Segment Information

We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment. As of February 28, 2018, our homebuilding reporting segments conducted ongoing operations in the following states:

West Coast: California

Southwest: Arizona and Nevada

Central: Colorado and Texas

Southeast: Florida and North Carolina

Our homebuilding reporting segments are engaged in the acquisition and development of land primarily for residential purposes and offer a wide variety of homes that are designed to appeal to first-time, first move-up and active adult homebuyers. Our homebuilding operations generate most of their revenues from the delivery of completed homes to homebuyers. They also earn revenues from the sale of land.

Our homebuilding reporting segments were identified based primarily on similarities in economic and geographic characteristics, product types, regulatory environments, methods used to sell and construct homes and land acquisition characteristics. Management evaluates segment performance primarily based on segment pretax results.

Our financial services reporting segment offers property and casualty insurance and, in certain instances, earthquake, flood and personal property insurance to our homebuyers in the same markets as our homebuilding reporting segments, and provides title services in the majority of our markets located within our Central and Southeast homebuilding reporting segments. This segment earns revenues primarily from insurance commissions and from the provision of title services.

In 2016, a subsidiary of ours and a subsidiary of Stearns Lending, LLC (“Stearns”) formed KBHS Home Loans, LLC (“KBHS”), an unconsolidated mortgage banking joint venture to offer mortgage banking services, including mortgage loan originations, to our homebuyers. We and Stearns each have a 50.0% ownership interest in KBHS, with Stearns providing management oversight of KBHS’ operations. KBHS was operational in all of our served markets as of June 2017. The financial services reporting segment is separately reported in our consolidated financial statements.

Corporate and other is a non-operating segment that develops and oversees the implementation of company-wide strategic initiatives and provides support to our reporting segments by centralizing certain administrative functions. Corporate management is responsible for, among other things, evaluating and selecting the geographic markets in which we operate, consistent with our overall business strategy; allocating capital resources to markets for land acquisition and development activities; making major personnel decisions related to employee compensation and benefits; and monitoring the financial and operational performance of our divisions. Corporate and other includes general and administrative expenses related to operating our corporate headquarters. A portion of the expenses incurred by Corporate and other is allocated to our homebuilding reporting segments.

Our reporting segments follow the same accounting policies used for our consolidated financial statements. The results of each reporting segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented, nor are they indicative of the results to be expected in future periods.

The following tables present financial information relating to our homebuilding reporting segments (in thousands):



	Three Months Ended February 28,
	2018			2017
Revenues:
West Coast	$	386,652		$	355,832
Southwest	151,899			117,636
Central	244,181			242,256
Southeast	86,473			100,522
Total	$	869,205		$	816,246

Pretax income (loss):
West Coast	$	31,593		$	22,853
Southwest	14,977			8,672
Central	19,095			19,678
Southeast	1,320			(2,213		)
Corporate and other	(22,824		)	(29,091		)
Total	$	44,161		$	19,899



Inventory impairment charges:
West Coast	$	4,699	$	—
Southwest	—		1,343
Central	—		—
Southeast	—		1,874
Total	$	4,699	$	3,217

Land option contract abandonments:
West Coast	$	208	$	791
Southwest	—		—
Central	78		—
Southeast	—		—
Total	$	286	$	791



	February 28, 2018		November 30, 2017
Inventories:
Homes under construction
West Coast	$	666,333	$	638,639
Southwest	188,344		179,240
Central	329,996		320,205
Southeast	109,242		98,764
Subtotal	1,293,915		1,236,848

Land under development
West Coast	844,556		723,761
Southwest	289,603		309,672
Central	443,261		435,373
Southeast	188,614		182,533
Subtotal	1,766,034		1,651,339

Land held for future development or sale
West Coast	230,592		233,188
Southwest	64,386		62,475
Central	18,890		12,654
Southeast	67,757		66,882
Subtotal	381,625		375,199
Total	$	3,441,574	$	3,263,386



Assets:
West Coast	$	1,890,866	$	1,747,786
Southwest	588,495		586,666
Central	917,837		901,516
Southeast	375,322		359,307
Corporate and other	1,173,024		1,433,883
Total	$	4,945,544	$	5,029,158