November 30, | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash | $ | 18,567 | $ | 21,193 | |||
Receivables | 9 | 688 | |||||
Inventories | 131,074 | 145,519 | |||||
Other assets | 521 | 1,398 | |||||
Total assets | $ | 150,171 | $ | 168,798 | |||
Liabilities and equity | |||||||
Accounts payable and other liabilities | $ | 11,374 | $ | 25,426 | |||
Notes payable (a) | 17,956 | 20,040 | |||||
Equity | 120,841 | 123,332 | |||||
Total liabilities and equity | $ | 150,171 | $ | 168,798 |
(a) | As of November 30, 2017, two of our unconsolidated joint ventures had separate construction loan agreements with different third-party lenders to finance their respective land development activities, with the outstanding debt secured by the corresponding underlying property and related project assets and non-recourse to us. The secured debt of one of these unconsolidated joint ventures was repaid in August 2018 upon maturity. All of the outstanding secured debt at November 30, 2018 is scheduled to mature in February 2020. None of our other unconsolidated joint ventures had outstanding debt at November 30, 2018 or 2017. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues | |||||||||||
Insurance commissions | $ | 7,535 | $ | 6,991 | $ | 6,728 | |||||
Title services | 5,672 | 5,268 | 4,975 | ||||||||
Interest income | — | 5 | — | ||||||||
Total | 13,207 | 12,264 | 11,703 | ||||||||
Expenses | |||||||||||
General and administrative | (3,844 | ) | (3,430 | ) | (3,817 | ) | |||||
Operating income | 9,363 | 8,834 | 7,886 | ||||||||
Equity in income (loss) of unconsolidated joint ventures | 7,301 | 4,234 | (3,420 | ) | |||||||
Pretax income | $ | 16,664 | $ | 13,068 | $ | 4,466 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues | |||||||||||
Insurance commissions | $ | 7,535 | $ | 6,991 | $ | 6,728 | |||||
Title services | 5,672 | 5,268 | 4,975 | ||||||||
Interest income | — | 5 | — | ||||||||
Total | 13,207 | 12,264 | 11,703 | ||||||||
Expenses | |||||||||||
General and administrative | (3,844 | ) | (3,430 | ) | (3,817 | ) | |||||
Operating income | 9,363 | 8,834 | 7,886 | ||||||||
Equity in income (loss) of unconsolidated joint ventures | 7,301 | 4,234 | (3,420 | ) | |||||||
Pretax income | $ | 16,664 | $ | 13,068 | $ | 4,466 |
November 30, | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 760 | $ | 231 | |||
Receivables | 2,885 | 1,724 | |||||
Investments in unconsolidated joint ventures (a) | 8,594 | 10,340 | |||||
Other assets | 141 | 62 | |||||
Total assets | $ | 12,380 | $ | 12,357 | |||
Liabilities | |||||||
Accounts payable and accrued expenses | $ | 1,495 | $ | 966 | |||
Total liabilities | $ | 1,495 | $ | 966 |
(a) | In 2017, we made a $5.3 million capital contribution to KBHS and received a $5.0 million distribution from HCM. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Capitalized interest at beginning of year | $ | 262,191 | $ | 306,723 | $ | 288,442 | |||||
Interest incurred (a) | 149,698 | 177,171 | 185,466 | ||||||||
Interest expensed (a) | — | (6,307 | ) | (5,900 | ) | ||||||
Interest amortized to construction and land costs (b) | (202,760 | ) | (215,396 | ) | (161,285 | ) | |||||
Capitalized interest at end of year (c) | $ | 209,129 | $ | 262,191 | $ | 306,723 |
(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, 2018, 2017 and 2016 included $4.8 million, $4.9 million and $.7 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. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of year | $ | 177,695 | $ | 158,584 | $ | 173,011 | |||||
Self-insurance expense (a) | 20,436 | 20,371 | 24,808 | ||||||||
Payments (b) | (21,290 | ) | (22,933 | ) | (39,235 | ) | |||||
Adjustments (c) | — | 21,673 | — | ||||||||
Balance at end of year | $ | 176,841 | $ | 177,695 | $ | 158,584 |
(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) | Includes net changes in estimated probable insurance and other recoveries, which are recorded in receivables, to present our self-insurance liability on a gross basis. |
(c) | The amount for 2017 reflected a change in estimate to increase our self-insurance liability based on an actuarially determined estimate that we believed had a higher probability of being adequate to cover future payments associated with unresolved claims, including claims incurred but not yet reported. This adjustment was included in selling, general and administrative expenses. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues | $ | 59,418 | $ | 47,431 | $ | 46,389 | |||||
Construction and land costs | (46,288 | ) | (47,459 | ) | (50,566 | ) | |||||
Other expenses, net | (2,674 | ) | (4,749 | ) | (4,465 | ) | |||||
Income (loss) | $ | 10,456 | $ | (4,777 | ) | $ | (8,642 | ) |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Stock options | $ | 917 | $ | 2,592 | $ | 7,076 | |||||
Restricted stock | 4,600 | 4,177 | 2,630 | ||||||||
PSUs | 8,790 | 6,439 | 5,343 | ||||||||
Director awards | 1,554 | 1,425 | 1,801 | ||||||||
Total | $ | 15,861 | $ | 14,633 | $ | 16,850 |
November 30, | |||||||
2018 | 2017 | ||||||
Self-insurance and other legal liabilities | $ | 283,651 | $ | 222,808 | |||
Employee compensation and related benefits | 148,549 | 143,992 | |||||
Warranty liability | 82,490 | 69,798 | |||||
Inventory-related obligations (a) | 40,892 | 30,108 | |||||
Accrued interest payable | 31,180 | 39,518 | |||||
Customer deposits | 19,491 | 16,863 | |||||
Real estate and business taxes | 16,639 | 16,874 | |||||
Other | 43,376 | 35,969 | |||||
Total | $ | 666,268 | $ | 575,930 |
(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, our 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. |
Years Ended November 30, | ||||||
Unobservable Input (a) | 2018 | 2017 | 2016 | |||
Average selling price | $291,300 - $774,100 | $207,100 - $1,576,500 | $216,200 - $977,400 | |||
Deliveries per month | 2 - 6 | 1 - 4 | 1 - 4 | |||
Discount rate | 17% - 19% | 17% - 18% | 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. |
• | Within our homebuilding operations, ASC 606 will impact the classification and timing of recognition in our consolidated financial statements of certain community sales office and other marketing- and model home-related costs, which we currently capitalize to inventories and amortize through construction and land costs with each home delivered in a community. Under ASC 606, these costs will be capitalized to property and equipment and depreciated to selling, general and administrative expenses, or will be expensed as incurred. Upon adopting ASC 606, we will reclassify certain of these community sales office and other marketing- and model home-related costs from inventories to property and equipment in our consolidated financial statements. The change in the classification and timing of these costs will also result in lower construction and land costs, and higher selling, general and administrative expenses, as compared to amounts reported under the existing guidance. In addition, under ASC 606, forfeited customer deposits, which are currently reflected as other income, will be included in revenues. |
• | Within our financial services operations, ASC 606 will impact the timing of recognition of insurance commissions for insurance policy renewals. We currently recognize insurance commissions for renewals as revenue when policies are renewed by homeowners. Under ASC 606, insurance commissions for estimated future policy renewals will be recognized as revenue when the customer executes an initial insurance policy with the insurance carrier. Upon adopting ASC 606, we will record a contract asset for the estimated future renewal commissions related to existing policies as of December 1, 2018. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Summary of cash and cash equivalents at the end of the year: | |||||||||||
Homebuilding | $ | 574,359 | $ | 720,630 | $ | 592,086 | |||||
Financial services | 760 | 231 | 914 | ||||||||
Total | $ | 575,119 | $ | 720,861 | $ | 593,000 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid, net of amounts capitalized | $ | 8,338 | $ | 7,581 | $ | 5,567 | |||||
Income taxes paid | 11,949 | 4,664 | 3,307 | ||||||||
Income taxes refunded | 220 | 202 | 550 | ||||||||
Supplemental disclosure of non-cash activities: | |||||||||||
Reclassification of warranty recoveries to receivables | $ | — | $ | — | $ | 2,151 | |||||
Increase (decrease) in consolidated inventories not owned | 16,098 | (44,833 | ) | (59,413 | ) | ||||||
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture | 17,637 | 6,650 | 4,277 | ||||||||
Inventories acquired through seller financing | 44,586 | 49,658 | 99,108 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of year | $ | 69,798 | $ | 56,682 | $ | 49,085 | |||||
Warranties issued | 37,792 | 38,452 | 30,135 | ||||||||
Payments (a) | (23,300 | ) | (25,336 | ) | (23,190 | ) | |||||
Adjustments | (1,800 | ) | — | 652 | |||||||
Balance at end of year | $ | 82,490 | $ | 69,798 | $ | 56,682 |
(a) | Payments for 2016 included $2.3 million to repair homes affected by water intrusion-related issues in certain of our communities in central and southwest Florida. |
• | 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, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of year | $ | 177,695 | $ | 158,584 | $ | 173,011 | |||||
Self-insurance expense (a) | 20,436 | 20,371 | 24,808 | ||||||||
Payments (b) | (21,290 | ) | (22,933 | ) | (39,235 | ) | |||||
Adjustments (c) | — | 21,673 | — | ||||||||
Balance at end of year | $ | 176,841 | $ | 177,695 | $ | 158,584 |
(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) | Includes net changes in estimated probable insurance and other recoveries, which are recorded in receivables, to present our self-insurance liability on a gross basis. |
(c) | The amount for 2017 reflected a change in estimate to increase our self-insurance liability based on an actuarially determined estimate that we believed had a higher probability of being adequate to cover future payments associated with unresolved claims, including claims incurred but not yet reported. This adjustment was included in selling, general and administrative expenses. |
Postretirement Benefit Plan Adjustments | Total Accumulated Other Comprehensive Loss | ||||
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 | ) | |||
Other comprehensive income before reclassifications | 8,216 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1,892 | ||||
Income tax expense related to items of other comprehensive income | (2,749 | ) | |||
Other comprehensive income, net of tax | 7,359 | ||||
Balance at November 30, 2018 | $ | (9,565 | ) |
Years Ended November 30, | ||||||||||||
Details About Accumulated Other Comprehensive Loss Components | 2018 | 2017 | 2016 | |||||||||
Postretirement benefit plan adjustments | ||||||||||||
Amortization of net actuarial loss | $ | 336 | $ | 142 | $ | 79 | ||||||
Amortization of prior service cost | 1,556 | 1,556 | 1,556 | |||||||||
Total reclassifications (a) | $ | 1,892 | $ | 1,698 | $ | 1,635 |
(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. |
November 30, 2018 | November 30, 2017 | ||||||||||||||
Cash Deposits | Aggregate Purchase Price | Cash Deposits | Aggregate Purchase Price | ||||||||||||
Unconsolidated VIEs | $ | 26,542 | $ | 784,334 | $ | 43,171 | $ | 653,858 | |||||||
Other land option contracts and other similar contracts | 27,288 | 586,904 | 21,531 | 440,229 | |||||||||||
Total | $ | 53,830 | $ | 1,371,238 | $ | 64,702 | $ | 1,094,087 |
November 30, | |||||||
2018 | 2017 | ||||||
Mortgages and land contracts due to land sellers and other loans (at interest rates of 7% at November 30, 2018 and 3% to 6% at November 30, 2017) | $ | 40,038 | $ | 10,203 | |||
7 1/4% Senior notes due June 15, 2018 | — | 299,867 | |||||
4.75% Senior notes due May 15, 2019 | 399,483 | 398,397 | |||||
8.00% Senior notes due March 15, 2020 | 347,790 | 346,238 | |||||
7.00% Senior notes due December 15, 2021 | 447,359 | 446,608 | |||||
7.50% Senior notes due September 15, 2022 | 347,731 | 347,234 | |||||
7.625% Senior notes due May 15, 2023 | 248,074 | 247,726 | |||||
1.375% Convertible senior notes due February 1, 2019 | 229,788 | 228,572 | |||||
Total | $ | 2,060,263 | $ | 2,324,845 |
Redeemable Prior to Maturity | Effective Interest Rate | ||||||||||||
Notes Payable | Principal | Issuance Date | Maturity Date | ||||||||||
4.75% Senior notes | $ | 400,000 | March 25, 2014 | May 15, 2019 | Yes (a) | 5.0 | % | ||||||
8.00% Senior notes | 350,000 | February 7, 2012 | March 15, 2020 | Yes (b) | 8.5 | ||||||||
7.00% Senior notes | 450,000 | October 29, 2013 | December 15, 2021 | Yes (a) | 7.2 | ||||||||
7.50% Senior notes | 350,000 | July 31, 2012 | September 15, 2022 | Yes (b) | 7.7 | ||||||||
7.625% Senior notes | 250,000 | February 17, 2015 | May 15, 2023 | Yes (a) | 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, 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. |
(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 the applicable redemption date. |
(c) | 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. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Stock options | $ | 917 | $ | 2,592 | $ | 7,076 | |||||
Restricted stock | 4,600 | 4,177 | 2,630 | ||||||||
PSUs | 8,790 | 6,439 | 5,343 | ||||||||
Director awards | 1,554 | 1,425 | 1,801 | ||||||||
Total | $ | 15,861 | $ | 14,633 | $ | 16,850 |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | |||||||||||||||
Options outstanding at beginning of year | 9,265,240 | $ | 17.64 | 12,731,545 | $ | 18.95 | 12,635,644 | $ | 19.39 | |||||||||||
Granted | — | — | — | — | 1,012,686 | 16.21 | ||||||||||||||
Exercised | (1,195,926 | ) | 16.73 | (1,650,360 | ) | 16.01 | (551,898 | ) | 13.95 | |||||||||||
Cancelled | (831,770 | ) | 33.05 | (1,815,945 | ) | 28.31 | (364,887 | ) | 34.07 | |||||||||||
Options outstanding at end of year | 7,237,544 | $ | 16.02 | 9,265,240 | $ | 17.64 | 12,731,545 | $ | 18.95 | |||||||||||
Options exercisable at end of year | 6,948,670 | $ | 16.01 | 8,307,632 | $ | 17.86 | 10,506,810 | $ | 19.70 | |||||||||||
Options available for grant at end of year | 6,418,197 | 7,495,792 | 7,034,523 |
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 | 1,201,167 | $ | 6.36 | 2.9 | 1,201,167 | $ | 6.36 | |||||||||||||
$11.06 to $14.62 | 2,048,758 | 12.99 | 4.0 | 2,048,758 | 12.99 | |||||||||||||||
$14.63 to $16.20 | 1,906,964 | 15.14 | 4.1 | 1,906,964 | 15.14 | |||||||||||||||
$16.21 to $28.10 | 1,300,596 | 16.35 | 6.8 | 1,011,722 | 16.39 | |||||||||||||||
$28.11 to $45.68 | 780,059 | 40.46 | 0.8 | 780,059 | 40.46 | |||||||||||||||
$ 6.32 to $45.68 | 7,237,544 | $ | 16.02 | 4.0 | 6,948,670 | $ | 16.01 | 3.8 |
Years Ended November 30, | ||||||||
2018 | 2017 | 2016 | ||||||
Risk-free interest rate | — | — | 1.3 | % | ||||
Expected volatility factor | — | — | 41.3 | % | ||||
Expected dividend yield | — | — | .6 | % | ||||
Expected term | — | — | 5 years |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
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 | 503,926 | $ | 21.69 | 604,619 | $ | 16.24 | 416,977 | $ | 15.88 | |||||||||||
Granted | 303,030 | 23.05 | 321,835 | 24.49 | 453,703 | 15.73 | ||||||||||||||
Vested | (221,951 | ) | 19.79 | (364,670 | ) | 16.09 | (252,854 | ) | 14.78 | |||||||||||
Cancelled | (29,548 | ) | 21.76 | (57,858 | ) | 15.61 | (13,207 | ) | 15.12 | |||||||||||
Outstanding at end of year | 555,457 | $ | 23.19 | 503,926 | $ | 21.69 | 604,619 | $ | 16.24 |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
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 | 925,232 | $ | 20.09 | 809,860 | $ | 17.19 | 820,209 | $ | 15.52 | |||||||||||
Granted | 603,424 | 25.70 | 424,797 | 22.99 | 369,281 | 13.81 | ||||||||||||||
Vested | (437,689 | ) | 31.28 | (278,460 | ) | 16.67 | (374,630 | ) | 10.21 | |||||||||||
Cancelled | — | — | (30,965 | ) | 14.92 | (5,000 | ) | 16.21 | ||||||||||||
Outstanding at end of year | 1,090,967 | $ | 18.70 | 925,232 | $ | 20.09 | 809,860 | $ | 17.19 | |||||||||||
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Numerator: | |||||||||||
Net income | $ | 170,365 | $ | 180,595 | $ | 105,615 | |||||
Less: Distributed earnings allocated to nonvested restricted stock | (51 | ) | (56 | ) | (45 | ) | |||||
Less: Undistributed earnings allocated to nonvested restricted stock | (927 | ) | (1,121 | ) | (508 | ) | |||||
Numerator for basic earnings per share | 169,387 | 179,418 | 105,062 | ||||||||
Effect of dilutive securities: | |||||||||||
Interest expense and amortization of debt issuance costs associated with convertible senior notes, net of taxes | 3,190 | 2,654 | 2,667 | ||||||||
Add: Undistributed earnings allocated to nonvested restricted stock | 927 | 1,121 | 508 | ||||||||
Less: Undistributed earnings reallocated to nonvested restricted stock | (805 | ) | (979 | ) | (453 | ) | |||||
Numerator for diluted earnings per share | $ | 172,699 | $ | 182,214 | $ | 107,784 | |||||
Denominator: | |||||||||||
Weighted average shares outstanding — basic | 87,773 | 85,842 | 85,706 | ||||||||
Effect of dilutive securities: | |||||||||||
Share-based payments | 4,884 | 4,072 | 2,170 | ||||||||
Convertible senior notes | 8,402 | 8,402 | 8,402 | ||||||||
Weighted average shares outstanding — diluted | 101,059 | 98,316 | 96,278 | ||||||||
Basic earnings per share | $ | 1.93 | $ | 2.09 | $ | 1.23 | |||||
Diluted earnings per share | $ | 1.71 | $ | 1.85 | $ | 1.12 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues | $ | 59,418 | $ | 47,431 | $ | 46,389 | |||||
Construction and land costs | (46,288 | ) | (47,459 | ) | (50,566 | ) | |||||
Other expenses, net | (2,674 | ) | (4,749 | ) | (4,465 | ) | |||||
Income (loss) | $ | 10,456 | $ | (4,777 | ) | $ | (8,642 | ) |
November 30, | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash | $ | 18,567 | $ | 21,193 | |||
Receivables | 9 | 688 | |||||
Inventories | 131,074 | 145,519 | |||||
Other assets | 521 | 1,398 | |||||
Total assets | $ | 150,171 | $ | 168,798 | |||
Liabilities and equity | |||||||
Accounts payable and other liabilities | $ | 11,374 | $ | 25,426 | |||
Notes payable (a) | 17,956 | 20,040 | |||||
Equity | 120,841 | 123,332 | |||||
Total liabilities and equity | $ | 150,171 | $ | 168,798 |
(a) | As of November 30, 2017, two of our unconsolidated joint ventures had separate construction loan agreements with different third-party lenders to finance their respective land development activities, with the outstanding debt secured by the corresponding underlying property and related project assets and non-recourse to us. The secured debt of one of these unconsolidated joint ventures was repaid in August 2018 upon maturity. All of the outstanding secured debt at November 30, 2018 is scheduled to mature in February 2020. None of our other unconsolidated joint ventures had outstanding debt at November 30, 2018 or 2017. |
November 30, | ||||||||
2018 | 2017 | |||||||
Number of investments in unconsolidated joint ventures | 6 | 7 | ||||||
Investments in unconsolidated joint ventures | $ | 61,960 | $ | 64,794 | ||||
Number of unconsolidated joint venture lots controlled under land option contracts and other similar contracts | 36 | 377 |
November 30, | ||||||||
2018 | 2017 | |||||||
Number of investments in unconsolidated joint ventures | 6 | 7 | ||||||
Investments in unconsolidated joint ventures | $ | 61,960 | $ | 64,794 | ||||
Number of unconsolidated joint venture lots controlled under land option contracts and other similar contracts | 36 | 377 |
November 30, 2018 | November 30, 2017 | |||||||||||||||||||||||||
Description | Fair Value Hierarchy | Pre-Impairment Value | Inventory Impairment Charges | Fair Value (a) | Pre-Impairment Value | Inventory Impairment Charges | Fair Value (a) | |||||||||||||||||||
Inventories (a) | Level 3 | $ | 70,156 | $ | (26,104 | ) | $ | 44,052 | $ | 58,962 | $ | (20,605 | ) | $ | 38,357 |
(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. |
Years Ended November 30, | ||||||
Unobservable Input (a) | 2018 | 2017 | 2016 | |||
Average selling price | $291,300 - $774,100 | $207,100 - $1,576,500 | $216,200 - $977,400 | |||
Deliveries per month | 2 - 6 | 1 - 4 | 1 - 4 | |||
Discount rate | 17% - 19% | 17% - 18% | 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. |
November 30, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Description | Fair Value Hierarchy | Carrying Value (a) | Estimated Fair Value | Carrying Value (a) | Estimated Fair Value | |||||||||||||
Financial Liabilities: | ||||||||||||||||||
Senior notes | Level 2 | $ | 1,790,437 | $ | 1,853,438 | $ | 2,086,070 | $ | 2,292,250 | |||||||||
Convertible senior notes | Level 2 | 229,788 | 229,425 | 228,572 | 278,300 |
(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. |
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. |
November 30, 2018 | November 30, 2017 | |||||||||||||||||||||||||
Description | Fair Value Hierarchy | Pre-Impairment Value | Inventory Impairment Charges | Fair Value (a) | Pre-Impairment Value | Inventory Impairment Charges | Fair Value (a) | |||||||||||||||||||
Inventories (a) | Level 3 | $ | 70,156 | $ | (26,104 | ) | $ | 44,052 | $ | 58,962 | $ | (20,605 | ) | $ | 38,357 |
(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, | ||||||||||||||||||
2018 | 2017 | |||||||||||||||||
Description | Fair Value Hierarchy | Carrying Value (a) | Estimated Fair Value | Carrying Value (a) | Estimated Fair Value | |||||||||||||
Financial Liabilities: | ||||||||||||||||||
Senior notes | Level 2 | $ | 1,790,437 | $ | 1,853,438 | $ | 2,086,070 | $ | 2,292,250 | |||||||||
Convertible senior notes | Level 2 | 229,788 | 229,425 | 228,572 | 278,300 |
(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. |
Year Ended November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Revenues | $ | — | $ | 4,198,969 | $ | 348,033 | $ | — | $ | 4,547,002 | |||||||||
Homebuilding: | |||||||||||||||||||
Revenues | $ | — | $ | 4,198,969 | $ | 334,826 | $ | — | $ | 4,533,795 | |||||||||
Construction and land costs | — | (3,435,058 | ) | (308,862 | ) | — | (3,743,920 | ) | |||||||||||
Selling, general and administrative expenses | (101,152 | ) | (311,815 | ) | (31,187 | ) | — | (444,154 | ) | ||||||||||
Operating income (loss) | (101,152 | ) | 452,096 | (5,223 | ) | — | 345,721 | ||||||||||||
Interest income | 3,273 | 11 | 230 | — | 3,514 | ||||||||||||||
Interest expense | (141,812 | ) | (2,624 | ) | (5,262 | ) | 149,698 | — | |||||||||||
Intercompany interest | 302,253 | (142,882 | ) | (9,673 | ) | (149,698 | ) | — | |||||||||||
Equity in income of unconsolidated joint ventures | — | 2,066 | — | — | 2,066 | ||||||||||||||
Homebuilding pretax income (loss) | 62,562 | 308,667 | (19,928 | ) | — | 351,301 | |||||||||||||
Financial services pretax income | — | — | 16,664 | — | 16,664 | ||||||||||||||
Total pretax income (loss) | 62,562 | 308,667 | (3,264 | ) | — | 367,965 | |||||||||||||
Income tax expense | (62,100 | ) | (101,200 | ) | (34,300 | ) | — | (197,600 | ) | ||||||||||
Equity in net income of subsidiaries | 169,903 | — | — | (169,903 | ) | — | |||||||||||||
Net income (loss) | $ | 170,365 | $ | 207,467 | $ | (37,564 | ) | $ | (169,903 | ) | $ | 170,365 |
Year Ended November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Revenues | $ | — | $ | 4,034,057 | $ | 334,472 | $ | — | $ | 4,368,529 | |||||||||
Homebuilding: | |||||||||||||||||||
Revenues | $ | — | $ | 4,034,057 | $ | 322,208 | $ | — | $ | 4,356,265 | |||||||||
Construction and land costs | — | (3,342,617 | ) | (303,851 | ) | — | (3,646,468 | ) | |||||||||||
Selling, general and administrative expenses | (91,120 | ) | (298,498 | ) | (36,776 | ) | — | (426,394 | ) | ||||||||||
Operating income (loss) | (91,120 | ) | 392,942 | (18,419 | ) | — | 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 | (118,138 | ) | 22,218 | (170,864 | ) | — | ||||||||||||
Equity in loss of unconsolidated joint ventures | — | (1,407 | ) | (2 | ) | — | (1,409 | ) | |||||||||||
Homebuilding pretax income | 4,794 | 271,770 | 363 | — | 276,927 | ||||||||||||||
Financial services pretax income | — | — | 13,068 | — | 13,068 | ||||||||||||||
Total pretax income | 4,794 | 271,770 | 13,431 | — | 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 | $ | 171,770 | $ | 12,831 | $ | (184,601 | ) | $ | 180,595 |
Year Ended November 30, 2016 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Revenues | $ | — | $ | 3,243,928 | $ | 350,718 | $ | — | $ | 3,594,646 | |||||||||
Homebuilding: | |||||||||||||||||||
Revenues | $ | — | $ | 3,243,928 | $ | 339,015 | $ | — | $ | 3,582,943 | |||||||||
Construction and land costs | — | (2,706,402 | ) | (334,699 | ) | — | (3,041,101 | ) | |||||||||||
Selling, general and administrative expenses | (91,859 | ) | (254,210 | ) | (43,372 | ) | — | (389,441 | ) | ||||||||||
Operating income (loss) | (91,859 | ) | 283,316 | (39,056 | ) | — | 152,401 | ||||||||||||
Interest income | 470 | 55 | 4 | — | 529 | ||||||||||||||
Interest expense | (177,329 | ) | (3,958 | ) | (3,946 | ) | 179,333 | (5,900 | ) | ||||||||||
Intercompany interest | 301,432 | (105,865 | ) | (16,234 | ) | (179,333 | ) | — | |||||||||||
Equity in loss of unconsolidated joint ventures | — | (2,181 | ) | — | — | (2,181 | ) | ||||||||||||
Homebuilding pretax income (loss) | 32,714 | 171,367 | (59,232 | ) | — | 144,849 | |||||||||||||
Financial services pretax income | — | — | 4,466 | — | 4,466 | ||||||||||||||
Total pretax income (loss) | 32,714 | 171,367 | (54,766 | ) | — | 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 | $ | 118,667 | $ | (62,966 | ) | $ | (55,701 | ) | $ | 105,615 |
Year Ended November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net income (loss) | $ | 170,365 | $ | 207,467 | $ | (37,564 | ) | $ | (169,903 | ) | $ | 170,365 | |||||||
Other comprehensive income: | |||||||||||||||||||
Postretirement benefit plan adjustments | 10,108 | — | — | — | 10,108 | ||||||||||||||
Other comprehensive income before tax | 10,108 | — | — | — | 10,108 | ||||||||||||||
Income tax expense related to items of other comprehensive income | (2,749 | ) | — | — | — | (2,749 | ) | ||||||||||||
Other comprehensive income, net of tax | 7,359 | — | — | — | 7,359 | ||||||||||||||
Comprehensive income (loss) | $ | 177,724 | $ | 207,467 | $ | (37,564 | ) | $ | (169,903 | ) | $ | 177,724 | |||||||
Year Ended November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net income | $ | 180,595 | $ | 171,770 | $ | 12,831 | $ | (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 | $ | 171,770 | $ | 12,831 | $ | (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 | $ | 118,667 | $ | (62,966 | ) | $ | (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 | $ | 118,667 | $ | (62,966 | ) | $ | (55,701 | ) | $ | 106,877 |
November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Assets | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Cash and cash equivalents | $ | 429,977 | $ | 114,269 | $ | 30,113 | $ | — | $ | 574,359 | |||||||||
Receivables | 5,135 | 198,465 | 89,230 | — | 292,830 | ||||||||||||||
Inventories | — | 3,314,386 | 268,453 | — | 3,582,839 | ||||||||||||||
Investments in unconsolidated joint ventures | — | 61,960 | — | — | 61,960 | ||||||||||||||
Deferred tax assets, net | 84,564 | 303,669 | 53,587 | — | 441,820 | ||||||||||||||
Other assets | 95,738 | 9,530 | 2,115 | — | 107,383 | ||||||||||||||
615,414 | 4,002,279 | 443,498 | — | 5,061,191 | |||||||||||||||
Financial services | — | — | 12,380 | — | 12,380 | ||||||||||||||
Intercompany receivables | 3,569,422 | — | 158,760 | (3,728,182 | ) | — | |||||||||||||
Investments in subsidiaries | 67,657 | — | — | (67,657 | ) | — | |||||||||||||
Total assets | $ | 4,252,493 | $ | 4,002,279 | $ | 614,638 | $ | (3,795,839 | ) | $ | 5,073,571 | ||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 126,176 | $ | 584,321 | $ | 213,816 | $ | — | $ | 924,313 | |||||||||
Notes payable | 1,995,115 | 40,038 | 25,110 | — | 2,060,263 | ||||||||||||||
2,121,291 | 624,359 | 238,926 | — | 2,984,576 | |||||||||||||||
Financial services | — | — | 1,495 | — | 1,495 | ||||||||||||||
Intercompany payables | 43,702 | 3,377,920 | 306,560 | (3,728,182 | ) | — | |||||||||||||
Stockholders’ equity | 2,087,500 | — | 67,657 | (67,657 | ) | 2,087,500 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 4,252,493 | $ | 4,002,279 | $ | 614,638 | $ | (3,795,839 | ) | $ | 5,073,571 |
November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Assets | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Cash and cash equivalents | $ | 575,193 | $ | 104,120 | $ | 41,317 | $ | — | $ | 720,630 | |||||||||
Receivables | 24,815 | 145,067 | 74,331 | — | 244,213 | ||||||||||||||
Inventories | — | 2,959,606 | 303,780 | — | 3,263,386 | ||||||||||||||
Investments in unconsolidated joint ventures | — | 64,794 | — | — | 64,794 | ||||||||||||||
Deferred tax assets, net | 250,747 | 243,523 | 139,367 | — | 633,637 | ||||||||||||||
Other assets | 91,592 | 8,954 | 1,952 | — | 102,498 | ||||||||||||||
942,347 | 3,526,064 | 560,747 | — | 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 | $ | 3,526,064 | $ | 681,096 | $ | (3,572,005 | ) | $ | 5,041,515 | ||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 163,984 | $ | 374,051 | $ | 251,358 | $ | — | $ | 789,393 | |||||||||
Notes payable | 2,289,532 | 9,283 | 26,030 | — | 2,324,845 | ||||||||||||||
2,453,516 | 383,334 | 277,388 | — | 3,114,238 | |||||||||||||||
Financial services | — | — | 966 | — | 966 | ||||||||||||||
Intercompany payables | 26,533 | 3,142,730 | 352,966 | (3,522,229 | ) | — | |||||||||||||
Stockholders’ equity | 1,926,311 | — | 49,776 | (49,776 | ) | 1,926,311 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 4,406,360 | $ | 3,526,064 | $ | 681,096 | $ | (3,572,005 | ) | $ | 5,041,515 |
Year Ended November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 236,892 | $ | 9,668 | $ | (25,048 | ) | $ | — | $ | 221,512 | ||||||||
Cash flows from investing activities: | |||||||||||||||||||
Contributions to unconsolidated joint ventures | — | (22,672 | ) | 1 | — | (22,671 | ) | ||||||||||||
Return of investments in unconsolidated joint ventures | — | 9,934 | — | — | 9,934 | ||||||||||||||
Purchases of property and equipment, net | (6,584 | ) | (674 | ) | (112 | ) | — | (7,370 | ) | ||||||||||
Intercompany | (43,128 | ) | — | — | 43,128 | — | |||||||||||||
Net cash used in investing activities | (49,712 | ) | (13,412 | ) | (111 | ) | 43,128 | (20,107 | ) | ||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repayment of senior notes | (300,000 | ) | — | — | — | (300,000 | ) | ||||||||||||
Borrowings under revolving credit facility | 70,000 | — | — | — | 70,000 | ||||||||||||||
Repayments under revolving credit facility | (70,000 | ) | — | — | — | (70,000 | ) | ||||||||||||
Payments on mortgages and land contracts due to land sellers and other loans | — | (13,831 | ) | (920 | ) | — | (14,751 | ) | |||||||||||
Issuance of common stock under employee stock plans | 20,011 | — | — | — | 20,011 | ||||||||||||||
Stock repurchases | (35,039 | ) | — | — | — | (35,039 | ) | ||||||||||||
Tax payments associated with stock-based compensation awards | (8,476 | ) | — | — | — | (8,476 | ) | ||||||||||||
Payments of cash dividends | (8,892 | ) | — | — | — | (8,892 | ) | ||||||||||||
Intercompany | — | 27,724 | 15,404 | (43,128 | ) | — | |||||||||||||
Net cash provided by (used in) financing activities | (332,396 | ) | 13,893 | 14,484 | (43,128 | ) | (347,147 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | (145,216 | ) | 10,149 | (10,675 | ) | — | (145,742 | ) | |||||||||||
Cash and cash equivalents at beginning of year | 575,193 | 104,120 | 41,548 | — | 720,861 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 429,977 | $ | 114,269 | $ | 30,873 | $ | — | $ | 575,119 |
Year Ended November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net cash provided by operating activities | $ | 70,683 | $ | 366,005 | $ | 76,531 | $ | — | $ | 513,219 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Contributions to unconsolidated joint ventures | — | (13,569 | ) | (5,125 | ) | — | (18,694 | ) | |||||||||||
Return of investments in unconsolidated joint ventures | — | 4,119 | 6,916 | — | 11,035 | ||||||||||||||
Purchases of property and equipment, net | (7,215 | ) | (809 | ) | (61 | ) | — | (8,085 | ) | ||||||||||
Intercompany | 311,857 | — | — | (311,857 | ) | — | |||||||||||||
Net cash provided by (used in) investing activities | 304,642 | (10,259 | ) | 1,730 | (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 | ||||||||||||||
Tax payments associated with stock-based compensation awards | (6,673 | ) | — | — | — | (6,673 | ) | ||||||||||||
Payments of cash dividends | (8,642 | ) | — | — | — | (8,642 | ) | ||||||||||||
Intercompany | — | (251,147 | ) | (60,710 | ) | 311,857 | — | ||||||||||||
Net cash used in financing activities | (263,232 | ) | (357,529 | ) | (60,710 | ) | 311,857 | (369,614 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | 112,093 | (1,783 | ) | 17,551 | — | 127,861 | |||||||||||||
Cash and cash equivalents at beginning of year | 463,100 | 105,903 | 23,997 | — | 593,000 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 575,193 | $ | 104,120 | $ | 41,548 | $ | — | $ | 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 | ) | $ | 183,466 | $ | 45,466 | $ | — | $ | 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 | ) | (579 | ) | (153 | ) | — | (4,784 | ) | ||||||||||
Intercompany | 144,651 | — | — | (144,651 | ) | — | |||||||||||||
Net cash provided by (used in) investing activities | 140,599 | (1,124 | ) | (903 | ) | (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 | ||||||||||||||
Stock repurchases | (85,938 | ) | — | — | — | (85,938 | ) | ||||||||||||
Tax payments associated with stock-based compensation awards | (2,421 | ) | — | — | — | (2,421 | ) | ||||||||||||
Payments of cash dividends | (8,586 | ) | — | — | — | (8,586 | ) | ||||||||||||
Intercompany | — | (108,039 | ) | (36,612 | ) | 144,651 | — | ||||||||||||
Net cash used in financing activities | (82,072 | ) | (175,884 | ) | (36,612 | ) | 144,651 | (149,917 | ) | ||||||||||
Net increase in cash and cash equivalents | 18,250 | 6,458 | 7,951 | — | 32,659 | ||||||||||||||
Cash and cash equivalents at beginning of year | 444,850 | 99,445 | 16,046 | — | 560,341 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 463,100 | $ | 105,903 | $ | 23,997 | $ | — | $ | 593,000 |
• | We recorded a non-cash charge of $106.7 million in income tax expense due to the accounting re-measurement of our deferred tax assets based on the lower federal corporate income tax rate under the TCJA. |
• | We have AMT credit carryforwards that do not expire and can be used to offset regular income taxes in future years. Under the TCJA, we may claim a refund of 50% of our remaining AMT credits in 2019, 2020, and 2021 to the extent the credits exceed regular tax for any such year. Any AMT credits remaining after our fiscal year ending November 30, 2021 will be refunded in 2022. We currently estimate our refund will total approximately $50.0 million. As the refund is subject to a sequestration reduction rate of approximately 6.6%, we established a federal deferred tax valuation allowance of $3.3 million for 2018. Our accounting policy regarding the balance sheet presentation of the AMT credits is to maintain the balance in deferred tax assets until a tax return is filed claiming a refund of a portion of the credit, at which time such amount will be presented in receivables. |
• | We recorded a non-cash charge of $2.5 million for disallowed executive compensation due to the TCJA’s eliminating the deductibility of certain performance-based compensation. The TCJA also modified who is a covered employee with respect to the deduction limitation, and provided a transition rule that would preserve the deductibility of certain 2018 performance-based compensation payable under written binding contracts in place prior to November 2, 2017 that have not been modified in any material respect. |
Federal | State | Total | |||||||||
2018 | |||||||||||
Current | $ | (3,600 | ) | $ | (4,800 | ) | $ | (8,400 | ) | ||
Deferred | (170,700 | ) | (18,500 | ) | (189,200 | ) | |||||
Income tax expense | $ | (174,300 | ) | $ | (23,300 | ) | $ | (197,600 | ) | ||
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 | ) |
November 30, | |||||||
2018 | 2017 | ||||||
Deferred tax liabilities: | |||||||
Capitalized expenses | $ | 51,660 | $ | 98,147 | |||
State taxes | 31,246 | 59,174 | |||||
Other | 225 | 313 | |||||
Total | 83,131 | 157,634 | |||||
Deferred tax assets: | |||||||
NOLs from 2006 through 2018 | 121,432 | 236,273 | |||||
Tax credits | 231,100 | 208,841 | |||||
Inventory impairment and land option contract abandonment charges | 67,416 | 139,737 | |||||
Employee benefits | 45,802 | 100,200 | |||||
Warranty, legal and other accruals | 43,213 | 60,238 | |||||
Capitalized expenses | 27,894 | 39,195 | |||||
Partnerships and joint ventures | 6,368 | 14,784 | |||||
Depreciation and amortization | 1,869 | 7,333 | |||||
Other | 3,457 | 8,270 | |||||
Total | 548,551 | 814,871 | |||||
Valuation allowance | (23,600 | ) | (23,600 | ) | |||
Total | 524,951 | 791,271 | |||||
Deferred tax assets, net | $ | 441,820 | $ | 633,637 |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
$ | % | $ | % | $ | % | |||||||||||||||
Income tax expense computed at statutory rate | $ | (81,689 | ) | (22.2 | )% | $ | (101,499 | ) | (35.0 | )% | $ | (52,260 | ) | (35.0 | )% | |||||
Tax credits | 14,177 | 3.9 | 6,227 | 2.2 | 4,447 | 3.0 | ||||||||||||||
Valuation allowance for deferred tax assets | 2,000 | .5 | 1,200 | .4 | 12,982 | 8.7 | ||||||||||||||
Depreciation and amortization | 1,223 | .3 | 362 | .1 | 1,842 | 1.2 | ||||||||||||||
State taxes, net of federal income tax benefit | (20,155 | ) | (5.5 | ) | (14,450 | ) | (4.9 | ) | (7,511 | ) | (5.0 | ) | ||||||||
TCJA adjustment | (112,458 | ) | (30.5 | ) | — | — | — | — | ||||||||||||
NOL reconciliation | — | — | (2,210 | ) | (.8 | ) | (3,691 | ) | (2.5 | ) | ||||||||||
Other, net | (698 | ) | (.2 | ) | 970 | .3 | 491 | .3 | ||||||||||||
Income tax expense | $ | (197,600 | ) | (53.7 | )% | $ | (109,400 | ) | (37.7 | )% | $ | (43,700 | ) | (29.3 | )% |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of year | $ | 56 | $ | 56 | $ | 56 | |||||
Reductions due to lapse of statute of limitations | (56 | ) | — | — | |||||||
Balance at end of year | $ | — | $ | 56 | $ | 56 |
November 30, | |||||||
2018 | 2017 | ||||||
Homes under construction | $ | 1,125,152 | $ | 1,236,848 | |||
Land under development | 2,219,936 | 1,651,339 | |||||
Land held for future development or sale (a) | 237,751 | 375,199 | |||||
Total | $ | 3,582,839 | $ | 3,263,386 |
(a) | Land held for sale totaled $9.8 million at November 30, 2018 and $21.8 million at November 30, 2017. |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Capitalized interest at beginning of year | $ | 262,191 | $ | 306,723 | $ | 288,442 | |||||
Interest incurred (a) | 149,698 | 177,171 | 185,466 | ||||||||
Interest expensed (a) | — | (6,307 | ) | (5,900 | ) | ||||||
Interest amortized to construction and land costs (b) | (202,760 | ) | (215,396 | ) | (161,285 | ) | |||||
Capitalized interest at end of year (c) | $ | 209,129 | $ | 262,191 | $ | 306,723 |
(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, 2018, 2017 and 2016 included $4.8 million, $4.9 million and $.7 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. |
• | Within our homebuilding operations, ASC 606 will impact the classification and timing of recognition in our consolidated financial statements of certain community sales office and other marketing- and model home-related costs, which we currently capitalize to inventories and amortize through construction and land costs with each home delivered in a community. Under ASC 606, these costs will be capitalized to property and equipment and depreciated to selling, general and administrative expenses, or will be expensed as incurred. Upon adopting ASC 606, we will reclassify certain of these community sales office and other marketing- and model home-related costs from inventories to property and equipment in our consolidated financial statements. The change in the classification and timing of these costs will also result in lower construction and land costs, and higher selling, general and administrative expenses, as compared to amounts reported under the existing guidance. In addition, under ASC 606, forfeited customer deposits, which are currently reflected as other income, will be included in revenues. |
• | Within our financial services operations, ASC 606 will impact the timing of recognition of insurance commissions for insurance policy renewals. We currently recognize insurance commissions for renewals as revenue when policies are renewed by homeowners. Under ASC 606, insurance commissions for estimated future policy renewals will be recognized as revenue when the customer executes an initial insurance policy with the insurance carrier. Upon adopting ASC 606, we will record a contract asset for the estimated future renewal commissions related to existing policies as of December 1, 2018. |
November 30, | |||||||
2018 | 2017 | ||||||
Cash surrender value of corporate-owned life insurance contracts | $ | 73,721 | $ | 75,236 | |||
Property and equipment, net | 24,283 | 19,521 | |||||
Prepaid expenses | 7,647 | 5,360 | |||||
Debt issuance costs associated with unsecured revolving credit facility | 1,732 | 2,381 | |||||
Total | $ | 107,383 | $ | 102,498 |
Years Ended November 30, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Interest cost | $ | 2,252 | $ | 2,274 | $ | 2,285 | ||||||
Amortization of prior service cost | 1,556 | 1,556 | 1,556 | |||||||||
Service cost | 1,085 | 1,046 | 1,045 | |||||||||
Amortization of net actuarial loss | 336 | 142 | 79 | |||||||||
Total | $ | 5,229 | $ | 5,018 | $ | 4,965 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2018 | |||||||||||||||
Revenues | $ | 871,623 | $ | 1,101,423 | $ | 1,225,347 | $ | 1,348,609 | |||||||
Gross profits | 141,192 | 189,222 | 222,893 | 245,931 | |||||||||||
Inventory impairment and land option contract abandonment charges | 4,985 | 6,526 | 8,414 | 9,069 | |||||||||||
Pretax income | 46,045 | 78,308 | 114,676 | 128,936 | |||||||||||
Net income (loss) (a) | (71,255 | ) | 57,308 | 87,476 | 96,836 | ||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | (.82 | ) | $ | .65 | $ | .99 | $ | 1.09 | ||||||
Diluted | (.82 | ) | .57 | .87 | .96 | ||||||||||
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 |
(a) | Net income (loss) included non-cash charges to income tax expense of $111.2 million in the first quarter and $1.3 million in the fourth quarter for TCJA-related impacts. |
November 30, | |||||||
2018 | 2017 | ||||||
Recoveries related to self-insurance and other legal claims | $ | 138,261 | $ | 91,763 | |||
Due from utility companies, improvement districts and municipalities (a) | 113,434 | 113,744 | |||||
Refundable deposits and bonds | 14,115 | 13,829 | |||||
Recoveries related to warranty and other claims | 4,750 | 4,073 | |||||
Other | 33,775 | 33,797 | |||||
Subtotal | 304,335 | 257,206 | |||||
Allowance for doubtful accounts | (11,505 | ) | (12,993 | ) | |||
Total | $ | 292,830 | $ | 244,213 |
(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. |
Years Ended November 30, | ||||||||||||
Details About Accumulated Other Comprehensive Loss Components | 2018 | 2017 | 2016 | |||||||||
Postretirement benefit plan adjustments | ||||||||||||
Amortization of net actuarial loss | $ | 336 | $ | 142 | $ | 79 | ||||||
Amortization of prior service cost | 1,556 | 1,556 | 1,556 | |||||||||
Total reclassifications (a) | $ | 1,892 | $ | 1,698 | $ | 1,635 |
(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. |
November 30, | |||||||
2018 | 2017 | ||||||
Recoveries related to self-insurance and other legal claims | $ | 138,261 | $ | 91,763 | |||
Due from utility companies, improvement districts and municipalities (a) | 113,434 | 113,744 | |||||
Refundable deposits and bonds | 14,115 | 13,829 | |||||
Recoveries related to warranty and other claims | 4,750 | 4,073 | |||||
Other | 33,775 | 33,797 | |||||
Subtotal | 304,335 | 257,206 | |||||
Allowance for doubtful accounts | (11,505 | ) | (12,993 | ) | |||
Total | $ | 292,830 | $ | 244,213 |
(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. |
November 30, | |||||||
2018 | 2017 | ||||||
Self-insurance and other legal liabilities | $ | 283,651 | $ | 222,808 | |||
Employee compensation and related benefits | 148,549 | 143,992 | |||||
Warranty liability | 82,490 | 69,798 | |||||
Inventory-related obligations (a) | 40,892 | 30,108 | |||||
Accrued interest payable | 31,180 | 39,518 | |||||
Customer deposits | 19,491 | 16,863 | |||||
Real estate and business taxes | 16,639 | 16,874 | |||||
Other | 43,376 | 35,969 | |||||
Total | $ | 666,268 | $ | 575,930 |
(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, our 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. |
Postretirement Benefit Plan Adjustments | Total Accumulated Other Comprehensive Loss | ||||
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 | ) | |||
Other comprehensive income before reclassifications | 8,216 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1,892 | ||||
Income tax expense related to items of other comprehensive income | (2,749 | ) | |||
Other comprehensive income, net of tax | 7,359 | ||||
Balance at November 30, 2018 | $ | (9,565 | ) |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Summary of cash and cash equivalents at the end of the year: | |||||||||||
Homebuilding | $ | 574,359 | $ | 720,630 | $ | 592,086 | |||||
Financial services | 760 | 231 | 914 | ||||||||
Total | $ | 575,119 | $ | 720,861 | $ | 593,000 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Interest paid, net of amounts capitalized | $ | 8,338 | $ | 7,581 | $ | 5,567 | |||||
Income taxes paid | 11,949 | 4,664 | 3,307 | ||||||||
Income taxes refunded | 220 | 202 | 550 | ||||||||
Supplemental disclosure of non-cash activities: | |||||||||||
Reclassification of warranty recoveries to receivables | $ | — | $ | — | $ | 2,151 | |||||
Increase (decrease) in consolidated inventories not owned | 16,098 | (44,833 | ) | (59,413 | ) | ||||||
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture | 17,637 | 6,650 | 4,277 | ||||||||
Inventories acquired through seller financing | 44,586 | 49,658 | 99,108 |
Federal | State | Total | |||||||||
2018 | |||||||||||
Current | $ | (3,600 | ) | $ | (4,800 | ) | $ | (8,400 | ) | ||
Deferred | (170,700 | ) | (18,500 | ) | (189,200 | ) | |||||
Income tax expense | $ | (174,300 | ) | $ | (23,300 | ) | $ | (197,600 | ) | ||
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 | ) |
Year Ended November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net income (loss) | $ | 170,365 | $ | 207,467 | $ | (37,564 | ) | $ | (169,903 | ) | $ | 170,365 | |||||||
Other comprehensive income: | |||||||||||||||||||
Postretirement benefit plan adjustments | 10,108 | — | — | — | 10,108 | ||||||||||||||
Other comprehensive income before tax | 10,108 | — | — | — | 10,108 | ||||||||||||||
Income tax expense related to items of other comprehensive income | (2,749 | ) | — | — | — | (2,749 | ) | ||||||||||||
Other comprehensive income, net of tax | 7,359 | — | — | — | 7,359 | ||||||||||||||
Comprehensive income (loss) | $ | 177,724 | $ | 207,467 | $ | (37,564 | ) | $ | (169,903 | ) | $ | 177,724 | |||||||
Year Ended November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net income | $ | 180,595 | $ | 171,770 | $ | 12,831 | $ | (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 | $ | 171,770 | $ | 12,831 | $ | (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 | $ | 118,667 | $ | (62,966 | ) | $ | (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 | $ | 118,667 | $ | (62,966 | ) | $ | (55,701 | ) | $ | 106,877 |
November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Assets | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Cash and cash equivalents | $ | 429,977 | $ | 114,269 | $ | 30,113 | $ | — | $ | 574,359 | |||||||||
Receivables | 5,135 | 198,465 | 89,230 | — | 292,830 | ||||||||||||||
Inventories | — | 3,314,386 | 268,453 | — | 3,582,839 | ||||||||||||||
Investments in unconsolidated joint ventures | — | 61,960 | — | — | 61,960 | ||||||||||||||
Deferred tax assets, net | 84,564 | 303,669 | 53,587 | — | 441,820 | ||||||||||||||
Other assets | 95,738 | 9,530 | 2,115 | — | 107,383 | ||||||||||||||
615,414 | 4,002,279 | 443,498 | — | 5,061,191 | |||||||||||||||
Financial services | — | — | 12,380 | — | 12,380 | ||||||||||||||
Intercompany receivables | 3,569,422 | — | 158,760 | (3,728,182 | ) | — | |||||||||||||
Investments in subsidiaries | 67,657 | — | — | (67,657 | ) | — | |||||||||||||
Total assets | $ | 4,252,493 | $ | 4,002,279 | $ | 614,638 | $ | (3,795,839 | ) | $ | 5,073,571 | ||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 126,176 | $ | 584,321 | $ | 213,816 | $ | — | $ | 924,313 | |||||||||
Notes payable | 1,995,115 | 40,038 | 25,110 | — | 2,060,263 | ||||||||||||||
2,121,291 | 624,359 | 238,926 | — | 2,984,576 | |||||||||||||||
Financial services | — | — | 1,495 | — | 1,495 | ||||||||||||||
Intercompany payables | 43,702 | 3,377,920 | 306,560 | (3,728,182 | ) | — | |||||||||||||
Stockholders’ equity | 2,087,500 | — | 67,657 | (67,657 | ) | 2,087,500 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 4,252,493 | $ | 4,002,279 | $ | 614,638 | $ | (3,795,839 | ) | $ | 5,073,571 |
November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Assets | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Cash and cash equivalents | $ | 575,193 | $ | 104,120 | $ | 41,317 | $ | — | $ | 720,630 | |||||||||
Receivables | 24,815 | 145,067 | 74,331 | — | 244,213 | ||||||||||||||
Inventories | — | 2,959,606 | 303,780 | — | 3,263,386 | ||||||||||||||
Investments in unconsolidated joint ventures | — | 64,794 | — | — | 64,794 | ||||||||||||||
Deferred tax assets, net | 250,747 | 243,523 | 139,367 | — | 633,637 | ||||||||||||||
Other assets | 91,592 | 8,954 | 1,952 | — | 102,498 | ||||||||||||||
942,347 | 3,526,064 | 560,747 | — | 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 | $ | 3,526,064 | $ | 681,096 | $ | (3,572,005 | ) | $ | 5,041,515 | ||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||
Homebuilding: | |||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 163,984 | $ | 374,051 | $ | 251,358 | $ | — | $ | 789,393 | |||||||||
Notes payable | 2,289,532 | 9,283 | 26,030 | — | 2,324,845 | ||||||||||||||
2,453,516 | 383,334 | 277,388 | — | 3,114,238 | |||||||||||||||
Financial services | — | — | 966 | — | 966 | ||||||||||||||
Intercompany payables | 26,533 | 3,142,730 | 352,966 | (3,522,229 | ) | — | |||||||||||||
Stockholders’ equity | 1,926,311 | — | 49,776 | (49,776 | ) | 1,926,311 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 4,406,360 | $ | 3,526,064 | $ | 681,096 | $ | (3,572,005 | ) | $ | 5,041,515 |
Year Ended November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 236,892 | $ | 9,668 | $ | (25,048 | ) | $ | — | $ | 221,512 | ||||||||
Cash flows from investing activities: | |||||||||||||||||||
Contributions to unconsolidated joint ventures | — | (22,672 | ) | 1 | — | (22,671 | ) | ||||||||||||
Return of investments in unconsolidated joint ventures | — | 9,934 | — | — | 9,934 | ||||||||||||||
Purchases of property and equipment, net | (6,584 | ) | (674 | ) | (112 | ) | — | (7,370 | ) | ||||||||||
Intercompany | (43,128 | ) | — | — | 43,128 | — | |||||||||||||
Net cash used in investing activities | (49,712 | ) | (13,412 | ) | (111 | ) | 43,128 | (20,107 | ) | ||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repayment of senior notes | (300,000 | ) | — | — | — | (300,000 | ) | ||||||||||||
Borrowings under revolving credit facility | 70,000 | — | — | — | 70,000 | ||||||||||||||
Repayments under revolving credit facility | (70,000 | ) | — | — | — | (70,000 | ) | ||||||||||||
Payments on mortgages and land contracts due to land sellers and other loans | — | (13,831 | ) | (920 | ) | — | (14,751 | ) | |||||||||||
Issuance of common stock under employee stock plans | 20,011 | — | — | — | 20,011 | ||||||||||||||
Stock repurchases | (35,039 | ) | — | — | — | (35,039 | ) | ||||||||||||
Tax payments associated with stock-based compensation awards | (8,476 | ) | — | — | — | (8,476 | ) | ||||||||||||
Payments of cash dividends | (8,892 | ) | — | — | — | (8,892 | ) | ||||||||||||
Intercompany | — | 27,724 | 15,404 | (43,128 | ) | — | |||||||||||||
Net cash provided by (used in) financing activities | (332,396 | ) | 13,893 | 14,484 | (43,128 | ) | (347,147 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents | (145,216 | ) | 10,149 | (10,675 | ) | — | (145,742 | ) | |||||||||||
Cash and cash equivalents at beginning of year | 575,193 | 104,120 | 41,548 | — | 720,861 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 429,977 | $ | 114,269 | $ | 30,873 | $ | — | $ | 575,119 |
Year Ended November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Net cash provided by operating activities | $ | 70,683 | $ | 366,005 | $ | 76,531 | $ | — | $ | 513,219 | |||||||||
Cash flows from investing activities: | |||||||||||||||||||
Contributions to unconsolidated joint ventures | — | (13,569 | ) | (5,125 | ) | — | (18,694 | ) | |||||||||||
Return of investments in unconsolidated joint ventures | — | 4,119 | 6,916 | — | 11,035 | ||||||||||||||
Purchases of property and equipment, net | (7,215 | ) | (809 | ) | (61 | ) | — | (8,085 | ) | ||||||||||
Intercompany | 311,857 | — | — | (311,857 | ) | — | |||||||||||||
Net cash provided by (used in) investing activities | 304,642 | (10,259 | ) | 1,730 | (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 | ||||||||||||||
Tax payments associated with stock-based compensation awards | (6,673 | ) | — | — | — | (6,673 | ) | ||||||||||||
Payments of cash dividends | (8,642 | ) | — | — | — | (8,642 | ) | ||||||||||||
Intercompany | — | (251,147 | ) | (60,710 | ) | 311,857 | — | ||||||||||||
Net cash used in financing activities | (263,232 | ) | (357,529 | ) | (60,710 | ) | 311,857 | (369,614 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | 112,093 | (1,783 | ) | 17,551 | — | 127,861 | |||||||||||||
Cash and cash equivalents at beginning of year | 463,100 | 105,903 | 23,997 | — | 593,000 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 575,193 | $ | 104,120 | $ | 41,548 | $ | — | $ | 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 | ) | $ | 183,466 | $ | 45,466 | $ | — | $ | 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 | ) | (579 | ) | (153 | ) | — | (4,784 | ) | ||||||||||
Intercompany | 144,651 | — | — | (144,651 | ) | — | |||||||||||||
Net cash provided by (used in) investing activities | 140,599 | (1,124 | ) | (903 | ) | (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 | ||||||||||||||
Stock repurchases | (85,938 | ) | — | — | — | (85,938 | ) | ||||||||||||
Tax payments associated with stock-based compensation awards | (2,421 | ) | — | — | — | (2,421 | ) | ||||||||||||
Payments of cash dividends | (8,586 | ) | — | — | — | (8,586 | ) | ||||||||||||
Intercompany | — | (108,039 | ) | (36,612 | ) | 144,651 | — | ||||||||||||
Net cash used in financing activities | (82,072 | ) | (175,884 | ) | (36,612 | ) | 144,651 | (149,917 | ) | ||||||||||
Net increase in cash and cash equivalents | 18,250 | 6,458 | 7,951 | — | 32,659 | ||||||||||||||
Cash and cash equivalents at beginning of year | 444,850 | 99,445 | 16,046 | — | 560,341 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 463,100 | $ | 105,903 | $ | 23,997 | $ | — | $ | 593,000 |
Year Ended November 30, 2018 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Revenues | $ | — | $ | 4,198,969 | $ | 348,033 | $ | — | $ | 4,547,002 | |||||||||
Homebuilding: | |||||||||||||||||||
Revenues | $ | — | $ | 4,198,969 | $ | 334,826 | $ | — | $ | 4,533,795 | |||||||||
Construction and land costs | — | (3,435,058 | ) | (308,862 | ) | — | (3,743,920 | ) | |||||||||||
Selling, general and administrative expenses | (101,152 | ) | (311,815 | ) | (31,187 | ) | — | (444,154 | ) | ||||||||||
Operating income (loss) | (101,152 | ) | 452,096 | (5,223 | ) | — | 345,721 | ||||||||||||
Interest income | 3,273 | 11 | 230 | — | 3,514 | ||||||||||||||
Interest expense | (141,812 | ) | (2,624 | ) | (5,262 | ) | 149,698 | — | |||||||||||
Intercompany interest | 302,253 | (142,882 | ) | (9,673 | ) | (149,698 | ) | — | |||||||||||
Equity in income of unconsolidated joint ventures | — | 2,066 | — | — | 2,066 | ||||||||||||||
Homebuilding pretax income (loss) | 62,562 | 308,667 | (19,928 | ) | — | 351,301 | |||||||||||||
Financial services pretax income | — | — | 16,664 | — | 16,664 | ||||||||||||||
Total pretax income (loss) | 62,562 | 308,667 | (3,264 | ) | — | 367,965 | |||||||||||||
Income tax expense | (62,100 | ) | (101,200 | ) | (34,300 | ) | — | (197,600 | ) | ||||||||||
Equity in net income of subsidiaries | 169,903 | — | — | (169,903 | ) | — | |||||||||||||
Net income (loss) | $ | 170,365 | $ | 207,467 | $ | (37,564 | ) | $ | (169,903 | ) | $ | 170,365 |
Year Ended November 30, 2017 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Revenues | $ | — | $ | 4,034,057 | $ | 334,472 | $ | — | $ | 4,368,529 | |||||||||
Homebuilding: | |||||||||||||||||||
Revenues | $ | — | $ | 4,034,057 | $ | 322,208 | $ | — | $ | 4,356,265 | |||||||||
Construction and land costs | — | (3,342,617 | ) | (303,851 | ) | — | (3,646,468 | ) | |||||||||||
Selling, general and administrative expenses | (91,120 | ) | (298,498 | ) | (36,776 | ) | — | (426,394 | ) | ||||||||||
Operating income (loss) | (91,120 | ) | 392,942 | (18,419 | ) | — | 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 | (118,138 | ) | 22,218 | (170,864 | ) | — | ||||||||||||
Equity in loss of unconsolidated joint ventures | — | (1,407 | ) | (2 | ) | — | (1,409 | ) | |||||||||||
Homebuilding pretax income | 4,794 | 271,770 | 363 | — | 276,927 | ||||||||||||||
Financial services pretax income | — | — | 13,068 | — | 13,068 | ||||||||||||||
Total pretax income | 4,794 | 271,770 | 13,431 | — | 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 | $ | 171,770 | $ | 12,831 | $ | (184,601 | ) | $ | 180,595 |
Year Ended November 30, 2016 | |||||||||||||||||||
KB Home Corporate | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Total | |||||||||||||||
Revenues | $ | — | $ | 3,243,928 | $ | 350,718 | $ | — | $ | 3,594,646 | |||||||||
Homebuilding: | |||||||||||||||||||
Revenues | $ | — | $ | 3,243,928 | $ | 339,015 | $ | — | $ | 3,582,943 | |||||||||
Construction and land costs | — | (2,706,402 | ) | (334,699 | ) | — | (3,041,101 | ) | |||||||||||
Selling, general and administrative expenses | (91,859 | ) | (254,210 | ) | (43,372 | ) | — | (389,441 | ) | ||||||||||
Operating income (loss) | (91,859 | ) | 283,316 | (39,056 | ) | — | 152,401 | ||||||||||||
Interest income | 470 | 55 | 4 | — | 529 | ||||||||||||||
Interest expense | (177,329 | ) | (3,958 | ) | (3,946 | ) | 179,333 | (5,900 | ) | ||||||||||
Intercompany interest | 301,432 | (105,865 | ) | (16,234 | ) | (179,333 | ) | — | |||||||||||
Equity in loss of unconsolidated joint ventures | — | (2,181 | ) | — | — | (2,181 | ) | ||||||||||||
Homebuilding pretax income (loss) | 32,714 | 171,367 | (59,232 | ) | — | 144,849 | |||||||||||||
Financial services pretax income | — | — | 4,466 | — | 4,466 | ||||||||||||||
Total pretax income (loss) | 32,714 | 171,367 | (54,766 | ) | — | 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 | $ | 118,667 | $ | (62,966 | ) | $ | (55,701 | ) | $ | 105,615 |
Redeemable Prior to Maturity | Effective Interest Rate | ||||||||||||
Notes Payable | Principal | Issuance Date | Maturity Date | ||||||||||
4.75% Senior notes | $ | 400,000 | March 25, 2014 | May 15, 2019 | Yes (a) | 5.0 | % | ||||||
8.00% Senior notes | 350,000 | February 7, 2012 | March 15, 2020 | Yes (b) | 8.5 | ||||||||
7.00% Senior notes | 450,000 | October 29, 2013 | December 15, 2021 | Yes (a) | 7.2 | ||||||||
7.50% Senior notes | 350,000 | July 31, 2012 | September 15, 2022 | Yes (b) | 7.7 | ||||||||
7.625% Senior notes | 250,000 | February 17, 2015 | May 15, 2023 | Yes (a) | 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, 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. |
(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 the applicable redemption date. |
(c) | 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. |
November 30, | |||||||
2018 | 2017 | ||||||
Mortgages and land contracts due to land sellers and other loans (at interest rates of 7% at November 30, 2018 and 3% to 6% at November 30, 2017) | $ | 40,038 | $ | 10,203 | |||
7 1/4% Senior notes due June 15, 2018 | — | 299,867 | |||||
4.75% Senior notes due May 15, 2019 | 399,483 | 398,397 | |||||
8.00% Senior notes due March 15, 2020 | 347,790 | 346,238 | |||||
7.00% Senior notes due December 15, 2021 | 447,359 | 446,608 | |||||
7.50% Senior notes due September 15, 2022 | 347,731 | 347,234 | |||||
7.625% Senior notes due May 15, 2023 | 248,074 | 247,726 | |||||
1.375% Convertible senior notes due February 1, 2019 | 229,788 | 228,572 | |||||
Total | $ | 2,060,263 | $ | 2,324,845 |
November 30, | |||||||
2018 | 2017 | ||||||
Deferred tax liabilities: | |||||||
Capitalized expenses | $ | 51,660 | $ | 98,147 | |||
State taxes | 31,246 | 59,174 | |||||
Other | 225 | 313 | |||||
Total | 83,131 | 157,634 | |||||
Deferred tax assets: | |||||||
NOLs from 2006 through 2018 | 121,432 | 236,273 | |||||
Tax credits | 231,100 | 208,841 | |||||
Inventory impairment and land option contract abandonment charges | 67,416 | 139,737 | |||||
Employee benefits | 45,802 | 100,200 | |||||
Warranty, legal and other accruals | 43,213 | 60,238 | |||||
Capitalized expenses | 27,894 | 39,195 | |||||
Partnerships and joint ventures | 6,368 | 14,784 | |||||
Depreciation and amortization | 1,869 | 7,333 | |||||
Other | 3,457 | 8,270 | |||||
Total | 548,551 | 814,871 | |||||
Valuation allowance | (23,600 | ) | (23,600 | ) | |||
Total | 524,951 | 791,271 | |||||
Deferred tax assets, net | $ | 441,820 | $ | 633,637 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Numerator: | |||||||||||
Net income | $ | 170,365 | $ | 180,595 | $ | 105,615 | |||||
Less: Distributed earnings allocated to nonvested restricted stock | (51 | ) | (56 | ) | (45 | ) | |||||
Less: Undistributed earnings allocated to nonvested restricted stock | (927 | ) | (1,121 | ) | (508 | ) | |||||
Numerator for basic earnings per share | 169,387 | 179,418 | 105,062 | ||||||||
Effect of dilutive securities: | |||||||||||
Interest expense and amortization of debt issuance costs associated with convertible senior notes, net of taxes | 3,190 | 2,654 | 2,667 | ||||||||
Add: Undistributed earnings allocated to nonvested restricted stock | 927 | 1,121 | 508 | ||||||||
Less: Undistributed earnings reallocated to nonvested restricted stock | (805 | ) | (979 | ) | (453 | ) | |||||
Numerator for diluted earnings per share | $ | 172,699 | $ | 182,214 | $ | 107,784 | |||||
Denominator: | |||||||||||
Weighted average shares outstanding — basic | 87,773 | 85,842 | 85,706 | ||||||||
Effect of dilutive securities: | |||||||||||
Share-based payments | 4,884 | 4,072 | 2,170 | ||||||||
Convertible senior notes | 8,402 | 8,402 | 8,402 | ||||||||
Weighted average shares outstanding — diluted | 101,059 | 98,316 | 96,278 | ||||||||
Basic earnings per share | $ | 1.93 | $ | 2.09 | $ | 1.23 | |||||
Diluted earnings per share | $ | 1.71 | $ | 1.85 | $ | 1.12 |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
$ | % | $ | % | $ | % | |||||||||||||||
Income tax expense computed at statutory rate | $ | (81,689 | ) | (22.2 | )% | $ | (101,499 | ) | (35.0 | )% | $ | (52,260 | ) | (35.0 | )% | |||||
Tax credits | 14,177 | 3.9 | 6,227 | 2.2 | 4,447 | 3.0 | ||||||||||||||
Valuation allowance for deferred tax assets | 2,000 | .5 | 1,200 | .4 | 12,982 | 8.7 | ||||||||||||||
Depreciation and amortization | 1,223 | .3 | 362 | .1 | 1,842 | 1.2 | ||||||||||||||
State taxes, net of federal income tax benefit | (20,155 | ) | (5.5 | ) | (14,450 | ) | (4.9 | ) | (7,511 | ) | (5.0 | ) | ||||||||
TCJA adjustment | (112,458 | ) | (30.5 | ) | — | — | — | — | ||||||||||||
NOL reconciliation | — | — | (2,210 | ) | (.8 | ) | (3,691 | ) | (2.5 | ) | ||||||||||
Other, net | (698 | ) | (.2 | ) | 970 | .3 | 491 | .3 | ||||||||||||
Income tax expense | $ | (197,600 | ) | (53.7 | )% | $ | (109,400 | ) | (37.7 | )% | $ | (43,700 | ) | (29.3 | )% |
November 30, | |||||||
2018 | 2017 | ||||||
Homes under construction | $ | 1,125,152 | $ | 1,236,848 | |||
Land under development | 2,219,936 | 1,651,339 | |||||
Land held for future development or sale (a) | 237,751 | 375,199 | |||||
Total | $ | 3,582,839 | $ | 3,263,386 |
Years Ended November 30, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Interest cost | $ | 2,252 | $ | 2,274 | $ | 2,285 | ||||||
Amortization of prior service cost | 1,556 | 1,556 | 1,556 | |||||||||
Service cost | 1,085 | 1,046 | 1,045 | |||||||||
Amortization of net actuarial loss | 336 | 142 | 79 | |||||||||
Total | $ | 5,229 | $ | 5,018 | $ | 4,965 |
November 30, | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 760 | $ | 231 | |||
Receivables | 2,885 | 1,724 | |||||
Investments in unconsolidated joint ventures (a) | 8,594 | 10,340 | |||||
Other assets | 141 | 62 | |||||
Total assets | $ | 12,380 | $ | 12,357 | |||
Liabilities | |||||||
Accounts payable and accrued expenses | $ | 1,495 | $ | 966 | |||
Total liabilities | $ | 1,495 | $ | 966 |
November 30, | |||||||
2018 | 2017 | ||||||
Cash surrender value of corporate-owned life insurance contracts | $ | 73,721 | $ | 75,236 | |||
Property and equipment, net | 24,283 | 19,521 | |||||
Prepaid expenses | 7,647 | 5,360 | |||||
Debt issuance costs associated with unsecured revolving credit facility | 1,732 | 2,381 | |||||
Total | $ | 107,383 | $ | 102,498 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of year | $ | 69,798 | $ | 56,682 | $ | 49,085 | |||||
Warranties issued | 37,792 | 38,452 | 30,135 | ||||||||
Payments (a) | (23,300 | ) | (25,336 | ) | (23,190 | ) | |||||
Adjustments | (1,800 | ) | — | 652 | |||||||
Balance at end of year | $ | 82,490 | $ | 69,798 | $ | 56,682 |
(a) | Payments for 2016 included $2.3 million to repair homes affected by water intrusion-related issues in certain of our communities in central and southwest Florida. |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2018 | |||||||||||||||
Revenues | $ | 871,623 | $ | 1,101,423 | $ | 1,225,347 | $ | 1,348,609 | |||||||
Gross profits | 141,192 | 189,222 | 222,893 | 245,931 | |||||||||||
Inventory impairment and land option contract abandonment charges | 4,985 | 6,526 | 8,414 | 9,069 | |||||||||||
Pretax income | 46,045 | 78,308 | 114,676 | 128,936 | |||||||||||
Net income (loss) (a) | (71,255 | ) | 57,308 | 87,476 | 96,836 | ||||||||||
Earnings (loss) per share: | |||||||||||||||
Basic | $ | (.82 | ) | $ | .65 | $ | .99 | $ | 1.09 | ||||||
Diluted | (.82 | ) | .57 | .87 | .96 | ||||||||||
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 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues: | |||||||||||
West Coast | $ | 2,085,328 | $ | 2,186,411 | $ | 1,638,078 | |||||
Southwest | 707,075 | 533,052 | 447,473 | ||||||||
Central | 1,239,305 | 1,188,839 | 1,018,535 | ||||||||
Southeast | 502,087 | 447,963 | 478,857 | ||||||||
Total | $ | 4,533,795 | $ | 4,356,265 | $ | 3,582,943 |
Pretax income (loss): | |||||||||||
West Coast | $ | 240,337 | $ | 217,649 | $ | 148,014 | |||||
Southwest | 91,017 | 45,540 | 38,807 | ||||||||
Central | 117,609 | 116,098 | 85,924 | ||||||||
Southeast | 7,624 | (509 | ) | (29,385 | ) | ||||||
Corporate and other | (105,286 | ) | (101,851 | ) | (98,511 | ) | |||||
Total | $ | 351,301 | $ | 276,927 | $ | 144,849 | |||||
Equity in income (loss) of unconsolidated joint ventures: | |||||||||||
West Coast | $ | (966 | ) | $ | (1,770 | ) | $ | (1,561 | ) | ||
Southwest | 3,033 | 362 | (618 | ) | |||||||
Central | — | — | — | ||||||||
Southeast | (1 | ) | (1 | ) | (2 | ) | |||||
Total | $ | 2,066 | $ | (1,409 | ) | $ | (2,181 | ) | |||
Inventory impairment charges: | |||||||||||
West Coast | $ | 19,169 | $ | 13,482 | $ | 8,209 | |||||
Southwest | — | 3,445 | 3,191 | ||||||||
Central | 1,463 | — | 10,633 | ||||||||
Southeast | 5,472 | 3,678 | 27,547 | ||||||||
Total | $ | 26,104 | $ | 20,605 | $ | 49,580 | |||||
Land option contract abandonment charges: | |||||||||||
West Coast | $ | 1,212 | $ | 3,225 | $ | 769 | |||||
Southwest | 432 | — | 253 | ||||||||
Central | 1,095 | 846 | 460 | ||||||||
Southeast | 151 | 556 | 1,750 | ||||||||
Total | $ | 2,890 | $ | 4,627 | $ | 3,232 |
November 30, | |||||||
2018 | 2017 | ||||||
Inventories: | |||||||
Homes under construction | |||||||
West Coast | $ | 514,099 | $ | 638,639 | |||
Southwest | 173,036 | 179,240 | |||||
Central | 312,366 | 320,205 | |||||
Southeast | 125,651 | 98,764 | |||||
Subtotal | 1,125,152 | 1,236,848 | |||||
Land under development | |||||||
West Coast | 1,059,432 | 723,761 | |||||
Southwest | 404,201 | 309,672 | |||||
Central | 543,472 | 435,373 | |||||
Southeast | 212,831 | 182,533 | |||||
Subtotal | 2,219,936 | 1,651,339 | |||||
Land held for future development or sale | |||||||
West Coast | 154,462 | 233,188 | |||||
Southwest | 21,137 | 62,475 | |||||
Central | 9,346 | 12,654 | |||||
Southeast | 52,806 | 66,882 | |||||
Subtotal | 237,751 | 375,199 | |||||
Total | $ | 3,582,839 | $ | 3,263,386 | |||
Investments in unconsolidated joint ventures: | |||||||
West Coast | $ | 56,128 | $ | 53,506 | |||
Southwest | 3,327 | 8,784 | |||||
Central | — | — | |||||
Southeast | 2,505 | 2,504 | |||||
Total | $ | 61,960 | $ | 64,794 | |||
Assets: | |||||||
West Coast | $ | 1,880,516 | $ | 1,747,786 | |||
Southwest | 631,509 | 586,666 | |||||
Central | 1,017,490 | 901,516 | |||||
Southeast | 463,224 | 359,307 | |||||
Corporate and other | 1,068,452 | 1,433,883 | |||||
Total | $ | 5,061,191 | $ | 5,029,158 |
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 | 1,201,167 | $ | 6.36 | 2.9 | 1,201,167 | $ | 6.36 | |||||||||||||
$11.06 to $14.62 | 2,048,758 | 12.99 | 4.0 | 2,048,758 | 12.99 | |||||||||||||||
$14.63 to $16.20 | 1,906,964 | 15.14 | 4.1 | 1,906,964 | 15.14 | |||||||||||||||
$16.21 to $28.10 | 1,300,596 | 16.35 | 6.8 | 1,011,722 | 16.39 | |||||||||||||||
$28.11 to $45.68 | 780,059 | 40.46 | 0.8 | 780,059 | 40.46 | |||||||||||||||
$ 6.32 to $45.68 | 7,237,544 | $ | 16.02 | 4.0 | 6,948,670 | $ | 16.01 | 3.8 |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | Options | Weighted Average Exercise Price | |||||||||||||||
Options outstanding at beginning of year | 9,265,240 | $ | 17.64 | 12,731,545 | $ | 18.95 | 12,635,644 | $ | 19.39 | |||||||||||
Granted | — | — | — | — | 1,012,686 | 16.21 | ||||||||||||||
Exercised | (1,195,926 | ) | 16.73 | (1,650,360 | ) | 16.01 | (551,898 | ) | 13.95 | |||||||||||
Cancelled | (831,770 | ) | 33.05 | (1,815,945 | ) | 28.31 | (364,887 | ) | 34.07 | |||||||||||
Options outstanding at end of year | 7,237,544 | $ | 16.02 | 9,265,240 | $ | 17.64 | 12,731,545 | $ | 18.95 | |||||||||||
Options exercisable at end of year | 6,948,670 | $ | 16.01 | 8,307,632 | $ | 17.86 | 10,506,810 | $ | 19.70 | |||||||||||
Options available for grant at end of year | 6,418,197 | 7,495,792 | 7,034,523 |
Years Ended November 30, | ||||||||
2018 | 2017 | 2016 | ||||||
Risk-free interest rate | — | — | 1.3 | % | ||||
Expected volatility factor | — | — | 41.3 | % | ||||
Expected dividend yield | — | — | .6 | % | ||||
Expected term | — | — | 5 years |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
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 | 503,926 | $ | 21.69 | 604,619 | $ | 16.24 | 416,977 | $ | 15.88 | |||||||||||
Granted | 303,030 | 23.05 | 321,835 | 24.49 | 453,703 | 15.73 | ||||||||||||||
Vested | (221,951 | ) | 19.79 | (364,670 | ) | 16.09 | (252,854 | ) | 14.78 | |||||||||||
Cancelled | (29,548 | ) | 21.76 | (57,858 | ) | 15.61 | (13,207 | ) | 15.12 | |||||||||||
Outstanding at end of year | 555,457 | $ | 23.19 | 503,926 | $ | 21.69 | 604,619 | $ | 16.24 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Balance at beginning of year | $ | 56 | $ | 56 | $ | 56 | |||||
Reductions due to lapse of statute of limitations | (56 | ) | — | — | |||||||
Balance at end of year | $ | — | $ | 56 | $ | 56 |
November 30, 2018 | November 30, 2017 | ||||||||||||||
Cash Deposits | Aggregate Purchase Price | Cash Deposits | Aggregate Purchase Price | ||||||||||||
Unconsolidated VIEs | $ | 26,542 | $ | 784,334 | $ | 43,171 | $ | 653,858 | |||||||
Other land option contracts and other similar contracts | 27,288 | 586,904 | 21,531 | 440,229 | |||||||||||
Total | $ | 53,830 | $ | 1,371,238 | $ | 64,702 | $ | 1,094,087 |
Years Ended November 30, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenues: | |||||||||||
West Coast | $ | 2,085,328 | $ | 2,186,411 | $ | 1,638,078 | |||||
Southwest | 707,075 | 533,052 | 447,473 | ||||||||
Central | 1,239,305 | 1,188,839 | 1,018,535 | ||||||||
Southeast | 502,087 | 447,963 | 478,857 | ||||||||
Total | $ | 4,533,795 | $ | 4,356,265 | $ | 3,582,943 |
Pretax income (loss): | |||||||||||
West Coast | $ | 240,337 | $ | 217,649 | $ | 148,014 | |||||
Southwest | 91,017 | 45,540 | 38,807 | ||||||||
Central | 117,609 | 116,098 | 85,924 | ||||||||
Southeast | 7,624 | (509 | ) | (29,385 | ) | ||||||
Corporate and other | (105,286 | ) | (101,851 | ) | (98,511 | ) | |||||
Total | $ | 351,301 | $ | 276,927 | $ | 144,849 | |||||
Equity in income (loss) of unconsolidated joint ventures: | |||||||||||
West Coast | $ | (966 | ) | $ | (1,770 | ) | $ | (1,561 | ) | ||
Southwest | 3,033 | 362 | (618 | ) | |||||||
Central | — | — | — | ||||||||
Southeast | (1 | ) | (1 | ) | (2 | ) | |||||
Total | $ | 2,066 | $ | (1,409 | ) | $ | (2,181 | ) | |||
Inventory impairment charges: | |||||||||||
West Coast | $ | 19,169 | $ | 13,482 | $ | 8,209 | |||||
Southwest | — | 3,445 | 3,191 | ||||||||
Central | 1,463 | — | 10,633 | ||||||||
Southeast | 5,472 | 3,678 | 27,547 | ||||||||
Total | $ | 26,104 | $ | 20,605 | $ | 49,580 | |||||
Land option contract abandonment charges: | |||||||||||
West Coast | $ | 1,212 | $ | 3,225 | $ | 769 | |||||
Southwest | 432 | — | 253 | ||||||||
Central | 1,095 | 846 | 460 | ||||||||
Southeast | 151 | 556 | 1,750 | ||||||||
Total | $ | 2,890 | $ | 4,627 | $ | 3,232 |
November 30, | |||||||
2018 | 2017 | ||||||
Inventories: | |||||||
Homes under construction | |||||||
West Coast | $ | 514,099 | $ | 638,639 | |||
Southwest | 173,036 | 179,240 | |||||
Central | 312,366 | 320,205 | |||||
Southeast | 125,651 | 98,764 | |||||
Subtotal | 1,125,152 | 1,236,848 | |||||
Land under development | |||||||
West Coast | 1,059,432 | 723,761 | |||||
Southwest | 404,201 | 309,672 | |||||
Central | 543,472 | 435,373 | |||||
Southeast | 212,831 | 182,533 | |||||
Subtotal | 2,219,936 | 1,651,339 | |||||
Land held for future development or sale | |||||||
West Coast | 154,462 | 233,188 | |||||
Southwest | 21,137 | 62,475 | |||||
Central | 9,346 | 12,654 | |||||
Southeast | 52,806 | 66,882 | |||||
Subtotal | 237,751 | 375,199 | |||||
Total | $ | 3,582,839 | $ | 3,263,386 | |||
Investments in unconsolidated joint ventures: | |||||||
West Coast | $ | 56,128 | $ | 53,506 | |||
Southwest | 3,327 | 8,784 | |||||
Central | — | — | |||||
Southeast | 2,505 | 2,504 | |||||
Total | $ | 61,960 | $ | 64,794 | |||
Assets: | |||||||
West Coast | $ | 1,880,516 | $ | 1,747,786 | |||
Southwest | 631,509 | 586,666 | |||||
Central | 1,017,490 | 901,516 | |||||
Southeast | 463,224 | 359,307 | |||||
Corporate and other | 1,068,452 | 1,433,883 | |||||
Total | $ | 5,061,191 | $ | 5,029,158 |
Years Ended November 30, | ||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||
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 | 925,232 | $ | 20.09 | 809,860 | $ | 17.19 | 820,209 | $ | 15.52 | |||||||||||
Granted | 603,424 | 25.70 | 424,797 | 22.99 | 369,281 | 13.81 | ||||||||||||||
Vested | (437,689 | ) | 31.28 | (278,460 | ) | 16.67 | (374,630 | ) | 10.21 | |||||||||||
Cancelled | — | — | (30,965 | ) | 14.92 | (5,000 | ) | 16.21 | ||||||||||||
Outstanding at end of year | 1,090,967 | $ | 18.70 | 925,232 | $ | 20.09 | 809,860 | $ | 17.19 | |||||||||||