Segment Information

12 Months Ended

Nov. 30, 2019

An operating segment is defined as a component of an enterprise for which separate financial information is available and for which segment results are evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We have identified each of our homebuilding divisions as an operating segment. Our homebuilding operating segments have been aggregated into four homebuilding reporting segments based primarily on similarities in economic and geographic characteristics, product types, regulatory environments, methods used to sell and construct homes and land acquisition characteristics. We also have one financial services reporting segment. Management evaluates segment performance primarily based on segment pretax results.

As of November 30, 2019, our homebuilding reporting segments conducted ongoing operations in the following states:

West Coast: California and Washington

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. In 2018, we expanded into the Seattle, Washington market.

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 Southwest, Central and Southeast homebuilding reporting segments. In 2019, we also expanded our title services business to include Arizona, Colorado and Nevada. Our financial services segment earns revenues primarily from insurance commissions and from the provision of title services.

In 2016, we and Stearns formed 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, with Stearns providing management oversight of KBHS’ operations. KBHS was operational in all of our served markets as of June 2017. Our homebuyers may select any lender of their choice to obtain mortgage financing for the purchase of their home. 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 as described in Note 1 – Summary of Significant Accounting Policies. 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):



	Years Ended November 30,
	2019		2018		2017
Revenues:
West Coast	$	1,912,146	$	2,085,328	$	2,186,411
Southwest	764,816		707,075		533,052
Central	1,267,892		1,239,305		1,188,839
Southeast	592,804		502,087		447,963
Total	$	4,537,658	$	4,533,795	$	4,356,265



Pretax income (loss):
West Coast	$	178,078		$	240,337		$	217,649
Southwest	111,016			91,017			45,540
Central	126,304			117,609			116,098
Southeast	18,550			7,624			(509		)
Corporate and other	(108,759		)	(105,286		)	(101,851		)
Total	$	325,189		$	351,301		$	276,927

Equity in income (loss) of unconsolidated joint ventures:
West Coast	$	(851	)	$	(966	)	$	(1,770	)
Southwest	(697		)	3,033			362
Central	—			—			—
Southeast	(1		)	(1		)	(1		)
Total	$	(1,549	)	$	2,066		$	(1,409	)

Inventory impairment and land option contract abandonment charges:
West Coast	$	15,567		$	20,381		$	16,707
Southwest	408			432			3,445
Central	848			2,558			846
Southeast	468			5,623			4,234
Total	$	17,291		$	28,994		$	25,232



	November 30,
	2019		2018
Inventories:
West Coast	$	1,795,088	$	1,727,993
Southwest	629,811		598,374
Central	889,179		865,184
Southeast	390,524		391,288
Total	$	3,704,602	$	3,582,839

Investments in unconsolidated joint ventures:
West Coast	$	51,740	$	56,128
Southwest	2,792		3,327
Central	—		—
Southeast	2,506		2,505
Total	$	57,038	$	61,960

Assets:
West Coast	$	1,925,192	$	1,880,516
Southwest	674,310		631,509
Central	1,035,563		1,017,490
Southeast	441,451		463,224
Corporate and other	900,570		1,068,452
Total	$	4,977,086	$	5,061,191