
|
(72,059
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
7,141
|
|
|
56,050
|
|
|
(5,322
|
)
|
|
(72,059
|
)
|
|
(14,190
|
)
|
|||||
Net decrease in cash and cash equivalents
|
(67,645
|
)
|
|
(20,883
|
)
|
|
(11,585
|
)
|
|
—
|
|
|
(100,113
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
340,957
|
|
|
46,375
|
|
|
30,742
|
|
|
—
|
|
|
418,074
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
273,312
|
|
|
$
|
25,492
|
|
|
$
|
19,157
|
|
|
$
|
—
|
|
|
$
|
317,961
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
|
Variance
|
||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Six Months
|
|
Three Months
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding
|
$
|
924,604
|
|
|
$
|
552,500
|
|
|
$
|
521,788
|
|
|
$
|
300,605
|
|
|
67
|
%
|
|
74
|
%
|
Financial services
|
5,021
|
|
|
4,910
|
|
|
2,618
|
|
|
2,247
|
|
|
2
|
|
|
17
|
|
||||
Total
|
$
|
929,625
|
|
|
$
|
557,410
|
|
|
$
|
524,406
|
|
|
$
|
302,852
|
|
|
67
|
%
|
|
73
|
%
|
Pretax income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding
|
$
|
(21,168
|
)
|
|
$
|
(77,509
|
)
|
|
$
|
(6,151
|
)
|
|
$
|
(30,137
|
)
|
|
73
|
%
|
|
80
|
%
|
Financial services
|
4,637
|
|
|
3,471
|
|
|
1,978
|
|
|
1,501
|
|
|
34
|
|
|
32
|
|
||||
Total pretax loss
|
(16,531
|
)
|
|
(74,038
|
)
|
|
(4,173
|
)
|
|
(28,636
|
)
|
|
78
|
|
|
85
|
|
||||
Income tax benefit
|
1,100
|
|
|
4,100
|
|
|
1,200
|
|
|
4,500
|
|
|
(73
|
)
|
|
(73
|
)
|
||||
Net loss
|
$
|
(15,431
|
)
|
|
$
|
(69,938
|
)
|
|
$
|
(2,973
|
)
|
|
$
|
(24,136
|
)
|
|
78
|
%
|
|
88
|
%
|
Basic and diluted loss per share
|
$
|
(.19
|
)
|
|
$
|
(.91
|
)
|
|
$
|
(.04
|
)
|
|
$
|
(.31
|
)
|
|
79
|
%
|
|
87
|
%
|
•
|
Revenues.
Total revenues of
$524.4 million
for the three months ended
May 31, 2013
increased
73%
from
$302.9 million
for the three months ended May 31, 2012, primarily due to higher homebuilding revenues, which were generated entirely from housing operations. Housing revenues rose
74%
to
$521.8 million
for the second quarter of 2013 from
$300.6 million
for the year-earlier quarter, reflecting increases in the number of homes delivered and average selling prices across all of our homebuilding reporting segments. We use the term “home” in this discussion and analysis to refer to a single-family residence, whether it is a single-family home or other type of residential property. Our total revenues included financial services revenues of
$2.6 million
for the three months ended
May 31, 2013
and
$2.2 million
for the three months ended May 31, 2012.
|
◦
|
Homes Delivered.
We delivered
1,797
homes in the second quarter of 2013, up
39%
from
1,290
homes delivered in the year-earlier quarter. This increase was largely due to our relatively higher backlog level at the beginning of the current quarter, which was up
25%
on a year-over-year basis, and an improvement in our backlog conversion ratio to
65%
in the current quarter from 59% in the year-earlier quarter. Our higher beginning backlog level primarily reflected the strategic positioning of our communities in markets and submarkets where demand is relatively stronger. We use the term “backlog conversion ratio” in this discussion and analysis to refer to the number of homes delivered for a period divided by the number of homes in backlog at the beginning of the period.
|
◦
|
Average Selling Price.
Our overall average selling price of homes delivered increased
25%
to
$290,400
in the second quarter of 2013 from
$233,000
in the year-earlier quarter. This increase reflected our strategic community positioning efforts, with more of our served markets and submarkets generally featuring buyers with higher household incomes who choose larger home sizes and spend more on design options and features at our KB Home Studios; a shift in mix with a higher proportion of homes delivered from our West Coast homebuilding reporting segment; our increased emphasis on pricing discipline to drive profitability; and general market increases in home prices.
|
•
|
Operating Income (Loss).
Our homebuilding operations generated operating income of
$8.7 million
for the three months ended
May 31, 2013
, an improvement of
$24.2 million
from the operating loss of
$15.5 million
posted for the three months ended May 31, 2012. The year-over-year improvement reflected higher housing gross profits, partly offset by higher selling, general and administrative expenses in the second quarter of 2013.
|
◦
|
Housing Gross Profits.
Housing gross profits of
$78.8 million
for the three months ended
May 31, 2013
increased by
$31.2 million
from
$47.6 million
for the year-earlier period. Our housing gross profit margin was
15.1%
in the current quarter, compared to
15.8%
in the second quarter of 2012. Our housing gross profit margin for the three months ended May 31, 2013 included a net charge of
$15.9 million
associated with water intrusion-related repairs of homes at certain of our communities in central and southwest Florida, and land option contract abandonment charges of
$.3 million
. In the second quarter of 2012, our housing gross profit margin included favorable warranty adjustments of
$11.2 million
and insurance recoveries of
$10.0 million
, which were partially offset by
$9.9 million
of inventory impairment charges. Our adjusted housing gross profit margin, which excludes the above-mentioned charges and items for 2013 and 2012, improved by
610
basis points to
18.2%
in the second quarter of 2013 from
12.1%
in the year-earlier quarter. The calculation of adjusted housing gross profit margin, which we believe provides a clearer measure of the performance of our business, is described below under “Non-GAAP Financial Measures.” The year-over-year improvement in our adjusted housing gross profit margin primarily reflected our ongoing execution of strategies targeting growth and profitability, including our actions to optimize the selling prices of our homes and generate greater operating efficiencies, partly offset by the impact of higher direct construction labor and material costs in the 2013 period.
|
◦
|
Selling, General and Administrative Expenses.
Our selling, general and administrative expenses rose by
$7.0 million
, or
11%
, to
$70.1 million
for the three months ended
May 31, 2013
from
$63.1 million
for the year-earlier period, reflecting, among other things, the higher volume of homes delivered in the current quarter and corresponding higher housing revenues. Our selling, general and administrative expenses for the 2012 second quarter included an $8.8 million charge recorded as a result of an unfavorable court decision that we are appealing. As a percentage of housing revenues, selling, general and administrative expenses improved by
760
basis points to
13.4%
for the three months ended
May 31, 2013
, from
21.0%
for the year-earlier period, mainly due to the increased volume and higher average selling prices of homes delivered in the current period, combined with our focus on containing and leveraging our overhead costs.
|
•
|
Net Loss.
We reduced our net loss by
$21.1 million
to
$3.0 million
, or
$.04
per diluted share, for the three months ended
May 31, 2013
, compared to the net loss of
$24.1 million
, or
$.31
per diluted share, posted for the three months ended May 31, 2012. In the current quarter, our net loss included the water intrusion-related charge and land option contract abandonment charges mentioned above, which were partly offset by an income tax benefit of
$1.2 million
. Excluding the net
$15.9 million
water intrusion-related charge, we generated net income of
$12.9 million
for the 2013 second quarter versus the net loss reported. Our net loss in the second quarter of 2012 included the above-mentioned favorable warranty adjustments and
|
•
|
Revenues.
Total revenues of
$929.6 million
for the six months ended May 31, 2013 increased
67%
from
$557.4 million
for the corresponding period of 2012. Our total revenues included financial services revenues of
$5.0 million
for the six months ended May 31, 2013 and
$4.9 million
for the corresponding year-earlier period.
|
◦
|
Homes Delivered.
We delivered
3,282
homes in the first six months of 2013, up
35%
from
2,440
in the year-earlier period.
|
◦
|
Average Selling Price.
Our overall average selling price of
$281,700
for the six months ended May 31, 2013 increased
24%
from
$226,400
for the corresponding period of 2012.
|
•
|
Net Loss.
Our net loss for the six months ended May 31, 2013 totaled
$15.4 million
, or
$.19
per diluted share, compared to the net loss of
$69.9 million
, or
$.91
per diluted share, posted for the year-earlier period. In the first six months of 2013, our net loss included net water intrusion-related charges of
$17.5 million
and land option contract abandonment charges of
$.3 million
. Our net loss for the six months ended May 31, 2013 also included an income tax benefit of
$1.1 million
. Our net loss for the first six months of 2012 included charges of
$16.5 million
for inventory impairments and the above-mentioned unfavorable court decision charge, which were partly offset by the favorable warranty adjustments and insurance recoveries recorded in the three months ended May 31, 2012. Our net loss for the six months ended May 31, 2012 also included an income tax benefit of
$4.1 million
.
|
•
|
Cash, Cash Equivalents and Restricted Cash.
Our cash, cash equivalents and restricted cash totaled
$580.9 million
at
May 31, 2013
, up from
$567.1 million
at November 30, 2012. Of our total cash, cash equivalents and restricted cash at
May 31, 2013
and November 30, 2012,
$538.6 million
and
$524.8 million
, respectively, was unrestricted. The increase in our total cash, cash equivalents and restricted cash was primarily due to our concurrent underwritten public issuance of the $230 Million Convertible Senior Notes and the Common Stock Offering in the first quarter of 2013, which generated total net proceeds of
$332.2 million
, largely offset by our investments in inventories during the first six months of 2013. During the six months ended
May 31, 2013
, our operating activities used net cash of
$267.6 million
, up from
$89.9 million
in the corresponding period of 2012, mainly due to investments in land and land development that drove our inventories higher at
May 31, 2013
compared to the November 30, 2012 level.
|
•
|
Inventories.
Reflecting our investments in land and land development of
$574.7 million
in the first six months of the year, our inventory balance of
$2.03 billion
at
May 31, 2013
increased by
19%
from
$1.71 billion
at November 30, 2012. We made strategic investments in land and land development in each of our homebuilding reporting segments in the six months ended
May 31, 2013
, with the majority of our investments made in our West Coast homebuilding reporting segment. We ended our 2013 second quarter with a land inventory portfolio comprised of
52,725
lots owned or controlled, representing an increase of
18%
from the
44,752
lots owned or controlled at November 30, 2012.
|
•
|
Mortgages and Notes Payable.
Our debt balance was
$1.94 billion
at
May 31, 2013
, compared to
$1.72 billion
at November 30, 2012. Our debt balance at
May 31, 2013
reflected the underwritten public issuance of the $230 Million Convertible Senior Notes in the first quarter of 2013. Our ratio of debt to total capital was
80.5%
at
May 31, 2013
, compared to
82.1%
at November 30, 2012. Our ratio of net debt to total capital (a calculation that is described below under “Non-GAAP Financial Measures”) was
74.3%
at
May 31, 2013
, compared to
75.4%
at November 30, 2012.
|
•
|
Stockholders’ Equity.
Our stockholders’ equity increased to $
470.8 million
at
May 31, 2013
from
$376.8 million
at November 30, 2012, primarily due to the Common Stock Offering in the first quarter of 2013, partly offset by our net loss and the cash dividends we paid on our common stock for the six months ended
May 31, 2013
.
|
•
|
Net Orders.
Net orders from our homebuilding operations increased
6%
to
2,162
in the second quarter of 2013 from
2,049
in the year-earlier quarter, even with a 3% year-over-year decrease in our average community count. The year-over-year increase in overall net orders reflected increases in our Central and Southeast homebuilding reporting segments of
8%
and
31%
, respectively, partly offset by decreases in our West Coast and Southwest homebuilding reporting segments of
2%
and
17%
, respectively.
|
◦
|
The overall value of the net orders we generated in the second quarter of 2013 increased
27%
to
$639.6 million
from
$503.1 million
in the year-earlier quarter, largely due to the higher average selling prices in each of our homebuilding reporting segments. Each of our homebuilding reporting segments generated year-over-year increases in net order value, with our West Coast homebuilding reporting segment up
24%
to
$292.8 million
, our Southwest homebuilding reporting segment up
10%
to
$49.2 million
, our Central homebuilding reporting segment up
28%
to
$198.6 million
, and our Southeast homebuilding reporting segment up
46%
to
$99.0 million
.
|
◦
|
For the six months ended May 31, our net orders increased
18%
to
3,833
in 2013 from
3,246
in 2012. The value of the net orders we generated in the six months ended May 31, 2013 increased
47%
to
$1.15 billion
from
$780.6 million
in the year-earlier period.
|
◦
|
Our second quarter cancellation rate was
27%
in 2013, essentially flat with
26%
in 2012. We define our cancellation rate in a given period as the total number of contracts for new homes canceled divided by the total new (gross) orders for homes during the same period.
|
•
|
Backlog
. Our backlog at
May 31, 2013
increased to
3,128
homes, representing potential future housing revenues of
$826.6 million
, from
2,962
homes, representing potential future housing revenues of
$693.4 million
, at May 31, 2012. The number of homes in our backlog increased
6%
year over year due to a higher number of homes in our backlog at the beginning of the year and the increase in our net orders in the first half of 2013, partly offset by an increase in the number of homes delivered. These increases primarily reflect our strategic community positioning efforts described above. The potential future housing revenues in our backlog at
May 31, 2013
rose
19%
from May 31, 2012, reflecting the increased number of homes in our backlog and a higher average selling price.
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net orders
|
|
3,833
|
|
|
3,246
|
|
|
2,162
|
|
|
2,049
|
|
||||
Net order value
|
|
$
|
1,146,442
|
|
|
$
|
780,599
|
|
|
$
|
639,639
|
|
|
$
|
503,070
|
|
Cancellation rate
|
|
29
|
%
|
|
30
|
%
|
|
27
|
%
|
|
26
|
%
|
||||
Ending backlog — homes
|
|
3,128
|
|
|
2,962
|
|
|
3,128
|
|
|
2,962
|
|
||||
Ending backlog — value
|
|
$
|
826,613
|
|
|
$
|
693,408
|
|
|
$
|
826,613
|
|
|
$
|
693,408
|
|
Ending community count
|
|
185
|
|
|
177
|
|
|
185
|
|
|
177
|
|
||||
Average community count
|
|
176
|
|
|
188
|
|
|
178
|
|
|
183
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Housing
|
$
|
924,604
|
|
|
$
|
552,500
|
|
|
$
|
521,788
|
|
|
$
|
300,605
|
|
Land
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
924,604
|
|
|
552,500
|
|
|
521,788
|
|
|
300,605
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Construction and land costs
|
|
|
|
|
|
|
|
||||||||
Housing
|
(786,263
|
)
|
|
(484,873
|
)
|
|
(442,998
|
)
|
|
(253,041
|
)
|
||||
Land
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
(786,263
|
)
|
|
(484,873
|
)
|
|
(442,998
|
)
|
|
(253,041
|
)
|
||||
Selling, general and administrative expenses
|
(129,196
|
)
|
|
(114,312
|
)
|
|
(70,099
|
)
|
|
(63,100
|
)
|
||||
Total
|
(915,459
|
)
|
|
(599,185
|
)
|
|
(513,097
|
)
|
|
(316,141
|
)
|
||||
Operating income (loss)
|
$
|
9,145
|
|
|
$
|
(46,685
|
)
|
|
$
|
8,691
|
|
|
$
|
(15,536
|
)
|
Homes delivered
|
3,282
|
|
|
2,440
|
|
|
1,797
|
|
|
1,290
|
|
||||
Average selling price
|
$
|
281,700
|
|
|
$
|
226,400
|
|
|
$
|
290,400
|
|
|
$
|
233,000
|
|
Housing gross profit margin as a percentage of housing revenues
|
15.0
|
%
|
|
12.2
|
%
|
|
15.1
|
%
|
|
15.8
|
%
|
||||
Adjusted housing gross profit margin as a percentage of housing revenues
|
16.9
|
%
|
|
11.4
|
%
|
|
18.2
|
%
|
|
12.1
|
%
|
||||
Selling, general and administrative expenses as a percentage of housing revenues
|
14.0
|
%
|
|
20.7
|
%
|
|
13.4
|
%
|
|
21.0
|
%
|
||||
Operating income (loss) as a percentage of homebuilding revenues
|
1.0
|
%
|
|
(8.4
|
)%
|
|
1.7
|
%
|
|
(5.2
|
)%
|
|
|
Three Months Ended May 31,
|
||||||||||||||||
|
|
Homes Delivered
|
|
Net Orders
|
|
Cancellation Rates
|
||||||||||||
Segment
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||
West Coast
|
|
594
|
|
|
330
|
|
|
587
|
|
|
600
|
|
|
20
|
%
|
|
24
|
%
|
Southwest
|
|
211
|
|
|
157
|
|
|
189
|
|
|
229
|
|
|
23
|
|
|
17
|
|
Central
|
|
637
|
|
|
536
|
|
|
968
|
|
|
900
|
|
|
32
|
|
|
28
|
|
Southeast
|
|
355
|
|
|
267
|
|
|
418
|
|
|
320
|
|
|
22
|
|
|
28
|
|
Total
|
|
1,797
|
|
|
1,290
|
|
|
2,162
|
|
|
2,049
|
|
|
27
|
%
|
|
26
|
%
|
|
|
Six Months Ended May 31,
|
||||||||||||||||
|
|
Homes Delivered
|
|
Net Orders
|
|
Cancellation Rates
|
||||||||||||
Segment
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||
West Coast
|
|
1,103
|
|
|
639
|
|
|
1,117
|
|
|
889
|
|
|
21
|
%
|
|
27
|
%
|
Southwest
|
|
351
|
|
|
327
|
|
|
388
|
|
|
369
|
|
|
23
|
|
|
20
|
|
Central
|
|
1,208
|
|
|
1,023
|
|
|
1,621
|
|
|
1,447
|
|
|
35
|
|
|
33
|
|
Southeast
|
|
620
|
|
|
451
|
|
|
707
|
|
|
541
|
|
|
27
|
|
|
32
|
|
Total
|
|
3,282
|
|
|
2,440
|
|
|
3,833
|
|
|
3,246
|
|
|
29
|
%
|
|
30
|
%
|
|
|
|
May 31,
|
||||||||||||
|
|
|
Backlog – Homes
|
|
Backlog – Value
(in thousands)
|
||||||||||
Segment
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||
West Coast
|
|
|
698
|
|
|
713
|
|
|
$
|
337,878
|
|
|
$
|
301,652
|
|
Southwest
|
|
|
220
|
|
|
245
|
|
|
48,524
|
|
|
43,518
|
|
||
Central
|
|
|
1,562
|
|
|
1,442
|
|
|
296,949
|
|
|
237,558
|
|
||
Southeast
|
|
|
648
|
|
|
562
|
|
|
143,262
|
|
|
110,680
|
|
||
Total
|
|
|
3,128
|
|
|
2,962
|
|
|
$
|
826,613
|
|
|
$
|
693,408
|
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Inventory impairment and land option contract abandonment charges
|
|
$
|
(284
|
)
|
|
$
|
(16,509
|
)
|
|
$
|
(284
|
)
|
|
$
|
(9,937
|
)
|
Water intrusion-related charges
|
|
(17,547
|
)
|
|
—
|
|
|
(15,873
|
)
|
|
—
|
|
||||
Warranty adjustments
|
|
—
|
|
|
11,162
|
|
|
—
|
|
|
11,162
|
|
||||
Insurance recoveries
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
||||
Court decision charge
|
|
—
|
|
|
(8,764
|
)
|
|
—
|
|
|
(8,764
|
)
|
||||
Total
|
|
$
|
(17,831
|
)
|
|
$
|
(4,111
|
)
|
|
$
|
(16,157
|
)
|
|
$
|
2,461
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Inventory impairments:
|
|
|
|
|
|
|
|
||||||||
Number of communities or land parcels evaluated for recoverability
|
38
|
|
|
76
|
|
|
18
|
|
|
39
|
|
||||
Number of communities or land parcels impaired (a)
|
—
|
|
|
7
|
|
|
—
|
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Pre-impairment carrying value of communities or land parcels impaired
|
$
|
—
|
|
|
$
|
43,905
|
|
|
$
|
—
|
|
|
$
|
25,094
|
|
Inventory impairment charges (a)
|
—
|
|
|
(16,509
|
)
|
|
—
|
|
|
(9,937
|
)
|
||||
Post-impairment fair value
|
$
|
—
|
|
|
$
|
27,396
|
|
|
$
|
—
|
|
|
$
|
15,157
|
|
(a)
|
The inventory impairment charges we recognized in 2012 reflected challenging economic and housing market conditions in certain of our served markets and were partly due to our efforts to accelerate our return on investment in the affected communities. Inventory impairment charges are included in construction and land costs in our consolidated statements of operations.
|
|
0-2 years
|
|
3-5 years
|
|
6-10 years
|
|
Greater than
10 years
|
|
Total
|
||||||||||
Inventories as of May 31, 2013
|
$
|
946.4
|
|
|
$
|
526.8
|
|
|
$
|
403.8
|
|
|
$
|
152.4
|
|
|
$
|
2,029.4
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Housing revenues
|
$
|
924,604
|
|
|
$
|
552,500
|
|
|
$
|
521,788
|
|
|
$
|
300,605
|
|
Housing construction and land costs
|
(786,263
|
)
|
|
(484,873
|
)
|
|
(442,998
|
)
|
|
(253,041
|
)
|
||||
Housing gross profits
|
138,341
|
|
|
67,627
|
|
|
78,790
|
|
|
47,564
|
|
||||
Add: Inventory impairment and land option contract abandonment charges
|
284
|
|
|
16,509
|
|
|
284
|
|
|
9,937
|
|
||||
Water intrusion-related charges
|
17,547
|
|
|
—
|
|
|
15,873
|
|
|
—
|
|
||||
Less: Warranty adjustments
|
—
|
|
|
(11,162
|
)
|
|
—
|
|
|
(11,162
|
)
|
||||
Insurance recoveries
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|
(10,000
|
)
|
||||
Adjusted housing gross profits
|
$
|
156,172
|
|
|
$
|
62,974
|
|
|
$
|
94,947
|
|
|
$
|
36,339
|
|
Housing gross profit margin as a percentage of housing revenues
|
15.0
|
%
|
|
12.2
|
%
|
|
15.1
|
%
|
|
15.8
|
%
|
||||
Adjusted housing gross profit margin as a percentage of housing revenues
|
16.9
|
%
|
|
11.4
|
%
|
|
18.2
|
%
|
|
12.1
|
%
|
|
May 31,
2013 |
|
November 30,
2012 |
||||
Mortgages and notes payable
|
$
|
1,943,275
|
|
|
$
|
1,722,815
|
|
Stockholders’ equity
|
470,816
|
|
|
376,806
|
|
||
Total capital
|
$
|
2,414,091
|
|
|
$
|
2,099,621
|
|
Ratio of debt to total capital
|
80.5
|
%
|
|
82.1
|
%
|
||
|
|
|
|
||||
Mortgages and notes payable
|
$
|
1,943,275
|
|
|
$
|
1,722,815
|
|
Less: Cash and cash equivalents and restricted cash
|
(580,893
|
)
|
|
(567,127
|
)
|
||
Net debt
|
1,362,382
|
|
|
1,155,688
|
|
||
Stockholders’ equity
|
470,816
|
|
|
376,806
|
|
||
Total capital
|
$
|
1,833,198
|
|
|
$
|
1,532,494
|
|
Ratio of net debt to total capital
|
74.3
|
%
|
|
75.4
|
%
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
|
Variance
|
||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Six Months
|
|
Three Months
|
||||||||||
West Coast:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
479,594
|
|
|
$
|
237,884
|
|
|
$
|
273,490
|
|
|
$
|
132,651
|
|
|
102
|
%
|
|
106
|
%
|
Construction and land costs
|
(392,003
|
)
|
|
(221,341
|
)
|
|
(220,105
|
)
|
|
(118,067
|
)
|
|
(77
|
)
|
|
(86
|
)
|
||||
Selling, general and administrative expenses
|
(35,796
|
)
|
|
(35,005
|
)
|
|
(19,011
|
)
|
|
(22,412
|
)
|
|
(2
|
)
|
|
15
|
|
||||
Operating income (loss)
|
51,795
|
|
|
(18,462
|
)
|
|
34,374
|
|
|
(7,828
|
)
|
|
(a)
|
|
|
(a)
|
|
||||
Other, net
|
(13,933
|
)
|
|
(14,992
|
)
|
|
(6,354
|
)
|
|
(6,866
|
)
|
|
7
|
%
|
|
7
|
%
|
||||
Pretax income (loss)
|
$
|
37,862
|
|
|
$
|
(33,454
|
)
|
|
$
|
28,020
|
|
|
$
|
(14,694
|
)
|
|
(a)
|
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Southwest:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
79,078
|
|
|
$
|
59,493
|
|
|
$
|
47,247
|
|
|
$
|
27,909
|
|
|
33
|
%
|
|
69
|
%
|
Construction and land costs
|
(60,913
|
)
|
|
(49,129
|
)
|
|
(36,730
|
)
|
|
(21,440
|
)
|
|
(24
|
)
|
|
(71
|
)
|
||||
Selling, general and administrative expenses
|
(7,862
|
)
|
|
(8,989
|
)
|
|
(4,232
|
)
|
|
(4,452
|
)
|
|
13
|
|
|
5
|
|
||||
Operating income
|
10,303
|
|
|
1,375
|
|
|
6,285
|
|
|
2,017
|
|
|
649
|
|
|
212
|
|
||||
Other, net
|
(9,462
|
)
|
|
(8,557
|
)
|
|
(4,695
|
)
|
|
(4,156
|
)
|
|
(11
|
)%
|
|
(13
|
)%
|
||||
Pretax income (loss)
|
$
|
841
|
|
|
$
|
(7,182
|
)
|
|
$
|
1,590
|
|
|
$
|
(2,139
|
)
|
|
(a)
|
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Central:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
226,797
|
|
|
$
|
168,030
|
|
|
$
|
120,305
|
|
|
$
|
87,756
|
|
|
35
|
%
|
|
37
|
%
|
Construction and land costs
|
(192,992
|
)
|
|
(146,507
|
)
|
|
(101,722
|
)
|
|
(75,772
|
)
|
|
(32
|
)
|
|
(34
|
)
|
||||
Selling, general and administrative expenses
|
(28,603
|
)
|
|
(24,023
|
)
|
|
(14,983
|
)
|
|
(12,265
|
)
|
|
(19
|
)
|
|
(22
|
)
|
||||
Operating income (loss)
|
5,202
|
|
|
(2,500
|
)
|
|
3,600
|
|
|
(281
|
)
|
|
(a)
|
|
|
(a)
|
|
||||
Other, net
|
(2,718
|
)
|
|
(1,638
|
)
|
|
(1,252
|
)
|
|
(350
|
)
|
|
(66
|
)%
|
|
(258
|
)%
|
||||
Pretax income (loss)
|
$
|
2,484
|
|
|
$
|
(4,138
|
)
|
|
$
|
2,348
|
|
|
$
|
(631
|
)
|
|
(a)
|
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Southeast:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
139,135
|
|
|
$
|
87,093
|
|
|
$
|
80,746
|
|
|
$
|
52,289
|
|
|
60
|
%
|
|
54
|
%
|
Construction and land costs
|
(139,070
|
)
|
|
(66,298
|
)
|
|
(83,723
|
)
|
|
(37,226
|
)
|
|
(110
|
)
|
|
(125
|
)
|
||||
Selling, general and administrative expenses
|
(19,035
|
)
|
|
(13,584
|
)
|
|
(10,671
|
)
|
|
(7,207
|
)
|
|
(40
|
)
|
|
(48
|
)
|
||||
Operating income (loss)
|
(18,970
|
)
|
|
7,211
|
|
|
(13,648
|
)
|
|
7,856
|
|
|
(a)
|
|
|
(a)
|
|
||||
Other, net
|
(6,122
|
)
|
|
(6,891
|
)
|
|
(3,120
|
)
|
|
(3,277
|
)
|
|
11
|
%
|
|
5
|
%
|
||||
Pretax income (loss)
|
$
|
(25,092
|
)
|
|
$
|
320
|
|
|
$
|
(16,768
|
)
|
|
$
|
4,579
|
|
|
(a)
|
|
|
(a)
|
|
|
|
Housing
Revenues
(in thousands)
|
|
Percentage of
Total
Housing
Revenues
|
|
Homes
Delivered
|
|
Percentage of
Total
Homes
Delivered
|
|
Average
Selling Price
|
|||||||
Six Months Ended May 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|||||||
West Coast
|
|
$
|
479,594
|
|
|
52
|
%
|
|
1,103
|
|
|
33
|
%
|
|
$
|
434,800
|
|
Southwest
|
|
79,078
|
|
|
9
|
|
|
351
|
|
|
11
|
|
|
225,300
|
|
||
Central
|
|
226,797
|
|
|
24
|
|
|
1,208
|
|
|
37
|
|
|
187,700
|
|
||
Southeast
|
|
139,135
|
|
|
15
|
|
|
620
|
|
|
19
|
|
|
224,400
|
|
||
Total
|
|
$
|
924,604
|
|
|
100
|
%
|
|
3,282
|
|
|
100
|
%
|
|
$
|
281,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Six Months Ended May 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|||||||
West Coast
|
|
$
|
237,884
|
|
|
43
|
%
|
|
639
|
|
|
26
|
%
|
|
$
|
372,300
|
|
Southwest
|
|
59,493
|
|
|
11
|
|
|
327
|
|
|
13
|
|
|
181,900
|
|
||
Central
|
|
168,030
|
|
|
30
|
|
|
1,023
|
|
|
42
|
|
|
164,300
|
|
||
Southeast
|
|
87,093
|
|
|
16
|
|
|
451
|
|
|
19
|
|
|
193,100
|
|
||
Total
|
|
$
|
552,500
|
|
|
100
|
%
|
|
2,440
|
|
|
100
|
%
|
|
$
|
226,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Three Months Ended May 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|||||||
West Coast
|
|
$
|
273,490
|
|
|
52
|
%
|
|
594
|
|
|
33
|
%
|
|
$
|
460,400
|
|
Southwest
|
|
47,247
|
|
|
9
|
|
|
211
|
|
|
12
|
|
|
223,900
|
|
||
Central
|
|
120,305
|
|
|
23
|
|
|
637
|
|
|
35
|
|
|
188,900
|
|
||
Southeast
|
|
80,746
|
|
|
16
|
|
|
355
|
|
|
20
|
|
|
227,500
|
|
||
Total
|
|
$
|
521,788
|
|
|
100
|
%
|
|
1,797
|
|
|
100
|
%
|
|
$
|
290,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Three Months Ended May 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|||||||
West Coast
|
|
$
|
132,651
|
|
|
44
|
%
|
|
330
|
|
|
26
|
%
|
|
$
|
402,000
|
|
Southwest
|
|
27,909
|
|
|
9
|
|
|
157
|
|
|
12
|
|
|
177,800
|
|
||
Central
|
|
87,756
|
|
|
29
|
|
|
536
|
|
|
41
|
|
|
163,700
|
|
||
Southeast
|
|
52,289
|
|
|
18
|
|
|
267
|
|
|
21
|
|
|
195,800
|
|
||
Total
|
|
$
|
300,605
|
|
|
100
|
%
|
|
1,290
|
|
|
100
|
%
|
|
$
|
233,000
|
|
|
Six Months Ended May 31,
|
|
Three Months Ended May 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues
|
$
|
5,021
|
|
|
$
|
4,910
|
|
|
$
|
2,618
|
|
|
$
|
2,247
|
|
Expenses
|
(1,471
|
)
|
|
(1,528
|
)
|
|
(636
|
)
|
|
(693
|
)
|
||||
Equity in income (loss) of unconsolidated joint ventures
|
1,087
|
|
|
89
|
|
|
(4
|
)
|
|
(53
|
)
|
||||
Pretax income
|
$
|
4,637
|
|
|
$
|
3,471
|
|
|
$
|
1,978
|
|
|
$
|
1,501
|
|
|
|
May 31, 2013
|
|
November 30, 2012
|
|
Variance
|
|||||||||||||||
Segment
|
|
Lots
|
|
$
|
|
Lots
|
|
$
|
|
Lots
|
|
$
|
|||||||||
West Coast
|
|
10,998
|
|
|
$
|
1,018,637
|
|
|
10,448
|
|
|
$
|
842,597
|
|
|
550
|
|
|
$
|
176,040
|
|
Southwest
|
|
11,130
|
|
|
255,253
|
|
|
9,552
|
|
|
221,445
|
|
|
1,578
|
|
|
33,808
|
|
|||
Central
|
|
19,385
|
|
|
371,286
|
|
|
14,526
|
|
|
319,724
|
|
|
4,859
|
|
|
51,562
|
|
|||
Southeast
|
|
11,212
|
|
|
384,214
|
|
|
10,226
|
|
|
322,805
|
|
|
986
|
|
|
61,409
|
|
|||
Total
|
|
52,725
|
|
|
$
|
2,029,390
|
|
|
44,752
|
|
|
$
|
1,706,571
|
|
|
7,973
|
|
|
$
|
322,819
|
|
|
May 31,
2013 |
|
November 30,
2012 |
|
Variance
|
||||||
Mortgages and land contracts due to land sellers and other loans
|
$
|
42,081
|
|
|
$
|
52,311
|
|
|
$
|
(10,230
|
)
|
Senior notes
|
1,671,194
|
|
|
1,670,504
|
|
|
690
|
|
|||
Convertible senior notes due February 1, 2019 at 1.375%
|
230,000
|
|
|
—
|
|
|
230,000
|
|
|||
Total
|
$
|
1,943,275
|
|
|
$
|
1,722,815
|
|
|
$
|
220,460
|
|
•
|
Consolidated Tangible Net Worth.
We must maintain a minimum consolidated tangible net worth equal to the sum of (a)
$282.6 million
; (b) 50% of cumulative positive consolidated net income after November 30, 2012, excluding consolidated net income realized from a reversal of our deferred tax asset valuation allowance; (c) 75% of any consolidated net income realized as a result of a reversal of our deferred tax asset valuation allowance after November 30, 2012; and (d) 50% of the cumulative net proceeds received from our issuance of capital stock after November 30, 2012. As of May 31, 2013, our applicable minimum consolidated tangible net worth requirement was
$337.6 million
.
|
•
|
Leverage Ratio.
We must also maintain a Leverage Ratio of less than .850, which adjusts to less than .825 for the first and second quarters of 2015; and to less than .800 for the third quarter of 2015 and each quarter thereafter during the term of the Credit Facility. As defined under the Credit Facility, the Leverage Ratio is calculated as the ratio of our consolidated total indebtedness to the sum of consolidated total indebtedness and consolidated tangible net worth.
|
•
|
Interest Coverage Ratio or Liquidity.
We are also required to maintain either (a) a minimum consolidated interest coverage ratio (“Coverage Ratio”) of 1.10, which adjusts to 1.20 for the second quarter of 2014; to 1.40 for the third quarter of 2014; to 1.60 for the fourth quarter of 2014; to 1.75 for the first and second quarter of 2015; and to 2.00 for the third quarter of 2015 and each quarter thereafter during the term of the Credit Facility; or (b) a minimum level of liquidity, but not both. As defined under the Credit Facility, the Coverage Ratio is the ratio of our consolidated adjusted EBITDA to consolidated interest incurred, in each case for the previous 12 months. Our minimum liquidity is the greater of (a) $50.0 million or (b) the sum of (i) consolidated interest incurred for the four most recently ended quarters and (ii) the aggregate principal amount of consolidated total indebtedness coming due in the next 12 months, provided that the highest minimum liquidity applicable under (b) is $200.0 million. As of May 31, 2013, our minimum liquidity requirement was
$200.0 million
.
|
Financial Covenant
|
|
Covenant Requirement
|
|
Actual
|
|
Consolidated tangible net worth
|
|
>
|
$337.6 million
|
|
$470.8 million
|
Leverage Ratio
|
|
<
|
.850
|
|
.80
|
Coverage Ratio (a)
|
|
>
|
1.10
|
|
1.19
|
Liquidity (a)
|
|
>
|
$200.0 million
|
|
$538.6 million
|
Investments in joint ventures and non-guarantor subsidiaries
|
|
<
|
$229.2 million
|
|
$140.3 million
|
Borrowing base in excess of borrowing base indebtedness (as defined)
|
|
>
|
$0
|
|
$273.0 million
|
(a)
|
Under the terms of the Credit Facility, we are required to meet either the Coverage Ratio or the minimum liquidity thresholds, but not both. As of May 31, 2013, we met both the Coverage Ratio and the minimum liquidity requirements.
|
|
Six Months Ended May 31,
|
||||||
|
2013
|
|
2012
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(267,600
|
)
|
|
$
|
(89,881
|
)
|
Investing activities
|
(6,403
|
)
|
|
3,958
|
|
||
Financing activities
|
289,521
|
|
|
(14,190
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
15,518
|
|
|
$
|
(100,113
|
)
|
|
May 31, 2013
|
|
November 30, 2012
|
||||||||||||
|
Cash
Deposits
|
|
Aggregate
Purchase Price
|
|
Cash
Deposits
|
|
Aggregate
Purchase Price
|
||||||||
Unconsolidated VIEs
|
$
|
10,323
|
|
|
$
|
475,665
|
|
|
$
|
8,463
|
|
|
$
|
327,196
|
|
Other land option contracts and other similar contracts
|
12,012
|
|
|
232,097
|
|
|
17,219
|
|
|
298,139
|
|
||||
|
$
|
22,335
|
|
|
$
|
707,762
|
|
|
$
|
25,682
|
|
|
$
|
625,335
|
|
|
Total
|
|
2013
|
|
2014-2015
|
|
2016-2017
|
|
Thereafter
|
||||||||||
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
1,943,275
|
|
|
$
|
28,192
|
|
|
$
|
427,403
|
|
|
$
|
263,032
|
|
|
$
|
1,224,648
|
|
Interest
|
708,645
|
|
|
65,282
|
|
|
236,499
|
|
|
201,531
|
|
|
205,333
|
|
|||||
Total
|
$
|
2,651,920
|
|
|
$
|
93,474
|
|
|
$
|
663,902
|
|
|
$
|
464,563
|
|
|
$
|
1,429,981
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Fiscal Year of Expected Maturity
|
|
Fixed Rate Debt
|
|
Weighted Average
Interest Rate
|
|||
2013
|
|
$
|
—
|
|
|
—
|
%
|
2014
|
|
75,935
|
|
|
5.8
|
|
|
2015
|
|
338,879
|
|
|
6.1
|
|
|
2016
|
|
—
|
|
|
—
|
|
|
2017
|
|
261,732
|
|
|
9.1
|
|
|
Thereafter
|
|
1,224,648
|
|
|
6.4
|
|
|
Total
|
|
$
|
1,901,194
|
|
|
6.7
|
%
|
Fair value at May 31, 2013
|
|
$
|
2,160,870
|
|
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Exhibits
|
|
|
4.22
|
|
Eighth Supplemental Indenture, dated as of March 12, 2013, by and among us, the Guarantors party thereto, the Additional Guarantors named therein and U.S. Bank National Association, as Trustee.
|
|
|
|
10.46
|
|
Revolving Loan Agreement, dated as of March 12, 2013, among us, the banks party thereto, and Citibank, N.A., as Administrative Agent.
|
|
|
|
31.1
|
|
Certification of Jeffrey T. Mezger, President and Chief Executive Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Jeffrey T. Mezger, President and Chief Executive Officer of KB Home Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of KB Home Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following materials from KB Home’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2013, formatted in eXtensible Business Reporting Language (XBRL): (a) Consolidated Statements of Operations for the six months and three months ended May 31, 2013 and 2012, (b) Consolidated Balance Sheets as of May 31, 2013 and November 30, 2012, (c) Consolidated Statements of Cash Flows for the six months ended May 31, 2013 and 2012, and (d) Notes to Consolidated Financial Statements.
|
|
KB HOME
Registrant
|
Dated
|
July 10, 2013
|
|
By:
|
/s/ JEFF J. KAMINSKI
|
|
|
|
|
Jeff J. Kaminski
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
Dated
|
July 10, 2013
|
|
By:
|
/s/ WILLIAM R. HOLLINGER
|
|
|
|
|
William R. Hollinger
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
4.22
|
|
Eighth Supplemental Indenture, dated as of March 12, 2013, by and among us, the Guarantors party thereto, the Additional Guarantors named therein and U.S. Bank National Association, as Trustee.
|
|
|
|
10.46
|
|
Revolving Loan Agreement, dated as of March 12, 2013, among us, the banks party thereto, and Citibank, N.A., as Administrative Agent.
|
|
|
|
31.1
|
|
Certification of Jeffrey T. Mezger, President and Chief Executive Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Jeffrey T. Mezger, President and Chief Executive Officer of KB Home Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of KB Home Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following materials from KB Home’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2013, formatted in eXtensible Business Reporting Language (XBRL): (a) Consolidated Statements of Operations for the six months and three months ended May 31, 2013 and 2012, (b) Consolidated Balance Sheets as of May 31, 2013 and November 30, 2012, (c) Consolidated Statements of Cash Flows for the six months ended May 31, 2013 and 2012, and (d) Notes to Consolidated Financial Statements.
|
“Additional Guarantors”:
|
KB HOME PHOENIX INC., an Arizona corporation
|
1.1
|
Defined Terms
|
1.2
|
Accounting Terms
|
1.3
|
Rounding
|
1.4
|
Other Interpretive Provisions
|
1.5
|
Exhibits and Schedules
|
1.6
|
References to “Borrower and its Subsidiaries”
|
1.7
|
Time of Day
|
1.8
|
Letter of Credit Amounts
|
2.1
|
Loans-General
|
2.2
|
Base Rate Loans
|
2.3
|
Eurodollar Rate Loans
|
2.4
|
[Intentionally Omitted
|
2.5
|
Letters of Credit
|
2.6
|
Reduction of Commitment
|
2.7
|
Optional Increase to Commitment
|
2.8
|
Borrowing Base
|
2.9
|
[Intentionally Omitted.]
|
3.1
|
Principal and Interest
|
3.2
|
Commitment Fee
|
3.3
|
Other Fees
|
3.4
|
Upfront Fee
|
3.5
|
[Intentionally Omitted]
|
3.6
|
Eurodollar Fees and Costs
|
3.7
|
Late Payments/Default Interest
|
3.8
|
Computation of Interest and Fees
|
3.9
|
Holidays
|
3.10
|
Payment Free of Taxes
|
3.11
|
Funding Sources
|
3.12
|
Failure to Charge or Making of Payment Not Subsequent Waiver
|
3.13
|
Time and Place of Payments; Evidence of Payments; Application of Payments
|
3.14
|
Administrative Agent’s Right to Assume Payments Will be Made
|
3.15
|
Survivability
|
3.16
|
Bank Calculation Certificate
|
3.17
|
Designation of a Different Lending Office
|
4.1
|
Existence and Qualification; Power; Compliance with Law
|
4.2
|
Authority; Compliance with Other Instruments and Government Regulations
|
4.3
|
No Governmental Approvals Required
|
4.4
|
Subsidiaries
|
4.5
|
Financial Statements
|
4.6
|
No Material Adverse Change
|
4.7
|
Title to Assets
|
4.8
|
Intangible Assets
|
4.9
|
Anti-Terrorism Laws.
|
4.10
|
Governmental Regulation
|
4.11
|
Litigation
|
4.12
|
Binding Obligations
|
4.13
|
No Default
|
4.14
|
Pension Plans
|
4.15
|
Tax Liability
|
4.16
|
Regulation U
|
4.17
|
Environmental Matters
|
4.18
|
Disclosure
|
4.19
|
Projections
|
4.20
|
ERISA Compliance
|
4.21
|
Solvency
|
4.22
|
Absence of Restrictions
|
4.23
|
Tax Shelter Regulations
|
5.1
|
Payment of Taxes and Other Potential Liens
|
5.2
|
Preservation of Existence
|
5.3
|
Maintenance of Properties
|
5.4
|
Maintenance of Insurance
|
5.5
|
Compliance with Laws
|
5.6
|
Inspection Rights
|
5.7
|
Keeping of Records and Books of Account
|
5.8
|
Use of Proceeds
|
5.9
|
Subsidiary Guaranty
|
5.10
|
Notice of Accelerated Maturity
|
6.1
|
Payment or Prepayment of Subordinated Obligations and Certain Other Obligations
|
6.2
|
[Intentionally Omitted]
|
6.3
|
Merger and Sale of Assets
|
6.4
|
Investments and Acquisitions
|
6.5
|
[Intentionally Omitted
|
6.6
|
Change in Business
|
6.7
|
Liens and Negative Pledges.
|
6.8
|
Transactions with Affiliates
|
6.9
|
Consolidated Tangible Net Worth
|
6.10
|
Consolidated Leverage Ratio
|
6.11
|
Consolidated Interest Coverage Ratio or Minimum Liquidity
|
6.12
|
Distributions
|
6.13
|
Amendments
|
6.14
|
[Intentionally Omitted]
|
6.15
|
[Intentionally Omitted]
|
6.16
|
Investment in Subsidiaries and Joint Ventures
|
6.17
|
Borrowing Base Indebtedness Not to Exceed Borrowing Base
|
6.18
|
[Intentionally Omitted]
|
6.19
|
Regulation U
|
6.20
|
Fiscal Year
|
7.1
|
Financial and Business Information of Borrower and Its Subsidiaries
|
7.2
|
Compliance Certificate
|
8.1
|
Initial Advances, Etc
|
8.2
|
Any Advance
|
8.3
|
Any Letter of Credit
|
9.1
|
Events of Default
|
9.2
|
Remedies Upon Event of Default
|
10.1
|
Appointment and Authorization
|
10.2
|
Delegation of Duties
|
10.3
|
Liability of Administrative Agent
|
10.4
|
Reliance by Administrative Agent
|
10.5
|
Notice of Default
|
10.6
|
Credit Decision; Disclosure of Information by Administrative Agent
|
10.7
|
Indemnification of Administrative Agent
|
10.8
|
Administrative Agent in its Individual Capacity
|
10.9
|
Successor Administrative Agent
|
10.10
|
Administrative Agent May File Proofs of Claim
|
10.11
|
Guaranty Matters
|
10.12
|
Other Agents; Arrangers and Managers
|
10.13
|
Defaulting Banks
|
10.14
|
No Obligations of Borrower
|
11.1
|
Cumulative Remedies; No Waiver
|
11.2
|
Amendments; Consents
|
11.3
|
Costs, Expenses and Taxes
|
11.4
|
Nature of Banks’ Obligations
|
11.5
|
Survival of Representations and Warranties
|
11.6
|
Notices and Other Communications; Facsimile Copies
|
11.7
|
Execution in Counterparts; Facsimile Delivery
|
11.8
|
Successors and Assigns
|
11.9
|
Sharing of Setoffs
|
11.10
|
Indemnification by the Borrower
|
11.11
|
Nonliability of Banks
|
11.12
|
Confidentiality
|
11.13
|
No Third Parties Benefited
|
11.14
|
Other Dealings
|
11.15
|
Right of Setoff — Deposit Accounts
|
11.16
|
Further Assurances
|
11.17
|
Integration
|
11.18
|
Governing Law
|
11.19
|
Severability of Provisions
|
11.20
|
Headings
|
11.21
|
Conflict in Loan Documents
|
11.22
|
Waiver of Right to Trial by Jury
|
11.23
|
Purported Oral Amendments
|
11.24
|
Payments Set Aside
|
11.25
|
Hazardous Materials Indemnity
|
11.26
|
USA PATRIOT Act Notice
|
11.27
|
Replacement of Banks
|
11.28
|
No Fiduciary Relationship
|
Applicable Pricing Level
|
Debt Ratings
|
Consolidated Leverage Ratio
|
I
|
BB/Ba2 or better
|
<0.65:1
|
II
|
BB-/Ba3
|
≥0.65:1 but <0.70:1
|
III
|
B+/B1
|
≥0.70:1 but <0.75:1
|
IV
|
B/B2
|
≥0.75:1 but <0.80:1
|
V
|
B-/B3 or worse
|
≥0.80:1
|
Applicable Pricing Level
|
Applicable Base Rate Spread
|
Applicable Commitment Fee Rate
|
Applicable Eurodollar Rate Spread/Applicable Letter of Credit Fee
|
I
|
2.50%
|
0.500%
|
3.50%
|
II
|
2.75%
|
0.625%
|
3.75%
|
III
|
3.00%
|
0.625%
|
4.00%
|
IV
|
3.25%
|
0.625%
|
4.25%
|
V
|
3.50%
|
0.750%
|
4.50%
|
1.00 – Eurodollar Reserve Percentage
|
(B)
|
the date by which the Change in Control Payment Notice (as defined in Section 3.1(f)(iii)) must be given; and
|
For each Fiscal Quarter ending after the Closing Date through and including the fourth Fiscal Quarter of 2014
|
0.85 to 1.00
|
For the first and second Fiscal Quarters of 2015
|
0.825 to 1.00
|
For the third Fiscal Quarter of 2015 and each Fiscal Quarter thereafter
|
0.80 to 1.00
|
1.
|
I have reviewed this quarterly report on Form 10-Q of KB Home;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated
|
July 10, 2013
|
|
/s/ JEFFREY T. MEZGER
|
|
|
|
Jeffrey T. Mezger
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of KB Home;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated
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July 10, 2013
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/s/ JEFF J. KAMINSKI
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Jeff J. Kaminski
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated
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July 10, 2013
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/s/ JEFFREY T. MEZGER
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Jeffrey T. Mezger
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President and Chief Executive Officer
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(Principal Executive Officer)
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated
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July 10, 2013
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/s/ JEFF J. KAMINSKI
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Jeff J. Kaminski
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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