Delaware
|
95-3666267
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Name of each exchange
on which registered
|
Common Stock (par value $1.00 per share)
|
New York Stock Exchange
|
Rights to Purchase Series A Participating Cumulative Preferred Stock
|
New York Stock Exchange
|
|
|
Page
Number
|
Item 1.
|
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 1.
|
BUSINESS
|
Segment
|
|
State(s)
|
|
Major Market(s)
|
|
|
|
|
|
West Coast
|
|
California
|
|
Contra Costa County, Fresno, Los Angeles, Madera, Oakland, Orange County, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Jose, Santa Rosa-Petaluma, Stockton, Vallejo, Ventura and Yuba City
|
Southwest
|
|
Arizona
|
|
Phoenix and Tucson
|
|
|
Nevada
|
|
Las Vegas
|
Central
|
|
Colorado
|
|
Denver
|
|
|
Texas
|
|
Austin, Dallas, Fort Worth, Houston and San Antonio
|
Southeast
|
|
Florida
|
|
Daytona Beach, Jacksonville, Lakeland, Orlando, Punta Gorda, Sarasota, Sebastian-Vero Beach and Tampa
|
|
|
North Carolina
|
|
Raleigh
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
West Coast:
|
|
|
|
|
|
||||||
Homes delivered
|
3,387
|
|
|
2,825
|
|
|
2,258
|
|
|||
Percentage of total homes delivered
|
31
|
%
|
|
29
|
%
|
|
27
|
%
|
|||
Average selling price
|
$
|
644,900
|
|
|
$
|
579,900
|
|
|
$
|
587,000
|
|
Total revenues (a)
|
$
|
2,186.4
|
|
|
$
|
1,638.1
|
|
|
$
|
1,402.3
|
|
Southwest:
|
|
|
|
|
|
||||||
Homes delivered
|
1,837
|
|
|
1,559
|
|
|
1,311
|
|
|||
Percentage of total homes delivered
|
17
|
%
|
|
16
|
%
|
|
16
|
%
|
|||
Average selling price
|
$
|
290,200
|
|
|
$
|
287,000
|
|
|
$
|
284,600
|
|
Total revenues (a)
|
$
|
533.1
|
|
|
$
|
447.5
|
|
|
$
|
398.2
|
|
Central:
|
|
|
|
|
|
||||||
Homes delivered
|
4,136
|
|
|
3,744
|
|
|
3,183
|
|
|||
Percentage of total homes delivered
|
38
|
%
|
|
38
|
%
|
|
39
|
%
|
|||
Average selling price
|
$
|
284,800
|
|
|
$
|
270,100
|
|
|
$
|
252,200
|
|
Total revenues (a)
|
$
|
1,188.8
|
|
|
$
|
1,018.5
|
|
|
$
|
809.7
|
|
Southeast:
|
|
|
|
|
|
||||||
Homes delivered
|
1,549
|
|
|
1,701
|
|
|
1,444
|
|
|||
Percentage of total homes delivered
|
14
|
%
|
|
17
|
%
|
|
18
|
%
|
|||
Average selling price
|
$
|
284,100
|
|
|
$
|
281,400
|
|
|
$
|
281,900
|
|
Total revenues (a)
|
$
|
448.0
|
|
|
$
|
478.9
|
|
|
$
|
410.8
|
|
Total:
|
|
|
|
|
|
||||||
Homes delivered
|
10,909
|
|
|
9,829
|
|
|
8,196
|
|
|||
Average selling price
|
$
|
397,400
|
|
|
$
|
363,800
|
|
|
$
|
354,800
|
|
Total revenues (a)
|
$
|
4,356.3
|
|
|
$
|
3,582.9
|
|
|
$
|
3,021.0
|
|
(a)
|
Total revenues include revenues from housing and land sales.
|
•
|
Customers
. For each of our served markets, we gain a detailed understanding of consumers’ location and product preferences, as well as product price-to-value perceptions, through ongoing customer surveys and other market research. Our primary focus is on first-time and first move-up homebuyers. First-time homebuyers have comprised nearly 60% of our homes delivered over the past 10 years. In addition, our Built-to-Order™ homebuying process provides our homebuyers with a wide range of choices in the major aspects of their future home, together with a personalized customer experience through our in-house community teams. These teams are made up of sales representatives, design consultants and other personnel who partner closely with each homebuyer and maintain constant communication from the initial sale of their home to its delivery. We believe this highly consumer-centric approach helps enhance customer satisfaction by enabling our homebuyers to design a home with the features and amenities they want based on what they value.
|
•
|
Land
. We seek to manage our working capital and reduce our operating risks by primarily acquiring entitled land parcels at reasonable prices within attractive submarkets as identified by our market research activities. We typically focus on metropolitan areas with favorable long-term economic and population growth prospects that we believe have the potential to sustain a minimum of 800 homes delivered per year, and target land parcels that provide a two- to three-year supply of lots per community and meet our investment return standards. Identified consumer preferences and home sales activity largely direct where our land acquisition teams search for available land. We leverage the relationships we have with land owners, developers and brokers in our served markets to acquire land, and use our experience in working with municipalities to efficiently obtain entitlements and any other required development approvals, typically before or concurrently with closing on a parcel.
|
•
|
Products
. We offer our customers a base product with a standardized set of functions and features that is generally priced to be affordable for the local area’s median household income level. Our Built-to-Order approach provides customers the opportunity to select their lot location, floor plan, elevation and structural options, and to personalize their homes with numerous interior design options and upgrades in our design studios. Our design studios, generally centrally located within our served markets, are a key component of our Built-to-Order process, and the mix of design options and upgrades they offer are primarily based on the preferences identified by consumer survey and purchase frequency data. We utilize a centralized internal architectural group that designs homes to meet or exceed customers’ price-to-value expectations while being as efficient as possible to construct. Our architectural group has developed a core series of flexible floor plans and elevations that we can offer across many of our served markets, which helps us understand the cost to build our products and enables us to compare and implement best practices across divisions or communities. We also incorporate energy-efficient features into our product designs to help lower the total cost of homeownership for our homebuyers and to reduce our homes’ impact on the environment, as further discussed below. As used in this report and elsewhere, the term “product” encompasses a home’s floor plan design and interior/exterior style, amenities, functions and features.
|
•
|
Operations
. In addition to differentiating us from other high-production homebuilders, our Built-to-Order process helps to drive low-cost production. We generally commence construction of a home only after we have a signed purchase contract with a homebuyer and have obtained preliminary credit approval or other evidence of the homebuyer’s financial ability to purchase the home, and seek to build a backlog of sold homes. By maintaining a healthy five-to-six-month backlog, along with centralized scheduling and standardized reporting processes, we have been able to establish a disciplined and scalable operational platform that helps us sustain an even-flow production of pre-sold homes, which reduces our inventory risk, enhances efficiencies in the construction process and our relationships with independent subcontractors, and provides us with greater visibility and predictability on future deliveries as we grow.
|
•
|
Housing revenues greater than $5 billion.
|
•
|
Homebuilding operating income margin, excluding inventory-related charges, of 8.0% to 9.0%.
|
◦
|
Housing gross profit margin, excluding inventory-related charges, of 17.5% to 18.2%.
|
◦
|
Selling, general and administrative expenses as a percentage of housing revenues (“selling, general and administrative expense ratio”) of 9.0% to 9.5%.
|
•
|
Return on invested capital in excess of 10.0%.
|
•
|
Return on equity of 10.0% to 15.0%.
|
•
|
Net debt to capital ratio of 40% to 50%.
|
|
Homes Under
Construction and Land
Under Development
|
|
Land Held for Future
Development or Sale
|
|
Land Under
Option
|
|
Total Land
Owned or
Under Option
|
||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
West Coast
|
6,056
|
|
|
5,192
|
|
|
1,982
|
|
|
2,202
|
|
|
3,305
|
|
|
3,510
|
|
|
11,343
|
|
|
10,904
|
|
Southwest
|
7,329
|
|
|
4,912
|
|
|
922
|
|
|
2,525
|
|
|
834
|
|
|
901
|
|
|
9,085
|
|
|
8,338
|
|
Central
|
11,849
|
|
|
13,090
|
|
|
889
|
|
|
1,058
|
|
|
6,323
|
|
|
4,124
|
|
|
19,061
|
|
|
18,272
|
|
Southeast
|
3,571
|
|
|
3,453
|
|
|
2,346
|
|
|
3,150
|
|
|
965
|
|
|
708
|
|
|
6,882
|
|
|
7,311
|
|
Total
|
28,805
|
|
|
26,647
|
|
|
6,139
|
|
|
8,935
|
|
|
11,427
|
|
|
9,243
|
|
|
46,371
|
|
|
44,825
|
|
•
|
build energy- and water-efficient new homes. We built our 100,000th
ENERGY STAR® certified home in 2017;
|
•
|
developed an Energy Performance Guide®, or EPG®, that informs our homebuyers of the relative energy efficiency and the related estimated monthly energy costs of each of our homes as designed, compared to typical new and existing homes;
|
•
|
advanced home automation technologies, components and systems that can increase convenience for our homebuyers. For instance, in 2017, we partnered with Apple® to offer HomeKit™-enabled homes in certain communities, which allow homeowners to control several comfort and security features in their home using a smart phone or tablet; and
|
•
|
created and continue to add more net-zero energy and zero freshwater design options, under a program called Double ZeroHouse™ 3.0, that are available in select markets.
|
Item 1A.
|
RISK FACTORS
|
•
|
Employment levels and job and wage growth, particularly for individuals and households who make up our core first-time and first move-up homebuyer demographic groups. If the recent upward trends in employment and income levels for these demographic groups weaken or reverse, a corresponding reduction in demand for homes could negatively impact our business, and the impact may be greater for us than for homebuilders that target more-experienced and/or higher-income homebuyers.
|
•
|
Negative population growth, household formations or other demographic changes that can impair demand for housing.
|
•
|
Diminished consumer confidence in general or specifically with respect to purchasing homes, or lack of consumer interest in purchasing a home compared to other housing alternatives due to location preferences, perceived affordability constraints or otherwise.
|
•
|
Inflation, which could result in our production costs increasing at a rate or to a level that we cannot recover through the selling prices of our homes. Inflation may also cause increases in mortgage loan interest rates, and in the interest rates we may need to accept to obtain external financing for our business.
|
•
|
Shortages or rising prices of building materials and construction services, including independent contractor or outside supplier capacity constraints. These conditions could increase our costs and/or extend our construction and home delivery schedules, and we may be unable to raise the selling prices of our homes to cover the impact of such cost increases and/or delays.
|
•
|
Seasonality, which, as discussed above in the “Competition, Seasonality, Delivery Mix and Other Factors” section in this report, generally results in fluctuations in our quarterly operating results, with a significant proportion of our homes delivered and revenues generated in our third and fourth fiscal quarters. While this pattern reflects when consumers have generally preferred to buy homes, we can provide no assurance that this historical seasonality will occur in 2018 or beyond, if at all.
|
•
|
Civil unrest and acts of terrorism, and government responses to such acts, as well as inclement weather, natural disasters, and other environmental conditions can delay the delivery of our homes and/or increase our costs.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Name
|
|
Age
|
|
Present Position
|
|
Year
Assumed
Present
Position
|
|
Years
at
KB
Home
|
|
Other Positions and Other
Business Experience within the
Last Five Years
|
|
From – To
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey T. Mezger
|
|
62
|
|
Chairman, President and Chief Executive Officer (a)
|
|
2016
|
|
24
|
|
President and Chief Executive Officer (a)
|
|
2006-2016
|
Jeff J. Kaminski
|
|
56
|
|
Executive Vice President and Chief Financial Officer
|
|
2010
|
|
7
|
|
|
|
|
Albert Z. Praw
|
|
69
|
|
Executive Vice President, Real Estate and Business Development
|
|
2011
|
|
21
|
|
|
|
|
Brian J. Woram
|
|
57
|
|
Executive Vice President and General Counsel
|
|
2010
|
|
7
|
|
|
|
|
William R. Hollinger
|
|
59
|
|
Senior Vice President and Chief Accounting Officer
|
|
2007
|
|
30
|
|
|
|
|
Thomas F. Norton
|
|
47
|
|
Senior Vice President, Human Resources
|
|
2009
|
|
9
|
|
|
|
|
(a)
|
Mr. Mezger has served as a director since 2006. He was elected Chairman of our board of directors in August 2016.
|
Item 5.
|
MARKET FOR REGISTRANT
’
S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Year Ended November 30, 2017
|
|
Year Ended November 30, 2016
|
||||||||||||||||||||||||||||
|
High
|
|
Low
|
|
Dividends
Declared
|
|
Dividends
Paid
|
|
High
|
|
Low
|
|
Dividends
Declared
|
|
Dividends
Paid
|
||||||||||||||||
First Quarter
|
$
|
17.86
|
|
|
$
|
15.03
|
|
|
$
|
.025
|
|
|
$
|
.025
|
|
|
$
|
14.50
|
|
|
$
|
9.04
|
|
|
$
|
.025
|
|
|
$
|
.025
|
|
Second Quarter
|
21.75
|
|
|
17.60
|
|
|
.025
|
|
|
.025
|
|
|
14.92
|
|
|
12.20
|
|
|
.025
|
|
|
.025
|
|
||||||||
Third Quarter
|
24.37
|
|
|
20.86
|
|
|
.025
|
|
|
.025
|
|
|
16.76
|
|
|
13.66
|
|
|
.025
|
|
|
.025
|
|
||||||||
Fourth Quarter
|
31.41
|
|
|
20.68
|
|
|
.025
|
|
|
.025
|
|
|
16.57
|
|
|
14.06
|
|
|
.025
|
|
|
.025
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs
|
|||||
September 1-30
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,627,000
|
|
October 1-31
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,627,000
|
|
|
November 1-30
|
|
124,199
|
|
|
26.62
|
|
|
—
|
|
|
1,627,000
|
|
|
Total
|
|
124,199
|
|
|
$
|
26.62
|
|
|
—
|
|
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||
KB Home
|
$
|
100
|
|
|
$
|
123
|
|
|
$
|
124
|
|
|
$
|
100
|
|
|
$
|
113
|
|
|
$
|
225
|
|
S&P 500 Index
|
100
|
|
|
130
|
|
|
152
|
|
|
156
|
|
|
169
|
|
|
208
|
|
||||||
Dow Jones US Home Construction Index
|
100
|
|
|
104
|
|
|
125
|
|
|
142
|
|
|
126
|
|
|
225
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Years Ended November 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding
|
$
|
4,356,265
|
|
|
$
|
3,582,943
|
|
|
$
|
3,020,987
|
|
|
$
|
2,389,643
|
|
|
$
|
2,084,978
|
|
Financial services
|
12,264
|
|
|
11,703
|
|
|
11,043
|
|
|
11,306
|
|
|
12,152
|
|
|||||
Total
|
$
|
4,368,529
|
|
|
$
|
3,594,646
|
|
|
$
|
3,032,030
|
|
|
$
|
2,400,949
|
|
|
$
|
2,097,130
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding
|
$
|
283,403
|
|
|
$
|
152,401
|
|
|
$
|
138,621
|
|
|
$
|
115,969
|
|
|
$
|
92,084
|
|
Financial services
|
8,834
|
|
|
7,886
|
|
|
7,332
|
|
|
7,860
|
|
|
9,110
|
|
|||||
Total
|
$
|
292,237
|
|
|
$
|
160,287
|
|
|
$
|
145,953
|
|
|
$
|
123,829
|
|
|
$
|
101,194
|
|
Pretax income
|
$
|
289,995
|
|
|
$
|
149,315
|
|
|
$
|
127,043
|
|
|
$
|
94,949
|
|
|
$
|
38,363
|
|
Net income (a)
|
180,595
|
|
|
105,615
|
|
|
84,643
|
|
|
918,349
|
|
|
39,963
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
2.09
|
|
|
$
|
1.23
|
|
|
$
|
.92
|
|
|
$
|
10.26
|
|
|
$
|
.48
|
|
Diluted
|
1.85
|
|
|
1.12
|
|
|
.85
|
|
|
9.25
|
|
|
.46
|
|
|||||
Cash dividends declared per share
|
.10
|
|
|
.10
|
|
|
.10
|
|
|
.10
|
|
|
.10
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding
|
$
|
5,029,158
|
|
|
$
|
5,121,125
|
|
|
$
|
5,072,877
|
|
|
$
|
4,846,083
|
|
|
$
|
3,309,558
|
|
Financial services
|
12,357
|
|
|
10,499
|
|
|
14,028
|
|
|
10,486
|
|
|
10,040
|
|
|||||
Total
|
$
|
5,041,515
|
|
|
$
|
5,131,624
|
|
|
$
|
5,086,905
|
|
|
$
|
4,856,569
|
|
|
$
|
3,319,598
|
|
Notes payable
|
$
|
2,324,845
|
|
|
$
|
2,640,149
|
|
|
$
|
2,601,754
|
|
|
$
|
2,550,622
|
|
|
$
|
2,125,254
|
|
Stockholders’ equity
|
1,926,311
|
|
|
1,723,145
|
|
|
1,690,834
|
|
|
1,595,910
|
|
|
536,086
|
|
|||||
Stockholders’ equity per share
|
22.13
|
|
|
20.25
|
|
|
18.32
|
|
|
17.36
|
|
|
6.40
|
|
|||||
Homebuilding Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Homes delivered
|
10,909
|
|
|
9,829
|
|
|
8,196
|
|
|
7,215
|
|
|
7,145
|
|
|||||
Average selling price
|
$
|
397,400
|
|
|
$
|
363,800
|
|
|
$
|
354,800
|
|
|
$
|
328,400
|
|
|
$
|
291,700
|
|
Net orders
|
10,900
|
|
|
10,283
|
|
|
9,253
|
|
|
7,567
|
|
|
7,125
|
|
|||||
Unit backlog
|
4,411
|
|
|
4,420
|
|
|
3,966
|
|
|
2,909
|
|
|
2,557
|
|
|||||
Average community count
|
233
|
|
|
238
|
|
|
244
|
|
|
200
|
|
|
182
|
|
(a)
|
Net income for the year ended November 30, 2014 included the favorable impact of an
$825.2 million
deferred tax asset valuation allowance reversal.
|
Item 7.
|
MANAGEMENT
’
S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Years Ended November 30,
|
|
Variance
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||
Homebuilding
|
$
|
4,356,265
|
|
|
$
|
3,582,943
|
|
|
$
|
3,020,987
|
|
|
22
|
%
|
|
19
|
%
|
Financial services
|
12,264
|
|
|
11,703
|
|
|
11,043
|
|
|
5
|
|
|
6
|
|
|||
Total
|
$
|
4,368,529
|
|
|
$
|
3,594,646
|
|
|
$
|
3,032,030
|
|
|
22
|
%
|
|
19
|
%
|
Pretax income:
|
|
|
|
|
|
|
|
|
|
||||||||
Homebuilding
|
$
|
276,927
|
|
|
$
|
144,849
|
|
|
$
|
115,419
|
|
|
91
|
%
|
|
25
|
%
|
Financial services
|
13,068
|
|
|
4,466
|
|
|
11,624
|
|
|
193
|
|
|
(62
|
)
|
|||
Total
|
289,995
|
|
|
149,315
|
|
|
127,043
|
|
|
94
|
|
|
18
|
|
|||
Income tax expense
|
(109,400
|
)
|
|
(43,700
|
)
|
|
(42,400
|
)
|
|
(150
|
)
|
|
(3
|
)
|
|||
Net income
|
$
|
180,595
|
|
|
$
|
105,615
|
|
|
$
|
84,643
|
|
|
71
|
%
|
|
25
|
%
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.09
|
|
|
$
|
1.23
|
|
|
$
|
.92
|
|
|
70
|
%
|
|
34
|
%
|
Diluted
|
$
|
1.85
|
|
|
$
|
1.12
|
|
|
$
|
.85
|
|
|
65
|
%
|
|
32
|
%
|
|
|
Years Ended November 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Net orders
|
|
10,900
|
|
|
10,283
|
|
||
Net order value (a)
|
|
$
|
4,476,247
|
|
|
$
|
3,813,155
|
|
Cancellation rate (b)
|
|
24
|
%
|
|
25
|
%
|
||
Ending backlog — homes
|
|
4,411
|
|
|
4,420
|
|
||
Ending backlog — value
|
|
$
|
1,660,131
|
|
|
$
|
1,519,089
|
|
Ending community count
|
|
224
|
|
|
235
|
|
||
Average community count
|
|
233
|
|
|
238
|
|
(a)
|
Net order value represents the potential future housing revenues associated with net orders generated during a period, as well as homebuyer selections of lot and product premiums and design studio options and upgrades for homes in backlog during the same period.
|
(b)
|
The cancellation rate represents the total number of contracts for new homes canceled during a period divided by the total (gross) orders for new homes generated during the same period.
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Housing
|
$
|
4,335,205
|
|
|
$
|
3,575,548
|
|
|
$
|
2,908,236
|
|
Land
|
21,060
|
|
|
7,395
|
|
|
112,751
|
|
|||
Total
|
4,356,265
|
|
|
3,582,943
|
|
|
3,020,987
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Construction and land costs
|
|
|
|
|
|
||||||
Housing
|
(3,627,732
|
)
|
|
(2,997,073
|
)
|
|
(2,433,683
|
)
|
|||
Land
|
(18,736
|
)
|
|
(44,028
|
)
|
|
(105,685
|
)
|
|||
Total
|
(3,646,468
|
)
|
|
(3,041,101
|
)
|
|
(2,539,368
|
)
|
|||
Selling, general and administrative expenses
|
(426,394
|
)
|
|
(389,441
|
)
|
|
(342,998
|
)
|
|||
Total
|
(4,072,862
|
)
|
|
(3,430,542
|
)
|
|
(2,882,366
|
)
|
|||
Operating income
|
$
|
283,403
|
|
|
$
|
152,401
|
|
|
$
|
138,621
|
|
Homes delivered
|
10,909
|
|
|
9,829
|
|
|
8,196
|
|
|||
Average selling price
|
$
|
397,400
|
|
|
$
|
363,800
|
|
|
$
|
354,800
|
|
Housing gross profit margin as a percentage of housing revenues
|
16.3
|
%
|
|
16.2
|
%
|
|
16.3
|
%
|
|||
Housing gross profit margin excluding inventory-related charges as a percentage of housing revenues
|
16.9
|
%
|
|
16.6
|
%
|
|
16.6
|
%
|
|||
Adjusted housing gross profit margin as a percentage of housing revenues
|
21.8
|
%
|
|
21.1
|
%
|
|
21.0
|
%
|
|||
Selling, general and administrative expense ratio
|
9.8
|
%
|
|
10.9
|
%
|
|
11.8
|
%
|
|||
Operating income as a percentage of homebuilding revenues
|
6.5
|
%
|
|
4.3
|
%
|
|
4.6
|
%
|
|
|
Years Ended November 30,
|
||||||||||||||||
|
|
Homes Delivered
|
|
Net Orders
|
|
Cancellation Rates
|
||||||||||||
Segment
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
West Coast
|
|
3,387
|
|
|
2,825
|
|
|
3,356
|
|
|
3,000
|
|
|
17
|
%
|
|
18
|
%
|
Southwest
|
|
1,837
|
|
|
1,559
|
|
|
2,121
|
|
|
1,758
|
|
|
22
|
|
|
20
|
|
Central
|
|
4,136
|
|
|
3,744
|
|
|
3,939
|
|
|
3,881
|
|
|
31
|
|
|
30
|
|
Southeast
|
|
1,549
|
|
|
1,701
|
|
|
1,484
|
|
|
1,644
|
|
|
24
|
|
|
29
|
|
Total
|
|
10,909
|
|
|
9,829
|
|
|
10,900
|
|
|
10,283
|
|
|
24
|
%
|
|
25
|
%
|
|
|
Years Ended November 30,
|
||||||||||||||||||||
|
|
Net Order Value
|
|
Average Community Count
|
||||||||||||||||||
Segment
|
|
2017
|
|
2016
|
|
Variance
|
|
2017
|
|
2016
|
|
Variance
|
||||||||||
West Coast
|
|
$
|
2,263,443
|
|
|
$
|
1,756,945
|
|
|
29
|
%
|
|
61
|
|
|
59
|
|
|
3
|
%
|
||
Southwest
|
|
632,747
|
|
|
507,870
|
|
|
25
|
|
|
39
|
|
|
37
|
|
|
5
|
|
||||
Central
|
|
1,160,378
|
|
|
1,075,586
|
|
|
8
|
|
|
93
|
|
|
90
|
|
|
3
|
|
||||
Southeast
|
|
419,679
|
|
|
472,754
|
|
|
(11
|
)
|
|
40
|
|
|
52
|
|
|
(23
|
)
|
||||
Total
|
|
$
|
4,476,247
|
|
|
$
|
3,813,155
|
|
|
17
|
%
|
|
233
|
|
|
238
|
|
|
(2
|
)%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
November 30,
|
||||||||||||||||||||
|
|
Backlog – Homes
|
|
Backlog – Value
|
||||||||||||||||||
Segment
|
|
2017
|
|
2016
|
|
Variance
|
|
2017
|
|
2016
|
|
Variance
|
||||||||||
West Coast
|
|
882
|
|
|
913
|
|
|
(3
|
)%
|
|
$
|
606,109
|
|
|
$
|
526,840
|
|
|
15
|
%
|
||
Southwest
|
|
1,088
|
|
|
804
|
|
|
35
|
|
|
327,517
|
|
|
227,822
|
|
|
44
|
|
||||
Central
|
|
1,782
|
|
|
1,979
|
|
|
(10
|
)
|
|
541,684
|
|
|
559,172
|
|
|
(3
|
)
|
||||
Southeast
|
|
659
|
|
|
724
|
|
|
(9
|
)
|
|
184,821
|
|
|
205,255
|
|
|
(10
|
)
|
||||
Total
|
|
4,411
|
|
|
4,420
|
|
|
—
|
%
|
|
$
|
1,660,131
|
|
|
$
|
1,519,089
|
|
|
9
|
%
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Housing revenues
|
$
|
4,335,205
|
|
|
$
|
3,575,548
|
|
|
$
|
2,908,236
|
|
Housing construction and land costs
|
(3,627,732
|
)
|
|
(2,997,073
|
)
|
|
(2,433,683
|
)
|
|||
Housing gross profits
|
707,473
|
|
|
578,475
|
|
|
474,553
|
|
|||
Add: Inventory-related charges (a)
|
25,232
|
|
|
16,152
|
|
|
9,591
|
|
|||
Housing gross profits excluding inventory-related charges
|
732,705
|
|
|
594,627
|
|
|
484,144
|
|
|||
Add: Amortization of previously capitalized interest (b)
|
210,538
|
|
|
160,633
|
|
|
126,817
|
|
|||
Adjusted housing gross profits
|
$
|
943,243
|
|
|
$
|
755,260
|
|
|
$
|
610,961
|
|
Housing gross profit margin as a percentage of housing revenues
|
16.3
|
%
|
|
16.2
|
%
|
|
16.3
|
%
|
|||
Housing gross profit margin excluding inventory-related charges as a percentage of housing revenues
|
16.9
|
%
|
|
16.6
|
%
|
|
16.6
|
%
|
|||
Adjusted housing gross profit margin as a percentage of housing revenues
|
21.8
|
%
|
|
21.1
|
%
|
|
21.0
|
%
|
(a)
|
Represents inventory impairment and land option contract abandonment charges associated with housing operations.
|
(b)
|
Represents the amortization of previously capitalized interest associated with housing operations.
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Notes payable
|
$
|
2,324,845
|
|
|
$
|
2,640,149
|
|
Stockholders’ equity
|
1,926,311
|
|
|
1,723,145
|
|
||
Total capital
|
$
|
4,251,156
|
|
|
$
|
4,363,294
|
|
Ratio of debt to capital
|
54.7
|
%
|
|
60.5
|
%
|
||
|
|
|
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Notes payable
|
$
|
2,324,845
|
|
|
$
|
2,640,149
|
|
Less: Cash and cash equivalents
|
(720,630
|
)
|
|
(592,086
|
)
|
||
Net debt
|
1,604,215
|
|
|
2,048,063
|
|
||
Stockholders’ equity
|
1,926,311
|
|
|
1,723,145
|
|
||
Total capital
|
$
|
3,530,526
|
|
|
$
|
3,771,208
|
|
Ratio of net debt to capital
|
45.4
|
%
|
|
54.3
|
%
|
|
Years Ended November 30,
|
|
Variance
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||
Revenues
|
$
|
2,186,411
|
|
|
$
|
1,638,078
|
|
|
$
|
1,402,264
|
|
|
33
|
%
|
|
17
|
%
|
Construction and land costs
|
(1,835,504
|
)
|
|
(1,386,270
|
)
|
|
(1,179,222
|
)
|
|
(32
|
)
|
|
(18
|
)
|
|||
Selling, general and administrative expenses
|
(131,182
|
)
|
|
(100,425
|
)
|
|
(84,875
|
)
|
|
(31
|
)
|
|
(18
|
)
|
|||
Operating income
|
$
|
219,725
|
|
|
$
|
151,383
|
|
|
$
|
138,167
|
|
|
45
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Homes delivered
|
3,387
|
|
|
2,825
|
|
|
2,258
|
|
|
20
|
%
|
|
25
|
%
|
|||
Average selling price
|
$
|
644,900
|
|
|
$
|
579,900
|
|
|
$
|
587,000
|
|
|
11
|
%
|
|
(1
|
) %
|
Housing gross profit margin
|
16.0
|
%
|
|
15.4
|
%
|
|
16.4
|
%
|
|
60
|
bps
|
|
(100
|
)bps
|
|
Years Ended November 30,
|
|
Variance
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||
Revenues
|
$
|
533,052
|
|
|
$
|
447,473
|
|
|
$
|
398,242
|
|
|
19
|
%
|
|
12
|
%
|
Construction and land costs
|
(445,451
|
)
|
|
(371,509
|
)
|
|
(329,203
|
)
|
|
(20
|
)
|
|
(13
|
)
|
|||
Selling, general and administrative expenses
|
(42,329
|
)
|
|
(35,786
|
)
|
|
(31,228
|
)
|
|
(18
|
)
|
|
(15
|
)
|
|||
Operating income
|
$
|
45,272
|
|
|
$
|
40,178
|
|
|
$
|
37,811
|
|
|
13
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Homes delivered
|
1,837
|
|
|
1,559
|
|
|
1,311
|
|
|
18
|
%
|
|
19
|
%
|
|||
Average selling price
|
$
|
290,200
|
|
|
$
|
287,000
|
|
|
$
|
284,600
|
|
|
1
|
%
|
|
1
|
%
|
Housing gross profit margin
|
16.4
|
%
|
|
17.4
|
%
|
|
18.4
|
%
|
|
(100
|
)bps
|
|
(100
|
)bps
|
|
Years Ended November 30,
|
|
Variance
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||
Revenues
|
$
|
1,188,839
|
|
|
$
|
1,018,535
|
|
|
$
|
809,738
|
|
|
17
|
%
|
|
26
|
%
|
Construction and land costs
|
(963,202
|
)
|
|
(830,368
|
)
|
|
(657,316
|
)
|
|
(16
|
)
|
|
(26
|
)
|
|||
Selling, general and administrative expenses
|
(109,385
|
)
|
|
(102,300
|
)
|
|
(82,400
|
)
|
|
(7
|
)
|
|
(24
|
)
|
|||
Operating income
|
$
|
116,252
|
|
|
$
|
85,867
|
|
|
$
|
70,022
|
|
|
35
|
%
|
|
23
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Homes delivered
|
4,136
|
|
|
3,744
|
|
|
3,183
|
|
|
10
|
%
|
|
18
|
%
|
|||
Average selling price
|
$
|
284,800
|
|
|
$
|
270,100
|
|
|
$
|
252,200
|
|
|
5
|
%
|
|
7
|
%
|
Housing gross profit margin
|
19.2
|
%
|
|
19.6
|
%
|
|
19.0
|
%
|
|
(40
|
)bps
|
|
60
|
bps
|
|
Years Ended November 30,
|
|
Variance
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs 2016
|
|
2016 vs 2015
|
||||||||
Revenues
|
$
|
447,963
|
|
|
$
|
478,857
|
|
|
$
|
410,743
|
|
|
(6)
|
%
|
|
17
|
%
|
Construction and land costs
|
(396,026
|
)
|
|
(446,539
|
)
|
|
(367,668
|
)
|
|
11
|
|
|
(21
|
)
|
|||
Selling, general and administrative expenses
|
(52,378
|
)
|
|
(58,361
|
)
|
|
(57,552
|
)
|
|
10
|
|
|
(1
|
)
|
|||
Operating loss
|
$
|
(441
|
)
|
|
$
|
(26,043
|
)
|
|
$
|
(14,477
|
)
|
|
98
|
%
|
|
(80
|
) %
|
|
|
|
|
|
|
|
|
|
|
||||||||
Homes delivered
|
1,549
|
|
|
1,701
|
|
|
1,444
|
|
|
(9)
|
%
|
|
18
|
%
|
|||
Average selling price
|
$
|
284,100
|
|
|
$
|
281,400
|
|
|
$
|
281,900
|
|
|
1
|
%
|
|
—
|
|
Housing gross profit margin
|
11.7
|
%
|
|
11.7
|
%
|
|
10.4
|
%
|
|
—
|
|
|
130
|
bps
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
12,264
|
|
|
$
|
11,703
|
|
|
$
|
11,043
|
|
Expenses
|
(3,430
|
)
|
|
(3,817
|
)
|
|
(3,711
|
)
|
|||
Equity in income (loss) of unconsolidated joint ventures
|
4,234
|
|
|
(3,420
|
)
|
|
4,292
|
|
|||
Pretax income
|
$
|
13,068
|
|
|
$
|
4,466
|
|
|
$
|
11,624
|
|
|
|
|
|
|
|
||||||
Total originations (a):
|
|
|
|
|
|
||||||
Loans
|
2,485
|
|
|
3,320
|
|
|
4,460
|
|
|||
Principal
|
$
|
688,763
|
|
|
$
|
847,905
|
|
|
$
|
1,132,479
|
|
Percentage of homebuyers using KBHS/HCM
|
25
|
%
|
|
37
|
%
|
|
62
|
%
|
|||
Average FICO score
|
719
|
|
|
713
|
|
|
718
|
|
|||
|
|
|
|
|
|
||||||
Loans sold (a):
|
|
|
|
|
|
||||||
Loans sold to Stearns/Nationstar
|
1,872
|
|
|
3,730
|
|
|
4,168
|
|
|||
Principal
|
$
|
514,307
|
|
|
$
|
966,155
|
|
|
$
|
1,055,551
|
|
Loans sold to other third parties
|
196
|
|
|
234
|
|
|
161
|
|
|||
Principal
|
$
|
51,425
|
|
|
$
|
47,936
|
|
|
$
|
38,608
|
|
(a)
|
Loan originations and sales in 2017 occurred within KBHS. In 2016 and 2015, loan originations and sales occurred within HCM. In the 2016 fourth quarter, we and Nationstar began the process to wind down HCM and transfer HCM’s operations and certain assets to Stearns.
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Income tax expense
|
$
|
109,400
|
|
|
$
|
43,700
|
|
|
$
|
42,400
|
|
Effective income tax rate
|
37.7
|
%
|
|
29.3
|
%
|
|
33.4
|
%
|
•
|
internally generated cash flows;
|
•
|
public issuances of our common stock;
|
•
|
public issuances of debt securities;
|
•
|
land option contracts and other similar contracts and seller notes; and
|
•
|
letters of credit and performance bonds.
|
•
|
land acquisitions and land development;
|
•
|
home construction;
|
•
|
operating expenses; and
|
•
|
principal and interest payments on notes payable.
|
|
|
November 30, 2017
|
|
November 30, 2016
|
|
Variance
|
|||||||||||||||
Segment
|
|
Lots
|
|
$
|
|
Lots
|
|
$
|
|
Lots
|
|
$
|
|||||||||
West Coast
|
|
11,343
|
|
|
$
|
1,595,588
|
|
|
10,904
|
|
|
$
|
1,726,740
|
|
|
439
|
|
|
$
|
(131,152
|
)
|
Southwest
|
|
9,085
|
|
|
551,387
|
|
|
8,338
|
|
|
522,320
|
|
|
747
|
|
|
29,067
|
|
|||
Central
|
|
19,061
|
|
|
768,232
|
|
|
18,272
|
|
|
769,237
|
|
|
789
|
|
|
(1,005
|
)
|
|||
Southeast
|
|
6,882
|
|
|
348,179
|
|
|
7,311
|
|
|
384,931
|
|
|
(429
|
)
|
|
(36,752
|
)
|
|||
Total
|
|
46,371
|
|
|
$
|
3,263,386
|
|
|
44,825
|
|
|
$
|
3,403,228
|
|
|
1,546
|
|
|
$
|
(139,842
|
)
|
|
November 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Variance
|
||||||
Mortgages and land contracts due to land sellers and other loans
|
$
|
10,203
|
|
|
$
|
66,927
|
|
|
$
|
(56,724
|
)
|
Senior notes
|
2,086,070
|
|
|
2,345,843
|
|
|
(259,773
|
)
|
|||
Convertible senior notes
|
228,572
|
|
|
227,379
|
|
|
1,193
|
|
|||
Total
|
$
|
2,324,845
|
|
|
$
|
2,640,149
|
|
|
$
|
(315,304
|
)
|
•
|
Consolidated Tangible Net Worth.
We must maintain a consolidated tangible net worth at the end of any fiscal quarter greater than or equal to the sum of (a) $1.24 billion, plus (b) an amount equal to 50% of the aggregate of the cumulative consolidated net income for each fiscal quarter commencing after May 31, 2017 and ending as of the last day of such fiscal quarter (though there is no reduction if there is a consolidated net loss in any fiscal quarter), plus (c) an amount equal to 50% of the cumulative net proceeds we receive from the issuance of our capital stock after May 31, 2017.
|
•
|
Leverage Ratio.
We must also maintain a Leverage Ratio of less than or equal to .65 at the end of each fiscal quarter. 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, all as defined under the Credit Facility.
|
•
|
Interest Coverage Ratio or Liquidity.
We are also required to maintain either (a) an Interest Coverage Ratio of greater than or equal to 1.50 at the end of each fiscal quarter; or (b) a minimum level of liquidity, but not both. The Interest Coverage Ratio is the ratio of our consolidated adjusted EBITDA to consolidated interest incurred, each as defined under the Credit Facility, in each case for the previous 12 months. Our minimum liquidity is required to be greater than or equal to consolidated interest incurred, as defined under the Credit Facility, for the four most recently ended fiscal quarters in the aggregate.
|
Financial Covenants and Other Requirements
|
|
Covenant Requirement
|
|
Actual
|
|||||
Consolidated tangible net worth
|
|
>
|
$
|
1.32
|
billion
|
|
$
|
1.93
|
billion
|
Leverage Ratio
|
|
<
|
.650
|
|
|
.547
|
|
||
Interest Coverage Ratio (a)
|
|
>
|
1.500
|
|
|
3.202
|
|
||
Minimum liquidity (a)
|
|
>
|
$
|
168.8
|
million
|
|
$
|
720.6
|
million
|
Investments in joint ventures and non-guarantor subsidiaries
|
|
<
|
$
|
490.1
|
million
|
|
$
|
114.6
|
million
|
Borrowing base in excess of borrowing base indebtedness (as defined)
|
|
|
n/a
|
|
$
|
680.4
|
million
|
(a)
|
Under the terms of the Credit Facility, we are required to maintain either a minimum Interest Coverage Ratio or a minimum level of liquidity, but not both. As of
November 30, 2017
, we met both the Interest Coverage Ratio and the minimum liquidity requirements.
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
513,219
|
|
|
$
|
188,655
|
|
|
$
|
181,185
|
|
Investing activities
|
(15,744
|
)
|
|
(6,079
|
)
|
|
(11,303
|
)
|
|||
Financing activities
|
(369,614
|
)
|
|
(149,917
|
)
|
|
31,691
|
|
|||
Net increase in cash and cash equivalents
|
$
|
127,861
|
|
|
$
|
32,659
|
|
|
$
|
201,573
|
|
|
Payments due by Period
|
||||||||||||||||||
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
2,340.2
|
|
|
$
|
303.1
|
|
|
$
|
987.1
|
|
|
$
|
800.0
|
|
|
$
|
250.0
|
|
Interest
|
500.0
|
|
|
140.8
|
|
|
210.5
|
|
|
139.2
|
|
|
9.5
|
|
|||||
Inventory-related obligations (a)
|
30.1
|
|
|
6.8
|
|
|
2.3
|
|
|
2.6
|
|
|
18.4
|
|
|||||
Purchase obligation (b)
|
35.2
|
|
|
18.2
|
|
|
17.0
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
30.7
|
|
|
8.3
|
|
|
12.3
|
|
|
4.3
|
|
|
5.8
|
|
|||||
Total (c)
|
$
|
2,936.2
|
|
|
$
|
477.2
|
|
|
$
|
1,229.2
|
|
|
$
|
946.1
|
|
|
$
|
283.7
|
|
(a)
|
Represents liabilities for inventory not owned associated with financing arrangements as discussed in Note 8 – Variable Interest Entities in the Notes to Consolidated Financial Statements in this report, as well as liabilities for fixed or determinable amounts associated with tax increment financing entity (“TIFE”) assessments. As homes are delivered, the obligation to pay the remaining TIFE assessments associated with each underlying lot is transferred to the homebuyer. As such, these assessment obligations will be paid by us only to the extent we do not deliver homes on applicable lots before the related TIFE obligations mature.
|
(b)
|
Represents our commitment to purchase lots from one of our unconsolidated joint ventures as discussed in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report. Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance.
|
(c)
|
Total contractual obligations exclude our accrual for uncertain tax positions recorded for financial reporting purposes as of November 30, 2017 because we are unable to make a reasonable estimate of cash settlements with the respective taxing authorities for all periods presented. We anticipate these potential cash settlement requirements for 2018 to range from zero to $.1 million.
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Inventory impairments:
|
|
|
|
|
|
||||||
Number of communities or land parcels evaluated for recoverability (a)
|
51
|
|
|
68
|
|
|
35
|
|
|||
Carrying value of communities or land parcels evaluated for recoverability (a)
|
$
|
456,875
|
|
|
$
|
423,122
|
|
|
$
|
286,333
|
|
|
|
|
|
|
|
||||||
Number of communities or land parcels written down to fair value
|
10
|
|
|
30
|
|
|
4
|
|
|||
Pre-impairment carrying value of communities or land parcels written down to fair value
|
$
|
58,962
|
|
|
$
|
89,097
|
|
|
$
|
20,018
|
|
Inventory impairment charges
|
(20,605
|
)
|
|
(49,580
|
)
|
|
(8,030
|
)
|
|||
Post-impairment fair value
|
$
|
38,357
|
|
|
$
|
39,517
|
|
|
$
|
11,988
|
|
|
|
|
|
|
|
||||||
Land option contract abandonments:
|
|
|
|
|
|
||||||
Number of lots abandoned
|
710
|
|
|
744
|
|
|
1,166
|
|
|||
Land option contract abandonment charges
|
$
|
4,627
|
|
|
$
|
3,232
|
|
|
$
|
1,561
|
|
(a)
|
As impairment indicators are assessed on a quarterly basis, some of the communities or land parcels evaluated during the years ended
November 30, 2017
,
2016
and
2015
were evaluated in more than one quarterly period.
Communities or land parcels evaluated for recoverability in more than one quarterly period are counted only once for each applicable year.
In 2017, the inventory impairment charges reflected our decisions to accelerate the monetization of our investment in
one
community in California, and to activate
nine
communities in Arizona, California, Florida and Nevada previously held for future development. In 2016, the number and carrying value of communities evaluated for impairment were higher than they were in 2017 and 2015 as a result of our decisions to make changes in our operational strategies for specific communities or land parcels aimed at more quickly monetizing our investment in those inventories.
|
•
|
We expect to generate housing revenues in the range of $840 million to $880 million, an increase from $810.9 million in 2017, and anticipate our average selling price to be in the range of $387,000 to $392,000, representing an increase in the range of 6% to 8% as compared to the year-earlier period.
|
•
|
We expect our housing gross profit margin, excluding inventory-related charges, to range from 16.0% to 16.5%.
|
•
|
We expect our selling, general and administrative expense ratio to be in the range of 11.7% to 12.0%.
|
•
|
We expect our homebuilding operating income margin, excluding inventory-related charges, to range from 4.3% to 4.7%.
|
•
|
We expect to record a one-time, non-cash charge to our provision for income taxes of approximately $115 million, as discussed above under “Income Taxes.”
|
•
|
We expect our average community count to be down approximately 5% from the 2017 first quarter.
|
•
|
We expect our housing revenues to be in the range of $4.5 billion to $4.9 billion, an increase from
$4.3 billion
in 2017, and anticipate our average selling price to be in the range of $395,000 to $405,000, roughly even as compared to 2017.
|
•
|
We expect our housing gross profit margin, excluding inventory-related charges, to range from 17.2% to 17.7%.
|
•
|
We expect our selling, general and administrative expense ratio to be in the range of 9.7% to 10.0%.
|
•
|
We expect our homebuilding operating income margin, excluding inventory-related charges, to range from 7.2% to 7.7%.
|
•
|
We expect the effective tax rate will be approximately 27%, excluding the impact of the above-mentioned one-time, non-cash charge.
|
•
|
We expect our average community count to remain relatively flat compared to 2017.
|
•
|
general economic, employment and business conditions;
|
•
|
population growth, household formations and demographic trends;
|
•
|
conditions in the capital, credit and financial markets;
|
•
|
our ability to access external financing sources and raise capital through the issuance of common stock, debt or other securities, and/or project financing, on favorable terms;
|
•
|
material and trade costs and availability;
|
•
|
changes in interest rates;
|
•
|
our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule;
|
•
|
our compliance with the terms of the Credit Facility;
|
•
|
volatility in the market price of our common stock;
|
•
|
weak or declining consumer confidence, either generally or specifically with respect to purchasing homes;
|
•
|
competition from other sellers of new and resale homes;
|
•
|
weather events, significant natural disasters and other climate and environmental factors;
|
•
|
government actions, policies, programs and regulations directed at or affecting the housing market (including the TCJA, the Dodd-Frank Act, tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities;
|
•
|
changes in existing tax laws or enacted corporate income tax rates, including pursuant to the TCJA;
|
•
|
the availability and cost of land in desirable areas;
|
•
|
our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred;
|
•
|
costs and/or charges arising from regulatory compliance requirements or from legal, arbitral or regulatory proceedings, investigations, claims or settlements, including unfavorable outcomes in any such matters resulting in actual or potential monetary damage awards, penalties, fines or other direct or indirect payments, or injunctions, consent decrees or other voluntary or involuntary restrictions or adjustments to our business operations or practices that are beyond our current expectations and/or accruals;
|
•
|
our ability to use/realize the net deferred tax assets we have generated;
|
•
|
our ability to successfully implement our current and planned strategies and initiatives related to our product, geographic and market positioning, gaining share and scale in our served markets;
|
•
|
our operational and investment concentration in markets in California;
|
•
|
consumer interest in our new home communities and products, particularly from first-time homebuyers and
higher-income consumers;
|
•
|
our ability to generate orders and
convert our backlog of orders to home deliveries and revenues, particularly in key markets in California;
|
•
|
our ability to successfully implement our Returns-Focused Growth Plan and achieve the associated revenue, margin, profitability, cash flow, community reactivation, land sales, business growth, asset efficiency, return on invested capital, return on equity, net debt to capital ratio and other financial and operational targets and objectives;
|
•
|
the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services;
|
•
|
the performance of mortgage lenders to our homebuyers;
|
•
|
the performance of KBHS;
|
•
|
information technology failures and data security breaches; and
|
•
|
other events outside of our control.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
As of November 30, 2017 for the Years Ended November 30,
|
|
Fair Value at
November 30,
2017
|
||||||||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
|||||||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Rate
|
$
|
300,000
|
|
|
$
|
630,000
|
|
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
800,000
|
|
|
$
|
250,000
|
|
|
$
|
2,330,000
|
|
|
$
|
2,570,550
|
|
Weighted Average Effective Interest Rate
|
7.3
|
%
|
|
3.9
|
%
|
|
8.5
|
%
|
|
—
|
%
|
|
7.4
|
%
|
|
7.8
|
%
|
|
6.7
|
%
|
|
|
|
As of November 30, 2016 for the Years Ended November 30,
|
|
Fair Value at
November 30,
2016
|
||||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
|||||||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Rate
|
$
|
265,000
|
|
|
$
|
300,000
|
|
|
$
|
630,000
|
|
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
1,050,000
|
|
|
$
|
2,595,000
|
|
|
$
|
2,718,519
|
|
Weighted Average Effective Interest Rate
|
9.6
|
%
|
|
7.3
|
%
|
|
3.9
|
%
|
|
8.5
|
%
|
|
—
|
%
|
|
7.5
|
%
|
|
7.0
|
%
|
|
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
Number
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Total revenues
|
$
|
4,368,529
|
|
|
$
|
3,594,646
|
|
|
$
|
3,032,030
|
|
Homebuilding:
|
|
|
|
|
|
||||||
Revenues
|
$
|
4,356,265
|
|
|
$
|
3,582,943
|
|
|
$
|
3,020,987
|
|
Construction and land costs
|
(3,646,468
|
)
|
|
(3,041,101
|
)
|
|
(2,539,368
|
)
|
|||
Selling, general and administrative expenses
|
(426,394
|
)
|
|
(389,441
|
)
|
|
(342,998
|
)
|
|||
Operating income
|
283,403
|
|
|
152,401
|
|
|
138,621
|
|
|||
Interest income
|
1,240
|
|
|
529
|
|
|
458
|
|
|||
Interest expense
|
(6,307
|
)
|
|
(5,900
|
)
|
|
(21,856
|
)
|
|||
Equity in loss of unconsolidated joint ventures
|
(1,409
|
)
|
|
(2,181
|
)
|
|
(1,804
|
)
|
|||
Homebuilding pretax income
|
276,927
|
|
|
144,849
|
|
|
115,419
|
|
|||
Financial services:
|
|
|
|
|
|
||||||
Revenues
|
12,264
|
|
|
11,703
|
|
|
11,043
|
|
|||
Expenses
|
(3,430
|
)
|
|
(3,817
|
)
|
|
(3,711
|
)
|
|||
Equity in income (loss) of unconsolidated joint ventures
|
4,234
|
|
|
(3,420
|
)
|
|
4,292
|
|
|||
Financial services pretax income
|
13,068
|
|
|
4,466
|
|
|
11,624
|
|
|||
Total pretax income
|
289,995
|
|
|
149,315
|
|
|
127,043
|
|
|||
Income tax expense
|
(109,400
|
)
|
|
(43,700
|
)
|
|
(42,400
|
)
|
|||
Net income
|
$
|
180,595
|
|
|
$
|
105,615
|
|
|
$
|
84,643
|
|
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.09
|
|
|
$
|
1.23
|
|
|
$
|
.92
|
|
Diluted
|
$
|
1.85
|
|
|
$
|
1.12
|
|
|
$
|
.85
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
85,842
|
|
|
85,706
|
|
|
92,054
|
|
|||
Diluted
|
98,316
|
|
|
96,278
|
|
|
102,857
|
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
180,595
|
|
|
$
|
105,615
|
|
|
$
|
84,643
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Postretirement benefit plan adjustments:
|
|
|
|
|
|
||||||
Net actuarial gain (loss) arising during the period
|
(3,143
|
)
|
|
468
|
|
|
3,745
|
|
|||
Amortization of net actuarial loss
|
142
|
|
|
79
|
|
|
848
|
|
|||
Amortization of prior service cost
|
1,556
|
|
|
1,556
|
|
|
1,556
|
|
|||
Other comprehensive income (loss) before tax
|
(1,445
|
)
|
|
2,103
|
|
|
6,149
|
|
|||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
578
|
|
|
(841
|
)
|
|
(2,460
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(867
|
)
|
|
1,262
|
|
|
3,689
|
|
|||
Comprehensive income
|
$
|
179,728
|
|
|
$
|
106,877
|
|
|
$
|
88,332
|
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Homebuilding:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
720,630
|
|
|
$
|
592,086
|
|
Receivables
|
244,213
|
|
|
231,665
|
|
||
Inventories
|
3,263,386
|
|
|
3,403,228
|
|
||
Investments in unconsolidated joint ventures
|
64,794
|
|
|
64,016
|
|
||
Deferred tax assets, net
|
633,637
|
|
|
738,985
|
|
||
Other assets
|
102,498
|
|
|
91,145
|
|
||
|
5,029,158
|
|
|
5,121,125
|
|
||
Financial services
|
12,357
|
|
|
10,499
|
|
||
Total assets
|
$
|
5,041,515
|
|
|
$
|
5,131,624
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
||||
Homebuilding:
|
|
|
|
||||
Accounts payable
|
$
|
213,463
|
|
|
$
|
215,331
|
|
Accrued expenses and other liabilities
|
575,930
|
|
|
550,996
|
|
||
Notes payable
|
2,324,845
|
|
|
2,640,149
|
|
||
|
3,114,238
|
|
|
3,406,476
|
|
||
Financial services
|
966
|
|
|
2,003
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock — $1.00 par value; 10,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock — $1.00 par value; 290,000,000 shares authorized at November 30, 2017 and 2016; 117,945,525 and 116,224,208 shares issued at November 30, 2017 and 2016, respectively
|
117,946
|
|
|
116,224
|
|
||
Paid-in capital
|
727,483
|
|
|
696,938
|
|
||
Retained earnings
|
1,735,695
|
|
|
1,563,742
|
|
||
Accumulated other comprehensive loss
|
(16,924
|
)
|
|
(16,057
|
)
|
||
Grantor stock ownership trust, at cost: 8,897,954 and 9,431,756 shares at November 30, 2017 and 2016, respectively
|
(96,509
|
)
|
|
(102,300
|
)
|
||
Treasury stock, at cost: 22,021,062 and 21,719,757 shares at November 30, 2017 and 2016, respectively
|
(541,380
|
)
|
|
(535,402
|
)
|
||
Total stockholders’ equity
|
1,926,311
|
|
|
1,723,145
|
|
||
Total liabilities and stockholders’ equity
|
$
|
5,041,515
|
|
|
$
|
5,131,624
|
|
|
Years Ended November 30, 2017, 2016 and 2015
|
|||||||||||||||||||||||||||||||||||
|
Number of Shares
|
|
Common
Stock
|
|
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Grantor
Stock
Ownership
Trust
|
|
Treasury
Stock
|
|
Total
Stockholders’
Equity
|
|||||||||||||||||||||
Common
Stock
|
|
Grantor
Stock
Ownership
Trust
|
|
Treasury
Stock
|
|
|||||||||||||||||||||||||||||||
Balance at November 30, 2014
|
115,387
|
|
|
(10,336
|
)
|
|
(13,097
|
)
|
|
$
|
115,387
|
|
|
$
|
668,857
|
|
|
$
|
1,391,256
|
|
|
$
|
(21,008
|
)
|
|
$
|
(112,106
|
)
|
|
$
|
(446,476
|
)
|
|
$
|
1,595,910
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,643
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84,643
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,689
|
|
|
—
|
|
|
—
|
|
|
3,689
|
|
|||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,186
|
)
|
|||||||
Employee stock options/other
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|
(874
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(798
|
)
|
|||||||
Stock awards
|
85
|
|
|
200
|
|
|
—
|
|
|
85
|
|
|
(2,255
|
)
|
|
—
|
|
|
—
|
|
|
2,170
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,143
|
|
|||||||
Stock repurchases
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(567
|
)
|
|
(567
|
)
|
|||||||
Balance at November 30, 2015
|
115,548
|
|
|
(10,136
|
)
|
|
(13,137
|
)
|
|
115,548
|
|
|
682,871
|
|
|
1,466,713
|
|
|
(17,319
|
)
|
|
(109,936
|
)
|
|
(447,043
|
)
|
|
1,690,834
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,615
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,262
|
|
|
—
|
|
|
—
|
|
|
1,262
|
|
|||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,586
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,586
|
)
|
|||||||
Employee stock options/other
|
552
|
|
|
—
|
|
|
—
|
|
|
552
|
|
|
4,977
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,529
|
|
|||||||
Stock awards
|
124
|
|
|
704
|
|
|
—
|
|
|
124
|
|
|
(7,760
|
)
|
|
—
|
|
|
—
|
|
|
7,636
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,850
|
|
|||||||
Stock repurchases
|
—
|
|
|
—
|
|
|
(8,583
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,359
|
)
|
|
(88,359
|
)
|
|||||||
Balance at November 30, 2016
|
116,224
|
|
|
(9,432
|
)
|
|
(21,720
|
)
|
|
116,224
|
|
|
696,938
|
|
|
1,563,742
|
|
|
(16,057
|
)
|
|
(102,300
|
)
|
|
(535,402
|
)
|
|
1,723,145
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180,595
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
180,595
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(867
|
)
|
|
—
|
|
|
—
|
|
|
(867
|
)
|
|||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,642
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,642
|
)
|
|||||||
Employee stock options/other
|
1,652
|
|
|
—
|
|
|
—
|
|
|
1,652
|
|
|
22,468
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,120
|
|
|||||||
Stock awards
|
70
|
|
|
534
|
|
|
28
|
|
|
70
|
|
|
(6,556
|
)
|
|
—
|
|
|
—
|
|
|
5,791
|
|
|
695
|
|
|
—
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,633
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,633
|
|
|||||||
Stock repurchases
|
—
|
|
|
—
|
|
|
(329
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,673
|
)
|
|
(6,673
|
)
|
|||||||
Balance at November 30, 2017
|
117,946
|
|
|
(8,898
|
)
|
|
(22,021
|
)
|
|
$
|
117,946
|
|
|
$
|
727,483
|
|
|
$
|
1,735,695
|
|
|
$
|
(16,924
|
)
|
|
$
|
(96,509
|
)
|
|
$
|
(541,380
|
)
|
|
$
|
1,926,311
|
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
180,595
|
|
|
$
|
105,615
|
|
|
$
|
84,643
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in (income) loss of unconsolidated joint ventures
|
(2,825
|
)
|
|
5,601
|
|
|
(2,488
|
)
|
|||
Amortization of discounts and issuance costs
|
6,573
|
|
|
7,576
|
|
|
7,738
|
|
|||
Depreciation and amortization
|
2,791
|
|
|
3,637
|
|
|
3,411
|
|
|||
Deferred income taxes
|
105,348
|
|
|
43,211
|
|
|
43,036
|
|
|||
Loss on early extinguishment of debt
|
5,685
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits from stock-based compensation
|
(958
|
)
|
|
(186
|
)
|
|
(157
|
)
|
|||
Stock-based compensation
|
14,633
|
|
|
16,850
|
|
|
17,143
|
|
|||
Inventory impairments and land option contract abandonments
|
25,232
|
|
|
52,812
|
|
|
9,591
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
(12,508
|
)
|
|
18,965
|
|
|
9,143
|
|
|||
Inventories
|
126,085
|
|
|
(98,321
|
)
|
|
34,852
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
66,594
|
|
|
32,723
|
|
|
(27,615
|
)
|
|||
Other, net
|
(4,026
|
)
|
|
172
|
|
|
1,888
|
|
|||
Net cash provided by operating activities
|
513,219
|
|
|
188,655
|
|
|
181,185
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Contributions to unconsolidated joint ventures
|
(18,694
|
)
|
|
(5,602
|
)
|
|
(20,626
|
)
|
|||
Return of investments in unconsolidated joint ventures
|
11,035
|
|
|
4,307
|
|
|
14,000
|
|
|||
Purchases of property and equipment, net
|
(8,085
|
)
|
|
(4,784
|
)
|
|
(4,677
|
)
|
|||
Net cash used in investing activities
|
(15,744
|
)
|
|
(6,079
|
)
|
|
(11,303
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Change in restricted cash
|
—
|
|
|
9,344
|
|
|
17,891
|
|
|||
Proceeds from issuance of debt
|
—
|
|
|
—
|
|
|
250,000
|
|
|||
Payment of debt issuance costs
|
(1,711
|
)
|
|
—
|
|
|
(4,561
|
)
|
|||
Repayment of senior notes
|
(270,326
|
)
|
|
—
|
|
|
(199,906
|
)
|
|||
Payments on mortgages and land contracts due to land sellers and other loans
|
(106,382
|
)
|
|
(67,845
|
)
|
|
(22,877
|
)
|
|||
Issuance of common stock under employee stock plans
|
23,162
|
|
|
5,343
|
|
|
740
|
|
|||
Excess tax benefits from stock-based compensation
|
958
|
|
|
186
|
|
|
157
|
|
|||
Payments of cash dividends
|
(8,642
|
)
|
|
(8,586
|
)
|
|
(9,186
|
)
|
|||
Stock repurchases
|
(6,673
|
)
|
|
(88,359
|
)
|
|
(567
|
)
|
|||
Net cash provided by (used in) financing activities
|
(369,614
|
)
|
|
(149,917
|
)
|
|
31,691
|
|
|||
Net increase in cash and cash equivalents
|
127,861
|
|
|
32,659
|
|
|
201,573
|
|
|||
Cash and cash equivalents at beginning of year
|
593,000
|
|
|
560,341
|
|
|
358,768
|
|
|||
Cash and cash equivalents at end of year
|
$
|
720,861
|
|
|
$
|
593,000
|
|
|
$
|
560,341
|
|
Note 1.
|
Summary of Significant Accounting Policies
|
Note 2.
|
Segment Information
|
Pretax income (loss):
|
|
|
|
|
|
||||||
West Coast
|
$
|
217,649
|
|
|
$
|
148,014
|
|
|
$
|
127,946
|
|
Southwest
|
45,540
|
|
|
38,807
|
|
|
31,718
|
|
|||
Central
|
116,098
|
|
|
85,924
|
|
|
70,959
|
|
|||
Southeast
|
(509
|
)
|
|
(29,385
|
)
|
|
(22,758
|
)
|
|||
Corporate and other
|
(101,851
|
)
|
|
(98,511
|
)
|
|
(92,446
|
)
|
|||
Total
|
$
|
276,927
|
|
|
$
|
144,849
|
|
|
$
|
115,419
|
|
|
|
|
|
|
|
||||||
Equity in income (loss) of unconsolidated joint ventures:
|
|
|
|
|
|
||||||
West Coast
|
$
|
(1,770
|
)
|
|
$
|
(1,561
|
)
|
|
$
|
(1,106
|
)
|
Southwest
|
362
|
|
|
(618
|
)
|
|
(696
|
)
|
|||
Central
|
—
|
|
|
—
|
|
|
—
|
|
|||
Southeast
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Total
|
$
|
(1,409
|
)
|
|
$
|
(2,181
|
)
|
|
$
|
(1,804
|
)
|
|
|
|
|
|
|
||||||
Inventory impairment charges:
|
|
|
|
|
|
||||||
West Coast
|
$
|
13,482
|
|
|
$
|
8,209
|
|
|
$
|
645
|
|
Southwest
|
3,445
|
|
|
3,191
|
|
|
3,253
|
|
|||
Central
|
—
|
|
|
10,633
|
|
|
—
|
|
|||
Southeast
|
3,678
|
|
|
27,547
|
|
|
4,132
|
|
|||
Total
|
$
|
20,605
|
|
|
$
|
49,580
|
|
|
$
|
8,030
|
|
|
|
|
|
|
|
||||||
Land option contract abandonments:
|
|
|
|
|
|
||||||
West Coast
|
$
|
3,225
|
|
|
$
|
769
|
|
|
$
|
352
|
|
Southwest
|
—
|
|
|
253
|
|
|
—
|
|
|||
Central
|
846
|
|
|
460
|
|
|
225
|
|
|||
Southeast
|
556
|
|
|
1,750
|
|
|
984
|
|
|||
Total
|
$
|
4,627
|
|
|
$
|
3,232
|
|
|
$
|
1,561
|
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Inventories:
|
|
|
|
||||
Homes under construction
|
|
|
|
||||
West Coast
|
$
|
638,639
|
|
|
$
|
695,742
|
|
Southwest
|
179,240
|
|
|
130,886
|
|
||
Central
|
320,205
|
|
|
297,290
|
|
||
Southeast
|
98,764
|
|
|
122,020
|
|
||
Subtotal
|
1,236,848
|
|
|
1,245,938
|
|
||
Land under development
|
|
|
|
||||
West Coast
|
723,761
|
|
|
820,088
|
|
||
Southwest
|
309,672
|
|
|
268,507
|
|
||
Central
|
435,373
|
|
|
456,508
|
|
||
Southeast
|
182,533
|
|
|
182,554
|
|
||
Subtotal
|
1,651,339
|
|
|
1,727,657
|
|
||
Land held for future development or sale
|
|
|
|
||||
West Coast
|
233,188
|
|
|
210,910
|
|
||
Southwest
|
62,475
|
|
|
122,927
|
|
||
Central
|
12,654
|
|
|
15,439
|
|
||
Southeast
|
66,882
|
|
|
80,357
|
|
||
Subtotal
|
375,199
|
|
|
429,633
|
|
||
Total
|
$
|
3,263,386
|
|
|
$
|
3,403,228
|
|
|
|
|
|
||||
Investments in unconsolidated joint ventures:
|
|
|
|
||||
West Coast
|
$
|
53,506
|
|
|
$
|
51,612
|
|
Southwest
|
8,784
|
|
|
9,905
|
|
||
Central
|
—
|
|
|
—
|
|
||
Southeast
|
2,504
|
|
|
2,499
|
|
||
Total
|
$
|
64,794
|
|
|
$
|
64,016
|
|
|
|
|
|
||||
Assets:
|
|
|
|
||||
West Coast
|
$
|
1,747,786
|
|
|
$
|
1,847,279
|
|
Southwest
|
586,666
|
|
|
564,636
|
|
||
Central
|
901,516
|
|
|
909,497
|
|
||
Southeast
|
359,307
|
|
|
414,730
|
|
||
Corporate and other
|
1,433,883
|
|
|
1,384,983
|
|
||
Total
|
$
|
5,029,158
|
|
|
$
|
5,121,125
|
|
Note 3.
|
Financial Services
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
|
|
|
|
||||||
Insurance commissions
|
$
|
6,991
|
|
|
$
|
6,728
|
|
|
$
|
7,137
|
|
Title services
|
5,268
|
|
|
4,975
|
|
|
3,905
|
|
|||
Interest income
|
5
|
|
|
—
|
|
|
1
|
|
|||
Total
|
12,264
|
|
|
11,703
|
|
|
11,043
|
|
|||
Expenses
|
|
|
|
|
|
||||||
General and administrative
|
(3,430
|
)
|
|
(3,817
|
)
|
|
(3,711
|
)
|
|||
Operating income
|
8,834
|
|
|
7,886
|
|
|
7,332
|
|
|||
Equity in income (loss) of unconsolidated joint ventures
|
4,234
|
|
|
(3,420
|
)
|
|
4,292
|
|
|||
Pretax income
|
$
|
13,068
|
|
|
$
|
4,466
|
|
|
$
|
11,624
|
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
231
|
|
|
$
|
914
|
|
Receivables
|
1,724
|
|
|
1,764
|
|
||
Investments in unconsolidated joint ventures (a)
|
10,340
|
|
|
7,771
|
|
||
Other assets
|
62
|
|
|
50
|
|
||
Total assets
|
$
|
12,357
|
|
|
$
|
10,499
|
|
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
966
|
|
|
$
|
2,003
|
|
Total liabilities
|
$
|
966
|
|
|
$
|
2,003
|
|
(a)
|
In 2017, we made a
$5.3 million
capital contribution to KBHS and received a
$5.0 million
distribution from HCM.
|
Note 4.
|
Earnings Per Share
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
180,595
|
|
|
$
|
105,615
|
|
|
$
|
84,643
|
|
Less: Distributed earnings allocated to nonvested restricted stock
|
(56
|
)
|
|
(45
|
)
|
|
(33
|
)
|
|||
Less: Undistributed earnings allocated to nonvested restricted stock
|
(1,121
|
)
|
|
(508
|
)
|
|
(273
|
)
|
|||
Numerator for basic earnings per share
|
179,418
|
|
|
105,062
|
|
|
84,337
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Interest expense and amortization of debt issuance costs associated with convertible senior notes, net of taxes
|
2,654
|
|
|
2,667
|
|
|
2,667
|
|
|||
Add: Undistributed earnings allocated to nonvested restricted stock
|
1,121
|
|
|
508
|
|
|
273
|
|
|||
Less: Undistributed earnings reallocated to nonvested restricted stock
|
(979
|
)
|
|
(453
|
)
|
|
(244
|
)
|
|||
Numerator for diluted earnings per share
|
$
|
182,214
|
|
|
$
|
107,784
|
|
|
$
|
87,033
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding — basic
|
85,842
|
|
|
85,706
|
|
|
92,054
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Share-based payments
|
4,072
|
|
|
2,170
|
|
|
2,401
|
|
|||
Convertible senior notes
|
8,402
|
|
|
8,402
|
|
|
8,402
|
|
|||
Weighted average shares outstanding — diluted
|
98,316
|
|
|
96,278
|
|
|
102,857
|
|
|||
Basic earnings per share
|
$
|
2.09
|
|
|
$
|
1.23
|
|
|
$
|
.92
|
|
Diluted earnings per share
|
$
|
1.85
|
|
|
$
|
1.12
|
|
|
$
|
.85
|
|
Note 5.
|
Receivables
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Due from utility companies, improvement districts and municipalities (a)
|
$
|
113,744
|
|
|
$
|
102,780
|
|
Recoveries related to self-insurance and other legal claims
|
91,763
|
|
|
84,476
|
|
||
Refundable deposits and bonds
|
13,829
|
|
|
13,665
|
|
||
Recoveries related to warranty and other claims
|
4,073
|
|
|
14,609
|
|
||
Other
|
33,797
|
|
|
28,745
|
|
||
Subtotal
|
257,206
|
|
|
244,275
|
|
||
Allowance for doubtful accounts
|
(12,993
|
)
|
|
(12,610
|
)
|
||
Total
|
$
|
244,213
|
|
|
$
|
231,665
|
|
(a)
|
These receivables typically relate to infrastructure improvements we make with respect to our communities. We are generally reimbursed for the cost of such improvements when they are accepted by the utility company, improvement district or municipality, or after certain events occur, depending on the terms of the applicable agreements. These events may include, but are not limited to, the connection of utilities or the issuance of bonds by the respective improvement districts or municipalities.
|
Note 6.
|
Inventories
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Homes under construction
|
$
|
1,236,848
|
|
|
$
|
1,245,938
|
|
Land under development
|
1,651,339
|
|
|
1,727,657
|
|
||
Land held for future development or sale (a)
|
375,199
|
|
|
429,633
|
|
||
Total
|
$
|
3,263,386
|
|
|
$
|
3,403,228
|
|
(a)
|
Land held for sale totaled
$21.8 million
at
November 30, 2017
and
$63.4 million
at
November 30, 2016
.
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Capitalized interest at beginning of year
|
$
|
306,723
|
|
|
$
|
288,442
|
|
|
$
|
266,668
|
|
Interest incurred (a)
|
177,171
|
|
|
185,466
|
|
|
186,885
|
|
|||
Interest expensed (a)
|
(6,307
|
)
|
|
(5,900
|
)
|
|
(21,856
|
)
|
|||
Interest amortized to construction and land costs (b)
|
(215,396
|
)
|
|
(161,285
|
)
|
|
(143,255
|
)
|
|||
Capitalized interest at end of year (c)
|
$
|
262,191
|
|
|
$
|
306,723
|
|
|
$
|
288,442
|
|
(a)
|
Interest incurred and interest expensed for the year ended
November 30, 2017
included a charge of
$5.7 million
for the early extinguishment of debt.
|
(b)
|
Interest amortized to construction and land costs for the years ended
November 30, 2017
, 2016 and 2015 included
$4.9 million
,
$.7 million
and
$16.4 million
, respectively, related to land sales during the periods.
|
(c)
|
Capitalized interest amounts presented in the table reflect the gross amount of capitalized interest, as inventory impairment charges recognized, if any, are not generally allocated to specific components of inventory.
|
Note 7.
|
Inventory Impairments and Land Option Contract Abandonments
|
|
|
Years Ended November 30,
|
||||
Unobservable Input (a)
|
|
2017
|
|
2016
|
|
2015
|
Average selling price
|
|
$207,100 - $1,576,500
|
|
$216,200 - $977,400
|
|
$178,100 - $509,400
|
Deliveries per month
|
|
1 - 4
|
|
1 - 4
|
|
2 - 4
|
Discount rate
|
|
17% - 18%
|
|
17% - 20%
|
|
17% - 20%
|
(a)
|
The ranges of inputs used in each period primarily reflect differences between the housing markets where each impacted community is located, rather than fluctuations in prevailing market conditions.
|
Note 8.
|
Variable Interest Entities
|
|
November 30, 2017
|
|
November 30, 2016
|
||||||||||||
|
Cash
Deposits
|
|
Aggregate
Purchase Price
|
|
Cash
Deposits
|
|
Aggregate
Purchase Price
|
||||||||
Unconsolidated VIEs
|
$
|
43,171
|
|
|
$
|
653,858
|
|
|
$
|
24,910
|
|
|
$
|
641,642
|
|
Other land option contracts and other similar contracts
|
21,531
|
|
|
440,229
|
|
|
17,919
|
|
|
431,954
|
|
||||
Total
|
$
|
64,702
|
|
|
$
|
1,094,087
|
|
|
$
|
42,829
|
|
|
$
|
1,073,596
|
|
Note 9.
|
Investments in Unconsolidated Joint Ventures
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
$
|
47,431
|
|
|
$
|
46,389
|
|
|
$
|
15,322
|
|
Construction and land costs
|
(47,459
|
)
|
|
(50,566
|
)
|
|
(23,123
|
)
|
|||
Other expenses, net
|
(4,749
|
)
|
|
(4,465
|
)
|
|
(3,360
|
)
|
|||
Loss
|
$
|
(4,777
|
)
|
|
$
|
(8,642
|
)
|
|
$
|
(11,161
|
)
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash
|
$
|
21,193
|
|
|
$
|
31,928
|
|
Receivables
|
688
|
|
|
882
|
|
||
Inventories
|
145,519
|
|
|
165,385
|
|
||
Other assets
|
1,398
|
|
|
629
|
|
||
Total assets
|
$
|
168,798
|
|
|
$
|
198,824
|
|
Liabilities and equity
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
25,426
|
|
|
$
|
19,880
|
|
Notes payable (a)
|
20,040
|
|
|
44,381
|
|
||
Equity
|
123,332
|
|
|
134,563
|
|
||
Total liabilities and equity
|
$
|
168,798
|
|
|
$
|
198,824
|
|
(a)
|
As of November 30, 2017 and 2016,
two
and
one
of our unconsolidated joint ventures, respectively, had separate construction loan agreements with different third-party lenders to finance their respective land development activities. The outstanding debt under these agreements is secured by the corresponding underlying property and related project assets and is non-recourse to us. Of this outstanding secured debt at
November 30, 2017
,
$19.8 million
is scheduled to mature in August 2018 and the remainder is scheduled to mature in February 2020. None of our other unconsolidated joint ventures had outstanding debt at
November 30, 2017
or
2016
.
|
|
|
November 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Number of investments in unconsolidated joint ventures
|
|
7
|
|
|
7
|
|
||
Investments in unconsolidated joint ventures
|
|
$
|
64,794
|
|
|
$
|
64,016
|
|
Number of unconsolidated joint venture lots controlled under land option contracts and other similar contracts
|
|
377
|
|
|
471
|
|
Note 10.
|
Other Assets
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash surrender value of corporate-owned life insurance contracts
|
$
|
75,236
|
|
|
$
|
70,829
|
|
Property and equipment, net
|
19,521
|
|
|
14,240
|
|
||
Prepaid expenses
|
5,360
|
|
|
4,894
|
|
||
Debt issuance costs associated with unsecured revolving credit facility
|
2,381
|
|
|
1,182
|
|
||
Total
|
$
|
102,498
|
|
|
$
|
91,145
|
|
Note 11.
|
Accrued Expenses and Other Liabilities
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Self-insurance and other legal liabilities
|
$
|
222,808
|
|
|
$
|
170,988
|
|
Employee compensation and related benefits
|
143,992
|
|
|
130,352
|
|
||
Warranty liability
|
69,798
|
|
|
56,682
|
|
||
Accrued interest payable
|
65,343
|
|
|
67,411
|
|
||
Inventory-related obligations (a)
|
30,108
|
|
|
82,682
|
|
||
Real estate and business taxes
|
16,874
|
|
|
14,370
|
|
||
Customer deposits
|
16,863
|
|
|
18,175
|
|
||
Other
|
10,144
|
|
|
10,336
|
|
||
Total
|
$
|
575,930
|
|
|
$
|
550,996
|
|
(a)
|
Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities, as well as liabilities for fixed or determinable amounts associated with TIFE assessments. As homes are delivered, the obligation to pay the remaining TIFE assessments associated with each underlying lot is transferred to the homebuyer. As such, these assessment obligations will be paid by us only to the extent we do not deliver homes on applicable lots before the related TIFE obligations mature.
|
Note 12.
|
Income Taxes
|
|
Federal
|
|
State
|
|
Total
|
||||||
2017
|
|
|
|
|
|
||||||
Current
|
$
|
(2,800
|
)
|
|
$
|
(3,000
|
)
|
|
$
|
(5,800
|
)
|
Deferred
|
(86,300
|
)
|
|
(17,300
|
)
|
|
(103,600
|
)
|
|||
Income tax expense
|
$
|
(89,100
|
)
|
|
$
|
(20,300
|
)
|
|
$
|
(109,400
|
)
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
||||||
Current
|
$
|
(1,900
|
)
|
|
$
|
(1,000
|
)
|
|
$
|
(2,900
|
)
|
Deferred
|
(28,700
|
)
|
|
(12,100
|
)
|
|
(40,800
|
)
|
|||
Income tax expense
|
$
|
(30,600
|
)
|
|
$
|
(13,100
|
)
|
|
$
|
(43,700
|
)
|
|
|
|
|
|
|
||||||
2015
|
|
|
|
|
|
||||||
Current
|
$
|
(1,400
|
)
|
|
$
|
(2,000
|
)
|
|
$
|
(3,400
|
)
|
Deferred
|
(35,900
|
)
|
|
(3,100
|
)
|
|
(39,000
|
)
|
|||
Income tax expense
|
$
|
(37,300
|
)
|
|
$
|
(5,100
|
)
|
|
$
|
(42,400
|
)
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Capitalized expenses
|
$
|
98,147
|
|
|
$
|
116,551
|
|
State taxes
|
59,174
|
|
|
65,766
|
|
||
Other
|
313
|
|
|
286
|
|
||
Total
|
157,634
|
|
|
182,603
|
|
||
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
NOLs from 2006 through 2017
|
236,273
|
|
|
350,329
|
|
||
Tax credits
|
208,841
|
|
|
197,766
|
|
||
Inventory impairment and land option contract abandonment charges
|
139,737
|
|
|
176,555
|
|
||
Employee benefits
|
100,200
|
|
|
102,321
|
|
||
Warranty, legal and other accruals
|
60,238
|
|
|
51,448
|
|
||
Capitalized expenses
|
39,195
|
|
|
36,950
|
|
||
Partnerships and joint ventures
|
14,784
|
|
|
16,293
|
|
||
Depreciation and amortization
|
7,333
|
|
|
8,530
|
|
||
Other
|
8,270
|
|
|
6,196
|
|
||
Total
|
814,871
|
|
|
946,388
|
|
||
Valuation allowance
|
(23,600
|
)
|
|
(24,800
|
)
|
||
Total
|
791,271
|
|
|
921,588
|
|
||
Deferred tax assets, net
|
$
|
633,637
|
|
|
$
|
738,985
|
|
|
Years Ended November 30,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
Income tax expense computed at statutory rate
|
$
|
(101,499
|
)
|
|
(35.0
|
)%
|
|
$
|
(52,260
|
)
|
|
(35.0
|
)%
|
|
$
|
(44,462
|
)
|
|
(35.0
|
)%
|
Tax credits
|
6,227
|
|
|
2.2
|
|
|
4,447
|
|
|
3.0
|
|
|
6,926
|
|
|
5.5
|
|
|||
Valuation allowance for deferred tax assets
|
1,200
|
|
|
.4
|
|
|
12,982
|
|
|
8.7
|
|
|
3,356
|
|
|
2.6
|
|
|||
Depreciation and amortization
|
362
|
|
|
.1
|
|
|
1,842
|
|
|
1.2
|
|
|
3,183
|
|
|
2.5
|
|
|||
Basis in unconsolidated joint ventures
|
74
|
|
|
—
|
|
|
(86
|
)
|
|
(.1
|
)
|
|
1,617
|
|
|
1.3
|
|
|||
NOL reconciliation
|
(2,210
|
)
|
|
(.8
|
)
|
|
(3,691
|
)
|
|
(2.5
|
)
|
|
(3,379
|
)
|
|
(2.7
|
)
|
|||
State taxes, net of federal income tax benefit
|
(14,450
|
)
|
|
(4.9
|
)
|
|
(7,511
|
)
|
|
(5.0
|
)
|
|
(5,155
|
)
|
|
(4.1
|
)
|
|||
Other, net
|
896
|
|
|
.3
|
|
|
577
|
|
|
.4
|
|
|
(4,486
|
)
|
|
(3.5
|
)
|
|||
Income tax expense
|
$
|
(109,400
|
)
|
|
(37.7
|
)%
|
|
$
|
(43,700
|
)
|
|
(29.3
|
)%
|
|
$
|
(42,400
|
)
|
|
(33.4
|
)%
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
56
|
|
|
$
|
56
|
|
|
$
|
206
|
|
Reductions due to lapse of statute of limitations
|
—
|
|
|
—
|
|
|
(150
|
)
|
|||
Balance at end of year
|
$
|
56
|
|
|
$
|
56
|
|
|
$
|
56
|
|
Note 13.
|
Notes Payable
|
|
November 30,
|
||||||
|
2017
|
|
2016
|
||||
Mortgages and land contracts due to land sellers and other loans (at interest rates of 1% to 3% at November 30, 2017 and 1% to 7% at November 30, 2016)
|
$
|
10,203
|
|
|
$
|
66,927
|
|
9.10% Senior notes due September 15, 2017
|
—
|
|
|
263,932
|
|
||
7 1/4% Senior notes due June 15, 2018
|
299,867
|
|
|
299,647
|
|
||
4.75% Senior notes due May 15, 2019
|
398,397
|
|
|
397,364
|
|
||
8.00% Senior notes due March 15, 2020
|
346,238
|
|
|
344,811
|
|
||
7.00% Senior notes due December 15, 2021
|
446,608
|
|
|
445,911
|
|
||
7.50% Senior notes due September 15, 2022
|
347,234
|
|
|
346,774
|
|
||
7.625% Senior notes due May 15, 2023
|
247,726
|
|
|
247,404
|
|
||
1.375% Convertible senior notes due February 1, 2019
|
228,572
|
|
|
227,379
|
|
||
Total
|
$
|
2,324,845
|
|
|
$
|
2,640,149
|
|
|
|
|
|
|
|
|
|
Redeemable Prior to Maturity
|
|
Effective Interest Rate
|
|||
|
|
|
|
|
|
|
|
|
|||||
Notes Payable
|
|
Principal
|
|
Issuance Date
|
|
Maturity Date
|
|
|
|||||
7 1/4% Senior notes
|
|
$
|
300,000
|
|
|
April 3, 2006
|
|
June 15, 2018
|
|
Yes (a)
|
|
7.3
|
%
|
4.75% Senior notes
|
|
400,000
|
|
|
March 25, 2014
|
|
May 15, 2019
|
|
Yes (b)
|
|
5.0
|
|
|
8.00% Senior notes
|
|
350,000
|
|
|
February 7, 2012
|
|
March 15, 2020
|
|
Yes (a)
|
|
8.5
|
|
|
7.00% Senior notes
|
|
450,000
|
|
|
October 29, 2013
|
|
December 15, 2021
|
|
Yes (b)
|
|
7.2
|
|
|
7.50% Senior notes
|
|
350,000
|
|
|
July 31, 2012
|
|
September 15, 2022
|
|
Yes (a)
|
|
7.7
|
|
|
7.625% Senior notes
|
|
250,000
|
|
|
February 17, 2015
|
|
May 15, 2023
|
|
Yes (b)
|
|
7.8
|
|
|
1.375% Convertible senior notes
|
|
230,000
|
|
|
January 29, 2013
|
|
February 1, 2019
|
|
Yes (c)
|
|
1.9
|
|
(a)
|
At our option, these notes may be redeemed, in whole at any time or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed (exclusive of interest accrued to the applicable redemption date), discounted to the redemption date at a defined rate, plus, in each case, accrued and unpaid interest on the notes being redeemed to the applicable redemption date.
|
(b)
|
At our option, these notes may be redeemed, in whole at any time or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed (exclusive of interest accrued to the applicable redemption date), discounted to the redemption date at a defined rate, plus, in each case, accrued and unpaid interest on the notes being redeemed to, but excluding, the applicable redemption date, except that three months prior to the stated maturity dates for the 4.75% Senior Notes due 2019 and the 7.00% Senior Notes due 2021 and until their respective maturity, and six months prior to the stated maturity date for the 7.625% Senior Notes due 2023 and until their maturity, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus, in each case, accrued and unpaid interest on the notes being redeemed to, but excluding, the applicable redemption date.
|
(c)
|
We may not redeem these notes prior to November 6, 2018. On or after November 6, 2018, and prior to the stated maturity date, we may, at our option, redeem all or part of the notes at a redemption price equal to
100%
of the principal amount of the notes being redeemed plus accrued and unpaid interest to, but excluding the redemption date.
|
Note 14.
|
Fair Value Disclosures
|
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 Hierarchy
|
|
For the Years Ended November 30,
|
||||||
Description
|
|
|
2017
|
|
2016
|
|||||
Inventories (a)
|
|
Level 2
|
|
$
|
—
|
|
|
$
|
3,657
|
|
Inventories (a)
|
|
Level 3
|
|
38,357
|
|
|
37,329
|
|
(a)
|
Amounts represent the aggregate fair value for real estate assets impacted by inventory impairment charges during the applicable period, as of the date that the fair value measurements were made. The carrying value for these real estate assets may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.
|
|
|
|
November 30,
|
||||||||||||||
|
|
|
2017
|
|
2016
|
||||||||||||
|
Fair Value Hierarchy
|
|
Carrying
Value (a)
|
|
Estimated
Fair Value
|
|
Carrying
Value (a)
|
|
Estimated
Fair Value
|
||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
Level 2
|
|
$
|
2,086,070
|
|
|
$
|
2,292,250
|
|
|
$
|
2,345,843
|
|
|
$
|
2,494,844
|
|
Convertible senior notes
|
Level 2
|
|
228,572
|
|
|
278,300
|
|
|
227,379
|
|
|
223,675
|
|
(a)
|
The carrying values for the senior notes and convertible senior notes, as presented, include unamortized debt issuance costs. Debt issuance costs are not factored into the estimated fair values of these notes.
|
Note 15.
|
Commitments and Contingencies
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
56,682
|
|
|
$
|
49,085
|
|
|
$
|
45,196
|
|
Warranties issued
|
38,452
|
|
|
30,135
|
|
|
23,018
|
|
|||
Payments (a)
|
(25,336
|
)
|
|
(23,190
|
)
|
|
(26,367
|
)
|
|||
Adjustments (b)
|
—
|
|
|
652
|
|
|
7,238
|
|
|||
Balance at end of year
|
$
|
69,798
|
|
|
$
|
56,682
|
|
|
$
|
49,085
|
|
(a)
|
Payments for 2016 and 2015 included
$2.3 million
and
$8.4 million
, respectively, to repair homes affected by water intrusion-related issues in certain of our communities in central and southwest Florida.
|
(b)
|
Adjustments for 2016 and 2015 included the reclassification of certain estimated minimum probable recoveries to receivables in connection with the above-noted water intrusion-related issues. The adjustments for each year had no impact on our consolidated statements of operations.
|
•
|
Construction defect
: Construction defect claims, which represent the largest component of our self-insurance liability, typically originate through a legal or regulatory process rather than directly by a homeowner and involve the alleged occurrence of a condition affecting
two
or more homes within the same community, or they involve a common area or homeowners’ association property within a community. These claims typically involve higher costs to resolve than individual homeowner warranty claims, and the rate of claims is highly variable.
|
•
|
Bodily injury
: Bodily injury claims typically involve individuals (other than our employees) who claim they were injured while on our property or as a result of our operations.
|
•
|
Property damage
: Property damage claims generally involve claims by third parties for alleged damage to real or personal property as a result of our operations. Such claims may occasionally include those made against us by owners of property located near our communities.
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
158,584
|
|
|
$
|
173,011
|
|
|
$
|
205,228
|
|
Self-insurance expense (a)
|
20,371
|
|
|
24,808
|
|
|
18,590
|
|
|||
Payments
|
(9,720
|
)
|
|
(28,395
|
)
|
|
(21,201
|
)
|
|||
Adjustments (b)
|
8,460
|
|
|
(10,840
|
)
|
|
(29,606
|
)
|
|||
Balance at end of year
|
$
|
177,695
|
|
|
$
|
158,584
|
|
|
$
|
173,011
|
|
(a)
|
These expenses are included in selling, general and administrative expenses and are largely offset by contributions from independent subcontractors participating in the wrap-up policy.
|
(b)
|
The amount for each period reflects changes in our self-insurance liability that were offset by changes in the receivable for estimated probable insurance and other recoveries to present our self-insurance liability on a gross basis. The amount for 2017 also includes a
$21.7 million
change in estimate to increase our self-insurance liability
to reflect claim frequency and severity trends, which indicated that probable future payments for claims relating to homes delivered in certain prior years were likely to exceed the previously estimated liabilities remaining for those claims
. Therefore, we recorded an adjustment in the 2017 third quarter to increase our self-insurance liability, based on an actuarially determined estimate, to an amount expected to have a higher probability of being adequate to cover future payments associated with unresolved claims, including claims incurred but not yet reported. This adjustment is included in selling, general and administrative expenses.
|
Note 16.
|
Legal Matters
|
Note 17.
|
Stockholders’ Equity
|
Note 18.
|
Accumulated Other Comprehensive Loss
|
Postretirement Benefit Plan Adjustments
|
|
|
Total Accumulated Other Comprehensive Loss
|
||
Balance at November 30, 2015
|
|
|
$
|
(17,319
|
)
|
Other comprehensive income before reclassifications
|
|
|
468
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
|
1,635
|
|
|
Income tax expense related to items of other comprehensive income
|
|
|
(841
|
)
|
|
Other comprehensive income, net of tax
|
|
|
1,262
|
|
|
Balance at November 30, 2016
|
|
|
(16,057
|
)
|
|
Other comprehensive loss before reclassifications
|
|
|
(3,143
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
|
1,698
|
|
|
Income tax benefit related to items of other comprehensive loss
|
|
|
578
|
|
|
Other comprehensive loss, net of tax
|
|
|
(867
|
)
|
|
Balance at November 30, 2017
|
|
|
$
|
(16,924
|
)
|
|
|
Years Ended November 30,
|
||||||||||
Details About Accumulated Other Comprehensive Loss Components
|
|
2017
|
|
2016
|
|
2015
|
||||||
Postretirement benefit plan adjustments
|
|
|
|
|
|
|
||||||
Amortization of net actuarial loss
|
|
$
|
142
|
|
|
$
|
79
|
|
|
$
|
848
|
|
Amortization of prior service cost
|
|
1,556
|
|
|
1,556
|
|
|
1,556
|
|
|||
Total reclassifications (a)
|
|
$
|
1,698
|
|
|
$
|
1,635
|
|
|
$
|
2,404
|
|
(a)
|
The accumulated other comprehensive loss components are included in the computation of net periodic benefit costs as further discussed in Note 20 – Postretirement Benefits.
|
Note 19.
|
Employee Benefit and Stock Plans
|
|
Years Ended November 30,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|||||||||
Options outstanding at beginning of year
|
12,731,545
|
|
|
$
|
18.95
|
|
|
12,635,644
|
|
|
$
|
19.39
|
|
|
11,735,042
|
|
|
$
|
20.45
|
|
Granted
|
—
|
|
|
—
|
|
|
1,012,686
|
|
|
16.21
|
|
|
1,262,000
|
|
|
14.92
|
|
|||
Exercised
|
(1,650,360
|
)
|
|
16.01
|
|
|
(551,898
|
)
|
|
13.95
|
|
|
(76,164
|
)
|
|
9.69
|
|
|||
Cancelled
|
(1,815,945
|
)
|
|
28.31
|
|
|
(364,887
|
)
|
|
34.07
|
|
|
(285,234
|
)
|
|
45.80
|
|
|||
Options outstanding at end of year
|
9,265,240
|
|
|
$
|
17.64
|
|
|
12,731,545
|
|
|
$
|
18.95
|
|
|
12,635,644
|
|
|
$
|
19.39
|
|
Options exercisable at end of year
|
8,307,632
|
|
|
$
|
17.86
|
|
|
10,506,810
|
|
|
$
|
19.70
|
|
|
10,389,722
|
|
|
$
|
20.35
|
|
Options available for grant at end of year
|
7,495,792
|
|
|
|
|
7,034,523
|
|
|
|
|
1,554,195
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||||
Range of Exercise Price
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life
|
||||||||
$ 6.32 to $11.05
|
|
1,361,500
|
|
|
$
|
6.36
|
|
|
3.9
|
|
|
1,361,500
|
|
|
$
|
6.36
|
|
|
|
|
$11.06 to $14.62
|
|
2,165,435
|
|
|
12.96
|
|
|
5.0
|
|
|
2,165,435
|
|
|
12.96
|
|
|
|
|||
$14.63 to $16.20
|
|
2,064,255
|
|
|
15.15
|
|
|
5.0
|
|
|
1,709,586
|
|
|
15.19
|
|
|
|
|||
$16.21 to $28.10
|
|
2,106,093
|
|
|
17.62
|
|
|
5.3
|
|
|
1,503,154
|
|
|
18.18
|
|
|
|
|||
$28.11 to $45.68
|
|
1,567,957
|
|
|
37.23
|
|
|
1.4
|
|
|
1,567,957
|
|
|
37.23
|
|
|
|
|||
$ 6.32 to $45.68
|
|
9,265,240
|
|
|
$
|
17.64
|
|
|
4.3
|
|
|
8,307,632
|
|
|
$
|
17.86
|
|
|
3.8
|
|
|
Years Ended November 30,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Risk-free interest rate
|
—
|
|
|
1.3
|
%
|
|
1.4
|
%
|
Expected volatility factor
|
—
|
|
|
41.3
|
%
|
|
43.6
|
%
|
Expected dividend yield
|
—
|
|
|
.6
|
%
|
|
.7
|
%
|
Expected term
|
—
|
|
|
5 years
|
|
|
5 years
|
|
|
Years Ended November 30,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted
Average
per Share
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
per Share
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
per Share
Grant Date
Fair Value
|
|||||||||
Outstanding at beginning of year
|
604,619
|
|
|
$
|
16.24
|
|
|
416,977
|
|
|
$
|
15.88
|
|
|
355,294
|
|
|
$
|
15.81
|
|
Granted
|
321,835
|
|
|
24.49
|
|
|
453,703
|
|
|
15.73
|
|
|
285,006
|
|
|
15.19
|
|
|||
Vested
|
(364,670
|
)
|
|
16.09
|
|
|
(252,854
|
)
|
|
14.78
|
|
|
(204,663
|
)
|
|
14.83
|
|
|||
Cancelled
|
(57,858
|
)
|
|
15.61
|
|
|
(13,207
|
)
|
|
15.12
|
|
|
(18,660
|
)
|
|
15.45
|
|
|||
Outstanding at end of year
|
503,926
|
|
|
$
|
21.69
|
|
|
604,619
|
|
|
$
|
16.24
|
|
|
416,977
|
|
|
$
|
15.88
|
|
|
Years Ended November 30,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Shares
|
|
Weighted
Average
per Share
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
per Share
Grant Date
Fair Value
|
|
Shares
|
|
Weighted
Average
per Share
Grant Date
Fair Value
|
|||||||||
Outstanding at beginning of year
|
809,860
|
|
|
$
|
17.19
|
|
|
820,209
|
|
|
$
|
15.52
|
|
|
628,209
|
|
|
$
|
15.70
|
|
Granted
|
424,797
|
|
|
22.99
|
|
|
369,281
|
|
|
13.81
|
|
|
192,000
|
|
|
14.92
|
|
|||
Vested
|
(278,460
|
)
|
|
16.67
|
|
|
(374,630
|
)
|
|
10.21
|
|
|
—
|
|
|
—
|
|
|||
Cancelled
|
(30,965
|
)
|
|
14.92
|
|
|
(5,000
|
)
|
|
16.21
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at end of year
|
925,232
|
|
|
$
|
20.09
|
|
|
809,860
|
|
|
$
|
17.19
|
|
|
820,209
|
|
|
$
|
15.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 20.
|
Postretirement Benefits
|
|
|
Years Ended November 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest cost
|
|
$
|
2,274
|
|
|
$
|
2,285
|
|
|
$
|
2,270
|
|
Amortization of prior service cost
|
|
1,556
|
|
|
1,556
|
|
|
1,556
|
|
|||
Service cost
|
|
1,046
|
|
|
1,045
|
|
|
1,142
|
|
|||
Amortization of net actuarial loss
|
|
142
|
|
|
79
|
|
|
848
|
|
|||
Total
|
|
$
|
5,018
|
|
|
$
|
4,965
|
|
|
$
|
5,816
|
|
Note 21.
|
Supplemental Disclosure to Consolidated Statements of Cash Flows
|
|
Years Ended November 30,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Summary of cash and cash equivalents at the end of the year:
|
|
|
|
|
|
||||||
Homebuilding
|
$
|
720,630
|
|
|
$
|
592,086
|
|
|
$
|
559,042
|
|
Financial services
|
231
|
|
|
914
|
|
|
1,299
|
|
|||
Total
|
$
|
720,861
|
|
|
$
|
593,000
|
|
|
$
|
560,341
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid, net of amounts capitalized
|
$
|
2,690
|
|
|
$
|
1,134
|
|
|
$
|
22,486
|
|
Income taxes paid
|
4,664
|
|
|
3,307
|
|
|
3,612
|
|
|||
Income taxes refunded
|
202
|
|
|
550
|
|
|
11
|
|
|||
Supplemental disclosure of non-cash activities:
|
|
|
|
|
|
||||||
Reclassification of warranty recoveries to receivables
|
$
|
—
|
|
|
$
|
2,151
|
|
|
$
|
7,238
|
|
Increase (decrease) in consolidated inventories not owned
|
(44,833
|
)
|
|
(59,413
|
)
|
|
106,807
|
|
|||
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture
|
6,650
|
|
|
4,277
|
|
|
12,705
|
|
|||
Inventories acquired through seller financing
|
49,658
|
|
|
99,108
|
|
|
20,291
|
|
Note 22.
|
Supplemental Guarantor Information
|
|
Year Ended November 30, 2017
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
3,957,267
|
|
|
$
|
411,262
|
|
|
$
|
—
|
|
|
$
|
4,368,529
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
3,957,267
|
|
|
$
|
398,998
|
|
|
$
|
—
|
|
|
$
|
4,356,265
|
|
Construction and land costs
|
—
|
|
|
(3,286,891
|
)
|
|
(359,577
|
)
|
|
—
|
|
|
(3,646,468
|
)
|
|||||
Selling, general and administrative expenses
|
(91,120
|
)
|
|
(293,233
|
)
|
|
(42,041
|
)
|
|
—
|
|
|
(426,394
|
)
|
|||||
Operating income (loss)
|
(91,120
|
)
|
|
377,143
|
|
|
(2,620
|
)
|
|
—
|
|
|
283,403
|
|
|||||
Interest income
|
1,232
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
1,240
|
|
|||||
Interest expense
|
(172,102
|
)
|
|
(1,635
|
)
|
|
(3,434
|
)
|
|
170,864
|
|
|
(6,307
|
)
|
|||||
Intercompany interest
|
266,784
|
|
|
(117,926
|
)
|
|
22,006
|
|
|
(170,864
|
)
|
|
—
|
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(1,407
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1,409
|
)
|
|||||
Homebuilding pretax income
|
4,794
|
|
|
256,183
|
|
|
15,950
|
|
|
—
|
|
|
276,927
|
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
13,068
|
|
|
—
|
|
|
13,068
|
|
|||||
Total pretax income
|
4,794
|
|
|
256,183
|
|
|
29,018
|
|
|
—
|
|
|
289,995
|
|
|||||
Income tax expense
|
(8,800
|
)
|
|
(100,000
|
)
|
|
(600
|
)
|
|
—
|
|
|
(109,400
|
)
|
|||||
Equity in net income of subsidiaries
|
184,601
|
|
|
—
|
|
|
—
|
|
|
(184,601
|
)
|
|
—
|
|
|||||
Net income
|
$
|
180,595
|
|
|
$
|
156,183
|
|
|
$
|
28,418
|
|
|
$
|
(184,601
|
)
|
|
$
|
180,595
|
|
|
Year Ended November 30, 2016
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
3,169,545
|
|
|
$
|
425,101
|
|
|
$
|
—
|
|
|
$
|
3,594,646
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
3,169,545
|
|
|
$
|
413,398
|
|
|
$
|
—
|
|
|
$
|
3,582,943
|
|
Construction and land costs
|
—
|
|
|
(2,661,888
|
)
|
|
(379,213
|
)
|
|
—
|
|
|
(3,041,101
|
)
|
|||||
Selling, general and administrative expenses
|
(91,859
|
)
|
|
(251,384
|
)
|
|
(46,198
|
)
|
|
—
|
|
|
(389,441
|
)
|
|||||
Operating income (loss)
|
(91,859
|
)
|
|
256,273
|
|
|
(12,013
|
)
|
|
—
|
|
|
152,401
|
|
|||||
Interest income
|
470
|
|
|
55
|
|
|
4
|
|
|
—
|
|
|
529
|
|
|||||
Interest expense
|
(177,329
|
)
|
|
(3,958
|
)
|
|
(3,946
|
)
|
|
179,333
|
|
|
(5,900
|
)
|
|||||
Intercompany interest
|
301,432
|
|
|
(107,388
|
)
|
|
(14,711
|
)
|
|
(179,333
|
)
|
|
—
|
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(2,179
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2,181
|
)
|
|||||
Homebuilding pretax income (loss)
|
32,714
|
|
|
142,803
|
|
|
(30,668
|
)
|
|
—
|
|
|
144,849
|
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
4,466
|
|
|
—
|
|
|
4,466
|
|
|||||
Total pretax income (loss)
|
32,714
|
|
|
142,803
|
|
|
(26,202
|
)
|
|
—
|
|
|
149,315
|
|
|||||
Income tax benefit (expense)
|
17,200
|
|
|
(52,700
|
)
|
|
(8,200
|
)
|
|
—
|
|
|
(43,700
|
)
|
|||||
Equity in net income of subsidiaries
|
55,701
|
|
|
—
|
|
|
—
|
|
|
(55,701
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
105,615
|
|
|
$
|
90,103
|
|
|
$
|
(34,402
|
)
|
|
$
|
(55,701
|
)
|
|
$
|
105,615
|
|
|
Year Ended November 30, 2015
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
2,640,678
|
|
|
$
|
391,352
|
|
|
$
|
—
|
|
|
$
|
3,032,030
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
2,640,678
|
|
|
$
|
380,309
|
|
|
$
|
—
|
|
|
$
|
3,020,987
|
|
Construction and land costs
|
—
|
|
|
(2,196,228
|
)
|
|
(343,140
|
)
|
|
—
|
|
|
(2,539,368
|
)
|
|||||
Selling, general and administrative expenses
|
(86,053
|
)
|
|
(213,292
|
)
|
|
(43,653
|
)
|
|
—
|
|
|
(342,998
|
)
|
|||||
Operating income (loss)
|
(86,053
|
)
|
|
231,158
|
|
|
(6,484
|
)
|
|
—
|
|
|
138,621
|
|
|||||
Interest income
|
451
|
|
|
6
|
|
|
1
|
|
|
—
|
|
|
458
|
|
|||||
Interest expense
|
(180,701
|
)
|
|
(6,184
|
)
|
|
—
|
|
|
165,029
|
|
|
(21,856
|
)
|
|||||
Intercompany interest
|
289,727
|
|
|
(101,540
|
)
|
|
(23,158
|
)
|
|
(165,029
|
)
|
|
—
|
|
|||||
Equity in loss of unconsolidated joint ventures
|
—
|
|
|
(1,803
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1,804
|
)
|
|||||
Homebuilding pretax income (loss)
|
23,424
|
|
|
121,637
|
|
|
(29,642
|
)
|
|
—
|
|
|
115,419
|
|
|||||
Financial services pretax income
|
—
|
|
|
—
|
|
|
11,624
|
|
|
—
|
|
|
11,624
|
|
|||||
Total pretax income (loss)
|
23,424
|
|
|
121,637
|
|
|
(18,018
|
)
|
|
—
|
|
|
127,043
|
|
|||||
Income tax benefit (expense)
|
2,000
|
|
|
(46,700
|
)
|
|
2,300
|
|
|
—
|
|
|
(42,400
|
)
|
|||||
Equity in net income of subsidiaries
|
59,219
|
|
|
—
|
|
|
—
|
|
|
(59,219
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
84,643
|
|
|
$
|
74,937
|
|
|
$
|
(15,718
|
)
|
|
$
|
(59,219
|
)
|
|
$
|
84,643
|
|
|
Year Ended November 30, 2017
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net income
|
$
|
180,595
|
|
|
$
|
156,183
|
|
|
$
|
28,418
|
|
|
$
|
(184,601
|
)
|
|
$
|
180,595
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Postretirement benefit plan adjustments
|
(1,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,445
|
)
|
|||||
Other comprehensive loss before tax
|
(1,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,445
|
)
|
|||||
Income tax benefit related to items of other comprehensive loss
|
578
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
578
|
|
|||||
Other comprehensive loss, net of tax
|
(867
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(867
|
)
|
|||||
Comprehensive income
|
$
|
179,728
|
|
|
$
|
156,183
|
|
|
$
|
28,418
|
|
|
$
|
(184,601
|
)
|
|
$
|
179,728
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year Ended November 30, 2016
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net income (loss)
|
$
|
105,615
|
|
|
$
|
90,103
|
|
|
$
|
(34,402
|
)
|
|
$
|
(55,701
|
)
|
|
$
|
105,615
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Postretirement benefit plan adjustments
|
2,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,103
|
|
|||||
Other comprehensive income before tax
|
2,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,103
|
|
|||||
Income tax expense related to items of other comprehensive income
|
(841
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(841
|
)
|
|||||
Other comprehensive income, net of tax
|
1,262
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,262
|
|
|||||
Comprehensive income (loss)
|
$
|
106,877
|
|
|
$
|
90,103
|
|
|
$
|
(34,402
|
)
|
|
$
|
(55,701
|
)
|
|
$
|
106,877
|
|
|
Year Ended November 30, 2015
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net income (loss)
|
$
|
84,643
|
|
|
$
|
74,937
|
|
|
$
|
(15,718
|
)
|
|
$
|
(59,219
|
)
|
|
$
|
84,643
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Postretirement benefit plan adjustments
|
6,149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,149
|
|
|||||
Other comprehensive income before tax
|
6,149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,149
|
|
|||||
Income tax expense related to items of other comprehensive income
|
(2,460
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,460
|
)
|
|||||
Other comprehensive income, net of tax
|
3,689
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,689
|
|
|||||
Comprehensive income (loss)
|
$
|
88,332
|
|
|
$
|
74,937
|
|
|
$
|
(15,718
|
)
|
|
$
|
(59,219
|
)
|
|
$
|
88,332
|
|
|
November 30, 2017
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
575,193
|
|
|
$
|
102,661
|
|
|
$
|
42,776
|
|
|
$
|
—
|
|
|
$
|
720,630
|
|
Receivables
|
24,815
|
|
|
144,076
|
|
|
75,322
|
|
|
—
|
|
|
244,213
|
|
|||||
Inventories
|
—
|
|
|
2,929,466
|
|
|
333,920
|
|
|
—
|
|
|
3,263,386
|
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
62,290
|
|
|
2,504
|
|
|
—
|
|
|
64,794
|
|
|||||
Deferred tax assets, net
|
250,747
|
|
|
243,523
|
|
|
139,367
|
|
|
—
|
|
|
633,637
|
|
|||||
Other assets
|
91,592
|
|
|
8,424
|
|
|
2,482
|
|
|
—
|
|
|
102,498
|
|
|||||
|
942,347
|
|
|
3,490,440
|
|
|
596,371
|
|
|
—
|
|
|
5,029,158
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
12,357
|
|
|
—
|
|
|
12,357
|
|
|||||
Intercompany receivables
|
3,414,237
|
|
|
—
|
|
|
107,992
|
|
|
(3,522,229
|
)
|
|
—
|
|
|||||
Investments in subsidiaries
|
49,776
|
|
|
—
|
|
|
—
|
|
|
(49,776
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
4,406,360
|
|
|
$
|
3,490,440
|
|
|
$
|
716,720
|
|
|
$
|
(3,572,005
|
)
|
|
$
|
5,041,515
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable, accrued expenses and other liabilities
|
$
|
163,984
|
|
|
$
|
371,909
|
|
|
$
|
253,500
|
|
|
$
|
—
|
|
|
$
|
789,393
|
|
Notes payable
|
2,289,532
|
|
|
9,283
|
|
|
26,030
|
|
|
—
|
|
|
2,324,845
|
|
|||||
|
2,453,516
|
|
|
381,192
|
|
|
279,530
|
|
|
—
|
|
|
3,114,238
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
966
|
|
|
—
|
|
|
966
|
|
|||||
Intercompany payables
|
26,533
|
|
|
3,109,248
|
|
|
386,448
|
|
|
(3,522,229
|
)
|
|
—
|
|
|||||
Stockholders’ equity
|
1,926,311
|
|
|
—
|
|
|
49,776
|
|
|
(49,776
|
)
|
|
1,926,311
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
4,406,360
|
|
|
$
|
3,490,440
|
|
|
$
|
716,720
|
|
|
$
|
(3,572,005
|
)
|
|
$
|
5,041,515
|
|
|
November 30, 2016
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
463,100
|
|
|
$
|
100,439
|
|
|
$
|
28,547
|
|
|
$
|
—
|
|
|
$
|
592,086
|
|
Receivables
|
4,807
|
|
|
135,915
|
|
|
90,943
|
|
|
—
|
|
|
231,665
|
|
|||||
Inventories
|
—
|
|
|
3,048,132
|
|
|
355,096
|
|
|
—
|
|
|
3,403,228
|
|
|||||
Investments in unconsolidated joint ventures
|
—
|
|
|
61,517
|
|
|
2,499
|
|
|
—
|
|
|
64,016
|
|
|||||
Deferred tax assets, net
|
276,737
|
|
|
318,077
|
|
|
144,171
|
|
|
—
|
|
|
738,985
|
|
|||||
Other assets
|
79,526
|
|
|
9,177
|
|
|
2,442
|
|
|
—
|
|
|
91,145
|
|
|||||
|
824,170
|
|
|
3,673,257
|
|
|
623,698
|
|
|
—
|
|
|
5,121,125
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
10,499
|
|
|
—
|
|
|
10,499
|
|
|||||
Intercompany receivables
|
3,559,012
|
|
|
—
|
|
|
97,062
|
|
|
(3,656,074
|
)
|
|
—
|
|
|||||
Investments in subsidiaries
|
35,965
|
|
|
—
|
|
|
—
|
|
|
(35,965
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
4,419,147
|
|
|
$
|
3,673,257
|
|
|
$
|
731,259
|
|
|
$
|
(3,692,039
|
)
|
|
$
|
5,131,624
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable, accrued expenses and other liabilities
|
$
|
131,530
|
|
|
$
|
397,605
|
|
|
$
|
237,192
|
|
|
$
|
—
|
|
|
$
|
766,327
|
|
Notes payable
|
2,548,112
|
|
|
66,927
|
|
|
25,110
|
|
|
—
|
|
|
2,640,149
|
|
|||||
|
2,679,642
|
|
|
464,532
|
|
|
262,302
|
|
|
—
|
|
|
3,406,476
|
|
|||||
Financial services
|
—
|
|
|
—
|
|
|
2,003
|
|
|
—
|
|
|
2,003
|
|
|||||
Intercompany payables
|
16,360
|
|
|
3,208,725
|
|
|
430,989
|
|
|
(3,656,074
|
)
|
|
—
|
|
|||||
Stockholders’ equity
|
1,723,145
|
|
|
—
|
|
|
35,965
|
|
|
(35,965
|
)
|
|
1,723,145
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
4,419,147
|
|
|
$
|
3,673,257
|
|
|
$
|
731,259
|
|
|
$
|
(3,692,039
|
)
|
|
$
|
5,131,624
|
|
|
Year Ended November 30, 2017
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net cash provided by operating activities
|
$
|
70,683
|
|
|
$
|
374,524
|
|
|
$
|
68,012
|
|
|
$
|
—
|
|
|
$
|
513,219
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contributions to unconsolidated joint ventures
|
—
|
|
|
(13,563
|
)
|
|
(5,131
|
)
|
|
—
|
|
|
(18,694
|
)
|
|||||
Return of investments in unconsolidated joint ventures
|
—
|
|
|
4,119
|
|
|
6,916
|
|
|
—
|
|
|
11,035
|
|
|||||
Purchases of property and equipment, net
|
(7,215
|
)
|
|
(819
|
)
|
|
(51
|
)
|
|
—
|
|
|
(8,085
|
)
|
|||||
Intercompany
|
311,857
|
|
|
—
|
|
|
—
|
|
|
(311,857
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
304,642
|
|
|
(10,263
|
)
|
|
1,734
|
|
|
(311,857
|
)
|
|
(15,744
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of senior notes
|
(270,326
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(270,326
|
)
|
|||||
Issuance costs for unsecured revolving credit facility
|
(1,711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,711
|
)
|
|||||
Payments on mortgages and land contracts due to land sellers and other loans
|
—
|
|
|
(106,382
|
)
|
|
—
|
|
|
—
|
|
|
(106,382
|
)
|
|||||
Issuance of common stock under employee stock plans
|
23,162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,162
|
|
|||||
Excess tax benefits from stock-based compensation
|
958
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
958
|
|
|||||
Payments of cash dividends
|
(8,642
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,642
|
)
|
|||||
Stock repurchases
|
(6,673
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,673
|
)
|
|||||
Intercompany
|
—
|
|
|
(255,657
|
)
|
|
(56,200
|
)
|
|
311,857
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
(263,232
|
)
|
|
(362,039
|
)
|
|
(56,200
|
)
|
|
311,857
|
|
|
(369,614
|
)
|
|||||
Net increase in cash and cash equivalents
|
112,093
|
|
|
2,222
|
|
|
13,546
|
|
|
—
|
|
|
127,861
|
|
|||||
Cash and cash equivalents at beginning of year
|
463,100
|
|
|
100,439
|
|
|
29,461
|
|
|
—
|
|
|
593,000
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
575,193
|
|
|
$
|
102,661
|
|
|
$
|
43,007
|
|
|
$
|
—
|
|
|
$
|
720,861
|
|
|
Year Ended November 30, 2016
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
(40,277
|
)
|
|
$
|
188,372
|
|
|
$
|
40,560
|
|
|
$
|
—
|
|
|
$
|
188,655
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contributions to unconsolidated joint ventures
|
—
|
|
|
(4,852
|
)
|
|
(750
|
)
|
|
—
|
|
|
(5,602
|
)
|
|||||
Return of investments in unconsolidated joint ventures
|
—
|
|
|
4,307
|
|
|
—
|
|
|
—
|
|
|
4,307
|
|
|||||
Purchases of property and equipment, net
|
(4,052
|
)
|
|
(555
|
)
|
|
(177
|
)
|
|
—
|
|
|
(4,784
|
)
|
|||||
Intercompany
|
144,651
|
|
|
—
|
|
|
—
|
|
|
(144,651
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
140,599
|
|
|
(1,100
|
)
|
|
(927
|
)
|
|
(144,651
|
)
|
|
(6,079
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in restricted cash
|
9,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,344
|
|
|||||
Payments on mortgages and land contracts due to land sellers and other loans
|
—
|
|
|
(67,845
|
)
|
|
—
|
|
|
—
|
|
|
(67,845
|
)
|
|||||
Issuance of common stock under employee stock plans
|
5,343
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,343
|
|
|||||
Excess tax benefits from stock-based compensation
|
186
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|||||
Payments of cash dividends
|
(8,586
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,586
|
)
|
|||||
Stock repurchases
|
(88,359
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(88,359
|
)
|
|||||
Intercompany
|
—
|
|
|
(115,729
|
)
|
|
(28,922
|
)
|
|
144,651
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
(82,072
|
)
|
|
(183,574
|
)
|
|
(28,922
|
)
|
|
144,651
|
|
|
(149,917
|
)
|
|||||
Net increase in cash and cash equivalents
|
18,250
|
|
|
3,698
|
|
|
10,711
|
|
|
—
|
|
|
32,659
|
|
|||||
Cash and cash equivalents at beginning of year
|
444,850
|
|
|
96,741
|
|
|
18,750
|
|
|
—
|
|
|
560,341
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
463,100
|
|
|
$
|
100,439
|
|
|
$
|
29,461
|
|
|
$
|
—
|
|
|
$
|
593,000
|
|
|
Year Ended November 30, 2015
|
||||||||||||||||||
|
KB Home
Corporate
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Total
|
||||||||||
Net cash provided by operating activities
|
$
|
44,422
|
|
|
$
|
110,688
|
|
|
$
|
26,075
|
|
|
$
|
—
|
|
|
$
|
181,185
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contributions to unconsolidated joint ventures
|
—
|
|
|
(20,625
|
)
|
|
(1
|
)
|
|
—
|
|
|
(20,626
|
)
|
|||||
Return of investments in unconsolidated joint ventures
|
—
|
|
|
14,000
|
|
|
—
|
|
|
—
|
|
|
14,000
|
|
|||||
Purchases of property and equipment, net
|
(2,890
|
)
|
|
(1,271
|
)
|
|
(516
|
)
|
|
—
|
|
|
(4,677
|
)
|
|||||
Intercompany
|
45,470
|
|
|
—
|
|
|
—
|
|
|
(45,470
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
42,580
|
|
|
(7,896
|
)
|
|
(517
|
)
|
|
(45,470
|
)
|
|
(11,303
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in restricted cash
|
17,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,891
|
|
|||||
Proceeds from issuance of debt
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|||||
Payment of debt issuance costs
|
(4,561
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,561
|
)
|
|||||
Repayment of senior notes
|
(199,906
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(199,906
|
)
|
|||||
Payments on mortgages and land contracts due to land sellers and other loans
|
—
|
|
|
(22,877
|
)
|
|
—
|
|
|
—
|
|
|
(22,877
|
)
|
|||||
Issuance of common stock under employee stock plans
|
740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
740
|
|
|||||
Excess tax benefits from stock-based compensation
|
157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
157
|
|
|||||
Payments of cash dividends
|
(9,186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,186
|
)
|
|||||
Stock repurchases
|
(567
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(567
|
)
|
|||||
Intercompany
|
—
|
|
|
(19,586
|
)
|
|
(25,884
|
)
|
|
45,470
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
54,568
|
|
|
(42,463
|
)
|
|
(25,884
|
)
|
|
45,470
|
|
|
31,691
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
141,570
|
|
|
60,329
|
|
|
(326
|
)
|
|
—
|
|
|
201,573
|
|
|||||
Cash and cash equivalents at beginning of year
|
303,280
|
|
|
36,412
|
|
|
19,076
|
|
|
—
|
|
|
358,768
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
444,850
|
|
|
$
|
96,741
|
|
|
$
|
18,750
|
|
|
$
|
—
|
|
|
$
|
560,341
|
|
Note 23.
|
Quarterly Results (unaudited)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
818,596
|
|
|
$
|
1,002,794
|
|
|
$
|
1,144,001
|
|
|
$
|
1,403,138
|
|
Gross profits
|
119,697
|
|
|
155,382
|
|
|
188,110
|
|
|
255,442
|
|
||||
Inventory impairment and land option contract abandonment charges
|
4,008
|
|
|
6,001
|
|
|
8,113
|
|
|
7,110
|
|
||||
Pretax income
|
21,459
|
|
|
51,982
|
|
|
79,208
|
|
|
137,346
|
|
||||
Net income
|
14,259
|
|
|
31,782
|
|
|
50,208
|
|
|
84,346
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
.17
|
|
|
$
|
.37
|
|
|
$
|
.58
|
|
|
$
|
.97
|
|
Diluted
|
.15
|
|
|
.33
|
|
|
.51
|
|
|
.84
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
678,371
|
|
|
$
|
811,050
|
|
|
$
|
913,283
|
|
|
$
|
1,191,942
|
|
Gross profits
|
108,694
|
|
|
121,465
|
|
|
151,902
|
|
|
167,667
|
|
||||
Inventory impairment and land option contract abandonment charges
|
1,966
|
|
|
11,740
|
|
|
3,052
|
|
|
36,054
|
|
||||
Pretax income
|
16,027
|
|
|
24,797
|
|
|
53,463
|
|
|
55,028
|
|
||||
Net income
|
13,127
|
|
|
15,597
|
|
|
39,363
|
|
|
37,528
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
.15
|
|
|
$
|
.18
|
|
|
$
|
.46
|
|
|
$
|
.44
|
|
Diluted
|
.14
|
|
|
.17
|
|
|
.42
|
|
|
.40
|
|
Note 24.
|
Subsequent Event
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
(a)
|
Management’s Annual Report on Internal Control Over Financial Reporting
|
(b)
|
Report of Independent Registered Public Accounting Firm
|
(c)
|
Changes in Internal Control Over Financial Reporting
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Equity Compensation Plan Information
|
|
|||||||||||
Plan category
|
|
Number of
common shares to
be issued upon
exercise of
outstanding options,
warrants and
rights
(a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
|
Number of common
shares remaining
available for future
issuance under equity
compensation plans
(excluding common
shares reflected in
column(a))
(c)
|
|
|||||
Equity compensation plans approved by stockholders
|
|
9,265,240
|
|
|
$
|
17.64
|
|
|
7,495,792
|
|
|
|
Equity compensation plans not approved by stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
(1
|
)
|
|
Total
|
|
9,265,240
|
|
|
$
|
17.64
|
|
|
7,495,792
|
|
|
(1)
|
Represents a prior non-employee directors compensation plan under which our non-employee directors received Director Plan SARs, which were initially granted as cash-settled instruments. As discussed in Note 17 – Stockholders’ Equity in the Notes to Consolidated Financial Statements in this report, all non-employee directors serving on our board of directors have elected to receive shares of our common stock in settlement of their Director Plan SARs under the terms of the plan. We consider this non-employee director compensation plan as having no available capacity to issue shares of our common stock.
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
|
|
|
|
4.22
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
Form of Stock Option Agreement under KB Home Performance-Based Incentive Plan for Senior Management, filed as an exhibit to our 1995 Annual Report on Form 10-K (File No. 001-09195), is incorporated by reference herein.
|
|
|
|
10.5
|
|
KB Home Directors’ Legacy Program, as amended January 1, 1999, filed as an exhibit to our 1998 Annual Report on Form 10-K (File No. 001-09195), is incorporated by reference herein.
|
|
|
|
10.6
|
|
Trust Agreement between Kaufman and Broad Home Corporation and Wachovia Bank, N.A. as Trustee, dated as of August 27, 1999, filed as an exhibit to our 1999 Annual Report on Form 10-K (File No. 001-09195), is incorporated by reference herein.
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.7*
|
|
|
|
|
|
10.8*
|
|
|
|
|
|
10.9*
|
|
|
|
|
|
10.10*
|
|
|
|
|
|
10.11*
|
|
|
|
|
|
10.12*
|
|
|
|
|
|
10.13*
|
|
|
|
|
|
10.14*
|
|
|
|
|
|
10.15*
|
|
|
|
|
|
10.16*
|
|
|
|
|
|
10.17*
|
|
|
|
|
|
10.18*
|
|
|
|
|
|
10.19*
|
|
|
|
|
|
10.20*
|
|
|
|
|
|
10.21*
|
|
|
|
|
|
10.22*
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25*
|
|
|
|
|
|
10.26*
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.27*
|
|
|
|
|
|
10.28*
|
|
|
|
|
|
10.29*
|
|
|
|
|
|
10.30*
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32*
|
|
|
|
|
|
10.33*
|
|
|
|
|
|
10.34*
|
|
|
|
|
|
10.35*
|
|
|
|
|
|
10.36*
|
|
|
|
|
|
10.37*
|
|
|
|
|
|
10.38*
|
|
|
|
|
|
10.39*
|
|
|
|
|
|
10.40*
|
|
|
|
|
|
10.41*
|
|
|
|
|
|
10.42*
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44*
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.45*
|
|
|
|
|
|
10.46*
|
|
|
|
|
|
10.47*
|
|
.
|
|
|
|
10.48*
|
|
|
|
|
|
10.49
|
|
|
|
|
|
10.50*
|
|
|
|
|
|
10.51†*
|
|
|
|
|
|
12.1†
|
|
|
|
|
|
21†
|
|
|
|
|
|
23†
|
|
|
|
|
|
31.1†
|
|
|
|
|
|
31.2†
|
|
|
|
|
|
32.1†
|
|
|
|
|
|
32.2†
|
|
|
|
|
|
101†
|
|
The following materials from KB Home’s Annual Report on Form 10-K for the year ended November 30, 2017, formatted in eXtensible Business Reporting Language (XBRL): (a) Consolidated Statements of Operations for the years ended November 30, 2017, 2016 and 2015, (b) Consolidated Statements of Comprehensive Income for the years ended November 30, 2017, 2016 and 2015, (c) Consolidated Balance Sheets as of November 30, 2017 and 2016, (d) Consolidated Statements of Stockholders’ Equity for the years ended November 30, 2017, 2016 and 2015, (e) Consolidated Statements of Cash Flows for the years ended November 30, 2017, 2016 and 2015, and (f) the Notes to Consolidated Financial Statements.
|
Item 16.
|
FORM 10-K SUMMARY
|
|
|
KB Home
|
|
|
|
|
|
|
|
By:
|
/
S
/ JEFF J. KAMINSKI
|
|
|
|
Jeff J. Kaminski
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Date:
|
January 26, 2018
|
|
Signature
|
|
Title
|
|
Date
|
/
S
/ JEFFREY T. MEZGER
|
|
Chairman, President and
Chief Executive Officer
(Principal Executive Officer)
|
|
January 26, 2018
|
Jeffrey T. Mezger
|
|
|
|
|
|
|
|
||
/
S
/ JEFF J. KAMINSKI
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
|
January 26, 2018
|
Jeff J. Kaminski
|
|
|
|
|
|
|
|
||
/
S
/ WILLIAM R. HOLLINGER
|
|
Senior Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
|
|
January 26, 2018
|
William R. Hollinger
|
|
|
|
|
|
|
|
|
|
/
S
/ DORENE C. DOMINGUEZ
|
|
Director
|
|
January 26, 2018
|
Dorene C. Dominguez
|
|
|
|
|
|
|
|
|
|
/
S
/ TIMOTHY W. FINCHEM
|
|
Director
|
|
January 26, 2018
|
Timothy W. Finchem
|
|
|
|
|
|
|
|
|
|
/
S
/ STUART A. GABRIEL
|
|
Director
|
|
January 26, 2018
|
Stuart A. Gabriel
|
|
|
|
|
|
|
|
|
|
/
S
/ THOMAS W. GILLIGAN
|
|
Director
|
|
January 26, 2018
|
Thomas W. Gilligan
|
|
|
|
|
|
|
|
||
/
S
/ KENNETH M. JASTROW, II
|
|
Director
|
|
January 26, 2018
|
Kenneth M. Jastrow, II
|
|
|
|
|
|
|
|
||
/
S
/ ROBERT L. JOHNSON
|
|
Director
|
|
January 26, 2018
|
Robert L. Johnson
|
|
|
|
|
|
|
|
|
|
/
S
/ MELISSA LORA
|
|
Director
|
|
January 26, 2018
|
Melissa Lora
|
|
|
|
|
|
|
|
||
/
S
/ JAMES C. WEAVER
|
|
Director
|
|
January 26, 2018
|
James C. Weaver
|
|
|
|
|
|
|
|
|
|
/
S
/ MICHAEL M. WOOD
|
|
Director
|
|
January 26, 2018
|
Michael M. Wood
|
|
|
|
On
|
|
Shares Subject to Lapse of Transferability Restrictions
|
|
|
|
October 12, 2016
|
|
33 1/3% of Grant
|
October 12, 2017
|
an additional
|
33 1/3% of Grant
|
October 12, 2018
|
an additional
|
33 1/3% of Grant
|
KB HOME
|
|||||||||||||||||||
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
|
|||||||||||||||||||
(In Thousands, Except Ratios)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Years Ended November 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations before income taxes
|
$
|
289,995
|
|
|
$
|
149,315
|
|
|
$
|
127,043
|
|
|
$
|
94,949
|
|
|
$
|
38,363
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest incurred
|
177,171
|
|
|
185,466
|
|
|
186,885
|
|
|
171,541
|
|
|
149,101
|
|
|||||
Amortization of premiums and discounts related to debt
|
6,573
|
|
|
7,576
|
|
|
7,738
|
|
|
7,124
|
|
|
5,347
|
|
|||||
Portion of rent expense considered to be interest
|
4,939
|
|
|
5,097
|
|
|
4,524
|
|
|
3,917
|
|
|
3,204
|
|
|||||
Amortization of previously capitalized interest
|
215,396
|
|
|
161,285
|
|
|
143,255
|
|
|
90,804
|
|
|
87,414
|
|
|||||
Distribution of earnings from unconsolidated joint ventures, net of equity in income (loss)
|
8,210
|
|
|
9,908
|
|
|
11,512
|
|
|
(1,063
|
)
|
|
2,882
|
|
|||||
Deduct:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest capitalized
|
(170,864
|
)
|
|
(179,566
|
)
|
|
(165,029
|
)
|
|
(140,791
|
)
|
|
(86,411
|
)
|
|||||
Income as adjusted
|
$
|
531,420
|
|
|
$
|
339,081
|
|
|
$
|
315,928
|
|
|
$
|
226,481
|
|
|
$
|
199,900
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest incurred
|
$
|
177,171
|
|
|
$
|
185,466
|
|
|
$
|
186,885
|
|
|
$
|
171,541
|
|
|
$
|
149,101
|
|
Amortization of premiums and discounts related to debt
|
6,573
|
|
|
7,576
|
|
|
7,738
|
|
|
7,124
|
|
|
5,347
|
|
|||||
Portion of rent expense considered to be interest
|
4,939
|
|
|
5,097
|
|
|
4,524
|
|
|
3,917
|
|
|
3,204
|
|
|||||
Total fixed charges
|
$
|
188,683
|
|
|
$
|
198,139
|
|
|
$
|
199,147
|
|
|
$
|
182,582
|
|
|
$
|
157,652
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
2.82
|
x
|
|
1.71
|
x
|
|
1.59
|
x
|
|
1.24
|
x
|
|
1.27
|
x
|
|||||
|
|
|
|
|
|
|
|
|
|
Name of Company/Jurisdiction of Incorporation or Formation
|
|
Percentage of
Voting Securities
Owned by
the Registrant
or a
Subsidiary of
the Registrant
|
|
Arizona
|
|
|
|
KB HOME Phoenix Inc.
|
|
|
100
|
KB HOME Sales - Phoenix Inc.
|
|
|
100
|
KB HOME Sales - Tucson Inc.
|
|
|
100
|
KB HOME Tucson Inc.
|
|
|
100
|
California
|
|
|
|
KB HOME Central Valley Inc.
|
|
|
100
|
KB HOME Coastal Inc.
|
|
|
100
|
KB HOME Greater Los Angeles Inc.
|
|
|
100
|
KB HOME Insurance Agency Inc.
|
|
|
100
|
KB HOME Sacramento Inc.
|
|
|
100
|
KB HOME South Bay Inc.
|
|
|
100
|
Colorado
|
|
|
|
KB HOME Colorado Inc.
|
|
|
100
|
Delaware
|
|
|
|
KB HOME California LLC
|
|
|
100
|
KB HOME Florida LLC
|
|
|
100
|
KB HOME Fort Myers LLC
|
|
|
100
|
KB HOME Inspirada LLC
|
|
|
100
|
KB HOME Tampa LLC
|
|
|
100
|
KB HOME Treasure Coast LLC
|
|
|
100
|
KB Urban Inc.
|
|
|
100
|
Florida
|
|
|
|
KB HOME Title Services Inc.
|
|
|
100
|
Illinois
|
|
|
|
KB HOME Mortgage Company
|
|
|
100
|
Nevada
|
|
|
|
KB HOME Las Vegas Inc.
|
|
|
100
|
KB HOME Reno Inc.
|
|
|
100
|
New Mexico
|
|
|
|
KB HOME New Mexico Inc.
|
|
|
100
|
Texas
|
|
|
|
KB HOME Lone Star Inc.
|
|
|
100
|
KBSA, Inc.
|
|
|
100
|
*
|
Certain subsidiaries have been omitted from this list. These subsidiaries, when considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary as defined in Rule 1-02(w) of Regulation S-X.
|
|
(1)
|
Registration Statement (Form S-3 No. 333-219293) of KB Home,
|
|
(2)
|
Registration Statement (Form S-8 No. 333-129273) pertaining to the KB Home 1988 Employee Stock Plan, the KB Home 1998 Stock Incentive Plan, the KB Home Performance-Based Incentive Plan for Senior Management, the KB Home Non-Employee Directors Stock Plan, the KB Home 401(k) Savings Plan, the KB Home 1999 Incentive Plan, the KB Home 2001 Stock Incentive Plan, certain stock grants and the resale of certain shares by officers of KB Home,
|
|
(3)
|
Registration Statement (Form S-8 No. 333-168179) pertaining to the KB Home 401(k) Savings Plan,
|
|
(4)
|
Registration Statements (Form S-8 No. 333-168181 and Form S-8 No. 333-175601) pertaining to the KB Home 2010 Equity Incentive Plan,
|
|
(5)
|
Registration Statement (Form S-8 No. 333-197521) pertaining to the KB Home 2014 Equity Incentive Plan, the Third Amended and Restated Non-Employee Directors Compensation Plan, and the KB Home 401(k) Savings Plan, and
|
|
(6)
|
Registration Statement (Form S-8 No. 333-212521) pertaining to the Amended KB Home 2014 Equity Incentive Plan and the KB Home 401(k) Savings Plan;
|
1.
|
I have reviewed this annual report on Form 10-K 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
|
January 26, 2018
|
|
/s/ JEFFREY T. MEZGER
|
|
|
|
Jeffrey T. Mezger
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K 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)
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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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January 26, 2018
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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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January 26, 2018
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/s/ JEFFREY T. MEZGER
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Jeffrey T. Mezger
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Chairman, 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)
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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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January 26, 2018
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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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