10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended August 31, 2021.

or

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from [            ] to [            ].

Commission File No. 001-09195

KB HOME

(Exact name of registrant as specified in its charter)

Delaware	95-3666267
(State of incorporation)	(IRS employer identification number)

10990 Wilshire Boulevard

Los Angeles, California 90024

(310) 231-4000

(Address, including zip code, and telephone number of principal executive offices) 

Securities registered pursuant to section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value $1.00 per share)	KBH	New York Stock Exchange
Rights to Purchase Series A Participating Cumulative Preferred Stock		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No  ☒

There were 87,477,633 shares of the registrant’s common stock, par value $1.00 per share, outstanding on August 31, 2021. The registrant’s grantor stock ownership trust held an additional 6,705,247 shares of the registrant’s common stock on that date.

KB HOME

FORM 10-Q

INDEX

	Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations - Three Months and Nine Months Ended August 31, 2021 and 2020	3
Consolidated Balance Sheets - August 31, 2021 and November 30, 2020	4
Consolidated Statements of Cash Flows - Nine Months Ended August 31, 2021 and 2020	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures About Market Risk	48
Item 4. Controls and Procedures	48
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	48
Item 1A. Risk Factors	48
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 6. Exhibits	49
SIGNATURES	50

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PART I.    FINANCIAL INFORMATION

Item 1.Financial Statements

KB HOME

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts – Unaudited)

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Total revenues	$	1,467,102	$	999,013	$	4,049,732	$	2,988,918
Homebuilding:
Revenues	$	1,461,896	$	995,148	$	4,035,939	$	2,977,810
Construction and land costs	(1,147,642)		(798,495)		(3,177,569)		(2,429,001)
Selling, general and administrative expenses	(144,325)		(107,710)		(411,445)		(348,082)
Operating income	169,929		88,943		446,925		200,727
Interest income	144		786		1,038		2,163
Equity in income (loss) of unconsolidated joint ventures	(182)		1,922		(5)		11,981
Loss on early extinguishment of debt	(5,075)		—		(5,075)		—
Homebuilding pretax income	164,816		91,651		442,883		214,871
Financial services:
Revenues	5,206		3,865		13,793		11,108
Expenses	(1,234)		(1,056)		(3,687)		(2,901)
Equity in income of unconsolidated joint ventures	5,409		6,855		18,423		14,874
Financial services pretax income	9,381		9,664		28,529		23,081
Total pretax income	174,197		101,315		471,412		237,952
Income tax expense	(24,100)		(22,900)		(80,900)		(47,800)
Net income	$	150,097	$	78,415	$	390,512	$	190,152
Earnings per share:
Basic	$	1.66	$	.86	$	4.26	$	2.09
Diluted	$	1.60	$	.83	$	4.11	$	2.02
Weighted average shares outstanding:
Basic	90,076		90,535		91,290		90,292
Diluted	93,264		94,105		94,512		93,788

See accompanying notes.

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KB HOME

CONSOLIDATED BALANCE SHEETS

(In Thousands – Unaudited)

	August 31, 2021		November 30, 2020
Assets
Homebuilding:
Cash and cash equivalents	$	350,141	$	681,190
Receivables	295,092		272,659
Inventories	4,655,875		3,897,482
Investments in unconsolidated joint ventures	39,484		46,785
Property and equipment, net	72,470		65,547
Deferred tax assets, net	194,845		231,067
Other assets	111,022		125,510
	5,718,929		5,320,240
Financial services	37,418		36,202
Total assets	$	5,756,347	$	5,356,442
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable	$	340,540	$	273,368
Accrued expenses and other liabilities	708,265		667,501
Notes payable	1,863,501		1,747,175
	2,912,306		2,688,044
Financial services	2,308		2,629
Stockholders’ equity:
Common stock	100,151		99,869
Paid-in capital	842,380		824,306
Retained earnings	2,218,217		1,868,896
Accumulated other comprehensive loss	(22,276)		(22,276)
Grantor stock ownership trust, at cost	(72,718)		(77,265)
Treasury stock, at cost	(224,021)		(27,761)
Total stockholders’ equity	2,841,733		2,665,769
Total liabilities and stockholders’ equity	$	5,756,347	$	5,356,442

See accompanying notes.

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KB HOME

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands – Unaudited) 

	Nine Months Ended August 31,
	2021		2020
Cash flows from operating activities:
Net income	$	390,512	$	190,152
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in income of unconsolidated joint ventures	(18,418)		(26,855)
Distributions of earnings from unconsolidated joint ventures	18,625		29,384
Amortization of discounts, premiums and issuance costs	2,203		1,862
Depreciation and amortization	21,296		21,583
Deferred income taxes	36,300		40,200
Loss on early extinguishment of debt	5,075		—
Stock-based compensation	19,768		12,767
Inventory impairments and land option contract abandonments	11,222		16,939
Changes in assets and liabilities:
Receivables	(22,457)		62,839
Inventories	(760,350)		46,567
Accounts payable, accrued expenses and other liabilities	102,087		(62,419)
Other, net	13,912		(3,808)
Net cash provided by (used in) operating activities	(180,225)		329,211
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	(11,057)		(6,048)
Return of investments in unconsolidated joint ventures	12,724		8,816
Purchases of property and equipment, net	(28,219)		(21,154)
Net cash used in investing activities	(26,552)		(18,386)
Cash flows from financing activities:
Proceeds from issuance of debt	390,000		—
Payment of debt issuance costs	(4,813)		—
Repayment of senior notes	(274,904)		—
Payments on mortgages and land contracts due to land sellers and other loans	(600)		(20,314)
Issuance of common stock under employee stock plans	3,506		8,404
Stock repurchases	(188,175)		—
Tax payments associated with stock-based compensation awards	(8,456)		(6,219)
Payments of cash dividends	(40,965)		(24,428)
Net cash used in financing activities	(124,407)		(42,557)
Net increase (decrease) in cash and cash equivalents	(331,184)		268,268
Cash and cash equivalents at beginning of period	682,529		454,858
Cash and cash equivalents at end of period	$	351,345	$	723,126

See accompanying notes.

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KB HOME

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    Basis of Presentation and Significant Accounting Policies

Basis of Presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our consolidated financial position as of August 31, 2021, the results of our consolidated operations for the three months and nine months ended August 31, 2021 and 2020, and our consolidated cash flows for the nine months ended August 31, 2021 and 2020. The results of our consolidated operations for the three months and nine months ended August 31, 2021 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operating results and other factors. The consolidated balance sheet at November 30, 2020 has been taken from the audited consolidated financial statements as of that date. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended November 30, 2020, which are contained in our Annual Report on Form 10-K for that period.

Unless the context indicates otherwise, the terms “we,” “our,” and “us” used in this report refer to KB Home, a Delaware corporation, and its subsidiaries.

Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents. We consider all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents. Our cash equivalents totaled $126.7 million at August 31, 2021 and $508.5 million at November 30, 2020. At August 31, 2021 and November 30, 2020, the majority of our cash and cash equivalents was invested in interest-bearing bank deposit accounts.

Comprehensive Income. Our comprehensive income was $150.1 million for the three months ended August 31, 2021 and $78.4 million for the three months ended August 31, 2020. For the nine months ended August 31, 2021 and 2020, our comprehensive income was $390.5 million and $190.2 million, respectively. Our comprehensive income for each of the three-month and nine-month periods ended August 31, 2021 and 2020 was equal to our net income for the respective periods.

Adoption of New Accounting Pronouncement. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes the impairment model for most financial assets and certain other instruments from an incurred loss approach to a new expected credit loss methodology. On December 1, 2020, we adopted ASU 2016-13 using the modified retrospective method and recorded a cumulative effect adjustment to decrease beginning retained earnings by $.2 million, net of tax, to establish an allowance for credit losses for certain receivables on our consolidated balance sheet. The adoption of ASU 2016-13 did not materially impact our consolidated statements of operations or cash flows.

Recent Accounting Pronouncements Not Yet Adopted. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification Topic 740, “Income Taxes” (“ASC 740”), and clarifies certain aspects of ASC 740 to promote consistency among reporting entities.  ASU 2019-12 is effective for us beginning December 1, 2021, with early adoption permitted. Most amendments within ASU 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.  We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Reclassifications. Certain amounts in our consolidated financial statements of prior years have been reclassified to conform to the current period presentation.

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2.Segment Information

We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment. As of August 31, 2021, 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.

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. Our financial services reporting segment earns revenues primarily from insurance commissions and from the provision of title services.

We offer mortgage banking services, including residential consumer mortgage loan (“mortgage loan”) originations, to our homebuyers indirectly through KBHS Home Loans, LLC (“KBHS”), an unconsolidated joint venture we formed with Stearns Ventures, LLC (“Stearns”). We and Stearns each have a 50.0% ownership interest, with Stearns providing management oversight of KBHS’ operations. On March 1, 2021, Guaranteed Rate, Inc. (“Guaranteed Rate”) acquired Stearns’ parent company. There have been no significant changes with respect to Stearns or its operations since the transaction was completed. The financial services reporting segment is separately reported in our consolidated financial statements.

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 August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues:
West Coast	$	663,563	$	379,025	$	1,803,769	$	1,195,404
Southwest	234,933		223,096		680,679		589,665
Central	384,532		297,022		1,084,795		864,728
Southeast	178,868		96,005		466,696		328,013
Total	$	1,461,896	$	995,148	$	4,035,939	$	2,977,810
Pretax income (loss):
West Coast	$	93,247	$	34,353	$	228,508	$	96,202
Southwest	46,021		39,295		127,985		96,298
Central	53,375		35,422		150,650		84,996
Southeast	19,979		5,986		50,955		15,245
Corporate and other	(47,806)		(23,405)		(115,215)		(77,870)
Total	$	164,816	$	91,651	$	442,883	$	214,871

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	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Inventory impairment and land option contract abandonment charges:
West Coast	$	6,458	$	5,546	$	10,376	$	10,610
Southwest	243		—		536		171
Central	—		1,084		70		5,520
Southeast	—		258		240		638
Total	$	6,701	$	6,888	$	11,222	$	16,939

	August 31, 2021		November 30, 2020
Assets:
West Coast	$	2,439,635	$	2,057,362
Southwest	954,983		738,765
Central	1,125,069		998,612
Southeast	610,634		448,388
Corporate and other	588,608		1,077,113
Total	$	5,718,929	$	5,320,240

3.    Financial Services

The following tables present financial information relating to our financial services reporting segment (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues
Insurance commissions	$	2,771	$	2,150	$	7,051	$	6,133
Title services	2,435		1,715		6,742		4,975
Total	5,206		3,865		13,793		11,108
Expenses
General and administrative	(1,234)		(1,056)		(3,687)		(2,901)
Operating income	3,972		2,809		10,106		8,207
Equity in income of unconsolidated joint ventures	5,409		6,855		18,423		14,874
Pretax income	$	9,381	$	9,664	$	28,529	$	23,081

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	August 31, 2021		November 30, 2020
Assets
Cash and cash equivalents	$	1,204	$	1,339
Receivables	1,708		1,988
Investments in unconsolidated joint ventures	11,151		10,978
Other assets (a)	23,355		21,897
Total assets	$	37,418	$	36,202
Liabilities
Accounts payable and accrued expenses	$	2,308	$	2,629
Total liabilities	$	2,308	$	2,629

(a)Other assets at August 31, 2021 and November 30, 2020 included $23.1 million and $21.5 million, respectively, of contract assets for estimated future renewal commissions.

4.    Earnings Per Share

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Numerator:
Net income	$	150,097	$	78,415	$	390,512	$	190,152
Less: Distributed earnings allocated to nonvested restricted stock	(62)		(42)		(188)		(129)
Less: Undistributed earnings allocated to nonvested restricted stock	(625)		(360)		(1,594)		(875)
Numerator for basic earnings per share	149,410		78,013		388,730		189,148
Effect of dilutive securities:
Add: Undistributed earnings allocated to nonvested restricted stock	625		360		1,594		875
Less: Undistributed earnings reallocated to nonvested restricted stock	(604)		(346)		(1,540)		(843)
Numerator for diluted earnings per share	$	149,431	$	78,027	$	388,784	$	189,180
Denominator:
Weighted average shares outstanding — basic	90,076		90,535		91,290		90,292
Effect of dilutive securities:
Share-based payments	3,188		3,570		3,222		3,496
Weighted average shares outstanding — diluted	93,264		94,105		94,512		93,788
Basic earnings per share	$	1.66	$	.86	$	4.26	$	2.09
Diluted earnings per share	$	1.60	$	.83	$	4.11	$	2.02

We compute earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders. Our outstanding nonvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. We had no other participating securities at August 31, 2021 or 2020.

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For the three-month and nine-month periods ended August 31, 2021 and 2020, no outstanding stock options were excluded from the diluted earnings per share calculations. Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented as the applicable vesting conditions had not been satisfied.

5.    Receivables

Receivables consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Due from utility companies, improvement districts and municipalities	$	154,401	$	107,569
Recoveries related to self-insurance and other legal claims	77,944		82,018
Refundable deposits and bonds	13,948		10,897
Income taxes receivable	—		41,323
Other	54,058		38,151
Subtotal	300,351		279,958
Allowance for doubtful accounts	(5,259)		(7,299)
Total	$	295,092	$	272,659

6.    Inventories

Inventories consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Homes completed or under construction	$	2,022,354	$	1,437,911
Land under development	2,633,521		2,459,571
Total	$	4,655,875	$	3,897,482

Land under development included land held for future development and land held for sale of $64.5 million and $2.6 million, respectively, at August 31, 2021 and $74.0 million and $1.3 million, respectively, at November 30, 2020.

Interest is capitalized to inventories while the related communities or land parcels are being actively developed and until homes are completed or the land is available for immediate sale. Capitalized interest is amortized to construction and land costs as the related inventories are delivered to homebuyers or land buyers (as applicable). In the case of land held for future development and land held for sale, applicable interest is expensed as incurred.

Our interest costs were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Capitalized interest at beginning of period	$	180,065	$	194,434	$	190,113	$	195,738
Interest incurred	29,605		31,054		91,807		93,071
Interest amortized to construction and land costs (a)	(37,544)		(30,628)		(109,794)		(93,949)
Capitalized interest at end of period	$	172,126	$	194,860	$	172,126	$	194,860

(a)There was no interest amortized to construction and land costs related to land sales for the three months ended August 31, 2021. Interest amortized to construction and land costs for the nine months ended August 31, 2021 included $.2 million related to land sales. For the three months and nine months ended August 31, 2020, interest amortized to construction and land costs included $.4 million related to land sales.

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7.    Inventory Impairments and Land Option Contract Abandonments

Each community or land parcel in our owned inventory is assessed on a quarterly basis to determine if indicators of potential impairment exist. We record an inventory impairment charge on a community or land parcel that is active or held for future development when indicators of potential impairment exist and the carrying value of the real estate asset is greater than the undiscounted future net cash flows the asset is expected to generate. These real estate assets are written down to fair value, which is primarily determined based on the estimated future net cash flows discounted for inherent risk associated with each such asset, or other valuation techniques. We record an inventory impairment charge on land held for sale when the carrying value of a land parcel is greater than its fair value. These real estate assets are written down to fair value, less associated costs to sell. The estimated fair values of such assets are generally based on bona fide letters of intent from outside parties, executed sales contracts, broker quotes or similar information.

We evaluated four and 11 communities or land parcels for recoverability as of August 31, 2021 and November 30, 2020, respectively. The carrying values of those communities or land parcels evaluated as of August 31, 2021 and November 30, 2020 were $31.4 million and $123.4 million, respectively. In addition, we evaluated land held for future development for recoverability as of August 31, 2021 and November 30, 2020.

Based on the results of our evaluations, we recognized $6.3 million and $6.5 million of inventory impairment charges for the three months ended August 31, 2021 and 2020, respectively. For the nine months ended August 31, 2021 and 2020, we recognized inventory impairment charges of $9.9 million and $11.6 million, respectively. The inventory impairment charges for the three-month and nine-month periods reflected our decisions to make changes in our operational strategies aimed at more quickly monetizing our investment in certain communities by accelerating the overall pace for selling, building and delivering homes therein, including communities on land previously held for future development.

The following table summarizes significant quantitative unobservable inputs we utilized in our fair value measurements with respect to the impaired communities written down to fair value during the periods presented:

	Three Months Ended August 31,		Nine Months Ended August 31,
Unobservable Input (a)	2021	2020	2021	2020
Average selling price	$949,400	$301,600 - $1,010,100	$471,000 - $949,400	$301,600 - $1,010,100
Deliveries per month	4	2	4 - 5	1 - 4
Discount rate	18%	17% - 18%	18% - 19%	17% - 18%

(a)Ranges of inputs presented primarily reflect differences between the housing markets where each impacted community is located, rather than fluctuations in prevailing market conditions.

As of August 31, 2021, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $98.0 million, representing 12 communities and various other land parcels. As of November 30, 2020, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $113.1 million, representing 16 communities and various other land parcels.

Our inventory controlled under land option contracts and other similar contracts is assessed on a quarterly basis to determine whether it continues to meet our investment return standards. When a decision is made not to exercise certain land option contracts and other similar contracts due to market conditions and/or changes in our marketing strategy, we write off the related inventory costs, including non-refundable deposits and unrecoverable pre-acquisition costs. Based on the results of our assessments, we recognized land option contract abandonment charges of $.4 million for the three months ended August 31, 2021 and $1.3 million for the nine months ended August 31, 2021. For the three months and nine months ended August 31, 2020, we recognized land option contract abandonment charges of $.4 million and $5.4 million, respectively.

Due to the judgment and assumptions applied in our inventory impairment and land option contract abandonment assessment processes, and in our estimations of the remaining operating lives of our inventory assets and the realization of our inventory balances, particularly as to land held for future development, it is possible that actual results could differ substantially from those estimated.

8.    Variable Interest Entities

Unconsolidated Joint Ventures. We participate in joint ventures from time to time that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. Our

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investments in these joint ventures may create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. We analyze our joint ventures under the variable interest model to determine whether they are VIEs and, if so, whether we are the primary beneficiary. Based on our analyses, we determined that one of our joint ventures at August 31, 2021 and November 30, 2020 was a VIE, but we were not the primary beneficiary of the VIE. Therefore, all of our joint ventures at August 31, 2021 and November 30, 2020 were unconsolidated and accounted for under the equity method because we did not have a controlling financial interest.

Land Option Contracts and Other Similar Contracts. In the ordinary course of our business, we enter into land option contracts and other similar contracts with third parties and unconsolidated entities to acquire rights to land for the construction of homes. Under these contracts, we typically make a specified option payment or earnest money deposit in consideration for the right to purchase land in the future, usually at a predetermined price. We analyze each of our land option contracts and other similar contracts under the variable interest model to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, we are required to consolidate a VIE if we are the primary beneficiary. As a result of our analyses, we determined that as of August 31, 2021 and November 30, 2020, we were not the primary beneficiary of any VIEs from which we have acquired rights to land under land option contracts and other similar contracts. We perform ongoing reassessments of whether we are the primary beneficiary of a VIE.

The following table presents a summary of our interests in land option contracts and other similar contracts (in thousands):

	August 31, 2021				November 30, 2020
	Cash Deposits		Aggregate Purchase Price		Cash Deposits		Aggregate Purchase Price
Unconsolidated VIEs	$	57,968	$	1,002,812	$	20,962	$	910,495
Other land option contracts and other similar contracts	38,876		648,499		33,672		507,934
Total	$	96,844	$	1,651,311	$	54,634	$	1,418,429

In addition to the cash deposits presented in the table above, our exposure to loss related to our land option contracts and other similar contracts with third parties and unconsolidated entities consisted of pre-acquisition costs of $39.6 million at August 31, 2021 and $31.1 million at November 30, 2020. These pre-acquisition costs and cash deposits were included in inventories in our consolidated balance sheets.

For land option contracts and other similar contracts where the land seller entity is not required to be consolidated under the variable interest model, we consider whether such contracts should be accounted for as financing arrangements. Land option contracts and other similar contracts that may be considered financing arrangements include those we enter into with third-party land financiers or developers in conjunction with such third parties acquiring a specific land parcel(s) on our behalf, at our direction, and those with other landowners where we or our designee make improvements to the optioned land parcel(s) during the applicable option period. For these land option contracts and other similar contracts, we record the remaining purchase price of the associated land parcel(s) in inventories in our consolidated balance sheets with a corresponding financing obligation if we determine that we are effectively compelled to exercise the option to purchase the land parcel(s). As a result of our evaluations of land option contracts and other similar contracts for financing arrangements, we recorded inventories in our consolidated balance sheets, with a corresponding increase to accrued expenses and other liabilities, of $23.4 million at August 31, 2021 and $19.4 million at November 30, 2020.

9.    Investments in Unconsolidated Joint Ventures

We have investments in unconsolidated joint ventures that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. We and our unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures, typically on a pro rata basis, according to our respective equity interests. The obligations to make capital contributions are governed by each such unconsolidated joint venture’s respective operating agreement and related governing documents.

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As of August 31, 2021 and November 30, 2020, we had investments in six and five unconsolidated joint ventures, respectively. The following table presents combined condensed information from the statements of operations for our unconsolidated joint ventures (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues	$	1,979	$	21,473	$	14,818	$	115,893
Construction and land costs	(1,453)		(15,960)		(12,397)		(84,228)
Other expense, net	(591)		(1,606)		(2,000)		(7,455)
Income (loss)	$	(65)	$	3,907	$	421	$	24,210

The lower combined revenues and construction and land costs for the three months and nine months ended August 31, 2021, as compared to the corresponding year-earlier periods, mainly reflected a decrease in the number of homes delivered from an unconsolidated joint venture in California. This unconsolidated joint venture, which delivered its last home in the 2021 second quarter, had no deliveries in the three months ended August 31, 2021 and 10 deliveries in the nine months ended August 31, 2021, compared to 17 and 90 homes delivered in the corresponding year-earlier periods, respectively.

The following table presents combined condensed balance sheet information for our unconsolidated joint ventures (in thousands):

	August 31, 2021		November 30, 2020
Assets
Cash	$	21,320	$	38,837
Receivables	842		96
Inventories	63,067		65,233
Other assets	263		593
Total assets	$	85,492	$	104,759
Liabilities and equity
Accounts payable and other liabilities	$	11,608	$	14,037
Equity	73,884		90,722
Total liabilities and equity	$	85,492	$	104,759

10.Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Computer software and equipment	$	37,610	$	32,902
Model furnishings and sales office improvements	86,717		83,882
Leasehold improvements, office furniture and equipment	17,735		17,245
Subtotal	142,062		134,029
Less: Accumulated depreciation	(69,592)		(68,482)
Total	$	72,470	$	65,547

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11.Other Assets

Other assets consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Cash surrender value and benefit receivable from corporate-owned life insurance contracts	$	68,776	$	73,227
Lease right-of-use assets	29,896		35,967
Prepaid expenses	10,585		13,916
Debt issuance costs associated with unsecured revolving credit facility, net	1,765		2,400
Total	$	111,022	$	125,510

12.Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Self-insurance and other legal liabilities	$	228,312	$	232,556
Employee compensation and related benefits	171,126		165,342
Warranty liability	97,813		91,646
Customer deposits	66,372		26,243
Accrued interest payable	34,575		31,641
Inventory-related obligations (a)	33,768		31,094
Lease liabilities	31,773		37,668
Real estate and business taxes	16,656		14,249
Other	27,870		37,062
Total	$	708,265	$	667,501

(a)Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities, as well as liabilities for fixed or determinable amounts associated with tax increment financing entity (“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.

13.Leases

We lease certain property and equipment for use in our operations. We recognize lease expense for these leases generally on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Lease right-of-use assets and lease liabilities are recorded on our consolidated balance sheets for leases with an expected term at the commencement date of more than 12 months in accordance with Accounting Standards Codification Topic 842, “Leases” (“ASC 842”). Some of our leases include one or more renewal options, the exercise of which is generally at our discretion. Such options are excluded from the expected term of the lease unless we determine it is reasonably certain the option will be exercised. Lease liabilities are equal to the present value of the remaining lease payments while the amount of lease right-of-use assets is based on the lease liabilities, subject to adjustment, such as for lease incentives. Our leases do not provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term, market interest rates, current interest rates on our senior notes and the effects of collateralization. Our lease population at August 31, 2021 was comprised of operating leases where we are the lessee, primarily real estate leases for our corporate offices, division offices and design studios, as well as certain equipment leases. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

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Lease expense is included in selling, general and administrative expenses in our consolidated statements of operations and includes costs for leases with terms of more than 12 months as well as short-term leases with terms of 12 months or less. Our total lease expense for the three months ended August 31, 2021 and 2020 was $4.3 million and $4.2 million, respectively, and included short-term lease costs of $1.2 million and $1.1 million, respectively. For the nine months ended August 31, 2021 and 2020, our total lease expense was $12.9 million and $13.6 million, respectively, and included short-term lease costs of $3.7 million and $4.8 million, respectively. Variable lease costs and external sublease income for the three-month and nine-month periods ended August 31, 2021 and 2020 were immaterial.

The following table presents our lease right-of-use assets, lease liabilities and the weighted average remaining lease term and weighted average discount rate (incremental borrowing rate) used in calculating the lease liabilities (dollars in thousands):

	August 31, 2021			November 30, 2020
Lease right-of-use assets (a)	$	30,112		$	36,270
Lease liabilities (b)	32,011			38,000
Weighted average remaining lease term	4.0 years			4.5 years
Weighted average discount rate (incremental borrowing rate)	5.1		%	5.1		%

(a)Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020.

(b)Represents lease liabilities within our homebuilding operations and financial services operations of $31.8 million and $.2 million, respectively, at August 31, 2021, and $37.7 million and $.3 million, respectively, at November 30, 2020.

The following table presents additional information about our leases (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Lease right-of-use assets obtained in exchange for new lease liabilities	$	18	$	2,977	$	1,517	$	9,045
Cash payments on lease liabilities	2,979		2,831		8,648		8,468

As of August 31, 2021, the future minimum lease payments required under our leases are as follows (in thousands):

Years Ending November 30,
2021	$	2,962
2022	10,549
2023	8,280
2024	6,139
2025	4,503
Thereafter	3,112
Total lease payments	35,545
Less: Interest	(3,534)
Present value of lease liabilities	$	32,011

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14.Income Taxes

Income Tax Expense. Our income tax expense and effective tax rates were as follows (dollars in thousands):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Income tax expense	$	24,100		$	22,900		$	80,900		$	47,800
Effective tax rate	13.8		%	22.6		%	17.2		%	20.1		%

Our income tax expense and effective tax rate for the three months ended August 31, 2021 included the favorable impact of $21.5 million of federal energy tax credits we earned from building energy-efficient homes, partially offset by $2.5 million of non-deductible executive compensation expense under Internal Revenue Code Section 162(m). Our income tax expense and effective tax rate for the three months ended August 31, 2020 included the favorable impact of $3.1 million of federal energy tax credits we earned from building energy-efficient homes, partly offset by $1.2 million of non-deductible executive compensation expense.

Our income tax expense and effective tax rate for the nine months ended August 31, 2021 reflected the favorable impacts of $39.0 million of federal energy tax credits we earned from building energy-efficient homes and $3.9 million of excess tax benefits related to stock-based compensation, partially offset by $5.8 million of non-deductible executive compensation expense under Internal Revenue Code Section 162(m). For the nine months ended August 31, 2020, our income tax expense and effective tax rate included the favorable impacts of $10.1 million of federal energy tax credits we earned from building energy-efficient homes and $5.6 million of excess tax benefits related to stock-based compensation, partly offset by $3.2 million of non-deductible executive compensation expense.

The federal energy tax credits for the three months and nine months ended August 31, 2021 resulted from legislation enacted in December 2020 and earlier periods. The legislation enacted in December 2020, among other things, extended the availability of a business tax credit for building new energy-efficient homes through December 31, 2021. Prior to this legislation, the tax credit expired on December 31, 2020. This extension is expected to benefit our income tax provision in future periods.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted to provide economic and other relief as a result of the 2019 coronavirus disease (“COVID-19”) pandemic. Among other things, the CARES Act accelerated the timetable for alternative minimum tax (“AMT”) credit refunds. As a result, in the 2020 second quarter, we filed a superseding 2019 federal income tax return claiming a refund of $39.3 million of AMT credits and reclassified this amount from deferred tax assets to receivables. We received this AMT credit refund in the 2021 first quarter.

The CARES Act also provided an Employee Retention Credit (“ERC”), which is a refundable payroll tax credit that encouraged businesses to keep employees on the payroll during the COVID-19 pandemic. Eligible employers could qualify for up to $5,000 of credit for each employee based on certain wages paid after March 12, 2020 and before January 1, 2021. Based on our evaluation of this provision and the significant pandemic-related impacts on our operations in 2020, we recognized an ERC of $4.3 million as an offset to payroll tax expenses within selling general and administrative expenses in our consolidated statements of operations upon filing for the refund in the 2021 first quarter.

In June 2020, California enacted tax legislation that approved the suspension of California net operating loss deductions for tax years 2020, 2021 and 2022. The suspension of California net operating loss deductions did not have an impact on our income tax expense for the three months or nine months ended August 31, 2021.

Deferred Tax Asset Valuation Allowance. We evaluate our deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available positive and negative evidence using a “more likely than not” standard with respect to whether deferred tax assets will be realized. Our evaluation considers, among other factors, our historical operating results, our expectation of future profitability, the duration of the applicable statutory carryforward periods, and conditions in the housing market and the broader economy. The ultimate realization of our deferred tax assets depends primarily on our ability to generate future taxable income during the periods in which the related deferred tax assets become deductible. The value of our deferred tax assets depends on applicable income tax rates.

Our deferred tax assets of $213.1 million as of August 31, 2021 and $249.1 million as of November 30, 2020 were partly offset by valuation allowances of $18.3 million and $18.0 million, respectively. The deferred tax asset valuation allowances as of August 31, 2021 and November 30, 2020 were primarily related to certain state net operating losses that

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had not met the “more likely than not” realization standard at those dates. As a result of an adjustment to our state net operating losses, we increased the valuation allowance by $.3 million in the 2021 third quarter. Based on the evaluation of our deferred tax assets as of August 31, 2021, we determined that most of our deferred tax assets would be realized. Therefore, other than the slight increase mentioned above, no adjustments to our deferred tax valuation allowance were needed for the nine months ended August 31, 2021.

We will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to our deferred tax assets. The accounting for deferred tax assets is based upon estimates of future results. Changes in positive and negative evidence, including differences between estimated and actual results, could result in changes in the valuation of our deferred tax assets that could have a material impact on our consolidated financial statements. Changes in existing federal and state tax laws and corporate income tax rates could also affect actual tax results and the realization of deferred tax assets over time.

Unrecognized Tax Benefits. As of August 31, 2021, we had $.9 million of gross unrecognized tax benefits that if recognized would affect our effective tax rate. We had no such gross unrecognized tax benefits as of November 30, 2020. We do not anticipate a significant change in the amount of gross unrecognized tax benefits over the next 12 months. We recognize accrued interest and penalties related to unrecognized tax benefits in our consolidated financial statements as a component of the provision for income taxes. Our liability for unrecognized tax benefits at August 31, 2021 is included in accrued expenses and other liabilities in our consolidated balance sheets. The fiscal years ending 2017 and later remain open to federal examinations, while 2016 and later remain open to state examinations.

15.Notes Payable

Notes payable consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Mortgages and land contracts due to land sellers and other loans	$	4,067	$	4,667
7.00% Senior notes due December 15, 2021	180,051		449,029
7.50% Senior notes due September 15, 2022	349,310		348,846
7.625% Senior notes due May 15, 2023	350,914		351,281
6.875% Senior notes due June 15, 2027	297,057		296,757
4.80% Senior notes due November 15, 2029	296,826		296,595
4.00% Senior notes due June 15, 2031	385,276		—
Total	$	1,863,501	$	1,747,175

The carrying amounts of our senior notes listed above are net of unamortized debt issuance costs and premiums, which totaled $10.7 million at August 31, 2021 and $7.5 million at November 30, 2020.

Unsecured Revolving Credit Facility. We have an $800.0 million unsecured revolving credit facility with various banks (“Credit Facility”) that will mature on October 7, 2023. The Credit Facility contains an uncommitted accordion feature under which its aggregate principal amount of available loans can be increased to a maximum of $1.00 billion under certain conditions, including obtaining additional bank commitments. The Credit Facility also contains a sublimit of $250.0 million for the issuance of letters of credit. Interest on amounts borrowed under the Credit Facility is payable at least quarterly in arrears at a rate based on either a Eurodollar or a base rate, plus a spread that depends on our consolidated leverage ratio (“Leverage Ratio”), as defined under the Credit Facility. The Credit Facility also requires the payment of a commitment fee at a per annum rate ranging from .20% to .35% of the unused commitment, based on our Leverage Ratio. Under the terms of the Credit Facility, we are required, among other things, to maintain compliance with various covenants, including financial covenants relating to our consolidated tangible net worth, Leverage Ratio, and either a consolidated interest coverage ratio (“Interest Coverage Ratio”) or minimum level of liquidity, each as defined therein. The amount of the Credit Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility. As of August 31, 2021, we had no cash borrowings and $8.6 million of letters of credit outstanding under the Credit Facility. Therefore, as of August 31, 2021, we had $791.4 million available for cash borrowings under the Credit Facility, with up to $241.4 million of that amount available for the issuance of letters of credit.

Letter of Credit Facility. On August 12, 2021, we entered into an amendment to our unsecured letter of credit agreement with a financial institution (“LOC Facility”) that increased the limit of letters of credit we may issue from $50.0 million to $75.0 million and extended the expiration date from February 13, 2022 to February 13, 2025. Under the LOC Facility, we

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obtain letters of credit from time to time in the ordinary course of operating our business. As of August 31, 2021 and November 30, 2020, we had letters of credit outstanding under the LOC Facility of $35.0 million and $29.7 million, respectively.

Mortgages and Land Contracts Due to Land Sellers and Other Loans. As of August 31, 2021, inventories having a carrying value of $16.6 million were pledged to collateralize mortgages and land contracts due to land sellers and other loans.

Shelf Registration Statement. We have an automatically effective universal shelf registration statement that was filed with the SEC on July 9, 2020 (“2020 Shelf Registration”). The 2020 Shelf Registration registers the offering of securities that we may issue from time to time in amounts to be determined. Our ability to issue securities is subject to market conditions.

Senior Notes. On June 9, 2021, we completed the underwritten public offering of $390.0 million in aggregate principal amount of 4.00% senior notes due 2031 (“4.00% Senior Notes due 2031”) at 100% of their aggregate principal amount. Net proceeds from this offering totaled $385.2 million, after deducting the underwriting discount and our expenses related to the offering. The 4.00% Senior Notes due 2031 represent senior unsecured obligations of ours and rank equally in right of payment with all of our existing unsecured and unsubordinated indebtedness. Interest on the 4.00% Senior Notes due 2031 is payable semi-annually in arrears on June 15 and December 15, commencing on December 15, 2021. The 4.00% Senior Notes due 2031 will mature on June 15, 2031.

On June 9, 2021, we used a portion of the net proceeds from the issuance of the 4.00% Senior Notes due 2031 to purchase, pursuant to a tender offer that expired the previous day, $269.8 million in aggregate principal amount of our outstanding $450.0 million of 7.00% senior notes due 2021 (“7.00% Senior Notes due 2021”). We paid $274.9 million to purchase the notes and recorded a charge of $5.1 million for the early extinguishment of debt in the 2021 third quarter due to a premium paid under the tender offer and the unamortized original issue discount associated with these senior notes.

On September 15, 2021, we redeemed the remaining $180.2 million in aggregate principal amount of the 7.00% Senior Notes due 2021 at par value pursuant to the terms of the notes.

All of the senior notes outstanding at August 31, 2021 and November 30, 2020 represent senior unsecured obligations that are guaranteed by certain of our subsidiaries and rank equally in right of payment with all of our and our guarantor subsidiaries’ existing unsecured and unsubordinated indebtedness. All of our senior notes were issued in underwritten public offerings. Interest on each of these senior notes is payable semi-annually.

The indenture governing our senior notes does not contain any financial covenants. Subject to specified exceptions, the indenture contains certain restrictive covenants that, among other things, limit our ability to incur secured indebtedness, or engage in sale and leaseback transactions involving property above a certain specified value. In addition, our senior notes contain certain limitations related to mergers, consolidations, and sales of assets.

As of August 31, 2021, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the senior notes, the indenture, and the mortgages and land contracts due to land sellers and other loans. Our ability to access the Credit Facility for cash borrowings and letters of credit and our ability to secure future debt financing depend, in part, on our ability to remain in such compliance.

As of August 31, 2021, principal payments on senior notes, mortgages and land contracts due to land sellers and other loans are due during each year ending November 30 as follows: 2021 – $1.1 million; 2022 – $531.3 million; 2023 – $351.2 million; 2024 – $.7 million; 2025 – $0; and thereafter – $990.0 million.

16.Fair Value Disclosures

Fair value measurements of assets and liabilities are categorized based on the following hierarchy:

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.

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Fair value measurements are used for inventories on a nonrecurring basis when events and circumstances indicate that their carrying value is not recoverable. The following table presents the fair value hierarchy and our assets measured at fair value on a nonrecurring basis for the nine months ended August 31, 2021 and the year ended November 30, 2020 (in thousands): 

		August 31, 2021						November 30, 2020
Description	Fair Value Hierarchy	Pre-Impairment Value		Inventory Impairment Charges		Fair Value (a)		Pre-Impairment Value		Inventory Impairment Charges		Fair Value (a)
Inventories	Level 3	$	27,923	$	(9,903)	$	18,020	$	69,211	$	(22,723)	$	46,488

(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.

The fair values for inventories that were determined using Level 3 inputs were based on the estimated future net cash flows discounted for inherent risk associated with each underlying asset.

The following table presents the fair value hierarchy, carrying value and estimated fair value of our financial instruments, except those for which the carrying values approximate fair values (in thousands):

		August 31, 2021				November 30, 2020
Description	Fair Value Hierarchy	Carrying Value (a)		Estimated Fair Value		Carrying Value (a)		Estimated Fair Value
Financial Liabilities:
Senior notes	Level 2	$	1,859,434	$	2,024,346	$	1,742,508	$	1,924,250

(a)The carrying values for the senior notes include unamortized debt issuance costs. Debt issuance costs are not factored into the estimated fair values of these notes.

The fair values of our senior notes are generally estimated based on quoted market prices for these instruments. The carrying values reported for cash and cash equivalents, and mortgages and land contracts due to land sellers and other loans approximate fair values. The carrying value of corporate-owned life insurance is based on the cash surrender value of the policies and, accordingly, approximates fair value.

17.Commitments and Contingencies

Commitments and contingencies include typical obligations of homebuilders for the completion of contracts and those incurred in the ordinary course of business.

Warranty. We provide a limited warranty on all of our homes. The specific terms and conditions of our limited warranty program vary depending upon the markets in which we do business. We generally provide a structural warranty of 10 years, a warranty on electrical, heating, cooling, plumbing and certain other building systems each varying from two to five years based on geographic market and state law, and a warranty of one year for other components of the home. Our limited warranty program is ordinarily how we respond to and account for homeowners’ requests to local division offices seeking repairs of certain conditions or defects, including claims where we could have liability under applicable state statutes or tort law for a defective condition in or damages to a home. Our warranty liability covers our costs of repairs associated with homeowner claims made under our limited warranty program. These claims are generally made directly by a homeowner and involve their individual home.

We estimate the costs that may be incurred under each limited warranty and record a liability in the amount of such costs at the time the revenue associated with the sale of each home is recognized. Our primary assumption in estimating the amounts we accrue for warranty costs is that historical claims experience is a strong indicator of future claims experience. Factors that affect our warranty liability include the number of homes delivered, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our accrued warranty liability, which is included in accrued expenses and other liabilities in our consolidated balance sheets, and adjust the amount as necessary based on our assessment. Our assessment includes the review of our actual warranty costs incurred to identify trends and changes in our

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warranty claims experience, and considers our home construction quality and customer service initiatives and outside events. While we believe the warranty liability currently reflected in our consolidated balance sheets to be adequate, unanticipated changes or developments in the legal environment, local weather, land or environmental conditions, quality of materials or methods used in the construction of homes or customer service practices and/or our warranty claims experience could have a significant impact on our actual warranty costs in future periods and such amounts could differ significantly from our current estimates.

The changes in our warranty liability were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Balance at beginning of period	$	95,853	$	92,844	$	91,646	$	88,839
Warranties issued	8,264		6,326		25,099		21,960
Payments	(6,304)		(4,823)		(18,932)		(16,452)
Adjustments	—		—		—		—
Balance at end of period	$	97,813	$	94,347	$	97,813	$	94,347

Guarantees. In the normal course of our business, we issue certain representations, warranties and guarantees related to our home sales and land sales. Based on historical experience, we do not believe any potential liability with respect to these representations, warranties or guarantees would be material to our consolidated financial statements.

Self-Insurance. We maintain, and require the majority of our independent subcontractors to maintain, general liability insurance (including construction defect and bodily injury coverage) and workers’ compensation insurance. These insurance policies protect us against a portion of our risk of loss from claims related to our homebuilding activities, subject to certain self-insured retentions, deductibles and other coverage limits. We also maintain certain other insurance policies. Costs associated with our self-insurance programs are included in selling, general and administrative expenses. In Arizona, California, Colorado and Nevada, our subcontractors’ general liability insurance primarily takes the form of a wrap-up policy under a program where eligible independent subcontractors are enrolled as insureds on each community. Enrolled subcontractors contribute toward the cost of the insurance and agree to pay a contractual amount in the future if there is a claim related to their work. To the extent provided under the wrap-up program, we absorb the enrolled subcontractors’ general liability associated with the work performed on our homes within the applicable community as part of our overall general liability insurance and our self-insurance.

We self-insure a portion of our overall risk through the use of a captive insurance subsidiary, which provides coverage for our exposure to construction defect, bodily injury and property damage claims and related litigation or regulatory actions, up to certain limits. Our self-insurance liability generally covers the costs of settlements and/or repairs, if any, as well as our costs to defend and resolve the following types of claims:

•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.

Our self-insurance liability at each reporting date represents the estimated costs of reported claims, claims incurred but not yet reported, and claim adjustment expenses. The amount of our self-insurance liability is based on an analysis performed by a third-party actuary that uses our historical claim and expense data, as well as industry data to estimate these overall costs. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of products we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for

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variability in these underlying assumptions, our actual future costs could differ from those estimated. In addition, changes in the frequency and severity of reported claims and the estimates to resolve claims can impact the trends and assumptions used in the actuarial analysis, which could be material to our consolidated financial statements. Though state regulations vary, construction defect claims are reported and resolved over a long period of time, which can extend for 10 years or more. As a result, the majority of the estimated self-insurance liability based on the actuarial analysis relates to claims incurred but not yet reported. Therefore, adjustments related to individual existing claims generally do not significantly impact the overall estimated liability. Adjustments to our liabilities related to homes delivered in prior years are recorded in the period in which a change in our estimate occurs.

Our self-insurance liability is presented on a gross basis for all periods without consideration of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any. Estimated probable insurance and other recoveries of $57.1 million and $60.0 million are included in receivables in our consolidated balance sheets at August 31, 2021 and November 30, 2020, respectively. These self-insurance recoveries are principally based on actuarially determined amounts and depend on various factors, including, among other things, the above-described claim cost estimates, our insurance policy coverage limits for the applicable policy year(s), historical third-party recovery rates, insurance industry practices, the regulatory environment and legal precedent, and are subject to a high degree of variability from period to period. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated.

The changes in our self-insurance liability were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Balance at beginning of period	$	194,269	$	178,081	$	194,180	$	177,765
Self-insurance provided	5,168		3,545		15,679		9,522
Payments	(4,699)		(616)		(20,296)		(3,588)
Adjustments (a)	(8,072)		3,099		(2,897)		410
Balance at end of period	$	186,666	$	184,109	$	186,666	$	184,109

(a)Represents net changes in estimated probable recoveries related to self-insurance, which are recorded in receivables, to present our self-insurance liability on a gross basis.

For most of our claims, there is no interaction between our warranty liability and self-insurance liability. Typically, if a matter is identified at its outset as either a warranty or self-insurance claim, it remains as such through its resolution. However, there can be instances of interaction between the liabilities, such as where individual homeowners in a community separately request warranty repairs to their homes to address a similar condition or issue and subsequently join together to initiate, or potentially initiate, a legal process with respect to that condition or issue and/or the repair work we have undertaken. In these instances, the claims and related repair work generally are initially covered by our warranty liability, and the costs associated with resolving the legal matter (including any additional repair work) are covered by our self-insurance liability.

The payments we make in connection with claims and related repair work, whether covered within our warranty liability and/or our self-insurance liability, may be recovered from our insurers to the extent such payments exceed the self-insured retentions or deductibles under our general liability insurance policies. Also, in certain instances, in the course of resolving a claim, we pay amounts in advance of and/or on behalf of a subcontractor(s) or their insurer(s) and believe we will be reimbursed for such payments. Estimates of all such amounts, if any, are recorded as receivables in our consolidated balance sheets when any such recovery is considered probable.

Florida Chapter 558 Actions. We and certain of our subcontractors have received a growing number of claims from attorneys on behalf of individual owners of our homes and/or homeowners’ associations that allege, pursuant to Chapter 558 of the Florida Statutes, various construction defects, with most relating to stucco and water-intrusion issues. The claims primarily involve homes in our Jacksonville, Orlando, and Tampa operations. Under Chapter 558, homeowners must serve written notice of a construction defect(s) and provide the served construction and/or design contractor(s) with an opportunity to respond to the noticed issue(s) before they can file a lawsuit. Although we have resolved many of these claims without litigation, and a number of others have been resolved with applicable subcontractors or their insurers covering the related costs, as of August 31, 2021, we had approximately 650 outstanding noticed claims, and some are scheduled for trial over the next few quarters and beyond. In addition, some of our subcontractors’ insurers in some of these cases have informed us of their inability to continue to pay claims-related costs. At August 31, 2021, we had an

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accrual for our estimated probable loss for these matters and a receivable for estimated probable insurance recoveries. While it is reasonably possible that our loss could exceed the amount accrued and our recoveries could be less than the amount recorded, at this time, we are unable to estimate the total amount of the loss in excess of the accrued amount and/or associated with a shortfall in the recoveries that is reasonably possible.

Townhome Community Construction Defect Claims. In the 2016 fourth quarter, we received claims from a homeowners association alleging there were construction defects, primarily involving roofing and stucco issues, at a completed townhome community in Northern California totaling approximately $25.0 million. We, along with our outside consultants, have continued to investigate these allegations, and at August 31, 2021, we had an accrual for our estimated probable loss in this matter and a receivable for estimated probable insurance recoveries that reflected the status of our investigation to such date. At this stage of our investigation into these allegations, it is reasonably possible that our loss could exceed the amount accrued by an estimated range of $0 to $3.0 million. Our investigation has also involved identifying potentially responsible parties, including insurers, to pay for or perform any necessary repairs. We are in discussions with the homeowners association regarding the claims and their resolution.

Performance Bonds and Letters of Credit. We are often required to provide to various municipalities and other government agencies performance bonds and/or letters of credit to secure the completion of our projects and/or in support of obligations to build community improvements such as roads, sewers, water systems and other utilities, and to support similar development activities by certain of our unconsolidated joint ventures. At August 31, 2021, we had $1.06 billion of performance bonds and $43.6 million of letters of credit outstanding. At November 30, 2020, we had $897.6 million of performance bonds and $42.1 million of letters of credit outstanding. If any such performance bonds or letters of credit are called, we would be obligated to reimburse the issuer of the performance bond or letter of credit. We do not believe that a material amount of any currently outstanding performance bonds or letters of credit will be called. Performance bonds do not have stated expiration dates. Rather, we are released from the performance bonds as the underlying performance is completed. The expiration dates of some letters of credit issued in connection with community improvements coincide with the expected completion dates of the related projects or obligations. Most letters of credit, however, are issued with an initial term of one year and are typically extended on a year-to-year basis until the related performance obligations are completed.

Land Option Contracts and Other Similar Contracts. In the ordinary course of our business, we enter into land option contracts and other similar contracts to acquire rights to land for the construction of homes. At August 31, 2021, we had total cash deposits of $96.8 million to purchase land having an aggregate purchase price of $1.65 billion. Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance.

18.Legal Matters

We are involved in litigation and regulatory proceedings incidental to our business that are in various procedural stages. We believe that the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of August 31, 2021, it was not reasonably possible that an additional material loss had been incurred in an amount in excess of the estimated amounts already recognized or disclosed in our consolidated financial statements. We evaluate our accruals for litigation and regulatory proceedings at least quarterly and, as appropriate, adjust them to reflect (a) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments; (b) the advice and analyses of counsel; and (c) the assumptions and judgment of management. Similar factors and considerations are used in establishing new accruals for proceedings as to which losses have become probable and reasonably estimable at the time an evaluation is made. Our accruals for litigation and regulatory proceedings are presented on a gross basis without consideration of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any. Estimates of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any, are recorded as receivables when such recoveries are considered probable. Based on our experience, we believe that the amounts that may be claimed or alleged against us in these proceedings are not a meaningful indicator of our potential liability. The outcome of any of these proceedings, including the defense and other litigation-related costs and expenses we may incur, however, is inherently uncertain and could differ significantly from the estimate reflected in a related accrual, if made. Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a related accrual or if an accrual had not been made, could be material to our consolidated financial statements. Pursuant to SEC rules, we will disclose any proceeding in which a governmental authority is a party and that arises under any federal, state or local provisions enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment only where we believe that such proceeding will result in monetary sanctions on us, exclusive of interest and costs, above $1.0 million or is otherwise material to our consolidated financial statements.

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19.Stockholders’ Equity

A summary of changes in stockholders’ equity is presented below (in thousands):

	Three Months Ended August 31, 2021 and 2020
	Number of Shares
	Common Stock	Grantor Stock Ownership Trust	Treasury Stock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor Stock Ownership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at May 31, 2021	100,151	(6,705)	(1,303)	$	100,151	$	836,353	$	2,081,288	$	(22,276)	$	(72,718)	$	(35,933)	$	2,886,865
Net income	—	—	—	—		—		150,097		—		—		—		150,097
Dividends on common stock	—	—	—	—		—		(13,168)		—		—		—		(13,168)
Stock awards	—	—	3	—		(87)		—		—		—		87		—
Stock-based compensation	—	—	—	—		6,114		—		—		—		—		6,114
Stock repurchases	—	—	(4,669)	—		—		—		—		—		(188,175)		(188,175)
Balance at August 31, 2021	100,151	(6,705)	(5,969)	$	100,151	$	842,380	$	2,218,217	$	(22,276)	$	(72,718)	$	(224,021)	$	2,841,733
Balance at May 31, 2020	122,370	(7,317)	(24,526)	$	122,370	$	806,700	$	2,255,742	$	(17,149)	$	(79,359)	$	(597,950)	$	2,490,354
Net income	—	—	—	—		—		78,415		—		—		—		78,415
Dividends on common stock	—	—	—	—		—		(8,097)		—		—		—		(8,097)
Employee stock options/other	—	—	17	—		(421)		—		—		—		421		—
Stock-based compensation	—	—	—	—		4,636		—		—		—		—		4,636
Balance at August 31, 2020	122,370	(7,317)	(24,509)	$	122,370	$	810,915	$	2,326,060	$	(17,149)	$	(79,359)	$	(597,529)	$	2,565,308
	Nine Months Ended August 31, 2021 and 2020
	Number of Shares
	Common Stock	Grantor Stock Ownership Trust	Treasury Stock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor Stock Ownership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at November 30, 2020	99,869	(7,124)	(1,107)	$	99,869	$	824,306	$	1,868,896	$	(22,276)	$	(77,265)	$	(27,761)	$	2,665,769
Cumulative effect of adoption of ASU 2016-13	—	—	—	—		—		(226)		—		—		—		(226)
Net income	—	—	—	—		—		390,512		—		—		—		390,512
Dividends on common stock	—	—	—	—		—		(40,965)		—		—		—		(40,965)
Employee stock options/other	238	—	—	238		3,268		—		—		—		—		3,506
Stock awards	44	419	15	44		(4,962)		—		—		4,547		371		—
Stock-based compensation	—	—	—	—		19,768		—		—		—		—		19,768
Stock repurchases	—	—	(4,669)	—		—		—		—		—		(188,175)		(188,175)
Tax payments associated with stock-based compensation awards	—	—	(208)	—		—		—		—		—		(8,456)		(8,456)
Balance at August 31, 2021	100,151	(6,705)	(5,969)	$	100,151	$	842,380	$	2,218,217	$	(22,276)	$	(72,718)	$	(224,021)	$	2,841,733
Balance at November 30, 2019	121,593	(7,631)	(24,356)	$	121,593	$	793,954	$	2,157,183	$	(15,506)	$	(82,758)	$	(591,344)	$	2,383,122
Cumulative effect of adoption of ASC 842	—	—	—	—		—		1,510		—		—		—		1,510
Reclassification of stranded tax effects	—	—	—	—		—		1,643		(1,643)		—		—		—
Net income	—	—	—	—		—		190,152		—		—		—		190,152
Dividends on common stock	—	—	—	—		—		(24,428)		—		—		—		(24,428)
Employee stock options/other	709	—	17	709		7,274		—		—		—		421		8,404
Stock awards	68	314	(15)	68		(3,080)		—		—		3,399		(387)		—
Stock-based compensation	—	—	—	—		12,767		—		—		—		—		12,767
Tax payments associated with stock-based compensation awards	—	—	(155)	—		—		—		—		—		(6,219)		(6,219)
Balance at August 31, 2020	122,370	(7,317)	(24,509)	$	122,370	$	810,915	$	2,326,060	$	(17,149)	$	(79,359)	$	(597,529)	$	2,565,308

    

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On February 18, 2021, the management development and compensation committee of our board of directors approved the payout of 419,070 shares of our common stock in connection with the vesting of PSUs that were granted to certain employees on October 5, 2017. The shares paid out under the PSUs reflected our achievement of certain performance measures that were based on cumulative earnings per share, average return on invested capital, and revenue growth relative to a peer group of high-production public homebuilding companies over the three-year period from December 1, 2017 through November 30, 2020. Of the shares of common stock paid out, 207,775 shares, or $8.5 million, were purchased by us in the 2021 first quarter to satisfy the recipients’ withholding taxes on the vesting of the PSUs. The shares purchased were not considered repurchases under the authorizations described below.

On July 8, 2021, our board of directors authorized us to repurchase up to 5,000,000 shares of our outstanding common stock. This authorization reaffirmed and incorporated the then-current balance of 2,193,947 shares that remained under a prior board-approved share repurchase program. In the 2021 third quarter, we repurchased 4,668,600 shares of our common stock on the open market pursuant to this authorization at a total cost of $188.2 million. Repurchases under the remaining authorization of 331,400 shares may occur periodically through open market purchases, privately negotiated transactions or otherwise, with the timing and amount at management’s discretion and dependent on market and business conditions and other factors. This share repurchase authorization will continue in effect until fully used or earlier terminated or suspended by our board of directors and does not obligate us to purchase any additional shares.

Unrelated to the share repurchase program, our board of directors authorized in 2014 the repurchase of not more than 680,000 shares of our outstanding common stock, and also authorized potential future grants of up to 680,000 stock payment awards under the KB Home 2014 Equity Incentive Plan (“2014 Plan”), in each case solely as necessary for director elections in respect of outstanding stock appreciation rights awards granted under our Non-Employee Directors Compensation Plan. The 2014 Plan was amended in April 2016. As of August 31, 2021, we have not repurchased any shares and no stock payment awards have been granted under the 2014 Plan, as amended, pursuant to the respective board of directors’ authorizations.

On April 8, 2021, we entered into an Amended Rights Agreement with Computershare Inc., as rights agent, following its approval by our stockholders at our 2021 Annual Meeting held on April 8, 2021. The Amended Rights Agreement amends the Amended and Restated Rights Agreement, dated as of April 12, 2018 (“Prior Rights Agreement”). As with the Prior Rights Agreement, the Amended Rights Agreement is intended to continue to help protect our net operating losses and other deferred tax assets from an ownership change under Internal Revenue Code Section 382. The Amended Rights Agreement extended the latest possible expiration date of the rights issued pursuant to the Prior Rights Agreement to the close of business on April 30, 2024 and made certain other related changes. Otherwise, the Amended Rights Agreement’s terms are substantively the same as those of the Prior Rights Agreement, which were disclosed in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended November 30, 2020.

In the three-month period ended August 31, 2021, our board of directors declared, and we paid, a quarterly cash dividend on our common stock of $.15 per share. In the three-month period ended August 31, 2020, our board of directors declared, and we paid, a quarterly cash dividend on our common stock of $.09 per share. Quarterly cash dividends declared and paid on our common stock in the nine-month periods ended August 31, 2021 and 2020 totaled $.45 per share and $.27 per share of common stock, respectively.

20.Stock-Based Compensation

Stock Options. We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model. The following table summarizes stock option transactions for the nine months ended August 31, 2021:

	Options	Weighted Average Exercise Price
Options outstanding at beginning of period	2,462,714	$	15.32
Granted	—	—
Exercised	(228,651)	15.35
Cancelled	—	—
Options outstanding at end of period	2,234,063	$	15.32
Options exercisable at end of period	2,234,063	$	15.32

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We have not granted any stock option awards since 2016. As of August 31, 2021, stock options outstanding and stock options exercisable each had a weighted average remaining contractual life of 3.9 years. As all outstanding stock options have been fully vested since 2019, there was no unrecognized compensation expense related to stock option awards at August 31, 2021 and no stock-based compensation expense associated with stock options for the three-month and nine-month periods ended August 31, 2021 and 2020. Stock options outstanding and stock options exercisable each had an aggregate intrinsic value of $61.9 million at August 31, 2021. (The intrinsic value of a stock option is the amount by which the market value of a share of the underlying common stock exceeds the exercise price of the stock option.)

Other Stock-Based Awards. From time to time, we grant restricted stock and PSUs to various employees as a compensation benefit. We recognized total compensation expense of $6.1 million and $4.6 million for the three months ended August 31, 2021 and 2020, respectively, related to restricted stock and PSUs. For the nine months ended August 31, 2021 and 2020, we recognized total compensation expense of $19.8 million and $12.7 million, respectively, related to restricted stock and PSUs.

21.Supplemental Disclosure to Consolidated Statements of Cash Flows

The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

	Nine Months Ended August 31,
	2021		2020
Summary of cash and cash equivalents at end of period:
Homebuilding	$	350,141	$	722,033
Financial services	1,204		1,093
Total	$	351,345	$	723,126
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	$	(2,934)	$	(3,544)
Income taxes paid	43,248		8,436
Supplemental disclosures of non-cash activities:
Reclassification of federal tax refund from deferred tax assets to receivables	—		82,617
Increase in operating lease right-of-use assets and lease liabilities due to adoption of ASC 842	—		31,199
Inventories acquired through seller financing	—		18,045
Increase in consolidated inventories not owned	4,011		4,992
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture	5,451		6,996

22.Subsequent Events

On September 15, 2021, we redeemed the remaining $180.2 million in aggregate principal amount of the 7.00% Senior Notes due 2021 at par value pursuant to the terms of the notes.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

OVERVIEW

Revenues are generated from our homebuilding and financial services operations. The following table presents a summary of our consolidated results of operations (dollars in thousands, except per share amounts):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021		2020		Variance		2021		2020		Variance
Revenues:
Homebuilding	$	1,461,896	$	995,148	47	%	$	4,035,939	$	2,977,810	36	%
Financial services	5,206		3,865		35		13,793		11,108		24
Total revenues	$	1,467,102	$	999,013	47	%	$	4,049,732	$	2,988,918	35	%
Pretax income:
Homebuilding	$	164,816	$	91,651	80	%	$	442,883	$	214,871	106	%
Financial services	9,381		9,664		(3)		28,529		23,081		24
Total pretax income	174,197		101,315		72		471,412		237,952		98
Income tax expense	(24,100)		(22,900)		(5)		(80,900)		(47,800)		(69)
Net income	$	150,097	$	78,415	91	%	$	390,512	$	190,152	105	%
Diluted earnings per share	$	1.60	$	.83	93	%	$	4.11	$	2.02	103	%

Housing market conditions remained positive through the nine months ended August 31, 2021, as healthy demand, particularly from millennial and Generation Z demographic groups, a limited supply of new and resale inventory, and low mortgage interest rates drove strong results for our business. Amid the considerable demand for our homes and steadily increasing construction labor and building materials costs, we lifted selling prices in the vast majority of our communities and took other operational steps during the 2021 third quarter to balance pace, price and construction starts, optimize the performance of our inventory assets and improve returns. Reflecting these initiatives, the value of our net orders for the 2021 third quarter increased 22% from the 2020 third quarter due to a 26% rise in their overall selling price, partly offset by a 3% decline in net order volume. The decrease in net order volume was due to our lower average community count in the current period, partly offset by higher monthly net orders per community. Our lower average community count reflected the accelerated close-out of communities that resulted from our exceptionally strong monthly net order pace over the past few quarters and delays in new community openings during the nine months ended August 31, 2021. Compared to the 2021 second quarter, our current quarter average community count held steady, and ending community count increased 5%, reflecting our efforts to grow our business. The strong housing demand in our served markets propelled our monthly net orders per community to 6.6 from 5.9, even as we raised prices and strategically paced lot releases to enhance margins and align with current production capacity.

As during the 2021 first half, we continued to confront production issues in the third quarter due to industry-wide supply chain disruptions that created shortages of certain construction materials and other products, and experienced trade labor availability constraints and delays with respect to state and municipal construction permitting, inspections and utilities. As in the 2021 second quarter, these factors extended our construction cycle times in the 2021 third quarter, and many expected deliveries and new community openings were pushed beyond the quarter end. Though we are closely monitoring these risks to our construction cycle times and new community openings, we believe these challenging conditions will generally persist for the remainder of the year and into 2022. We have incorporated these trends into our performance expectations, as presented below under “Outlook.”

Homebuilding revenues for the 2021 third quarter grew 47% from the year-earlier quarter due to an increase in housing revenues that reflected 35% growth in the number of homes delivered to 3,425, our highest third-quarter level since 2007, and an 11% increase in the overall average selling price of those homes to $426,800. Homebuilding operating income for the three months ended August 31, 2021 rose 91% year over year to $169.9 million and, as a percentage of revenues, improved 270 basis points to 11.6%. The increase in our homebuilding operating income margin was driven by significant improvements in both our housing gross profit margin and selling, general and administrative expenses as a percentage of housing revenues. Our pretax income margin improved 180 basis points to 11.9%, and net income and diluted earnings per share increased 91% and 93%, respectively, each as compared to the corresponding quarter of 2020. Our 2021 third quarter results included a $5.1

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million loss on early extinguishment of debt associated with our purchase, pursuant to a tender offer that expired on June 8, 2021, of $269.8 million in aggregate principal amount of our 7.00% Senior Notes due 2021 prior to their maturity date. Further information regarding this transaction is provided in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report. Excluding the loss on early extinguishment of debt, our pretax income grew 77% to $179.3 million and, as a percentage of revenues, increased 210 basis points to 12.2%.

COVID-19 Pandemic Impact. The COVID-19 pandemic and related governmental control measures considerably disrupted global and national economies, the U.S. housing market, and our business during the 2020 second quarter. During that period, we experienced a sizable reduction in net orders and backlog, as discussed below under “Net Orders,” as well as protracted supply chain delays and construction cycle time extensions in most of our served markets that resulted in home delivery delays. With the uncertainty surrounding the COVID-19 pandemic, and in prioritizing cash preservation and liquidity, we limited our land investments and curtailed our overhead expenditures, partly through workforce realignment and reductions. As a result, our selling, general and administrative expenses for the 2020 second quarter included severance charges of $6.7 million.

With the easing to varying degrees of restrictive public health orders in our served markets beginning in May 2020, our net orders began to rebound significantly following a low point in April 2020, as steadily increasing housing demand drove our 2020 third- and fourth-quarter net orders to 15-year highs and our 2021 first- and second-quarter net orders to 14-year highs. The sharp rise in net orders over these periods substantially expanded the number of homes in our backlog as well as our backlog value. While our 2021 third quarter net orders decreased modestly from the year-earlier quarter reflecting our lower average community count, partly offset by an increase in net orders per community, our ending backlog value at August 31, 2021 increased 89% to approximately $4.84 billion, our highest third-quarter level since 2006. With this robust backlog, we expect to achieve significant year-over-year growth in our scale, profitability and returns during 2021 and further growth in 2022, as described below under “Outlook.” In addition, with the ongoing strong housing demand in the first three quarters of 2021, we continued to increase our land acquisition and development investments, as we did in the latter part of 2020, to measurably expand our lot pipeline and support future community count growth.

Our favorable outlook could be materially affected by adverse developments, if any, related to the COVID-19 pandemic, including new or more restrictive “stay-at-home” orders and other new or revised public health requirements recommended or imposed by federal, state and local authorities. Until the COVID-19 pandemic has been resolved as a public health crisis, it retains the potential to cause further and more severe disruption of global and national economies, the U.S. housing market and our business, including our net orders, backlog and revenues. In addition, as mentioned above, we are continuing to experience labor constraints, supply chain issues and rising and volatile raw material prices and availability, particularly with respect to building materials and appliances, as well as delays related to state and municipal construction permitting, inspections and utilities, that could negatively impact our growth, margins and financial results in future periods. Despite these challenges, and other factors, which may individually or in combination slow or reverse the current housing recovery from the COVID-19 pandemic-induced disruptions in the 2020 second quarter, we believe we are well-positioned to operate effectively through the present environment.

HOMEBUILDING

Financial Results. The following table presents a summary of certain financial and operational data for our homebuilding operations (dollars in thousands, except average selling price):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues:
Housing	$	1,461,648	$	979,113	$	4,035,033	$	2,960,901
Land	248		16,035		906		16,909
Total	1,461,896		995,148		4,035,939		2,977,810
Costs and expenses:
Construction and land costs
Housing	(1,147,448)		(784,427)		(3,176,643)		(2,414,059)
Land	(194)		(14,068)		(926)		(14,942)
Total	(1,147,642)		(798,495)		(3,177,569)		(2,429,001)
Selling, general and administrative expenses	(144,325)		(107,710)		(411,445)		(348,082)
Total	(1,291,967)		(906,205)		(3,589,014)		(2,777,083)
Operating income	169,929		88,943		446,925		200,727

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	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Interest income	144			786			1,038			2,163
Equity in income (loss) of unconsolidated joint ventures	(182)			1,922			(5)			11,981
Loss on early extinguishment of debt	(5,075)			—			(5,075)			—
Homebuilding pretax income	$	164,816		$	91,651		$	442,883		$	214,871
Homes delivered	3,425			2,545			9,793			7,796
Average selling price	$	426,800		$	384,700		$	412,000		$	379,800
Housing gross profit margin as a percentage of housing revenues	21.5		%	19.9		%	21.3		%	18.5		%
Housing gross profit margin excluding inventory-related charges as a percentage of housing revenues	22.0		%	20.6		%	21.6		%	19.0		%
Adjusted housing gross profit margin as a percentage of housing revenues	24.5		%	23.7		%	24.3		%	22.2		%
Selling, general and administrative expenses as a percentage of housing revenues	9.9		%	11.0		%	10.2		%	11.8		%
Operating income as a percentage of revenues	11.6		%	8.9		%	11.1		%	6.7		%

Revenues. Homebuilding revenues of $1.46 billion for the three months ended August 31, 2021 rose from the corresponding year-earlier period due to a 49% increase in housing revenues, partly offset by a decrease in land sale revenues. The year-over-year growth in housing revenues reflected a 35% increase in the number of homes delivered and an 11% increase in the overall average selling price of those homes. The higher volume of homes delivered was largely due to our backlog of homes at the beginning of the quarter (“beginning backlog”) increasing 98% year over year as a result of strong net order growth over the past several quarters. However, ongoing industry-wide supply chain disruptions, labor constraints, and delays with respect to state and municipal construction permitting, inspections and utilities extended build times in most of our served markets and pushed many expected deliveries beyond the quarter end. The overall average selling price of homes delivered reflected strong housing market conditions, which enabled us to raise prices in the vast majority of our communities, as well as product and geographic mix shifts of homes delivered.

For the nine months ended August 31, 2021, homebuilding revenues grew 36% year over year to $4.04 billion, reflecting growth in housing revenues, partially offset by a decrease in land sale revenues. Housing revenues for the nine months ended August 31, 2021 also increased 36% from the corresponding 2020 period as a result of a 26% increase in the number of homes delivered and an 8% rise in the overall average selling price of those homes.

Operating Income. The year-over-year growth in our operating income for the three-month and nine-month periods ended August 31, 2021 primarily reflected increases in housing gross profits, partly offset by increases in selling, general and administrative expenses.

Our operating income for the three months ended August 31, 2021 increased 91% from the year-earlier period. Operating income for the 2021 third quarter included inventory-related charges of $6.7 million, compared to $6.9 million in the year-earlier quarter. As a percentage of revenues, our operating income for the three months ended August 31, 2021 improved 270 basis points to 11.6%, compared to 8.9% for the corresponding 2020 period. Excluding inventory-related charges, our operating income as a percentage of revenues increased 250 basis points to 12.1% for the 2021 third quarter from 9.6% for the year-earlier quarter.

For the nine months ended August 31, 2021, our operating income grew 123% compared to the prior-year period. Operating income for the first three quarters of 2021 included inventory-related charges of $11.2 million. For the nine months ended August 31, 2020, operating income included inventory-related charges of $16.9 million and severance charges of $6.7 million associated with workforce reductions made during the 2020 second quarter, as discussed above under “COVID-19 Pandemic Impact.” As a percentage of revenues, our operating income for the nine months ended August 31, 2021 increased 440 basis points year over year to 11.1%. Excluding inventory-related charges for both periods and the above-mentioned severance charges in the 2020 period, our operating income margin improved to 11.4% for the nine months ended August 31, 2021, compared to 7.5% for the nine months ended August 31, 2020.

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Housing Gross Profits. Housing gross profits of $314.2 million for the three months ended August 31, 2021 grew 61% from $194.7 million for the year-earlier period, reflecting increases in both our housing revenues and housing gross profit margin. Our housing gross profit margin for the 2021 third quarter rose 160 basis points year over year to 21.5%, mainly as a result of a favorable pricing environment that more than offset higher construction costs (approximately 80 basis points); lower amortization of previously capitalized interest as a percentage of housing revenues (approximately 60 basis points); and a decrease in inventory-related charges (approximately 20 basis points). As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 2.5% and 3.1% for the three months ended August 31, 2021 and 2020, respectively. Excluding the amortization of previously capitalized interest associated with housing operations and the above-mentioned inventory-related charges for the applicable periods, our adjusted housing gross profit margin for the 2021 third quarter increased 80 basis points from the year-earlier quarter to 24.5%.

For the first three quarters of 2021, our housing gross profits of $858.4 million increased 57% from $546.8 million for the year-earlier period. Housing gross profits for the nine months ended August 31, 2021 included $11.2 million of inventory-related charges, compared to $16.9 million of such charges in the corresponding 2020 period. Our housing gross profit margin of 21.3% for the nine months ended August 31, 2021 increased 280 basis points year over year, primarily due to the reasons described above with respect to the three months ended August 31, 2021. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 2.7% for the nine months ended August 31, 2021, compared to 3.2% for the corresponding 2020 period. Our adjusted housing gross profit margin for the nine months ended August 31, 2021 increased 210 basis points from the year-earlier period to 24.3%. The calculation of adjusted housing gross profit margin, which we believe provides a clearer measure of the performance of our business, is described below under “Non-GAAP Financial Measures.”

Selling, General and Administrative Expenses. The following table presents the components of our selling, general and administrative expenses (dollars in thousands):

	Three Months Ended August 31,								Nine Months Ended August 31,
	2021		% of Housing Revenues		2020		% of Housing Revenues		2021		% of Housing Revenues		2020		% of Housing Revenues
Marketing expenses	$	28,760	2.0	%	$	26,799	2.7	%	$	86,664	2.1	%	$	88,776	3.0	%
Commission expenses (a)	55,455		3.8		38,398		3.9		156,930		3.9		118,675		4.0
General and administrative expenses	60,110		4.1		42,513		4.4		167,851		4.2		140,631		4.8
Total	$	144,325	9.9	%	$	107,710	11.0	%	$	411,445	10.2	%	$	348,082	11.8	%

(a)Commission expenses include sales commissions on homes delivered paid to internal sales counselors and external real estate brokers.

Selling, general and administrative expenses for the 2021 third quarter rose 34% from the year-earlier quarter, mainly due to an increase in commission expenses associated with our higher housing revenues, and an increase in general and administrative expenses. The year-over-year increase in general and administrative expenses primarily reflected higher costs associated with performance-based employee compensation plans, as well as expenses incurred to support current and expected growth. As a percentage of housing revenues, our selling, general and administrative expenses improved 110 basis points, largely reflecting increased operating leverage due to our higher housing revenues as compared to the year-earlier quarter, partly offset by the above-mentioned higher expenses.

For the nine months ended August 31, 2021, selling, general and administrative expenses increased 18% year over year, mainly due to the reasons described above with respect to the three months ended August 31, 2021, partly offset by a $4.3 million benefit from the ERC recognized in early 2021 and the above-mentioned severance charges recognized in 2020. The ERC, which is discussed in Note 14 – Income Taxes in the Notes to Consolidated Financial Statements in this report, favorably impacted each of our homebuilding reporting segments. As a percentage of housing revenues, selling, general and administrative expenses for the nine months ended August 31, 2021 improved 160 basis points to 10.2%.

Interest Income/Expense. Interest income, which is generated from short-term investments, totaled $.1 million for the three months ended August 31, 2021 and $.8 million for the year-earlier period. For the nine-month periods ended August 31, 2021 and 2020, our interest income totaled $1.0 million and $2.2 million, respectively. Generally, increases and decreases in interest

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income are attributable to changes in the interest-bearing average balances of short-term investments and fluctuations in interest rates.

We incur interest principally from our borrowings to finance land acquisitions, land development, home construction and other operating and capital needs. All interest incurred during the three-month and nine-month periods ended August 31, 2021 and 2020 was capitalized due to the average amount of our inventory qualifying for interest capitalization exceeding our average debt level for each period. As a result, we had no interest expense for these periods. Further information regarding our interest incurred and capitalized is provided in Note 6 – Inventories in the Notes to Consolidated Financial Statements in this report.

Equity in Income (Loss) of Unconsolidated Joint Ventures. Our equity in loss of unconsolidated joint ventures was $.2 million for the three months ended August 31, 2021, compared to equity in income of unconsolidated joint ventures of $1.9 million for the year-earlier period. For the nine months ended August 31, 2021, our equity in loss of unconsolidated joint ventures was nominal, compared to equity in income of $12.0 million for the corresponding 2020 period. The year-over-year changes for both periods mainly resulted from a decrease in the number of homes delivered from an unconsolidated joint venture in California. This unconsolidated joint venture, which delivered its last home in the 2021 second quarter, had no deliveries in the three months ended August 31, 2021 and 10 deliveries in the nine months ended August 31, 2021, compared to 17 and 90 homes delivered in the corresponding year-earlier periods, respectively.

Further information regarding our investments in unconsolidated joint ventures is provided in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.

Loss on Early Extinguishment of Debt. Our $5.1 million loss on early extinguishment of debt for the 2021 third quarter was associated with our purchase, pursuant to a tender offer that expired on June 8, 2021, of $269.8 million in aggregate principal amount of our 7.00% Senior Notes due 2021 prior to their maturity date. Further information regarding this transaction is provided in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report.

Net Orders, Cancellation Rates, Backlog and Community Count. The following table presents information concerning our net orders, cancellation rates, ending backlog and community count (dollars in thousands):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Net orders	4,085			4,214			12,677			9,467
Net order value (a)	$	2,009,192		$	1,643,760		$	5,915,097		$	3,714,858
Cancellation rates (b)	9		%	17		%	10		%	23		%
Ending backlog — homes	10,694			6,749			10,694			6,749
Ending backlog — value	$	4,842,467		$	2,567,664		$	4,842,467		$	2,567,664
Ending community count	210			232			210			232
Average community count	205			238			214			244

(a)    Net order value represents the potential future housing revenues associated with net orders generated during the period, as well as homebuyer selections of lot and product premiums and design studio options and upgrades for homes in backlog during the same period.

(b)    Cancellation rates represent the total number of contracts for new homes cancelled during a period divided by the total (gross) orders for new homes generated during the same period.

Net Orders. For the three months ended August 31, 2021, net orders from our homebuilding operations decreased 3% from the year-earlier period, reflecting a decrease in our average community count, partly offset by a 12% increase in monthly net orders per community to 6.6 from 5.9 in the year-earlier period. This higher monthly net order pace occurred even as we raised our home selling prices and paced lot releases, as described above under “Overview.” We believe our Built-to-Order® homebuying process, which provides personalization and choice, also was a key contributor to our strong 2021 third quarter monthly net order pace.

Though we experienced a modest decrease in our net orders for the 2021 third quarter compared to strong 2020 third-quarter net orders, which reached a 15-year high, the value of our net orders rose 22% due to a 26% increase in the overall average selling price of net orders that largely reflected strong housing demand in most of our served markets as well as a product and

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geographic mix shift. The year-over-year growth in overall net order value was due to improvements in all four of our homebuilding reporting segments, with net order value increases ranging from 3% in our West Coast segment to 89% in our Southeast segment.

Our cancellation rate as a percentage of gross orders for the three months ended August 31, 2021 improved from the year-earlier period.

Backlog. The number of homes in our backlog at August 31, 2021 increased 58% from August 31, 2020, reflecting our substantially higher backlog at the beginning of the fiscal year as well as year-over-year growth in our net orders for the nine months ended August 31, 2021. The potential future housing revenues in our backlog at August 31, 2021 rose 89% from the prior year as a result of both the higher number of homes in our backlog and a 19% increase in the overall average selling price of those homes. Each of our four homebuilding reporting segments generated year-over-year increases in backlog value, ranging from 70% in our West Coast segment to 140% in our Southeast segment.

Community Count. We use the term “community count” to refer to the number of communities open for sale with at least five homes left to sell at the end of a reporting period. Our average community count for the 2021 third quarter decreased 14% from the year-earlier period, and our ending community count declined 9%. The year-over-year decreases in our overall average and ending community counts primarily reflected the close-out of communities earlier than anticipated due to both an increase in our demand-driven net order pace and delays in new community openings during the nine months ended August 31, 2021, as described above under “Overview.” Compared to the 2021 second quarter, our current quarter average community count held steady, and our ending community count increased 5%. As described above under “COVID-19 Pandemic Impact,” we have substantially increased our investments in land acquisition and land development in 2021 to support future community count growth.

HOMEBUILDING REPORTING SEGMENTS

For reporting purposes, we organize our homebuilding operations into four segments — West Coast, Southwest, Central and Southeast. As of August 31, 2021, our homebuilding reporting segments conducted ongoing operations in the following states: West Coast — California and Washington; Southwest — Arizona and Nevada; Central — Colorado and Texas; and Southeast — Florida and North Carolina.

Operational Data. The following tables present homes delivered, net orders, cancellation rates as a percentage of gross orders, net order value, average community count and ending backlog (number of homes and value) by homebuilding reporting segment (dollars in thousands):

	Three Months Ended August 31,
	Homes Delivered				Net Orders			Cancellation Rates
Segment	2021		2020		2021		2020	2021		2020
West Coast	1,035		626		1,078		1,329	10	%	12	%
Southwest	626		628		818		857	7		13
Central	1,174		958		1,382		1,469	11		22
Southeast	590		333		807		559	7		19
Total	3,425		2,545		4,085		4,214	9	%	17	%
	Three Months Ended August 31,
	Net Order Value						Average Community Count
Segment	2021		2020		Variance		2021	2020		Variance
West Coast	$	785,430	$	761,742	3	%	56	74		(24)	%
Southwest	350,806		285,917		23		36	35		3
Central	575,737		438,697		31		73	88		(17)
Southeast	297,219		157,404		89		40	41		(2)
Total	$	2,009,192	$	1,643,760	22	%	205	238		(14)	%

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	Nine Months Ended August 31,
	Homes Delivered				Net Orders				Cancellation Rates
Segment	2021		2020		2021		2020		2021			2020
West Coast	2,925		2,005		3,538		2,863		9		%	18	%
Southwest	1,875		1,783		2,609		1,927		7			21
Central	3,417		2,881		4,272		3,405		11			24
Southeast	1,576		1,127		2,258		1,272		10			29
Total	9,793		7,796		12,677		9,467		10		%	23	%
	Net Order Value						Average Community Count
Segment	2021		2020		Variance		2021		2020			Variance
West Coast	$	2,502,397	$	1,685,094	49	%	60		74			(19)	%
Southwest	1,059,425		642,601		65		36		37			(3)
Central	1,592,424		1,024,623		55		78		89			(12)
Southeast	760,851		362,540		110		40		44			(9)
Total	$	5,915,097	$	3,714,858	59	%	214		244			(12)	%
	August 31,
	Backlog – Homes						Backlog – Value
Segment	2021		2020		Variance		2021		2020			Variance
West Coast	2,637		1,901		39	%	$	1,851,237	$	1,088,096		70	%
Southwest	2,255		1,382		63		902,451		458,681			97
Central	3,892		2,512		55		1,440,443		750,831			92
Southeast	1,910		954		100		648,336		270,056			140
Total	10,694		6,749		58	%	$	4,842,467	$	2,567,664		89	%

The composition of our homes delivered, net orders and backlog shifts with the mix of our active communities and the corresponding average selling prices of the homes ordered and/or delivered at these communities in any particular period, and changes as new communities open and existing communities wind down or close out. In addition, with our Built-to-Order model, the selling prices of homes within a community may vary due to differing lot sizes and locations, home square footage, and option and upgrade selections. These intrinsic variations in our business limit the effective comparability of our homes delivered, net orders and backlog, as well as their corresponding values, between sequential and year-over-year periods, in addition to the effect of prevailing economic or housing market conditions in or across any particular periods.

Financial Results. Below is a discussion of the financial results for each of our homebuilding reporting segments. Further information regarding these segments, including their pretax income (loss), is included in Note 2 – Segment Information in the Notes to Consolidated Financial Statements in this report. The difference between each homebuilding reporting segment’s operating income (loss) and pretax income (loss) is generally due to the equity in income (loss) of unconsolidated joint ventures and/or interest income and expense.

The financial results for each of our homebuilding reporting segments for the three months and nine months ended August 31, 2020 were negatively affected by the impacts from the onset of the COVID-19 pandemic, as discussed above under “COVID-19 Pandemic Impact.” With housing market conditions remaining strong from the 2020 third quarter through the 2021 third quarter, we delivered more homes at a higher overall average selling price and significantly expanded our operating income as a percentage of revenues for the three months and nine months ended August 31, 2021, as compared to the corresponding year-earlier periods.

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West Coast. The following table presents financial information related to our West Coast segment for the periods indicated (dollars in thousands, except average selling price):

	Three Months Ended August 31,								Nine Months Ended August 31,
	2021			2020			Variance		2021			2020			Variance
Revenues	$	663,563		$	379,025		75	%	$	1,803,769		$	1,195,404		51	%
Construction and land costs	(530,103)			(318,272)			(67)		(1,458,434)			(1,017,383)			(43)
Selling, general and administrative expenses	(40,050)			(28,424)			(41)		(117,056)			(94,197)			(24)
Operating income	$	93,410		$	32,329		189	%	$	228,279		$	83,824		172	%
Homes delivered	1,035			626			65	%	2,925			2,005			46	%
Average selling price	$	641,100		$	605,400		6	%	$	616,700		$	596,200		3	%
Operating income as a percentage of revenues	14.1		%	8.5		%	560	bps	12.7		%	7.0		%	570	bps

This segment’s revenues for the three-month and nine-month periods ended August 31, 2021 were generated solely from housing operations. For the three months and nine months ended August 31, 2020, this segment generated revenues from housing operations and nominal land sales. Housing revenues for the three-month and nine-month periods ended August 31, 2021 grew from the corresponding year-earlier periods due to increases in the number of homes delivered in both states that comprise this segment, and higher average selling prices of those homes. The increases in the average selling price of homes delivered for these same periods reflected strong housing market conditions and product and geographic mix shifts of homes delivered.

Operating income for the three months and nine months ended August 31, 2021 grew from the corresponding year-earlier periods, reflecting higher housing gross profits, partly offset by higher selling, general and administrative expenses. For the 2021 third quarter, this segment’s operating income as a percentage of revenues rose from the year-earlier quarter, primarily due to a 410 basis-point increase in the housing gross profit margin to 20.1% and a 150 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 6.0%. The housing gross profit margin expansion was largely driven by a favorable pricing environment, lower relative amortization of previously capitalized interest and a reduction in inventory-related charges as a percentage of housing revenues. Inventory-related charges totaled $6.5 million in the three months ended August 31, 2021, compared to $5.5 million in the year-earlier period. The improvement in selling, general and administrative expenses as a percentage of housing revenues mainly reflected increased operating leverage from higher housing revenues, partly offset by higher expenses incurred to support current and expected growth.

For the nine months ended August 31, 2021, the year-over-year growth in this segment’s operating income as a percentage of revenues mainly reflected a 420 basis-point rise in the housing gross profit margin to 19.1% and an improvement in selling, general and administrative expenses as a percentage of housing revenues to 6.5% from 7.9%. The housing gross profit margin improved primarily for the reasons described above with respect to the three months ended August 31, 2021, as well as an increase in operating leverage due to higher housing revenues. Inventory-related charges decreased slightly to $10.4 million in the 2021 first nine months, compared to $10.6 million in the year-earlier period. Selling, general and administrative expenses as a percentage of revenues improved primarily for the reason described above with respect to the three months ended August 31, 2021, as well as the continued impact of targeted actions we took in 2020 to reduce overhead costs in the early stages of the COVID-19 pandemic.

Southwest. The following table presents financial information related to our Southwest segment for the periods indicated (dollars in thousands, except average selling price):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021		2020		Variance		2021		2020		Variance
Revenues	$	234,933	$	223,096	5	%	$	680,679	$	589,665	15	%
Construction and land costs	(171,910)		(167,572)		(3)		(500,512)		(444,213)		(13)
Selling, general and administrative expenses	(16,983)		(16,128)		(5)		(51,952)		(48,760)		(7)
Operating income	$	46,040	$	39,396	17	%	$	128,215	$	96,692	33	%

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	Three Months Ended August 31,								Nine Months Ended August 31,
	2021			2020			Variance		2021			2020			Variance
Homes delivered	626			628			—	%	1,875			1,783			5	%
Average selling price	$	375,300		$	330,700		13	%	$	363,000		$	321,700		13	%
Operating income as a percentage of revenues	19.6		%	17.7		%	190	bps	18.8		%	16.4		%	240	bps

This segment’s revenues for the three-month and nine-month periods ended August 31, 2021 were generated solely from housing revenues. For the three months and nine months ended August 31, 2020, revenues were generated from housing operations as well as land sales. Housing revenues for the three months ended August 31, 2021 rose 13% year over year from $207.7 million, reflecting an increase in the average selling price of homes delivered. For the nine months ended August 31, 2021, housing revenues rose 19% from $573.5 million due to an increase in the number of homes delivered from our Nevada operations and a rise in the average selling price of homes delivered in both our Nevada and Arizona operations. The increase in the average selling price for each period reflected strong housing market conditions and a shift in product and geographic mix of homes delivered.

Operating income for the three months and nine months ended August 31, 2021 rose from the corresponding 2020 periods, primarily due to higher housing gross profits, partially offset by higher selling, general and administrative expenses. As a percentage of revenues, operating income for the three-month period ended August 31, 2021 grew from the year-earlier period largely due to a 100 basis-point increase in the housing gross profit margin to 26.8% and a 60 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.2%. The housing gross margin expansion was largely driven by a favorable pricing environment and lower relative amortization of previously capitalized interest. The improvement in selling, general and administrative expenses as a percentage of revenues was mainly due to increased operating leverage from higher housing revenues.

The year-over-year growth in this segment’s operating income as a percentage of revenues for the nine months ended August 31, 2021 mainly reflected a 150 basis-point increase in the housing gross profit margin to 26.5% and a 90 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.6% from 8.5%. The housing gross profit margin increased and selling, general and administrative expenses as a percentage of revenues improved primarily for the reasons described above with respect to the 2021 third quarter. In addition, selling, general and administrative expenses as a percentage of revenues for the nine months ended August 31, 2021 benefited from the continued impact of targeted actions we took in 2020 to reduce overhead costs in the early stages of the COVID-19 pandemic.

Central. The following table presents financial information related to our Central segment for the periods indicated (dollars in thousands, except average selling price):

	Three Months Ended August 31,								Nine Months Ended August 31,
	2021			2020			Variance		2021			2020			Variance
Revenues	$	384,532		$	297,022		29	%	$	1,084,795		$	864,728		25	%
Construction and land costs	(301,039)			(232,269)			(30)		(840,904)			(688,683)			(22)
Selling, general and administrative expenses	(30,118)			(29,331)			(3)		(93,242)			(91,061)			(2)
Operating income	$	53,375		$	35,422		51	%	$	150,649		$	84,984		77	%
Homes delivered	1,174			958			23	%	3,417			2,881			19	%
Average selling price	$	327,500		$	310,000		6	%	$	317,500		$	300,100		6	%
Operating income margin as a percentage of revenues	13.9		%	11.9		%	200	bps	13.9		%	9.8		%	410	bps

This segment’s revenues for the three-month and nine-month periods ended August 31, 2021 and 2020 were generated solely from housing operations. Housing revenues for the three months and nine months ended August 31, 2021 grew from the corresponding year-earlier periods, reflecting increases in the number of homes delivered in both states that comprise this segment, and the higher average selling prices of those homes. The increases in the average selling price for each period reflected the strong housing market conditions and shifts in the product and geographic mix of homes delivered.

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Operating income for the three months and nine months ended August 31, 2021 rose from the corresponding year-earlier periods due to growth in housing gross profits, partially offset by higher selling, general and administrative expenses. For the three months ended August 31, 2021, the increase in this segment’s operating income as a percentage of revenues primarily reflected a 210 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.8%, as the housing gross profit margin was essentially flat at 21.7%. There were no inventory-related charges for the three months ended August 31, 2021, compared to $1.1 million for the year-earlier period. The improvement in selling, general and administrative expenses as a percentage of housing revenues mainly reflected increased operating leverage from higher housing revenues.

For the nine months ended August 31, 2021, the year-over-year expansion in this segment’s operating income as a percentage of revenues reflected a 210 basis-point increase in the housing gross profit margin to 22.5% and a 190 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 8.6%. The housing gross profit expansion was mainly driven by a favorable pricing environment, lower inventory-related charges, improved operating leverage due to higher housing revenues and lower relative amortization of previously capitalized interest. Inventory-related charges for the nine months ended August 31, 2021 were nominal, compared to $5.5 million in the year-earlier period. The year-over-year improvement in selling, general and administrative expenses as a percentage of revenues was primarily due to the reason described above with respect to the three months ended August 31, 2021, as well as the continued impact of targeted actions we took in 2020 to reduce overhead costs in the early stages of the COVID-19 pandemic.

Southeast. The following table presents financial information related to our Southeast segment for the periods indicated (dollars in thousands, except average selling price):

	Three Months Ended August 31,								Nine Months Ended August 31,
	2021			2020			Variance		2021			2020			Variance
Revenues	$	178,868		$	96,005		86	%	$	466,696		$	328,013		42	%
Construction and land costs	(142,153)			(78,851)			(80)		(371,693)			(273,772)			(36)
Selling, general and administrative expenses	(16,736)			(11,168)			(50)		(44,047)			(38,995)			(13)
Operating income	$	19,979		$	5,986		234	%	$	50,956		$	15,246		234	%
Homes delivered	590			333			77	%	1,576			1,127			40	%
Average selling price	$	302,700		$	286,500		6	%	$	295,600		$	290,500		2	%
Operating income as a percentage of revenues	11.2		%	6.2		%	500	bps	10.9		%	4.6		%	630	bps

This segment’s revenues for the three-month and nine-month periods ended August 31, 2021 and 2020 were generated from both housing operations and nominal land sales. Housing revenues for the three months ended August 31, 2021 increased 87% year over year to $178.6 million from $95.4 million. For the nine months ended August 31, 2021, housing revenues grew 42% year over year to $465.8 million from $327.4 million. The housing revenue expansion in the three-month and nine-month periods primarily resulted from growth in the number of homes delivered and increases in the overall average selling price of these homes, which reflected strong housing market conditions and shifts in the product and geographic mix of homes delivered.

Operating income for the three months and nine months ended August 31, 2021 increased from the corresponding year-earlier periods, reflecting higher housing gross profits, partly offset by higher selling, general and administrative expenses. As a percentage of revenues, operating income for the 2021 third quarter rose from the year-earlier period due to a 250 basis-point increase in the housing gross profit margin to 20.5% that mainly reflected a shift in geographic mix, and lower relative amortization of previously capitalized interest. In addition, selling, general and administrative expenses as a percentage of housing revenues improved 230 basis points from the year-earlier period to 9.4%, primarily due to increased operating leverage as a result of higher housing revenues.

For the nine months ended August 31, 2021, the year-over-year increase in this segment’s operating income as a percentage of revenues reflected a 380 basis-point increase in the housing gross profit margin to 20.4% and a 240 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 9.5%. The housing gross profit margin expanded primarily for the reasons described above for the three months ended August 31, 2021, as well as increased operating leverage due to higher housing revenues. The improvement in selling, general and administrative expenses as a percentage of housing revenues was mainly due to the reasons described above with respect to the three months ended August 31, 2021. In

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addition, selling, general and administrative expenses as a percentage of revenues benefited from the continued impact of targeted actions we took in 2020 to reduce overhead costs in the early stages of the COVID-19 pandemic.

FINANCIAL SERVICES REPORTING SEGMENT

The following table presents a summary of selected financial and operational data for our financial services reporting segment (dollars in thousands):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Revenues	$	5,206		$	3,865		$	13,793		$	11,108
Expenses	(1,234)			(1,056)			(3,687)			(2,901)
Equity in income of unconsolidated joint venture	5,409			6,855			18,423			14,874
Pretax income	$	9,381		$	9,664		$	28,529		$	23,081
Total originations (a):
Loans	2,340			1,808			6,769			5,287
Principal	$	835,712		$	621,674		$	2,357,151		$	1,723,216
Percentage of homebuyers using KBHS	76		%	79		%	76		%	75		%
Average FICO score	731			725			728			722
Loans sold (a):
Loans sold to Stearns/Guaranteed Rate	2,087			1,936			5,772			5,985
Principal	$	747,936		$	618,770		$	2,013,617		$	1,877,463
Loans sold to third parties	269			26			905			219
Principal	$	91,053		$	9,157		$	300,277		$	71,160

(a)Loan originations and sales occurred within KBHS.

Revenues. Financial services revenues for the three months and nine months ended August 31, 2021 rose from the corresponding periods of 2020 due to increases in title services revenues and insurance commissions.

Pretax income. Our financial services pretax income for the three months ended August 31, 2021 was down 3% from the year-earlier period due to a decrease in the equity in income of unconsolidated joint ventures that was partly offset by an increase in income from title services and insurance commissions. In the 2021 third quarter, our equity in income of our unconsolidated joint venture, KBHS, decreased 21% year over year due to lower margins, reflecting increased competition in the primary mortgage market, partly offset by an increase in the principal amount of loan originations. The higher principal amount of loan originations primarily reflected a 35% rise in the number of homes we delivered and an 11% increase in the average selling price of those homes, partly offset by a decrease in the percentage of homebuyers using KBHS.

For the nine months ended August 31, 2021, our financial services pretax income rose 24% from the corresponding 2020 period primarily due to a 24% increase in our equity in income of KBHS that reflected a substantial increase in the principal amount of loan originations and improved margins. The year-over-year increase in the principal amount of loan originations was largely due to a 26% increase in the number of homes we delivered and an 8% rise in the average selling price of those homes.

On January 5, 2021, Guaranteed Rate announced it had reached an agreement to acquire Stearns’ parent company. This transaction closed on March 1, 2021. As of the date of this report, we are not aware of any significant changes with respect to Stearns or its operations as a result of the transaction being completed.

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INCOME TAXES

Income Tax Expense. Our income tax expense and effective tax rates were as follows (dollars in thousands):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Income tax expense	$	24,100		$	22,900		$	80,900		$	47,800
Effective tax rate	13.8		%	22.6		%	17.2		%	20.1		%

Our effective tax rate for the three months ended August 31, 2021 decreased from the year-earlier period, mainly due to an $18.4 million increase in the federal energy tax credits we earned from building energy-efficient homes.

For the nine months ended August 31, 2021, our effective tax rate decreased slightly from the corresponding 2020 period, primarily reflecting the favorable impact of a $28.9 million increase in federal energy tax credits on the overall rate, partly offset by an increase of $2.6 million in non-deductible executive compensation expense and a $1.7 million decrease in excess tax benefits related to stock-based compensation.

The federal energy tax credits for the three months and nine months ended August 31, 2021 resulted from legislation enacted in December 2020 and earlier periods. The legislation enacted in December 2020, among other things, extended the availability of a business tax credit for building new energy-efficient homes through December 31, 2021. Prior to this legislation, the tax credit expired on December 31, 2020. This extension is expected to benefit our income tax provision in future periods.

In June 2020, California enacted tax legislation that approved the suspension of California net operating loss deductions for tax years 2020, 2021 and 2022. The suspension of California net operating loss deductions did not have an impact on our income tax expense for the three months or nine months ended August 31, 2021.

Further information regarding our income taxes is provided in Note 14 – Income Taxes in the Notes to Consolidated Financial Statements in this report.

NON-GAAP FINANCIAL MEASURES

This report contains information about our adjusted housing gross profit margin and ratio of net debt to capital, neither of which is calculated in accordance with GAAP. We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and the leverage employed in our operations, and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. However, because they are not calculated in accordance with GAAP, these non-GAAP financial measures may not be completely comparable to other companies in the homebuilding industry and, thus, should not be considered in isolation or as an alternative to operating performance and/or financial measures prescribed by GAAP. Rather, these non-GAAP financial measures should be used to supplement their respective most directly comparable GAAP financial measures in order to provide a greater understanding of the factors and trends affecting our operations.

Adjusted Housing Gross Profit Margin. The following table reconciles our housing gross profit margin calculated in accordance with GAAP to the non-GAAP financial measure of our adjusted housing gross profit margin (dollars in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Housing revenues	$	1,461,648	$	979,113	$	4,035,033	$	2,960,901
Housing construction and land costs	(1,147,448)		(784,427)		(3,176,643)		(2,414,059)
Housing gross profits	314,200		194,686		858,390		546,842
Add: Inventory-related charges (a)	6,701		6,888		11,222		16,939
Housing gross profits excluding inventory-related charges	320,901		201,574		869,612		563,781
Add: Amortization of previously capitalized interest (b)	37,544		30,186		109,640		93,507
Adjusted housing gross profits	$	358,445	$	231,760	$	979,252	$	657,288

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	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Housing gross profit margin as a percentage of housing revenues	21.5	%	19.9	%	21.3	%	18.5	%
Housing gross profit margin excluding inventory-related charges as a percentage of housing revenues	22.0	%	20.6	%	21.6	%	19.0	%
Adjusted housing gross profit margin as a percentage of housing revenues	24.5	%	23.7	%	24.3	%	22.2	%

(a)    Represents inventory impairment and land option contract abandonment charges associated with housing operations.

(b)    Represents the amortization of previously capitalized interest associated with housing operations.

Adjusted housing gross profit margin is a non-GAAP financial measure, which we calculate by dividing housing revenues less housing construction and land costs excluding (1) housing inventory impairment and land option contract abandonment charges (as applicable) recorded during a given period and (2) amortization of previously capitalized interest associated with housing operations, by housing revenues. The most directly comparable GAAP financial measure is housing gross profit margin. We believe adjusted housing gross profit margin is a relevant and useful financial measure to investors in evaluating our performance as it measures the gross profits we generated specifically on the homes delivered during a given period. This non-GAAP financial measure isolates the impact that the housing inventory impairment and land option contract abandonment charges, and the amortization of previously capitalized interest associated with housing operations, have on housing gross profit margins, and allows investors to make comparisons with our competitors that adjust housing gross profit margins in a similar manner. We also believe investors will find adjusted housing gross profit margin relevant and useful because it represents a profitability measure that may be compared to a prior period without regard to variability of housing inventory impairment and land option contract abandonment charges, and amortization of previously capitalized interest associated with housing operations. This financial measure assists us in making strategic decisions regarding community location and product mix, product pricing and construction pace.

Ratio of Net Debt to Capital. The following table reconciles our ratio of debt to capital calculated in accordance with GAAP to the non-GAAP financial measure of our ratio of net debt to capital (dollars in thousands):

	August 31, 2021			November 30, 2020
Notes payable	$	1,863,501		$	1,747,175
Stockholders’ equity	2,841,733			2,665,769
Total capital	$	4,705,234		$	4,412,944
Ratio of debt to capital	39.6		%	39.6		%
Notes payable	$	1,863,501		$	1,747,175
Less: Cash and cash equivalents	(350,141)			(681,190)
Net debt	1,513,360			1,065,985
Stockholders’ equity	2,841,733			2,665,769
Total capital	$	4,355,093		$	3,731,754
Ratio of net debt to capital	34.7		%	28.6		%

The ratio of net debt to capital is a non-GAAP financial measure, which we calculate by dividing notes payable, net of homebuilding cash and cash equivalents, by capital (notes payable, net of homebuilding cash and cash equivalents, plus stockholders’ equity). The most directly comparable GAAP financial measure is the ratio of debt to capital. We believe the ratio of net debt to capital is a relevant and useful financial measure to investors in understanding the degree of leverage employed in our operations.

On September 15, 2021, we redeemed the remaining $180.2 million in aggregate principal amount of the 7.00% Senior Notes due 2021 at par value pursuant to the terms of the notes. On a pro forma basis, assuming this redemption occurred during the 2021 third quarter, our ratio of debt to capital would have been 37.2% as of August 31, 2021.

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Liquidity and Capital Resources

Overview. We have funded our homebuilding and financial services activities over the last several years with:

• internally generated cash flows;

• public issuances of debt securities;

• borrowings under the Credit Facility;

• land option contracts and other similar contracts and seller notes;

• public issuances of our common stock; and

• letters of credit and performance bonds.

We manage our use of cash in the operation of our business to support the execution of our primary strategic goals. Over the past several years, we have primarily used cash for:

•land acquisition and land development;

•home construction;

•operating expenses;

•principal and interest payments on notes payable; and

•repayments of borrowings under the Credit Facility.

We ended the 2021 third quarter with total liquidity of $1.14 billion, including cash and cash equivalents and $791.4 million of available capacity under the Credit Facility. Based on our financial position as of August 31, 2021, and our positive business forecast for the remainder of 2021 as discussed below under “Outlook,” we have no material concerns related to our liquidity. While the ongoing COVID-19 pandemic creates potential liquidity risks, as discussed further below, we believe that our existing cash and cash equivalents, our anticipated cash flows from operations and amounts available under our Credit Facility will be sufficient to fund our anticipated operating and land-related investment needs for at least the next 12 months.

Our investments in land and land development increased 83% to $1.91 billion for the nine months ended August 31, 2021, compared to $1.04 billion for the prior-year period. Approximately 52% of our total investments for the nine months ended August 31, 2021 related to land acquisition, compared to approximately 46% in the year-earlier period. While we made strategic investments in land and land development in each of our homebuilding reporting segments during the nine months ended August 31, 2021 and 2020, approximately 52% and 51%, respectively, of these investments for each period were made in our West Coast homebuilding reporting segment.

The following table presents the number of lots we owned or controlled under land option contracts and other similar contracts and the carrying value of inventory by homebuilding reporting segment (dollars in thousands):

	August 31, 2021			November 30, 2020			Variance
Segment	Lots	$		Lots	$		Lots	$
West Coast	22,388	$	2,239,853	16,990	$	1,928,500	5,398	$	311,353
Southwest	12,930	878,957		12,290	688,807		640	190,150
Central	26,270	963,919		23,699	867,170		2,571	96,749
Southeast	19,376	573,146		14,059	413,005		5,317	160,141
Total	80,964	$	4,655,875	67,038	$	3,897,482	13,926	$	758,393

The number and carrying value of lots we owned or controlled under land option contracts and other similar contracts at August 31, 2021 increased from November 30, 2020, primarily due to our investments in land and land development in the nine months ended August 31, 2021 and an increase in the number of homes under construction. The number of lots in inventory as of August 31, 2021 included 11,602 lots under contract where the associated deposits were refundable at our discretion, compared to 10,254 of such lots at November 30, 2020. Our lots controlled under land option contracts and other similar contracts as a percentage of total lots was 42% at August 31, 2021, compared to 40% at November 30, 2020. Generally, this percentage fluctuates with our decisions to control (or abandon) lots under land option contracts and other similar contracts or to purchase (or sell owned) lots based on available opportunities and our investment return standards.

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Liquidity. The table below summarizes our total cash and cash equivalents, and total liquidity (in thousands):

	August 31, 2021		November 30, 2020
Total cash and cash equivalents	$	350,141	$	681,190
Credit Facility commitment	800,000		800,000
Borrowings outstanding under the Credit Facility	—		—
Letters of credit outstanding under the Credit Facility	(8,618)		(12,429)
Credit Facility availability	791,382		787,571
Total liquidity	$	1,141,523	$	1,468,761

The majority of our cash equivalents at August 31, 2021 and November 30, 2020 were invested in interest-bearing bank deposit accounts.

Capital Resources. Our notes payable consisted of the following (in thousands):

	August 31, 2021		November 30, 2020		Variance
Mortgages and land contracts due to land sellers and other loans	$	4,067	$	4,667	$	(600)
Senior notes	1,859,434		1,742,508		116,926
Total	$	1,863,501	$	1,747,175	$	116,326

Our financial leverage, as measured by the ratio of debt to capital was 39.6% at both August 31, 2021 and November 30, 2020. Our ratio of net debt to capital (a calculation that is described above under “Non-GAAP Financial Measures”) at August 31, 2021 was 34.7%, compared to 28.6% at November 30, 2020.

On June 9, 2021, we completed the underwritten public offering of $390.0 million in aggregate principal amount of 4.00% Senior Notes due 2031 at 100% of their aggregate principal amount. Net proceeds from this offering totaled $385.2 million, after deducting the underwriting discount and our expenses relating to the offering. The 4.00% Senior Notes due 2031 will mature on June 15, 2031. On June 9, 2021, we used a portion of the net proceeds to purchase, pursuant to a tender offer that expired the previous day, $269.8 million in aggregate principal amount of our outstanding $450.0 million of 7.00% Senior Notes due 2021. We paid $274.9 million to purchase the notes and recorded a charge of $5.1 million for the early extinguishment of debt in the 2021 third quarter due to a premium paid under the tender offer and the unamortized original issue discount associated with these senior notes. On September 15, 2021, we redeemed the remaining $180.2 million in aggregate principal amount of 7.00% Senior Notes due 2021 at par value pursuant to the terms of the notes. The transactions completed in the 2021 third quarter, together with the redemption of the remaining 7.00% Senior Notes due 2021 subsequent to the end of the quarter, effectively extended the maturity of our senior notes by more than two years and reduced our weighted average borrowing rate by approximately 70 basis points. Further information regarding these transactions is provided in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report. On a pro forma basis, assuming the $180.2 million redemption occurred during the 2021 third quarter, our ratio of debt to capital would have been 37.2% as of August 31, 2021.

LOC Facility. On August 12, 2021, we entered into an amendment to our LOC Facility that increased the limit of letters of credit we may issue from $50.0 million to $75.0 million and extended the expiration date from February 13, 2022 to February 13, 2025. We had $35.0 million and $29.7 million of letters of credit outstanding under the LOC Facility at August 31, 2021 and November 30, 2020, respectively. Further information regarding our LOC Facility is provided in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report.

Unsecured Revolving Credit Facility. We have an $800.0 million Credit Facility that will mature on October 7, 2023. The amount of the Credit Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility. As of August 31, 2021, we had no cash borrowings and $8.6 million of letters of credit outstanding under the Credit Facility. The Credit Facility is further described in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report.

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There have been no changes to the terms of the Credit Facility during the nine months ended August 31, 2021 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2020.

The covenants and other requirements under the Credit Facility represent the most restrictive covenants that we are subject to with respect to our notes payable. The following table summarizes the financial covenants and other requirements under the Credit Facility, and our actual levels or ratios (as applicable) with respect to those covenants and other requirements, in each case as of August 31, 2021:

Financial Covenants and Other Requirements	Covenant Requirement		Actual
Consolidated tangible net worth	>	$1.99 billion	$2.81 billion
Leverage Ratio	<	.650	.401
Interest Coverage Ratio (a)	>	1.500	6.577
Minimum liquidity (a)	>	$121.5 million	$350.1 million
Investments in joint ventures and non-guarantor subsidiaries	<	$666.2 million	$229.6 million
Borrowing base in excess of borrowing base indebtedness (as defined)		n/a	$1.87 billion

(a)    Under the terms of the Credit Facility, we are required to maintain either a minimum Interest Coverage Ratio or a minimum level of liquidity, but not both. As of August 31, 2021, we met both the Interest Coverage Ratio and the minimum liquidity requirements.

The indenture governing our senior notes does not contain any financial covenants. Subject to specified exceptions, the indenture contains certain restrictive covenants that, among other things, limit our ability to incur secured indebtedness, or engage in sale and leaseback transactions involving property above a certain specified value. In addition, the indenture contains certain limitations related to mergers, consolidations, and sales of assets.

As of August 31, 2021, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the senior notes, the indenture, and the mortgages and land contracts due to land sellers and other loans. Our ability to access the Credit Facility for cash borrowings and letters of credit and our ability to secure future debt financing depend, in part, on our ability to remain in such compliance. There are no agreements that restrict our payment of dividends other than the Credit Facility, which would restrict our payment of certain dividends, such as cash dividends on our common stock, if a default under the Credit Facility exists at the time of any such payment, or if any such payment would result in such a default (other than dividends paid within 60 days after declaration, if there was no default at the time of declaration).

Depending on available terms, we finance certain land acquisitions with purchase-money financing from land sellers or with other forms of financing from third parties. At August 31, 2021, we had outstanding mortgages and land contracts due to land sellers and other loans payable in connection with such financing of $4.1 million, secured primarily by the underlying property, which had an aggregate carrying value of $16.6 million.

Credit Ratings. Our credit ratings are periodically reviewed by rating agencies. In February 2021, Moody’s Investors Service affirmed our corporate Ba3 credit rating, and upgraded the rating outlook to positive from stable. In May 2021, Moody’s Investors Service upgraded our corporate rating to Ba2 from Ba3, and changed the rating outlook to stable from positive.

Consolidated Cash Flows. The following table presents a summary of net cash provided by (used in) our operating, investing and financing activities (in thousands):

	Nine Months Ended August 31,
	2021		2020
Net cash provided by (used in):
Operating activities	$	(180,225)	$	329,211
Investing activities	(26,552)		(18,386)
Financing activities	(124,407)		(42,557)
Net increase (decrease) in cash and cash equivalents	$	(331,184)	$	268,268

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Operating Activities. Generally, our net operating cash flows fluctuate primarily based on changes in our inventories and our profitability. Our net cash used in operating activities for the nine months ended August 31, 2021 mainly reflected a net increase in inventories of $760.4 million and a net increase in receivables of $22.5 million, partly offset by net income of $390.5 million and a net increase in accounts payable, accrued expenses and other liabilities of $102.1 million. In the nine months ended August 31, 2020, our net cash provided by operating activities primarily reflected net income of $190.2 million, a $62.8 million net decrease in receivables and a $46.6 million net decrease in inventories, partly offset by a net decrease in accounts payable, accrued expenses and other liabilities of $62.4 million.

Investing Activities. In the nine months ended August 31, 2021, our uses of cash included $28.2 million for net purchases of property and equipment and $11.1 million for contributions to unconsolidated joint ventures. These uses of cash were partially offset by a $12.7 million return of investments in unconsolidated joint ventures. In the nine months ended August 31, 2020, the net cash used for investing activities reflected $21.2 million for net purchases of property and equipment and $6.0 million for contributions to unconsolidated joint ventures. These uses of cash were partially offset by an $8.8 million return of investments in unconsolidated joint ventures.

Financing Activities. In the nine months ended August 31, 2021, cash was used for our repayment of $269.8 million in aggregate principal amount of our 7.00% Senior Notes due 2021, stock repurchases totaling $188.2 million, dividend payments on our common stock of $41.0 million, tax payments associated with stock-based compensation awards of $8.5 million, payments of debt issuance costs of $4.8 million and payments on mortgages and land contracts due to land sellers and other loans of $.6 million. The cash used was partially offset by cash provided from our public offering of $390.0 million in aggregate principal amount of 4.00% Senior Notes due 2031 and $3.5 million of issuances of common stock under employee stock plans. In the nine months ended August 31, 2020, cash was used for dividend payments on our common stock of $24.4 million, payments on mortgages and land contracts due to land sellers and other loans of $20.3 million and tax payments associated with stock-based compensation awards of $6.2 million. The cash used was partially offset by $8.4 million of issuances of common stock under employee stock plans.

Dividends. In the three-month period ended August 31, 2021, our board of directors declared, and we paid, a quarterly cash dividend on our common stock of $.15 per share. In the three-month period ended August 31, 2020, our board of directors declared, and we paid, a quarterly cash dividend on our common stock of $.09 per share. Quarterly cash dividends declared and paid during the nine-month periods ended August 31, 2021 and 2020 totaled $.45 per share and $.27 per share of common stock, respectively. The declaration and payment of future cash dividends on our common stock, whether at current levels or at all, are at the discretion of our board of directors and depend upon, among other things, our expected future earnings, cash flows, capital requirements, access to external financing, debt structure and any adjustments thereto, operational and financial investment strategy and general financial condition, as well as general business conditions.

While the ongoing COVID-19 pandemic has created uncertainty as to general economic conditions for the remainder of 2021, as of the date of this report, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and reasonably anticipated requirements for funds to conduct our operations and meet other needs in the ordinary course of our business. For the remainder of 2021, we expect to use or redeploy our cash resources or cash borrowings under the Credit Facility to support our business within the context of prevailing market conditions. During this time, we may also engage in capital markets, bank loan, project debt or other financial transactions, including the repurchase of debt or equity securities, which we did in the 2021 third quarter, or potential new issuances of debt or equity securities to support our business needs. The amounts involved in these transactions, if any, may be material. In addition, as necessary or desirable, we may adjust or amend the terms of and/or expand the capacity of the Credit Facility or the LOC Facility, or enter into additional letter of credit facilities, or other similar facility arrangements, in each case with the same or other financial institutions, or allow any such facilities to mature or expire. However, with the uncertainty surrounding the COVID-19 pandemic, which could materially and negatively affect our business and the housing market, our ability to engage in such transactions may be constrained by volatile or tight economic, capital, credit and/or financial market conditions, as well as moderated investor and/or lender interest or capacity and/or our liquidity, leverage and net worth, and we can provide no assurance as to successfully completing, the costs of, or the operational limitations arising from any one or series of such transactions. Further discussion of the potential impacts from the COVID-19 pandemic on our capital resources and liquidity is provided in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended November 30, 2020.

Supplemental Guarantor Financial Information

As of August 31, 2021, we had $1.87 billion in aggregate principal amount of outstanding senior notes and no borrowings outstanding under the Credit Facility. Our obligations to pay principal, premium, if any, and interest on the senior notes and borrowings, if any, under the Credit Facility are guaranteed on a joint and several basis by certain of our subsidiaries (“Guarantor Subsidiaries”). Our other subsidiaries, including all of our subsidiaries associated with our financial services operations, do not guarantee any such indebtedness (collectively, “Non-Guarantor Subsidiaries”), although we may cause a

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Non-Guarantor Subsidiary to become a Guarantor Subsidiary if we believe it to be in our or the relevant subsidiary’s best interest. See Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report for additional information regarding the terms of our senior notes and the Credit Facility.

The guarantees are full and unconditional, and the Guarantor Subsidiaries are 100% owned by us. The guarantees are senior unsecured obligations of each of the Guarantor Subsidiaries and rank equally in right of payment with all unsecured and unsubordinated indebtedness and guarantees of such Guarantor Subsidiaries. The guarantees are effectively subordinated to any secured indebtedness of such Guarantor Subsidiaries to the extent of the value of the assets securing such indebtedness, and structurally subordinated to indebtedness and other liabilities of Non-Guarantor Subsidiaries.

Pursuant to the terms of the indenture governing the senior notes and the terms of the Credit Facility, if any of the Guarantor Subsidiaries ceases to be a “significant subsidiary” as defined by Rule 1-02 of Regulation S-X using a 5% rather than a 10% threshold (provided that the assets of our non-guarantor subsidiaries do not in the aggregate exceed 10% of an adjusted measure of our consolidated total assets), it will be automatically and unconditionally released and discharged from its guaranty of the senior notes and the Credit Facility so long as all guarantees by such Guarantor Subsidiary of any other of our or our subsidiaries’ indebtedness are terminated at or prior to the time of such release.

The following tables present summarized financial information for KB Home and the Guarantor Subsidiaries on a combined basis, excluding unconsolidated joint ventures and after the elimination of (a) intercompany transactions and balances between KB Home and the Guarantor Subsidiaries and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries. See Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report for additional information regarding our unconsolidated joint ventures.

	August 31, 2021		November 30, 2020
Summarized Balance Sheet Data (in thousands)
Assets
Cash	$	317,224	$	644,157
Inventories	4,047,194		3,464,674
Amounts due from Non-Guarantor Subsidiaries	541,344		394,226
Total assets	5,493,577		5,102,197
Liabilities and Stockholders’ Equity
Notes payable	1,859,834		1,743,508
Amounts due to Non-Guarantor Subsidiaries	252,118		221,330
Total liabilities	2,841,970		2,589,971
Stockholders’ equity	2,651,607		2,512,226

	Nine Months Ended August 31, 2021
Summarized Statement of Operations Data (in thousands)
Revenues	$	3,620,746
Construction and land costs	(2,830,198)
Selling, general and administrative expenses	(380,689)
Interest income from non-guarantor subsidiary	26,156
Pretax income	431,977
Net income	358,477

Off-Balance Sheet Arrangements, Contractual Obligations and Commercial Commitments

Unconsolidated Joint Ventures. As discussed in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report, we have investments in unconsolidated joint ventures in various markets where our homebuilding operations are located. None of our unconsolidated joint ventures had outstanding debt at August 31, 2021 or November 30, 2020.

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Land Option Contracts and Other Similar Contracts. As discussed in Note 8 – Variable Interest Entities in the Notes to Consolidated Financial Statements in this report, in the ordinary course of our business, we enter into land option contracts and other similar contracts with third parties and unconsolidated entities to acquire rights to land for the construction of homes. Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance. Our decision to exercise a particular land option contract or other similar contract depends on the results of our due diligence reviews and ongoing market and project feasibility analysis that we conduct after entering into such a contract. In some cases, our decision to exercise a land option contract or other similar contract may be conditioned on the land seller obtaining necessary entitlements, such as zoning rights and environmental and development approvals, and/or physically developing the underlying land by a pre-determined date. We typically have the ability not to exercise our rights to the underlying land for any reason and forfeit our deposits without further penalty or obligation to the sellers. If we were to acquire all the land we had under land option contracts and other similar contracts at August 31, 2021, we estimate the remaining purchase price to be paid during each year ending November 30 would be as follows: 2021 – $517.2 million; 2022 – $718.2 million; 2023 – $187.0 million; 2024 – $49.5 million; 2025 – $80.9 million; and thereafter – $1.7 million.

Contractual Obligations. Due to the debt issuance and purchase described in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report, our contractual obligations as of August 31, 2021 have changed materially from those reported in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report on Form 10-K for the year ended November 30, 2020. The following table sets forth our future cash requirements related to the contractual obligations of our long-term debt and interest as of August 31, 2021 (in millions):

	Payments due by Period
	Total		Fiscal Year 2021		Fiscal Years 2022-2023		Fiscal Years 2024-2025		Thereafter
Contractual obligations:
Long-term debt	$	1,874.2	$	1.1	$	882.4	$	.7	$	990.0
Interest	498.2		55.1		167.6		101.2		174.3
Total	$	2,372.4	$	56.2	$	1,050.0	$	101.9	$	1,164.3

There have been no other significant changes in our contractual obligations from those reported in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2020.

Critical Accounting Policies

The preparation of our consolidated financial statements requires the use of judgment in the application of accounting policies and estimates of uncertain matters. There have been no significant changes to our critical accounting policies and estimates during the nine months ended August 31, 2021 from those disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended November 30, 2020.

Recent Accounting Pronouncements

Recent accounting pronouncements are discussed in Note 1 – Basis of Presentation and Significant Accounting Policies in the Notes to Consolidated Financial Statements in this report.

Outlook

We believe long-term housing market fundamentals supporting demand remain positive. Most notably, demographic trends are favorable especially with respect to first-time homebuyers, largely comprised of the approximately 140 million members of the millennial and Generation Z cohorts in their prime homebuying years. First-time buyers accounted for 61% of our homes delivered in the three months ended August 31, 2021.

We believe our Built-to-Order model, which provides our buyers a significant degree of personalization and choice, as well as the industry leading energy efficiency of our homes, including our commitment to building ENERGY STAR® certified homes and solar homes that help lower the total cost of homeownership, gives us a meaningful and distinct competitive advantage over other homebuilders, and both resale and rental homes, particularly in serving first-time homebuyers. Mortgage interest rates are at relatively low levels and housing affordability remains generally favorable.

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For the remainder of 2021, we plan to continue to execute on our customer-centric, personalized approach to homebuilding, which we believe contributed to our robust year-over-year net orders in the first three quarters of 2021, and expand our community count to support future growth. In addition, we expect to continue to focus on aligning our housing starts with our net orders, and working to stabilize our construction cycle times, in order to deliver our homes in backlog and meet our expected delivery volumes for the year. We expect our increased investments in land and land development in recent quarters and more than 200 planned new community openings over the next five quarters will lead to sequential increases in our ending community count for the 2021 fourth quarter and each quarter of 2022. Our present outlook for the 2021 fourth quarter, the 2021 full year and the 2022 full year is as follows:

2021 Fourth Quarter

•We expect to generate housing revenues in the range of $1.65 billion to $1.75 billion, compared to $1.19 billion in the year-earlier quarter, and anticipate our average selling price to be approximately $450,000, representing a year-over-year increase of 9%.

•We expect our housing operating income as a percentage of revenues, assuming no inventory-related charges, to be approximately 11.8%, compared to 10.7% for the prior-year quarter.

◦We expect our housing gross profit margin to be in the range of 21.6% to 22.0%, assuming no inventory-related charges.

◦We expect our selling, general and administrative expenses as a percentage of housing revenues to be approximately 10.0%, an improvement from 10.3% for the 2020 fourth quarter.

•We expect an effective tax rate of approximately 24%.

•We estimate a weighted average share count of 91 million shares for calculating diluted earnings per share.

•We expect our ending community count will be up slightly from the third quarter, resulting in a high single-digit decrease in our fourth quarter average community count compared to the year-earlier quarter.

2021 Full Year

•We expect our housing revenues to be about $5.74 billion, compared to $4.15 billion in 2020, and anticipate our average selling price will be roughly $422,600, compared to $388,900 in 2020.

•We expect our homebuilding operating income as a percentage of revenues, assuming no inventory-related charges, will be approximately 11.5%, compared to 8.4% for 2020, which excluded severance charges of $6.7 million associated with pandemic-related workforce reductions.

◦We expect our housing gross profit margin to be around 21.6%, assuming no inventory-related charges, versus 19.6% for 2020.

◦We expect our selling, general and administrative expenses as a percentage of housing revenues to be approximately 10.1%, compared to 11.2%, excluding severance charges, in the prior year.

•We expect an effective tax rate of approximately 19%.

•We expect our return on equity will be approximately 20%, an improvement of more than 800 basis points compared to 11.8% for 2020.

•We estimate a weighted average share count of 93.5 million shares for calculating diluted earnings per share.

2022 Full Year

•We expect our housing revenues to be over $7.00 billion.

•We expect our year-end community count will be up about 20% and the average count will be around 10% higher, both as compared to 2021.

We believe we are well positioned to achieve our targets for the 2021 fourth quarter, the 2021 full year and the 2022 full year due to, among other things, our strong backlog, planned new community openings, investments in land and land development, and current positive economic and demographic trends, to varying degrees in many of our served markets. However, our industry continues to experience labor and supply constraints and rising and volatile raw material prices and availability, particularly related to building materials and appliances, as well as delays with respect to state and municipal construction permitting, inspections and utilities. Demand for our products could also be substantially diminished if the public health effort

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to contain the virulence and spread of COVID-19 continues for a prolonged period during the rest of the year or if there is a material rise in inflation. If these issues worsen in the remainder of 2021 or in 2022, our business and our ability to generate positive growth could be negatively impacted.

Forward-Looking Statements

Investors are cautioned that certain statements contained in this report, as well as some statements by us in periodic press releases and other public disclosures and some oral statements by us to securities analysts, stockholders and others during presentations, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “hope,” and similar expressions constitute forward-looking statements. In addition, any statements that we may make or provide concerning future financial or operating performance (including without limitation future revenues, community count, homes delivered, net orders, selling prices, sales pace per new community, expenses, expense ratios, housing gross profits, housing gross profit margins, earnings or earnings per share, or growth or growth rates), future market conditions, future interest rates, and other economic conditions, ongoing business strategies or prospects, future dividends and changes in dividend levels, the value of our backlog (including amounts that we expect to realize upon delivery of homes included in our backlog and the timing of those deliveries), the value of our net orders, potential future asset acquisitions and the impact of completed acquisitions, future share issuances or repurchases, future debt issuances, repurchases or redemptions and other possible future actions are also forward-looking statements as defined by the Act. Forward-looking statements are based on our current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about our operations, economic and market factors, and the homebuilding industry, among other things. These statements are not guarantees of future performance, and we have no specific policy or intention to update these statements. In addition, forward-looking and other statements in this report and in other public or oral disclosures that express or contain opinions, views or assumptions about market or economic conditions; the success, performance, effectiveness and/or relative positioning of our strategies, initiatives or operational activities; and other matters, may be based in whole or in part on general observations of our management, limited or anecdotal evidence and/or business or industry experience without in-depth or any particular empirical investigation, inquiry or analysis.

Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, the following:

•general economic, employment and business conditions;

•population growth, household formations and demographic trends;

•conditions in the capital, credit and financial markets;

•our ability to access external financing sources and raise capital through the issuance of common stock, debt or other securities, and/or project financing, on favorable terms;

•the execution of any securities repurchases pursuant to our board of directors’ authorization;

•material and trade costs and availability, including building materials and appliances;

•consumer and producer price inflation;

•changes in interest rates;

•our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule;

•our compliance with the terms of the Credit Facility;

•volatility in the market price of our common stock;

•home selling prices, including our homes’ selling prices, increasing at a faster rate than consumer incomes;

•weak or declining consumer confidence, either generally or specifically with respect to purchasing homes;

•competition from other sellers of new and resale homes;

•weather events, significant natural disasters and other climate and environmental factors;

•any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal government’s operations, and financial markets’ and businesses’ reactions to any such failure;

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•government actions, policies, programs and regulations directed at or affecting the housing market (including the CARES Act, relief provisions for outstanding mortgage loans and any extensions or broadening thereof, the tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and government agencies), the homebuilding industry, or construction activities;

•changes in existing tax laws or enacted corporate income tax rates, including those resulting from regulatory guidance and interpretations issued with respect to thereto;

•changes in U.S. trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with and retaliatory measures taken by other countries;

•the adoption of new or amended financial accounting standards and the guidance and/or interpretations with respect thereto;

•the availability and cost of land in desirable areas and our ability to timely develop acquired land parcels and open new home communities;

•our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred;

•costs and/or charges arising from regulatory compliance requirements or from legal, arbitral or regulatory proceedings, investigations, claims or settlements, including unfavorable outcomes in any such matters resulting in actual or potential monetary damage awards, penalties, fines or other direct or indirect payments, or injunctions, consent decrees or other voluntary or involuntary restrictions or adjustments to our business operations or practices that are beyond our current expectations and/or accruals;

•our ability to use/realize the net deferred tax assets we have generated;

•our ability to successfully implement our current and planned strategies and initiatives related to our product, geographic and market positioning, gaining share and scale in our served markets and in entering into new markets;

•our operational and investment concentration in markets in California;

•consumer interest in our new home communities and products, particularly from first-time homebuyers and higher-income consumers;

•our ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key markets in California;

•our ability to successfully implement our business strategies and achieve any associated financial and operational targets and objectives, including those discussed in this report or in any of our other public filings, presentations or disclosures;

•income tax expense volatility associated with stock-based compensation;

•the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services;

•the performance of mortgage lenders to our homebuyers;

•the performance of KBHS;

•information technology failures and data security breaches;

•an epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19), and the control response measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period;

•widespread protests and civil unrest, whether due to political events, efforts to institute law enforcement and other social and political reforms, and the impacts of implementing or failing to implement any such reforms, or otherwise; and

•other events outside of our control.

Please see our Annual Report on Form 10-K for the year ended November 30, 2020 and other filings with the SEC for a further discussion of these and other risks and uncertainties applicable to our business.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

We enter into debt obligations primarily to support general corporate purposes, including the operations of our subsidiaries. We are subject to interest rate risk on our senior notes. For fixed rate debt, changes in interest rates generally affect the fair value of the debt instrument, but not our earnings or cash flows. We generally have no obligation to prepay our debt before maturity, and, as a result, interest rate risk and changes in fair market value should not have a significant impact on our fixed rate debt until we are required or elect to refinance or repurchase such debt. Under our current policies, we do not use interest rate derivative instruments to manage our exposure to changes in interest rates.

The following table presents principal cash flows by scheduled maturity, weighted average effective interest rates and the estimated fair value of our long-term fixed rate debt obligations as of August 31, 2021 (dollars in thousands):

	As of August 31, 2021 and for the Years Ending November 30,																					Fair Value at August 31, 2021
	2021			2022			2023			2024			2025			Thereafter			Total
Long-term debt
Fixed Rate	$	—		$	530,171		$	350,000		$	—		$	—		$	990,000		$	1,870,171		$	2,024,346
Weighted Average Effective Interest Rate	—		%	7.5		%	7.5		%	—		%	—		%	5.3		%	6.3		%

For additional information regarding our market risk, refer to the “Quantitative and Qualitative Disclosures About Market Risk” section of our Annual Report on Form 10-K for the year ended November 30, 2020.

Item 4.Controls and Procedures

We have established disclosure controls and procedures to ensure that information we are required to disclose in the reports we file or submit under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and accumulated and communicated to management, including our Chief Executive Officer (“Principal Executive Officer”) and Chief Financial Officer (“Principal Financial Officer”), as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of senior management, including our Principal Executive Officer and our Principal Financial Officer, we evaluated our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of August 31, 2021.

There were no changes in our internal control over financial reporting during the quarter ended August 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.OTHER INFORMATION

Item 1.Legal Proceedings

For a discussion of our legal proceedings, see Note 18 – Legal Matters in the Notes to Consolidated Financial Statements in this report.

Item 1A.Risk Factors

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended November 30, 2020.

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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs
June 1-30	—	$	—	—	2,193,947
July 1-31	3,774,900	39.93		3,774,900	1,225,100
August 1-31	893,700	41.88		893,700	331,400
Total	4,668,600	$	40.31	4,668,600

As of November 30, 2020, we had 2,193,947 shares authorized for repurchase under a share repurchase program approved by our board of directors in 2018. On July 8, 2021, our board of directors authorized us to repurchase up to 5,000,000 shares of our outstanding common stock. This authorization reaffirmed and incorporated the then-current balance of 2,193,947 shares that remained under the prior authorization. In the 2021 third quarter, we purchased 4,668,600 shares of our common stock pursuant to this authorization at a total cost of $188.2 million. As of August 31, 2021, we had 331,400 shares authorized for repurchase.

Item 6.Exhibits 

Exhibits
22	List of Guarantor Subsidiaries, filed as an exhibit to our Annual Report on Form 10-K (File No. 001-09195), is incorporated by reference herein.
31.1	Certification of Jeffrey T. Mezger, Chairman, President and Chief Executive Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Jeffrey T. Mezger, Chairman, President and Chief Executive Officer of KB Home Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of KB Home Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

KB HOME
Registrant

Dated	October 8, 2021	By:	/s/ JEFF J. KAMINSKI
			Jeff J. Kaminski Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Dated	October 8, 2021	By:	/s/ WILLIAM R. HOLLINGER
			William R. Hollinger Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey T. Mezger, certify that: 

1.I have reviewed this quarterly report on Form 10-Q of KB Home;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated	October 8, 2021	/s/ JEFFREY T. MEZGER
		Jeffrey T. Mezger
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeff J. Kaminski, certify that:

1.I have reviewed this quarterly report on Form 10-Q of KB Home;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

Dated	October 8, 2021	/s/ JEFF J. KAMINSKI
		Jeff J. Kaminski
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of KB Home (the "Company") on Form 10-Q for the period ended August 31, 2021 (the “Report”), I, Jeffrey T. Mezger, Chairman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated	October 8, 2021	/s/ JEFFREY T. MEZGER
		Jeffrey T. Mezger
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of KB Home (the "Company") on Form 10-Q for the period ended August 31, 2021 (the “Report”), I, Jeff J. Kaminski, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated	October 8, 2021	/s/ JEFF J. KAMINSKI
		Jeff J. Kaminski
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

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Amendment Flag	false
Document Period End Date	Aug. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Registrant Name	KB HOME
Entity Central Index Key	0000795266
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--11-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock Shares Outstanding	87,477,633
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity File Number	001-09195
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-3666267
Entity Address, Address Line One	10990 Wilshire Boulevard
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90024
City Area Code	310
Local Phone Number	231-4000
Common Stock, Par or Stated Value Per Share | $ / shares	$ 1.00
Document Quarterly Report	true
Document Transition Report	false
Grantor Stock Ownership Trust
Document Information [Line Items]
Entity Common Stock Shares Outstanding	6,705,247
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock (par value $1.00 per share)
Trading Symbol	KBH
Security Exchange Name	NYSE
Rights
Document Information [Line Items]
Title of 12(b) Security	Rights to Purchase Series A Participating Cumulative Preferred Stock
Trading Symbol	KBH
Security Exchange Name	NYSE

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Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020
Total revenues	$ 1,467,102	$ 999,013	$ 4,049,732	$ 2,988,918
Equity in income of unconsolidated joint ventures			18,418	26,855
Loss on early extinguishment of debt			5,075	0
Income (Loss) from Continuing Operations before Income Taxes, Domestic	174,197	101,315	471,412	237,952
Income tax expense	(24,100)	(22,900)	(80,900)	(47,800)
Net income	$ 150,097	$ 78,415	$ 390,512	$ 190,152
Earnings per share:
Basic (in dollars per share)	$ 1.66	$ 0.86	$ 4.26	$ 2.09
Diluted (in dollars per share)	$ 1.60	$ 0.83	$ 4.11	$ 2.02
Weighted average shares outstanding:
Basic (in shares)	90,076	90,535	91,290	90,292
Diluted (in shares)	93,264	94,105	94,512	93,788
Home Building [Member]
Total revenues	$ 1,461,896	$ 995,148	$ 4,035,939	$ 2,977,810
Costs of goods and services sold	(1,147,642)	(798,495)	(3,177,569)	(2,429,001)
Selling, general and administrative expenses	(144,325)	(107,710)	(411,445)	(348,082)
Operating income	169,929	88,943	446,925	200,727
Interest income	144	786	1,038	2,163
Equity in income of unconsolidated joint ventures	(182)	1,922	(5)	11,981
Loss on early extinguishment of debt	5,075	0	5,075	0
Income (Loss) from Continuing Operations before Income Taxes, Domestic	164,816	91,651	442,883	214,871
Financial Service [Member]
Total revenues	5,206	3,865	13,793	11,108
Selling, general and administrative expenses	(1,234)	(1,056)	(3,687)	(2,901)
Operating income	3,972	2,809	10,106	8,207
Equity in income of unconsolidated joint ventures	5,409	6,855	18,423	14,874
Income (Loss) from Continuing Operations before Income Taxes, Domestic	$ 9,381	$ 9,664	$ 28,529	$ 23,081

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands		Aug. 31, 2021	Nov. 30, 2020
Assets
Cash and cash equivalents		$ 351,345	$ 682,529
Receivables		295,092	272,659
Inventories		4,655,875	3,897,482
Property and equipment, net		72,470	65,547
Other assets		111,022	125,510
Total assets		5,756,347	5,356,442
Liabilities and stockholders’ equity
Accrued expenses and other liabilities		708,265	667,501
Mortgages and notes payable		1,863,501	1,747,175
Common stock		100,151	99,869
Paid-in capital		842,380	824,306
Retained earnings		2,218,217	1,868,896
Accumulated other comprehensive loss		(22,276)	(22,276)
Grantor stock ownership trust, at cost		(72,718)	(77,265)
Treasury stock, at cost		(224,021)	(27,761)
Total stockholders’ equity		2,841,733	2,665,769
Total liabilities and stockholders’ equity		5,756,347	5,356,442
Home Building [Member]
Assets
Cash and cash equivalents		350,141	681,190
Receivables		295,092	272,659
Inventories		4,655,875	3,897,482
Investments in unconsolidated joint ventures		39,484	46,785
Property and equipment, net		72,470	65,547
Deferred tax assets, net		194,845	231,067
Other assets		111,022	125,510
Total assets		5,718,929	5,320,240
Liabilities and stockholders’ equity
Accounts payable		340,540	273,368
Accrued expenses and other liabilities		708,265	667,501
Mortgages and notes payable		1,863,501	1,747,175
Total Liabilities		2,912,306	2,688,044
Financial Service [Member]
Assets
Cash and cash equivalents		1,204	1,339
Receivables		1,708	1,988
Investments in unconsolidated joint ventures		11,151	10,978
Other assets	[1]	23,355	21,897
Total assets		37,418	36,202
Liabilities and stockholders’ equity
Financial services		$ 2,308	$ 2,629

[1] Other assets at August 31, 2021 and November 30, 2020 included $23.1 million and $21.5 million, respectively, of contract assets for estimated future renewal commissions.

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020
Cash flows from operating activities:
Net income	$ 390,512	$ 190,152
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in income of unconsolidated joint ventures	(18,418)	(26,855)
Distributions of earnings from unconsolidated joint ventures	18,625	29,384
Amortization of discounts, premiums and issuance costs	2,203	1,862
Depreciation and amortization	21,296	21,583
Deferred income taxes	36,300	40,200
Loss on early extinguishment of debt	5,075	0
Stock-based compensation	19,768	12,767
Inventory impairments and land option contract abandonments	11,222	16,939
Changes in assets and liabilities:
Receivables	(22,457)	62,839
Inventories	(760,350)	46,567
Accounts payable, accrued expenses and other liabilities	102,087	(62,419)
Other, net	13,912	(3,808)
Net cash provided by (used in) operating activities	(180,225)	329,211
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	(11,057)	(6,048)
Return of investments in unconsolidated joint ventures	12,724	8,816
Purchases of property and equipment, net	(28,219)	(21,154)
Net cash used in investing activities	(26,552)	(18,386)
Cash flows from financing activities:
Proceeds from issuance of debt	390,000	0
Issuance costs for unsecured revolving credit facility	(4,813)	0
Repayment of senior notes	(274,904)	0
Payments on mortgages and land contracts due to land sellers and other loans	(600)	(20,314)
Issuance of common stock under employee stock plans	3,506	8,404
Stock repurchases	(188,175)	0
Tax payments associated with stock-based compensation awards	(8,456)	(6,219)
Payments of cash dividends	(40,965)	(24,428)
Net cash used in financing activities	(124,407)	(42,557)
Net increase (decrease) in cash and cash equivalents	(331,184)	268,268
Cash and cash equivalents at beginning of period	682,529	454,858
Cash and cash equivalents at end of period	$ 351,345	$ 723,126

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Supplemental Disclosure to Consolidated Statements of Cash Flows

9 Months Ended

Aug. 31, 2021

Supplemental Cash Flow Information [Abstract]

Supplemental Disclosure to Consolidated Statements of Cash Flows

Supplemental Disclosure to Consolidated Statements of Cash Flows

The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

	Nine Months Ended August 31,
	2021		2020
Summary of cash and cash equivalents at end of period:
Homebuilding	$	350,141	$	722,033
Financial services	1,204		1,093
Total	$	351,345	$	723,126
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	$	(2,934)	$	(3,544)
Income taxes paid	43,248		8,436
Supplemental disclosures of non-cash activities:
Reclassification of federal tax refund from deferred tax assets to receivables	—		82,617
Increase in operating lease right-of-use assets and lease liabilities due to adoption of ASC 842	—		31,199
Inventories acquired through seller financing	—		18,045
Increase in consolidated inventories not owned	4,011		4,992
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture	5,451		6,996

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Supplemental Disclosure to Consolidated Statements of Cash Flows

9 Months Ended

Aug. 31, 2021

Supplemental Cash Flow Information [Abstract]

Schedule of Supplemental Cash Flow Disclosures

The following are supplemental disclosures to the consolidated statements of cash flows (in thousands):

	Nine Months Ended August 31,
	2021		2020
Summary of cash and cash equivalents at end of period:
Homebuilding	$	350,141	$	722,033
Financial services	1,204		1,093
Total	$	351,345	$	723,126
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	$	(2,934)	$	(3,544)
Income taxes paid	43,248		8,436
Supplemental disclosures of non-cash activities:
Reclassification of federal tax refund from deferred tax assets to receivables	—		82,617
Increase in operating lease right-of-use assets and lease liabilities due to adoption of ASC 842	—		31,199
Inventories acquired through seller financing	—		18,045
Increase in consolidated inventories not owned	4,011		4,992
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture	5,451		6,996

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Supplemental Disclosure to Consolidated Statements of Cash Flows - USD ($) $ in Thousands		9 Months Ended
		Aug. 31, 2021		Aug. 31, 2020	Nov. 30, 2020		Dec. 01, 2019
Segment Reporting Information [Line Items]
Operating Lease, Liability		$ 32,011	[1]		$ 38,000	[1]	$ 0
Summary of cash and cash equivalents at end of period:
Cash and cash equivalents		351,345		$ 723,126	682,529
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized		(2,934)		(3,544)
Income taxes paid		43,248		8,436
Deferred Tax Assets, Tax Credit Carryforwards		0		82,617
Noncash or Part Noncash Acquisition, Inventory Acquired		0		18,045
Lease right-of-use assets	[2]	30,112			36,270
Supplemental disclosures of non-cash activities:
Decrease in inventories due to adoption of ASC 606		4,655,875			3,897,482
Increase in property and equipment, net due to adoption of ASC 606		72,470			65,547
Increase in consolidated inventories not owned		4,011		4,992
Increase In Operating Lease Right-Of-Use Assets And Lease Liabilities Due to Adoption of ASC842							$ 31,199
Inspirada Builders LLC
Supplemental disclosures of non-cash activities:
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture		5,451		6,996
Home Building [Member]
Segment Reporting Information [Line Items]
Operating Lease, Liability		31,773			37,668
Summary of cash and cash equivalents at end of period:
Cash and cash equivalents		350,141		722,033	681,190
Supplemental disclosures of cash flow information:
Lease right-of-use assets		29,896			35,967
Supplemental disclosures of non-cash activities:
Decrease in inventories due to adoption of ASC 606		4,655,875			3,897,482
Increase in property and equipment, net due to adoption of ASC 606		72,470			65,547
Financial Service [Member]
Segment Reporting Information [Line Items]
Operating Lease, Liability		200			300
Summary of cash and cash equivalents at end of period:
Cash and cash equivalents		1,204		$ 1,093	1,339
Supplemental disclosures of cash flow information:
Lease right-of-use assets		$ 200			$ 300

[1] Represents lease liabilities within our homebuilding operations and financial services operations of $31.8 million and $.2 million, respectively, at August 31, 2021, and $37.7 million and $.3 million, respectively, at November 30, 2020.

[2] Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020

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Basis of Presentation and Significant Accounting Policies

9 Months Ended

Aug. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly our consolidated financial position as of August 31, 2021, the results of our consolidated operations for the three months and nine months ended August 31, 2021 and 2020, and our consolidated cash flows for the nine months ended August 31, 2021 and 2020. The results of our consolidated operations for the three months and nine months ended August 31, 2021 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operating results and other factors. The consolidated balance sheet at November 30, 2020 has been taken from the audited consolidated financial statements as of that date. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended November 30, 2020, which are contained in our Annual Report on Form 10-K for that period.

Unless the context indicates otherwise, the terms “we,” “our,” and “us” used in this report refer to KB Home, a Delaware corporation, and its subsidiaries.

Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents. We consider all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents. Our cash equivalents totaled $126.7 million at August 31, 2021 and $508.5 million at November 30, 2020. At August 31, 2021 and November 30, 2020, the majority of our cash and cash equivalents was invested in interest-bearing bank deposit accounts.

Comprehensive Income. Our comprehensive income was $150.1 million for the three months ended August 31, 2021 and $78.4 million for the three months ended August 31, 2020. For the nine months ended August 31, 2021 and 2020, our comprehensive income was $390.5 million and $190.2 million, respectively. Our comprehensive income for each of the three-month and nine-month periods ended August 31, 2021 and 2020 was equal to our net income for the respective periods.

Adoption of New Accounting Pronouncement. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes the impairment model for most financial assets and certain other instruments from an incurred loss approach to a new expected credit loss methodology. On December 1, 2020, we adopted ASU 2016-13 using the modified retrospective method and recorded a cumulative effect adjustment to decrease beginning retained earnings by $.2 million, net of tax, to establish an allowance for credit losses for certain receivables on our consolidated balance sheet. The adoption of ASU 2016-13 did not materially impact our consolidated statements of operations or cash flows.

Recent Accounting Pronouncements Not Yet Adopted. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification Topic 740, “Income Taxes” (“ASC 740”), and clarifies certain aspects of ASC 740 to promote consistency among reporting entities.  ASU 2019-12 is effective for us beginning December 1, 2021, with early adoption permitted. Most amendments within ASU 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.  We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Reclassifications. Certain amounts in our consolidated financial statements of prior years have been reclassified to conform to the current period presentation.

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Segment Information

9 Months Ended

Aug. 31, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment. As of August 31, 2021, 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.

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. Our financial services reporting segment earns revenues primarily from insurance commissions and from the provision of title services.

We offer mortgage banking services, including residential consumer mortgage loan (“mortgage loan”) originations, to our homebuyers indirectly through KBHS Home Loans, LLC (“KBHS”), an unconsolidated joint venture we formed with Stearns Ventures, LLC (“Stearns”). We and Stearns each have a 50.0% ownership interest, with Stearns providing management oversight of KBHS’ operations. On March 1, 2021, Guaranteed Rate, Inc. (“Guaranteed Rate”) acquired Stearns’ parent company. There have been no significant changes with respect to Stearns or its operations since the transaction was completed. The financial services reporting segment is separately reported in our consolidated financial statements.

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 August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues:
West Coast	$	663,563	$	379,025	$	1,803,769	$	1,195,404
Southwest	234,933		223,096		680,679		589,665
Central	384,532		297,022		1,084,795		864,728
Southeast	178,868		96,005		466,696		328,013
Total	$	1,461,896	$	995,148	$	4,035,939	$	2,977,810
Pretax income (loss):
West Coast	$	93,247	$	34,353	$	228,508	$	96,202
Southwest	46,021		39,295		127,985		96,298
Central	53,375		35,422		150,650		84,996
Southeast	19,979		5,986		50,955		15,245
Corporate and other	(47,806)		(23,405)		(115,215)		(77,870)
Total	$	164,816	$	91,651	$	442,883	$	214,871

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Inventory impairment and land option contract abandonment charges:
West Coast	$	6,458	$	5,546	$	10,376	$	10,610
Southwest	243		—		536		171
Central	—		1,084		70		5,520
Southeast	—		258		240		638
Total	$	6,701	$	6,888	$	11,222	$	16,939

	August 31, 2021		November 30, 2020
Assets:
West Coast	$	2,439,635	$	2,057,362
Southwest	954,983		738,765
Central	1,125,069		998,612
Southeast	610,634		448,388
Corporate and other	588,608		1,077,113
Total	$	5,718,929	$	5,320,240

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Financial Services

9 Months Ended

Aug. 31, 2021

Segment Reporting [Abstract]

Financial Services

Financial Services

The following tables present financial information relating to our financial services reporting segment (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues
Insurance commissions	$	2,771	$	2,150	$	7,051	$	6,133
Title services	2,435		1,715		6,742		4,975
Total	5,206		3,865		13,793		11,108
Expenses
General and administrative	(1,234)		(1,056)		(3,687)		(2,901)
Operating income	3,972		2,809		10,106		8,207
Equity in income of unconsolidated joint ventures	5,409		6,855		18,423		14,874
Pretax income	$	9,381	$	9,664	$	28,529	$	23,081

	August 31, 2021		November 30, 2020
Assets
Cash and cash equivalents	$	1,204	$	1,339
Receivables	1,708		1,988
Investments in unconsolidated joint ventures	11,151		10,978
Other assets (a)	23,355		21,897
Total assets	$	37,418	$	36,202
Liabilities
Accounts payable and accrued expenses	$	2,308	$	2,629
Total liabilities	$	2,308	$	2,629

(a)Other assets at August 31, 2021 and November 30, 2020 included $23.1 million and $21.5 million, respectively, of contract assets for estimated future renewal commissions.

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Earnings Per Share

9 Months Ended

Aug. 31, 2021

Earnings Per Share, Basic and Diluted [Abstract]

Earnings Per Share

Earnings Per Share

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Numerator:
Net income	$	150,097	$	78,415	$	390,512	$	190,152
Less: Distributed earnings allocated to nonvested restricted stock	(62)		(42)		(188)		(129)
Less: Undistributed earnings allocated to nonvested restricted stock	(625)		(360)		(1,594)		(875)
Numerator for basic earnings per share	149,410		78,013		388,730		189,148
Effect of dilutive securities:
Add: Undistributed earnings allocated to nonvested restricted stock	625		360		1,594		875
Less: Undistributed earnings reallocated to nonvested restricted stock	(604)		(346)		(1,540)		(843)
Numerator for diluted earnings per share	$	149,431	$	78,027	$	388,784	$	189,180
Denominator:
Weighted average shares outstanding — basic	90,076		90,535		91,290		90,292
Effect of dilutive securities:
Share-based payments	3,188		3,570		3,222		3,496
Weighted average shares outstanding — diluted	93,264		94,105		94,512		93,788
Basic earnings per share	$	1.66	$	.86	$	4.26	$	2.09
Diluted earnings per share	$	1.60	$	.83	$	4.11	$	2.02

We compute earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders. Our outstanding nonvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. We had no other participating securities at August 31, 2021 or 2020.

For the three-month and nine-month periods ended August 31, 2021 and 2020, no outstanding stock options were excluded from the diluted earnings per share calculations. Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented as the applicable vesting conditions had not been satisfied.

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Receivables

9 Months Ended

Aug. 31, 2021

Receivables [Abstract]

Receivables

ReceivablesReceivables consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Due from utility companies, improvement districts and municipalities	$	154,401	$	107,569
Recoveries related to self-insurance and other legal claims	77,944		82,018
Refundable deposits and bonds	13,948		10,897
Income taxes receivable	—		41,323
Other	54,058		38,151
Subtotal	300,351		279,958
Allowance for doubtful accounts	(5,259)		(7,299)
Total	$	295,092	$	272,659

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Inventories

9 Months Ended

Aug. 31, 2021

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Homes completed or under construction	$	2,022,354	$	1,437,911
Land under development	2,633,521		2,459,571
Total	$	4,655,875	$	3,897,482

Land under development included land held for future development and land held for sale of $64.5 million and $2.6 million, respectively, at August 31, 2021 and $74.0 million and $1.3 million, respectively, at November 30, 2020.

Interest is capitalized to inventories while the related communities or land parcels are being actively developed and until homes are completed or the land is available for immediate sale. Capitalized interest is amortized to construction and land costs as the related inventories are delivered to homebuyers or land buyers (as applicable). In the case of land held for future development and land held for sale, applicable interest is expensed as incurred.

Our interest costs were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Capitalized interest at beginning of period	$	180,065	$	194,434	$	190,113	$	195,738
Interest incurred	29,605		31,054		91,807		93,071
Interest amortized to construction and land costs (a)	(37,544)		(30,628)		(109,794)		(93,949)
Capitalized interest at end of period	$	172,126	$	194,860	$	172,126	$	194,860

(a)There was no interest amortized to construction and land costs related to land sales for the three months ended August 31, 2021. Interest amortized to construction and land costs for the nine months ended August 31, 2021 included $.2 million related to land sales. For the three months and nine months ended August 31, 2020, interest amortized to construction and land costs included $.4 million related to land sales.

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Inventory Impairments and Land Option Contract Abandonments

9 Months Ended

Aug. 31, 2021

Inventory Impairments and Land Option Contract Abandonments [Abstract]

Inventory Impairments and Land Option Contract Abandonments

Inventory Impairments and Land Option Contract Abandonments

Each community or land parcel in our owned inventory is assessed on a quarterly basis to determine if indicators of potential impairment exist. We record an inventory impairment charge on a community or land parcel that is active or held for future development when indicators of potential impairment exist and the carrying value of the real estate asset is greater than the undiscounted future net cash flows the asset is expected to generate. These real estate assets are written down to fair value, which is primarily determined based on the estimated future net cash flows discounted for inherent risk associated with each such asset, or other valuation techniques. We record an inventory impairment charge on land held for sale when the carrying value of a land parcel is greater than its fair value. These real estate assets are written down to fair value, less associated costs to sell. The estimated fair values of such assets are generally based on bona fide letters of intent from outside parties, executed sales contracts, broker quotes or similar information.

We evaluated four and 11 communities or land parcels for recoverability as of August 31, 2021 and November 30, 2020, respectively. The carrying values of those communities or land parcels evaluated as of August 31, 2021 and November 30, 2020 were $31.4 million and $123.4 million, respectively. In addition, we evaluated land held for future development for recoverability as of August 31, 2021 and November 30, 2020.

Based on the results of our evaluations, we recognized $6.3 million and $6.5 million of inventory impairment charges for the three months ended August 31, 2021 and 2020, respectively. For the nine months ended August 31, 2021 and 2020, we recognized inventory impairment charges of $9.9 million and $11.6 million, respectively. The inventory impairment charges for the three-month and nine-month periods reflected our decisions to make changes in our operational strategies aimed at more quickly monetizing our investment in certain communities by accelerating the overall pace for selling, building and delivering homes therein, including communities on land previously held for future development.

The following table summarizes significant quantitative unobservable inputs we utilized in our fair value measurements with respect to the impaired communities written down to fair value during the periods presented:

	Three Months Ended August 31,		Nine Months Ended August 31,
Unobservable Input (a)	2021	2020	2021	2020
Average selling price	$949,400	$301,600 - $1,010,100	$471,000 - $949,400	$301,600 - $1,010,100
Deliveries per month	4	2	4 - 5	1 - 4
Discount rate	18%	17% - 18%	18% - 19%	17% - 18%

(a)Ranges of inputs presented primarily reflect differences between the housing markets where each impacted community is located, rather than fluctuations in prevailing market conditions.

As of August 31, 2021, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $98.0 million, representing 12 communities and various other land parcels. As of November 30, 2020, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $113.1 million, representing 16 communities and various other land parcels.

Our inventory controlled under land option contracts and other similar contracts is assessed on a quarterly basis to determine whether it continues to meet our investment return standards. When a decision is made not to exercise certain land option contracts and other similar contracts due to market conditions and/or changes in our marketing strategy, we write off the related inventory costs, including non-refundable deposits and unrecoverable pre-acquisition costs. Based on the results of our assessments, we recognized land option contract abandonment charges of $.4 million for the three months ended August 31, 2021 and $1.3 million for the nine months ended August 31, 2021. For the three months and nine months ended August 31, 2020, we recognized land option contract abandonment charges of $.4 million and $5.4 million, respectively.

Due to the judgment and assumptions applied in our inventory impairment and land option contract abandonment assessment processes, and in our estimations of the remaining operating lives of our inventory assets and the realization of our inventory balances, particularly as to land held for future development, it is possible that actual results could differ substantially from those estimated.

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Variable Interest Entities

9 Months Ended

Aug. 31, 2021

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest EntitiesUnconsolidated Joint Ventures. We participate in joint ventures from time to time that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. Our

investments in these joint ventures may create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. We analyze our joint ventures under the variable interest model to determine whether they are VIEs and, if so, whether we are the primary beneficiary. Based on our analyses, we determined that one of our joint ventures at August 31, 2021 and November 30, 2020 was a VIE, but we were not the primary beneficiary of the VIE. Therefore, all of our joint ventures at August 31, 2021 and November 30, 2020 were unconsolidated and accounted for under the equity method because we did not have a controlling financial interest.

Land Option Contracts and Other Similar Contracts. In the ordinary course of our business, we enter into land option contracts and other similar contracts with third parties and unconsolidated entities to acquire rights to land for the construction of homes. Under these contracts, we typically make a specified option payment or earnest money deposit in consideration for the right to purchase land in the future, usually at a predetermined price. We analyze each of our land option contracts and other similar contracts under the variable interest model to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, we are required to consolidate a VIE if we are the primary beneficiary. As a result of our analyses, we determined that as of August 31, 2021 and November 30, 2020, we were not the primary beneficiary of any VIEs from which we have acquired rights to land under land option contracts and other similar contracts. We perform ongoing reassessments of whether we are the primary beneficiary of a VIE.

The following table presents a summary of our interests in land option contracts and other similar contracts (in thousands):

	August 31, 2021				November 30, 2020
	Cash Deposits		Aggregate Purchase Price		Cash Deposits		Aggregate Purchase Price
Unconsolidated VIEs	$	57,968	$	1,002,812	$	20,962	$	910,495
Other land option contracts and other similar contracts	38,876		648,499		33,672		507,934
Total	$	96,844	$	1,651,311	$	54,634	$	1,418,429

In addition to the cash deposits presented in the table above, our exposure to loss related to our land option contracts and other similar contracts with third parties and unconsolidated entities consisted of pre-acquisition costs of $39.6 million at August 31, 2021 and $31.1 million at November 30, 2020. These pre-acquisition costs and cash deposits were included in inventories in our consolidated balance sheets.

For land option contracts and other similar contracts where the land seller entity is not required to be consolidated under the variable interest model, we consider whether such contracts should be accounted for as financing arrangements. Land option contracts and other similar contracts that may be considered financing arrangements include those we enter into with third-party land financiers or developers in conjunction with such third parties acquiring a specific land parcel(s) on our behalf, at our direction, and those with other landowners where we or our designee make improvements to the optioned land parcel(s) during the applicable option period. For these land option contracts and other similar contracts, we record the remaining purchase price of the associated land parcel(s) in inventories in our consolidated balance sheets with a corresponding financing obligation if we determine that we are effectively compelled to exercise the option to purchase the land parcel(s). As a result of our evaluations of land option contracts and other similar contracts for financing arrangements, we recorded inventories in our consolidated balance sheets, with a corresponding increase to accrued expenses and other liabilities, of $23.4 million at August 31, 2021 and $19.4 million at November 30, 2020.

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Investments in Unconsolidated Joint Ventures

9 Months Ended

Aug. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Joint VenturesWe have investments in unconsolidated joint ventures that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. We and our unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures, typically on a pro rata basis, according to our respective equity interests. The obligations to make capital contributions are governed by each such unconsolidated joint venture’s respective operating agreement and related governing documents.

As of August 31, 2021 and November 30, 2020, we had investments in six and five unconsolidated joint ventures, respectively. The following table presents combined condensed information from the statements of operations for our unconsolidated joint ventures (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues	$	1,979	$	21,473	$	14,818	$	115,893
Construction and land costs	(1,453)		(15,960)		(12,397)		(84,228)
Other expense, net	(591)		(1,606)		(2,000)		(7,455)
Income (loss)	$	(65)	$	3,907	$	421	$	24,210

The lower combined revenues and construction and land costs for the three months and nine months ended August 31, 2021, as compared to the corresponding year-earlier periods, mainly reflected a decrease in the number of homes delivered from an unconsolidated joint venture in California. This unconsolidated joint venture, which delivered its last home in the 2021 second quarter, had no deliveries in the three months ended August 31, 2021 and 10 deliveries in the nine months ended August 31, 2021, compared to 17 and 90 homes delivered in the corresponding year-earlier periods, respectively.

The following table presents combined condensed balance sheet information for our unconsolidated joint ventures (in thousands):

	August 31, 2021		November 30, 2020
Assets
Cash	$	21,320	$	38,837
Receivables	842		96
Inventories	63,067		65,233
Other assets	263		593
Total assets	$	85,492	$	104,759
Liabilities and equity
Accounts payable and other liabilities	$	11,608	$	14,037
Equity	73,884		90,722
Total liabilities and equity	$	85,492	$	104,759

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Property and Equipment, Net Property and Equipment, Net

9 Months Ended

Aug. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Computer software and equipment	$	37,610	$	32,902
Model furnishings and sales office improvements	86,717		83,882
Leasehold improvements, office furniture and equipment	17,735		17,245
Subtotal	142,062		134,029
Less: Accumulated depreciation	(69,592)		(68,482)
Total	$	72,470	$	65,547

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Other Assets

9 Months Ended

Aug. 31, 2021

Other Assets [Abstract]

Other Assets

Other Assets

Other assets consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Cash surrender value and benefit receivable from corporate-owned life insurance contracts	$	68,776	$	73,227
Lease right-of-use assets	29,896		35,967
Prepaid expenses	10,585		13,916
Debt issuance costs associated with unsecured revolving credit facility, net	1,765		2,400
Total	$	111,022	$	125,510

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Accrued Expenses and Other Liabilities

9 Months Ended

Aug. 31, 2021

Payables and Accruals [Abstract]

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Self-insurance and other legal liabilities	$	228,312	$	232,556
Employee compensation and related benefits	171,126		165,342
Warranty liability	97,813		91,646
Customer deposits	66,372		26,243
Accrued interest payable	34,575		31,641
Inventory-related obligations (a)	33,768		31,094
Lease liabilities	31,773		37,668
Real estate and business taxes	16,656		14,249
Other	27,870		37,062
Total	$	708,265	$	667,501

(a)Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities, as well as liabilities for fixed or determinable amounts associated with tax increment financing entity (“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.

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Leases (Notes)

9 Months Ended

Aug. 31, 2021

Leases [Abstract]

Lessee, Operating Leases [Text Block]

LeasesWe lease certain property and equipment for use in our operations. We recognize lease expense for these leases generally on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Lease right-of-use assets and lease liabilities are recorded on our consolidated balance sheets for leases with an expected term at the commencement date of more than 12 months in accordance with Accounting Standards Codification Topic 842, “Leases” (“ASC 842”). Some of our leases include one or more renewal options, the exercise of which is generally at our discretion. Such options are excluded from the expected term of the lease unless we determine it is reasonably certain the option will be exercised. Lease liabilities are equal to the present value of the remaining lease payments while the amount of lease right-of-use assets is based on the lease liabilities, subject to adjustment, such as for lease incentives. Our leases do not provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term, market interest rates, current interest rates on our senior notes and the effects of collateralization. Our lease population at August 31, 2021 was comprised of operating leases where we are the lessee, primarily real estate leases for our corporate offices, division offices and design studios, as well as certain equipment leases. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

Lease expense is included in selling, general and administrative expenses in our consolidated statements of operations and includes costs for leases with terms of more than 12 months as well as short-term leases with terms of 12 months or less. Our total lease expense for the three months ended August 31, 2021 and 2020 was $4.3 million and $4.2 million, respectively, and included short-term lease costs of $1.2 million and $1.1 million, respectively. For the nine months ended August 31, 2021 and 2020, our total lease expense was $12.9 million and $13.6 million, respectively, and included short-term lease costs of $3.7 million and $4.8 million, respectively. Variable lease costs and external sublease income for the three-month and nine-month periods ended August 31, 2021 and 2020 were immaterial.

The following table presents our lease right-of-use assets, lease liabilities and the weighted average remaining lease term and weighted average discount rate (incremental borrowing rate) used in calculating the lease liabilities (dollars in thousands):

	August 31, 2021			November 30, 2020
Lease right-of-use assets (a)	$	30,112		$	36,270
Lease liabilities (b)	32,011			38,000
Weighted average remaining lease term	4.0 years			4.5 years
Weighted average discount rate (incremental borrowing rate)	5.1		%	5.1		%

(a)Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020.

(b)Represents lease liabilities within our homebuilding operations and financial services operations of $31.8 million and $.2 million, respectively, at August 31, 2021, and $37.7 million and $.3 million, respectively, at November 30, 2020.

The following table presents additional information about our leases (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Lease right-of-use assets obtained in exchange for new lease liabilities	$	18	$	2,977	$	1,517	$	9,045
Cash payments on lease liabilities	2,979		2,831		8,648		8,468

As of August 31, 2021, the future minimum lease payments required under our leases are as follows (in thousands):

Years Ending November 30,
2021	$	2,962
2022	10,549
2023	8,280
2024	6,139
2025	4,503
Thereafter	3,112
Total lease payments	35,545
Less: Interest	(3,534)
Present value of lease liabilities	$	32,011

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Income Taxes

9 Months Ended

Aug. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income Tax Expense. Our income tax expense and effective tax rates were as follows (dollars in thousands):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Income tax expense	$	24,100		$	22,900		$	80,900		$	47,800
Effective tax rate	13.8		%	22.6		%	17.2		%	20.1		%

Our income tax expense and effective tax rate for the three months ended August 31, 2021 included the favorable impact of $21.5 million of federal energy tax credits we earned from building energy-efficient homes, partially offset by $2.5 million of non-deductible executive compensation expense under Internal Revenue Code Section 162(m). Our income tax expense and effective tax rate for the three months ended August 31, 2020 included the favorable impact of $3.1 million of federal energy tax credits we earned from building energy-efficient homes, partly offset by $1.2 million of non-deductible executive compensation expense.

Our income tax expense and effective tax rate for the nine months ended August 31, 2021 reflected the favorable impacts of $39.0 million of federal energy tax credits we earned from building energy-efficient homes and $3.9 million of excess tax benefits related to stock-based compensation, partially offset by $5.8 million of non-deductible executive compensation expense under Internal Revenue Code Section 162(m). For the nine months ended August 31, 2020, our income tax expense and effective tax rate included the favorable impacts of $10.1 million of federal energy tax credits we earned from building energy-efficient homes and $5.6 million of excess tax benefits related to stock-based compensation, partly offset by $3.2 million of non-deductible executive compensation expense.

The federal energy tax credits for the three months and nine months ended August 31, 2021 resulted from legislation enacted in December 2020 and earlier periods. The legislation enacted in December 2020, among other things, extended the availability of a business tax credit for building new energy-efficient homes through December 31, 2021. Prior to this legislation, the tax credit expired on December 31, 2020. This extension is expected to benefit our income tax provision in future periods.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted to provide economic and other relief as a result of the 2019 coronavirus disease (“COVID-19”) pandemic. Among other things, the CARES Act accelerated the timetable for alternative minimum tax (“AMT”) credit refunds. As a result, in the 2020 second quarter, we filed a superseding 2019 federal income tax return claiming a refund of $39.3 million of AMT credits and reclassified this amount from deferred tax assets to receivables. We received this AMT credit refund in the 2021 first quarter.

The CARES Act also provided an Employee Retention Credit (“ERC”), which is a refundable payroll tax credit that encouraged businesses to keep employees on the payroll during the COVID-19 pandemic. Eligible employers could qualify for up to $5,000 of credit for each employee based on certain wages paid after March 12, 2020 and before January 1, 2021. Based on our evaluation of this provision and the significant pandemic-related impacts on our operations in 2020, we recognized an ERC of $4.3 million as an offset to payroll tax expenses within selling general and administrative expenses in our consolidated statements of operations upon filing for the refund in the 2021 first quarter.

In June 2020, California enacted tax legislation that approved the suspension of California net operating loss deductions for tax years 2020, 2021 and 2022. The suspension of California net operating loss deductions did not have an impact on our income tax expense for the three months or nine months ended August 31, 2021.

Deferred Tax Asset Valuation Allowance. We evaluate our deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available positive and negative evidence using a “more likely than not” standard with respect to whether deferred tax assets will be realized. Our evaluation considers, among other factors, our historical operating results, our expectation of future profitability, the duration of the applicable statutory carryforward periods, and conditions in the housing market and the broader economy. The ultimate realization of our deferred tax assets depends primarily on our ability to generate future taxable income during the periods in which the related deferred tax assets become deductible. The value of our deferred tax assets depends on applicable income tax rates.

Our deferred tax assets of $213.1 million as of August 31, 2021 and $249.1 million as of November 30, 2020 were partly offset by valuation allowances of $18.3 million and $18.0 million, respectively. The deferred tax asset valuation allowances as of August 31, 2021 and November 30, 2020 were primarily related to certain state net operating losses that

had not met the “more likely than not” realization standard at those dates. As a result of an adjustment to our state net operating losses, we increased the valuation allowance by $.3 million in the 2021 third quarter. Based on the evaluation of our deferred tax assets as of August 31, 2021, we determined that most of our deferred tax assets would be realized. Therefore, other than the slight increase mentioned above, no adjustments to our deferred tax valuation allowance were needed for the nine months ended August 31, 2021.

We will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to our deferred tax assets. The accounting for deferred tax assets is based upon estimates of future results. Changes in positive and negative evidence, including differences between estimated and actual results, could result in changes in the valuation of our deferred tax assets that could have a material impact on our consolidated financial statements. Changes in existing federal and state tax laws and corporate income tax rates could also affect actual tax results and the realization of deferred tax assets over time.

Unrecognized Tax Benefits. As of August 31, 2021, we had $.9 million of gross unrecognized tax benefits that if recognized would affect our effective tax rate. We had no such gross unrecognized tax benefits as of November 30, 2020. We do not anticipate a significant change in the amount of gross unrecognized tax benefits over the next 12 months. We recognize accrued interest and penalties related to unrecognized tax benefits in our consolidated financial statements as a component of the provision for income taxes. Our liability for unrecognized tax benefits at August 31, 2021 is included in accrued expenses and other liabilities in our consolidated balance sheets. The fiscal years ending 2017 and later remain open to federal examinations, while 2016 and later remain open to state examinations.

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Notes Payable

9 Months Ended

Aug. 31, 2021

Debt Disclosure [Abstract]

Notes Payable

Notes Payable

Notes payable consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Mortgages and land contracts due to land sellers and other loans	$	4,067	$	4,667
7.00% Senior notes due December 15, 2021	180,051		449,029
7.50% Senior notes due September 15, 2022	349,310		348,846
7.625% Senior notes due May 15, 2023	350,914		351,281
6.875% Senior notes due June 15, 2027	297,057		296,757
4.80% Senior notes due November 15, 2029	296,826		296,595
4.00% Senior notes due June 15, 2031	385,276		—
Total	$	1,863,501	$	1,747,175

The carrying amounts of our senior notes listed above are net of unamortized debt issuance costs and premiums, which totaled $10.7 million at August 31, 2021 and $7.5 million at November 30, 2020.

Unsecured Revolving Credit Facility. We have an $800.0 million unsecured revolving credit facility with various banks (“Credit Facility”) that will mature on October 7, 2023. The Credit Facility contains an uncommitted accordion feature under which its aggregate principal amount of available loans can be increased to a maximum of $1.00 billion under certain conditions, including obtaining additional bank commitments. The Credit Facility also contains a sublimit of $250.0 million for the issuance of letters of credit. Interest on amounts borrowed under the Credit Facility is payable at least quarterly in arrears at a rate based on either a Eurodollar or a base rate, plus a spread that depends on our consolidated leverage ratio (“Leverage Ratio”), as defined under the Credit Facility. The Credit Facility also requires the payment of a commitment fee at a per annum rate ranging from .20% to .35% of the unused commitment, based on our Leverage Ratio. Under the terms of the Credit Facility, we are required, among other things, to maintain compliance with various covenants, including financial covenants relating to our consolidated tangible net worth, Leverage Ratio, and either a consolidated interest coverage ratio (“Interest Coverage Ratio”) or minimum level of liquidity, each as defined therein. The amount of the Credit Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility. As of August 31, 2021, we had no cash borrowings and $8.6 million of letters of credit outstanding under the Credit Facility. Therefore, as of August 31, 2021, we had $791.4 million available for cash borrowings under the Credit Facility, with up to $241.4 million of that amount available for the issuance of letters of credit.

Letter of Credit Facility. On August 12, 2021, we entered into an amendment to our unsecured letter of credit agreement with a financial institution (“LOC Facility”) that increased the limit of letters of credit we may issue from $50.0 million to $75.0 million and extended the expiration date from February 13, 2022 to February 13, 2025. Under the LOC Facility, we

obtain letters of credit from time to time in the ordinary course of operating our business. As of August 31, 2021 and November 30, 2020, we had letters of credit outstanding under the LOC Facility of $35.0 million and $29.7 million, respectively.

Mortgages and Land Contracts Due to Land Sellers and Other Loans. As of August 31, 2021, inventories having a carrying value of $16.6 million were pledged to collateralize mortgages and land contracts due to land sellers and other loans.

Shelf Registration Statement. We have an automatically effective universal shelf registration statement that was filed with the SEC on July 9, 2020 (“2020 Shelf Registration”). The 2020 Shelf Registration registers the offering of securities that we may issue from time to time in amounts to be determined. Our ability to issue securities is subject to market conditions.

Senior Notes. On June 9, 2021, we completed the underwritten public offering of $390.0 million in aggregate principal amount of 4.00% senior notes due 2031 (“4.00% Senior Notes due 2031”) at 100% of their aggregate principal amount. Net proceeds from this offering totaled $385.2 million, after deducting the underwriting discount and our expenses related to the offering. The 4.00% Senior Notes due 2031 represent senior unsecured obligations of ours and rank equally in right of payment with all of our existing unsecured and unsubordinated indebtedness. Interest on the 4.00% Senior Notes due 2031 is payable semi-annually in arrears on June 15 and December 15, commencing on December 15, 2021. The 4.00% Senior Notes due 2031 will mature on June 15, 2031.

On June 9, 2021, we used a portion of the net proceeds from the issuance of the 4.00% Senior Notes due 2031 to purchase, pursuant to a tender offer that expired the previous day, $269.8 million in aggregate principal amount of our outstanding $450.0 million of 7.00% senior notes due 2021 (“7.00% Senior Notes due 2021”). We paid $274.9 million to purchase the notes and recorded a charge of $5.1 million for the early extinguishment of debt in the 2021 third quarter due to a premium paid under the tender offer and the unamortized original issue discount associated with these senior notes.

On September 15, 2021, we redeemed the remaining $180.2 million in aggregate principal amount of the 7.00% Senior Notes due 2021 at par value pursuant to the terms of the notes.

All of the senior notes outstanding at August 31, 2021 and November 30, 2020 represent senior unsecured obligations that are guaranteed by certain of our subsidiaries and rank equally in right of payment with all of our and our guarantor subsidiaries’ existing unsecured and unsubordinated indebtedness. All of our senior notes were issued in underwritten public offerings. Interest on each of these senior notes is payable semi-annually.

The indenture governing our senior notes does not contain any financial covenants. Subject to specified exceptions, the indenture contains certain restrictive covenants that, among other things, limit our ability to incur secured indebtedness, or engage in sale and leaseback transactions involving property above a certain specified value. In addition, our senior notes contain certain limitations related to mergers, consolidations, and sales of assets.

As of August 31, 2021, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the senior notes, the indenture, and the mortgages and land contracts due to land sellers and other loans. Our ability to access the Credit Facility for cash borrowings and letters of credit and our ability to secure future debt financing depend, in part, on our ability to remain in such compliance.

As of August 31, 2021, principal payments on senior notes, mortgages and land contracts due to land sellers and other loans are due during each year ending November 30 as follows: 2021 – $1.1 million; 2022 – $531.3 million; 2023 – $351.2 million; 2024 – $.7 million; 2025 – $0; and thereafter – $990.0 million.

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Fair Value Disclosures

9 Months Ended

Aug. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Disclosures

Fair Value Disclosures

Fair value measurements of assets and liabilities are categorized based on the following hierarchy:

Level 1	Fair value determined based on quoted prices in active markets for identical assets or liabilities.
Level 2	Fair value determined using significant observable inputs, such as quoted prices for similar assets or liabilities or quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data, by correlation or other means.
Level 3	Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

Fair value measurements are used for inventories on a nonrecurring basis when events and circumstances indicate that their carrying value is not recoverable. The following table presents the fair value hierarchy and our assets measured at fair value on a nonrecurring basis for the nine months ended August 31, 2021 and the year ended November 30, 2020 (in thousands): 

		August 31, 2021						November 30, 2020
Description	Fair Value Hierarchy	Pre-Impairment Value		Inventory Impairment Charges		Fair Value (a)		Pre-Impairment Value		Inventory Impairment Charges		Fair Value (a)
Inventories	Level 3	$	27,923	$	(9,903)	$	18,020	$	69,211	$	(22,723)	$	46,488

(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.

The fair values for inventories that were determined using Level 3 inputs were based on the estimated future net cash flows discounted for inherent risk associated with each underlying asset.

The following table presents the fair value hierarchy, carrying value and estimated fair value of our financial instruments, except those for which the carrying values approximate fair values (in thousands):

		August 31, 2021				November 30, 2020
Description	Fair Value Hierarchy	Carrying Value (a)		Estimated Fair Value		Carrying Value (a)		Estimated Fair Value
Financial Liabilities:
Senior notes	Level 2	$	1,859,434	$	2,024,346	$	1,742,508	$	1,924,250

(a)The carrying values for the senior notes include unamortized debt issuance costs. Debt issuance costs are not factored into the estimated fair values of these notes.

The fair values of our senior notes are generally estimated based on quoted market prices for these instruments. The carrying values reported for cash and cash equivalents, and mortgages and land contracts due to land sellers and other loans approximate fair values. The carrying value of corporate-owned life insurance is based on the cash surrender value of the policies and, accordingly, approximates fair value.

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Commitments and Contingencies

9 Months Ended

Aug. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments and contingencies include typical obligations of homebuilders for the completion of contracts and those incurred in the ordinary course of business.

Warranty. We provide a limited warranty on all of our homes. The specific terms and conditions of our limited warranty program vary depending upon the markets in which we do business. We generally provide a structural warranty of 10 years, a warranty on electrical, heating, cooling, plumbing and certain other building systems each varying from two to five years based on geographic market and state law, and a warranty of one year for other components of the home. Our limited warranty program is ordinarily how we respond to and account for homeowners’ requests to local division offices seeking repairs of certain conditions or defects, including claims where we could have liability under applicable state statutes or tort law for a defective condition in or damages to a home. Our warranty liability covers our costs of repairs associated with homeowner claims made under our limited warranty program. These claims are generally made directly by a homeowner and involve their individual home.

We estimate the costs that may be incurred under each limited warranty and record a liability in the amount of such costs at the time the revenue associated with the sale of each home is recognized. Our primary assumption in estimating the amounts we accrue for warranty costs is that historical claims experience is a strong indicator of future claims experience. Factors that affect our warranty liability include the number of homes delivered, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our accrued warranty liability, which is included in accrued expenses and other liabilities in our consolidated balance sheets, and adjust the amount as necessary based on our assessment. Our assessment includes the review of our actual warranty costs incurred to identify trends and changes in our

warranty claims experience, and considers our home construction quality and customer service initiatives and outside events. While we believe the warranty liability currently reflected in our consolidated balance sheets to be adequate, unanticipated changes or developments in the legal environment, local weather, land or environmental conditions, quality of materials or methods used in the construction of homes or customer service practices and/or our warranty claims experience could have a significant impact on our actual warranty costs in future periods and such amounts could differ significantly from our current estimates.

The changes in our warranty liability were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Balance at beginning of period	$	95,853	$	92,844	$	91,646	$	88,839
Warranties issued	8,264		6,326		25,099		21,960
Payments	(6,304)		(4,823)		(18,932)		(16,452)
Adjustments	—		—		—		—
Balance at end of period	$	97,813	$	94,347	$	97,813	$	94,347

Guarantees. In the normal course of our business, we issue certain representations, warranties and guarantees related to our home sales and land sales. Based on historical experience, we do not believe any potential liability with respect to these representations, warranties or guarantees would be material to our consolidated financial statements.

Self-Insurance. We maintain, and require the majority of our independent subcontractors to maintain, general liability insurance (including construction defect and bodily injury coverage) and workers’ compensation insurance. These insurance policies protect us against a portion of our risk of loss from claims related to our homebuilding activities, subject to certain self-insured retentions, deductibles and other coverage limits. We also maintain certain other insurance policies. Costs associated with our self-insurance programs are included in selling, general and administrative expenses. In Arizona, California, Colorado and Nevada, our subcontractors’ general liability insurance primarily takes the form of a wrap-up policy under a program where eligible independent subcontractors are enrolled as insureds on each community. Enrolled subcontractors contribute toward the cost of the insurance and agree to pay a contractual amount in the future if there is a claim related to their work. To the extent provided under the wrap-up program, we absorb the enrolled subcontractors’ general liability associated with the work performed on our homes within the applicable community as part of our overall general liability insurance and our self-insurance.

We self-insure a portion of our overall risk through the use of a captive insurance subsidiary, which provides coverage for our exposure to construction defect, bodily injury and property damage claims and related litigation or regulatory actions, up to certain limits. Our self-insurance liability generally covers the costs of settlements and/or repairs, if any, as well as our costs to defend and resolve the following types of claims:

•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.

Our self-insurance liability at each reporting date represents the estimated costs of reported claims, claims incurred but not yet reported, and claim adjustment expenses. The amount of our self-insurance liability is based on an analysis performed by a third-party actuary that uses our historical claim and expense data, as well as industry data to estimate these overall costs. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of products we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for

variability in these underlying assumptions, our actual future costs could differ from those estimated. In addition, changes in the frequency and severity of reported claims and the estimates to resolve claims can impact the trends and assumptions used in the actuarial analysis, which could be material to our consolidated financial statements. Though state regulations vary, construction defect claims are reported and resolved over a long period of time, which can extend for 10 years or more. As a result, the majority of the estimated self-insurance liability based on the actuarial analysis relates to claims incurred but not yet reported. Therefore, adjustments related to individual existing claims generally do not significantly impact the overall estimated liability. Adjustments to our liabilities related to homes delivered in prior years are recorded in the period in which a change in our estimate occurs.

Our self-insurance liability is presented on a gross basis for all periods without consideration of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any. Estimated probable insurance and other recoveries of $57.1 million and $60.0 million are included in receivables in our consolidated balance sheets at August 31, 2021 and November 30, 2020, respectively. These self-insurance recoveries are principally based on actuarially determined amounts and depend on various factors, including, among other things, the above-described claim cost estimates, our insurance policy coverage limits for the applicable policy year(s), historical third-party recovery rates, insurance industry practices, the regulatory environment and legal precedent, and are subject to a high degree of variability from period to period. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated.

The changes in our self-insurance liability were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Balance at beginning of period	$	194,269	$	178,081	$	194,180	$	177,765
Self-insurance provided	5,168		3,545		15,679		9,522
Payments	(4,699)		(616)		(20,296)		(3,588)
Adjustments (a)	(8,072)		3,099		(2,897)		410
Balance at end of period	$	186,666	$	184,109	$	186,666	$	184,109

(a)Represents net changes in estimated probable recoveries related to self-insurance, which are recorded in receivables, to present our self-insurance liability on a gross basis.

For most of our claims, there is no interaction between our warranty liability and self-insurance liability. Typically, if a matter is identified at its outset as either a warranty or self-insurance claim, it remains as such through its resolution. However, there can be instances of interaction between the liabilities, such as where individual homeowners in a community separately request warranty repairs to their homes to address a similar condition or issue and subsequently join together to initiate, or potentially initiate, a legal process with respect to that condition or issue and/or the repair work we have undertaken. In these instances, the claims and related repair work generally are initially covered by our warranty liability, and the costs associated with resolving the legal matter (including any additional repair work) are covered by our self-insurance liability.

The payments we make in connection with claims and related repair work, whether covered within our warranty liability and/or our self-insurance liability, may be recovered from our insurers to the extent such payments exceed the self-insured retentions or deductibles under our general liability insurance policies. Also, in certain instances, in the course of resolving a claim, we pay amounts in advance of and/or on behalf of a subcontractor(s) or their insurer(s) and believe we will be reimbursed for such payments. Estimates of all such amounts, if any, are recorded as receivables in our consolidated balance sheets when any such recovery is considered probable.

Florida Chapter 558 Actions. We and certain of our subcontractors have received a growing number of claims from attorneys on behalf of individual owners of our homes and/or homeowners’ associations that allege, pursuant to Chapter 558 of the Florida Statutes, various construction defects, with most relating to stucco and water-intrusion issues. The claims primarily involve homes in our Jacksonville, Orlando, and Tampa operations. Under Chapter 558, homeowners must serve written notice of a construction defect(s) and provide the served construction and/or design contractor(s) with an opportunity to respond to the noticed issue(s) before they can file a lawsuit. Although we have resolved many of these claims without litigation, and a number of others have been resolved with applicable subcontractors or their insurers covering the related costs, as of August 31, 2021, we had approximately 650 outstanding noticed claims, and some are scheduled for trial over the next few quarters and beyond. In addition, some of our subcontractors’ insurers in some of these cases have informed us of their inability to continue to pay claims-related costs. At August 31, 2021, we had an

accrual for our estimated probable loss for these matters and a receivable for estimated probable insurance recoveries. While it is reasonably possible that our loss could exceed the amount accrued and our recoveries could be less than the amount recorded, at this time, we are unable to estimate the total amount of the loss in excess of the accrued amount and/or associated with a shortfall in the recoveries that is reasonably possible.

Townhome Community Construction Defect Claims. In the 2016 fourth quarter, we received claims from a homeowners association alleging there were construction defects, primarily involving roofing and stucco issues, at a completed townhome community in Northern California totaling approximately $25.0 million. We, along with our outside consultants, have continued to investigate these allegations, and at August 31, 2021, we had an accrual for our estimated probable loss in this matter and a receivable for estimated probable insurance recoveries that reflected the status of our investigation to such date. At this stage of our investigation into these allegations, it is reasonably possible that our loss could exceed the amount accrued by an estimated range of $0 to $3.0 million. Our investigation has also involved identifying potentially responsible parties, including insurers, to pay for or perform any necessary repairs. We are in discussions with the homeowners association regarding the claims and their resolution.

Performance Bonds and Letters of Credit. We are often required to provide to various municipalities and other government agencies performance bonds and/or letters of credit to secure the completion of our projects and/or in support of obligations to build community improvements such as roads, sewers, water systems and other utilities, and to support similar development activities by certain of our unconsolidated joint ventures. At August 31, 2021, we had $1.06 billion of performance bonds and $43.6 million of letters of credit outstanding. At November 30, 2020, we had $897.6 million of performance bonds and $42.1 million of letters of credit outstanding. If any such performance bonds or letters of credit are called, we would be obligated to reimburse the issuer of the performance bond or letter of credit. We do not believe that a material amount of any currently outstanding performance bonds or letters of credit will be called. Performance bonds do not have stated expiration dates. Rather, we are released from the performance bonds as the underlying performance is completed. The expiration dates of some letters of credit issued in connection with community improvements coincide with the expected completion dates of the related projects or obligations. Most letters of credit, however, are issued with an initial term of one year and are typically extended on a year-to-year basis until the related performance obligations are completed.

Land Option Contracts and Other Similar Contracts. In the ordinary course of our business, we enter into land option contracts and other similar contracts to acquire rights to land for the construction of homes. At August 31, 2021, we had total cash deposits of $96.8 million to purchase land having an aggregate purchase price of $1.65 billion. Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance.

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Legal Matters	9 Months Ended
	Aug. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Legal Matters	Legal MattersWe are involved in litigation and regulatory proceedings incidental to our business that are in various procedural stages. We believe that the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of August 31, 2021, it was not reasonably possible that an additional material loss had been incurred in an amount in excess of the estimated amounts already recognized or disclosed in our consolidated financial statements. We evaluate our accruals for litigation and regulatory proceedings at least quarterly and, as appropriate, adjust them to reflect (a) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments; (b) the advice and analyses of counsel; and (c) the assumptions and judgment of management. Similar factors and considerations are used in establishing new accruals for proceedings as to which losses have become probable and reasonably estimable at the time an evaluation is made. Our accruals for litigation and regulatory proceedings are presented on a gross basis without consideration of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any. Estimates of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any, are recorded as receivables when such recoveries are considered probable. Based on our experience, we believe that the amounts that may be claimed or alleged against us in these proceedings are not a meaningful indicator of our potential liability. The outcome of any of these proceedings, including the defense and other litigation-related costs and expenses we may incur, however, is inherently uncertain and could differ significantly from the estimate reflected in a related accrual, if made. Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a related accrual or if an accrual had not been made, could be material to our consolidated financial statements. Pursuant to SEC rules, we will disclose any proceeding in which a governmental authority is a party and that arises under any federal, state or local provisions enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment only where we believe that such proceeding will result in monetary sanctions on us, exclusive of interest and costs, above $1.0 million or is otherwise material to our consolidated financial statements.

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Stockholders' Equity

9 Months Ended

Aug. 31, 2021

Equity [Abstract]

Stockholders’ Equity

Stockholders’ Equity

A summary of changes in stockholders’ equity is presented below (in thousands):

	Three Months Ended August 31, 2021 and 2020
	Number of Shares
	Common Stock	Grantor Stock Ownership Trust	Treasury Stock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor Stock Ownership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at May 31, 2021	100,151	(6,705)	(1,303)	$	100,151	$	836,353	$	2,081,288	$	(22,276)	$	(72,718)	$	(35,933)	$	2,886,865
Net income	—	—	—	—		—		150,097		—		—		—		150,097
Dividends on common stock	—	—	—	—		—		(13,168)		—		—		—		(13,168)
Stock awards	—	—	3	—		(87)		—		—		—		87		—
Stock-based compensation	—	—	—	—		6,114		—		—		—		—		6,114
Stock repurchases	—	—	(4,669)	—		—		—		—		—		(188,175)		(188,175)
Balance at August 31, 2021	100,151	(6,705)	(5,969)	$	100,151	$	842,380	$	2,218,217	$	(22,276)	$	(72,718)	$	(224,021)	$	2,841,733
Balance at May 31, 2020	122,370	(7,317)	(24,526)	$	122,370	$	806,700	$	2,255,742	$	(17,149)	$	(79,359)	$	(597,950)	$	2,490,354
Net income	—	—	—	—		—		78,415		—		—		—		78,415
Dividends on common stock	—	—	—	—		—		(8,097)		—		—		—		(8,097)
Employee stock options/other	—	—	17	—		(421)		—		—		—		421		—
Stock-based compensation	—	—	—	—		4,636		—		—		—		—		4,636
Balance at August 31, 2020	122,370	(7,317)	(24,509)	$	122,370	$	810,915	$	2,326,060	$	(17,149)	$	(79,359)	$	(597,529)	$	2,565,308
	Nine Months Ended August 31, 2021 and 2020
	Number of Shares
	Common Stock	Grantor Stock Ownership Trust	Treasury Stock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor Stock Ownership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at November 30, 2020	99,869	(7,124)	(1,107)	$	99,869	$	824,306	$	1,868,896	$	(22,276)	$	(77,265)	$	(27,761)	$	2,665,769
Cumulative effect of adoption of ASU 2016-13	—	—	—	—		—		(226)		—		—		—		(226)
Net income	—	—	—	—		—		390,512		—		—		—		390,512
Dividends on common stock	—	—	—	—		—		(40,965)		—		—		—		(40,965)
Employee stock options/other	238	—	—	238		3,268		—		—		—		—		3,506
Stock awards	44	419	15	44		(4,962)		—		—		4,547		371		—
Stock-based compensation	—	—	—	—		19,768		—		—		—		—		19,768
Stock repurchases	—	—	(4,669)	—		—		—		—		—		(188,175)		(188,175)
Tax payments associated with stock-based compensation awards	—	—	(208)	—		—		—		—		—		(8,456)		(8,456)
Balance at August 31, 2021	100,151	(6,705)	(5,969)	$	100,151	$	842,380	$	2,218,217	$	(22,276)	$	(72,718)	$	(224,021)	$	2,841,733
Balance at November 30, 2019	121,593	(7,631)	(24,356)	$	121,593	$	793,954	$	2,157,183	$	(15,506)	$	(82,758)	$	(591,344)	$	2,383,122
Cumulative effect of adoption of ASC 842	—	—	—	—		—		1,510		—		—		—		1,510
Reclassification of stranded tax effects	—	—	—	—		—		1,643		(1,643)		—		—		—
Net income	—	—	—	—		—		190,152		—		—		—		190,152
Dividends on common stock	—	—	—	—		—		(24,428)		—		—		—		(24,428)
Employee stock options/other	709	—	17	709		7,274		—		—		—		421		8,404
Stock awards	68	314	(15)	68		(3,080)		—		—		3,399		(387)		—
Stock-based compensation	—	—	—	—		12,767		—		—		—		—		12,767
Tax payments associated with stock-based compensation awards	—	—	(155)	—		—		—		—		—		(6,219)		(6,219)
Balance at August 31, 2020	122,370	(7,317)	(24,509)	$	122,370	$	810,915	$	2,326,060	$	(17,149)	$	(79,359)	$	(597,529)	$	2,565,308

    

On February 18, 2021, the management development and compensation committee of our board of directors approved the payout of 419,070 shares of our common stock in connection with the vesting of PSUs that were granted to certain employees on October 5, 2017. The shares paid out under the PSUs reflected our achievement of certain performance measures that were based on cumulative earnings per share, average return on invested capital, and revenue growth relative to a peer group of high-production public homebuilding companies over the three-year period from December 1, 2017 through November 30, 2020. Of the shares of common stock paid out, 207,775 shares, or $8.5 million, were purchased by us in the 2021 first quarter to satisfy the recipients’ withholding taxes on the vesting of the PSUs. The shares purchased were not considered repurchases under the authorizations described below.

On July 8, 2021, our board of directors authorized us to repurchase up to 5,000,000 shares of our outstanding common stock. This authorization reaffirmed and incorporated the then-current balance of 2,193,947 shares that remained under a prior board-approved share repurchase program. In the 2021 third quarter, we repurchased 4,668,600 shares of our common stock on the open market pursuant to this authorization at a total cost of $188.2 million. Repurchases under the remaining authorization of 331,400 shares may occur periodically through open market purchases, privately negotiated transactions or otherwise, with the timing and amount at management’s discretion and dependent on market and business conditions and other factors. This share repurchase authorization will continue in effect until fully used or earlier terminated or suspended by our board of directors and does not obligate us to purchase any additional shares.

Unrelated to the share repurchase program, our board of directors authorized in 2014 the repurchase of not more than 680,000 shares of our outstanding common stock, and also authorized potential future grants of up to 680,000 stock payment awards under the KB Home 2014 Equity Incentive Plan (“2014 Plan”), in each case solely as necessary for director elections in respect of outstanding stock appreciation rights awards granted under our Non-Employee Directors Compensation Plan. The 2014 Plan was amended in April 2016. As of August 31, 2021, we have not repurchased any shares and no stock payment awards have been granted under the 2014 Plan, as amended, pursuant to the respective board of directors’ authorizations.

On April 8, 2021, we entered into an Amended Rights Agreement with Computershare Inc., as rights agent, following its approval by our stockholders at our 2021 Annual Meeting held on April 8, 2021. The Amended Rights Agreement amends the Amended and Restated Rights Agreement, dated as of April 12, 2018 (“Prior Rights Agreement”). As with the Prior Rights Agreement, the Amended Rights Agreement is intended to continue to help protect our net operating losses and other deferred tax assets from an ownership change under Internal Revenue Code Section 382. The Amended Rights Agreement extended the latest possible expiration date of the rights issued pursuant to the Prior Rights Agreement to the close of business on April 30, 2024 and made certain other related changes. Otherwise, the Amended Rights Agreement’s terms are substantively the same as those of the Prior Rights Agreement, which were disclosed in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended November 30, 2020.

In the three-month period ended August 31, 2021, our board of directors declared, and we paid, a quarterly cash dividend on our common stock of $.15 per share. In the three-month period ended August 31, 2020, our board of directors declared, and we paid, a quarterly cash dividend on our common stock of $.09 per share. Quarterly cash dividends declared and paid on our common stock in the nine-month periods ended August 31, 2021 and 2020 totaled $.45 per share and $.27 per share of common stock, respectively.

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Stock-Based Compensation

9 Months Ended

Aug. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock Options. We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model. The following table summarizes stock option transactions for the nine months ended August 31, 2021:

	Options	Weighted Average Exercise Price
Options outstanding at beginning of period	2,462,714	$	15.32
Granted	—	—
Exercised	(228,651)	15.35
Cancelled	—	—
Options outstanding at end of period	2,234,063	$	15.32
Options exercisable at end of period	2,234,063	$	15.32

We have not granted any stock option awards since 2016. As of August 31, 2021, stock options outstanding and stock options exercisable each had a weighted average remaining contractual life of 3.9 years. As all outstanding stock options have been fully vested since 2019, there was no unrecognized compensation expense related to stock option awards at August 31, 2021 and no stock-based compensation expense associated with stock options for the three-month and nine-month periods ended August 31, 2021 and 2020. Stock options outstanding and stock options exercisable each had an aggregate intrinsic value of $61.9 million at August 31, 2021. (The intrinsic value of a stock option is the amount by which the market value of a share of the underlying common stock exceeds the exercise price of the stock option.)Other Stock-Based Awards. From time to time, we grant restricted stock and PSUs to various employees as a compensation benefit. We recognized total compensation expense of $6.1 million and $4.6 million for the three months ended August 31, 2021 and 2020, respectively, related to restricted stock and PSUs. For the nine months ended August 31, 2021 and 2020, we recognized total compensation expense of $19.8 million and $12.7 million, respectively, related to restricted stock and PSUs.

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Subsequent Events	Sep. 15, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn September 15, 2021, we redeemed the remaining $180.2 million in aggregate principal amount of the 7.00% Senior Notes due 2021 at par value pursuant to the terms of the notes.

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Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Aug. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents and Restricted Cash

We consider all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents. Our cash equivalents totaled $126.7 million at August 31, 2021 and $508.5 million at November 30, 2020. At August 31, 2021 and November 30, 2020, the majority of our cash and cash equivalents was invested in interest-bearing bank deposit accounts.

Comprehensive Income (Loss)

Our comprehensive income was $150.1 million for the three months ended August 31, 2021 and $78.4 million for the three months ended August 31, 2020. For the nine months ended August 31, 2021 and 2020, our comprehensive income was $390.5 million and $190.2 million, respectively. Our comprehensive income for each of the three-month and nine-month periods ended August 31, 2021 and 2020 was equal to our net income for the respective periods.

Adoption of New Accounting Pronouncement and Recent Accounting Pronouncements

Adoption of New Accounting Pronouncement. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes the impairment model for most financial assets and certain other instruments from an incurred loss approach to a new expected credit loss methodology. On December 1, 2020, we adopted ASU 2016-13 using the modified retrospective method and recorded a cumulative effect adjustment to decrease beginning retained earnings by $.2 million, net of tax, to establish an allowance for credit losses for certain receivables on our consolidated balance sheet. The adoption of ASU 2016-13 did not materially impact our consolidated statements of operations or cash flows.Recent Accounting Pronouncements Not Yet Adopted. In December 2019, the FASB issued Accounting Standards Update No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification Topic 740, “Income Taxes” (“ASC 740”), and clarifies certain aspects of ASC 740 to promote consistency among reporting entities.  ASU 2019-12 is effective for us beginning December 1, 2021, with early adoption permitted. Most amendments within ASU 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.  We are currently evaluating the potential impact of adopting this guidance on our consolidated financial statements.

Segment Reporting (ASC 280)

We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment. As of August 31, 2021, 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.

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. Our financial services reporting segment earns revenues primarily from insurance commissions and from the provision of title services.

We offer mortgage banking services, including residential consumer mortgage loan (“mortgage loan”) originations, to our homebuyers indirectly through KBHS Home Loans, LLC (“KBHS”), an unconsolidated joint venture we formed with Stearns Ventures, LLC (“Stearns”). We and Stearns each have a 50.0% ownership interest, with Stearns providing management oversight of KBHS’ operations. On March 1, 2021, Guaranteed Rate, Inc. (“Guaranteed Rate”) acquired Stearns’ parent company. There have been no significant changes with respect to Stearns or its operations since the transaction was completed. The financial services reporting segment is separately reported in our consolidated financial statements.

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.

Earnings Per Share (ASC 260)

We compute earnings per share using the two-class method, which is an allocation of earnings between the holders of common stock and a company’s participating security holders. Our outstanding nonvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method. We had no other participating securities at August 31, 2021 or 2020.

Property, Plant and Equipment (ASC 360)

Each community or land parcel in our owned inventory is assessed on a quarterly basis to determine if indicators of potential impairment exist. We record an inventory impairment charge on a community or land parcel that is active or held for future development when indicators of potential impairment exist and the carrying value of the real estate asset is greater than the undiscounted future net cash flows the asset is expected to generate. These real estate assets are written down to fair value, which is primarily determined based on the estimated future net cash flows discounted for inherent risk associated with each such asset, or other valuation techniques. We record an inventory impairment charge on land held for sale when the carrying value of a land parcel is greater than its fair value. These real estate assets are written down to fair value, less associated costs to sell. The estimated fair values of such assets are generally based on bona fide letters of intent from outside parties, executed sales contracts, broker quotes or similar information.

Consolidation (ASC 810)

We participate in joint ventures from time to time that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. Our investments in these joint ventures may create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. We analyze our joint ventures under the variable interest model to determine whether they are VIEs and, if so, whether we are the primary beneficiary. Based on our analyses, we determined that one of our joint ventures at August 31, 2021 and November 30, 2020 was a VIE, but we were not the primary beneficiary of the VIE. Therefore, all of our joint ventures at August 31, 2021 and November 30, 2020 were unconsolidated and accounted for under the equity method because we did not have a controlling financial interest. Land Option Contracts and Other Similar Contracts. In the ordinary course of our business, we enter into land option contracts and other similar contracts with third parties and unconsolidated entities to acquire rights to land for the construction of homes. Under these contracts, we typically make a specified option payment or earnest money deposit in consideration for the right to purchase land in the future, usually at a predetermined price. We analyze each of our land option contracts and other similar contracts under the variable interest model to determine whether the land seller is a VIE and, if so, whether we are the primary beneficiary. Although we do not have legal title to the underlying land, we are required to consolidate a VIE if we are the primary beneficiary. As a result of our analyses, we determined that as of August 31, 2021 and November 30, 2020, we were not the primary beneficiary of any VIEs from which we have acquired rights to land under land option contracts and other similar contracts. We perform ongoing reassessments of whether we are the primary beneficiary of a VIE.

Debt (ASC 470)

For land option contracts and other similar contracts where the land seller entity is not required to be consolidated under the variable interest model, we consider whether such contracts should be accounted for as financing arrangements. Land option contracts and other similar contracts that may be considered financing arrangements include those we enter into with third-party land financiers or developers in conjunction with such third parties acquiring a specific land parcel(s) on our behalf, at our direction, and those with other landowners where we or our designee make improvements to the optioned land parcel(s) during the applicable option period. For these land option contracts and other similar contracts, we record the remaining purchase price of the associated land parcel(s) in inventories in our consolidated balance sheets with a corresponding financing obligation if we determine that we are effectively compelled to exercise the option to purchase the land parcel(s). As a result of our evaluations of land option contracts and other similar contracts for financing arrangements, we recorded inventories in our consolidated balance sheets, with a corresponding increase to accrued expenses and other liabilities, of $23.4 million at August 31, 2021 and $19.4 million at November 30, 2020.

Income Taxes (ASC 740)

We evaluate our deferred tax assets quarterly to determine if adjustments to our valuation allowance are required based on the consideration of all available positive and negative evidence using a “more likely than not” standard with respect to whether deferred tax assets will be realized. Our evaluation considers, among other factors, our historical operating results, our expectation of future profitability, the duration of the applicable statutory carryforward periods, and conditions in the housing market and the broader economy. The ultimate realization of our deferred tax assets depends primarily on our ability to generate future taxable income during the periods in which the related deferred tax assets become deductible. The value of our deferred tax assets depends on applicable income tax rates.

Fair Value Measurements and Disclosures (ASC 820)

Fair value measurements of assets and liabilities are categorized based on the following hierarchy:

Level 1	Fair value determined based on quoted prices in active markets for identical assets or liabilities.
Level 2	Fair value determined using significant observable inputs, such as quoted prices for similar assets or liabilities or quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data, by correlation or other means.
Level 3	Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

Fair value measurements are used for inventories on a nonrecurring basis when events and circumstances indicate that their carrying value is not recoverable.

Guarantees (ASC 460)

Guarantees. In the normal course of our business, we issue certain representations, warranties and guarantees related to our home sales and land sales. Based on historical experience, we do not believe any potential liability with respect to these representations, warranties or guarantees would be material to our consolidated financial statements.

Self-Insurance

Self-Insurance. We maintain, and require the majority of our independent subcontractors to maintain, general liability insurance (including construction defect and bodily injury coverage) and workers’ compensation insurance. These insurance policies protect us against a portion of our risk of loss from claims related to our homebuilding activities, subject to certain self-insured retentions, deductibles and other coverage limits. We also maintain certain other insurance policies. Costs associated with our self-insurance programs are included in selling, general and administrative expenses. In Arizona, California, Colorado and Nevada, our subcontractors’ general liability insurance primarily takes the form of a wrap-up policy under a program where eligible independent subcontractors are enrolled as insureds on each community. Enrolled subcontractors contribute toward the cost of the insurance and agree to pay a contractual amount in the future if there is a claim related to their work. To the extent provided under the wrap-up program, we absorb the enrolled subcontractors’ general liability associated with the work performed on our homes within the applicable community as part of our overall general liability insurance and our self-insurance.

We self-insure a portion of our overall risk through the use of a captive insurance subsidiary, which provides coverage for our exposure to construction defect, bodily injury and property damage claims and related litigation or regulatory actions, up to certain limits. Our self-insurance liability generally covers the costs of settlements and/or repairs, if any, as well as our costs to defend and resolve the following types of claims:

•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.

Our self-insurance liability at each reporting date represents the estimated costs of reported claims, claims incurred but not yet reported, and claim adjustment expenses. The amount of our self-insurance liability is based on an analysis performed by a third-party actuary that uses our historical claim and expense data, as well as industry data to estimate these overall costs. Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time. These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a construction defect claim is made, and the ultimate resolution of such claim; uncertainties regarding such claims relative to our markets and the types of products we build; and legal or regulatory actions and/or interpretations, among other factors. Due to the degree of judgment involved and the potential for

variability in these underlying assumptions, our actual future costs could differ from those estimated. In addition, changes in the frequency and severity of reported claims and the estimates to resolve claims can impact the trends and assumptions used in the actuarial analysis, which could be material to our consolidated financial statements. Though state regulations vary, construction defect claims are reported and resolved over a long period of time, which can extend for 10 years or more. As a result, the majority of the estimated self-insurance liability based on the actuarial analysis relates to claims incurred but not yet reported. Therefore, adjustments related to individual existing claims generally do not significantly impact the overall estimated liability. Adjustments to our liabilities related to homes delivered in prior years are recorded in the period in which a change in our estimate occurs. Our self-insurance liability is presented on a gross basis for all periods without consideration of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any. Estimated probable insurance and other recoveries of $57.1 million and $60.0 million are included in receivables in our consolidated balance sheets at August 31, 2021 and November 30, 2020, respectively. These self-insurance recoveries are principally based on actuarially determined amounts and depend on various factors, including, among other things, the above-described claim cost estimates, our insurance policy coverage limits for the applicable policy year(s), historical third-party recovery rates, insurance industry practices, the regulatory environment and legal precedent, and are subject to a high degree of variability from period to period. Because of the inherent uncertainty and variability in these assumptions, our actual insurance recoveries could differ significantly from amounts currently estimated.

Warranty

Warranty. We provide a limited warranty on all of our homes. The specific terms and conditions of our limited warranty program vary depending upon the markets in which we do business. We generally provide a structural warranty of 10 years, a warranty on electrical, heating, cooling, plumbing and certain other building systems each varying from two to five years based on geographic market and state law, and a warranty of one year for other components of the home. Our limited warranty program is ordinarily how we respond to and account for homeowners’ requests to local division offices seeking repairs of certain conditions or defects, including claims where we could have liability under applicable state statutes or tort law for a defective condition in or damages to a home. Our warranty liability covers our costs of repairs associated with homeowner claims made under our limited warranty program. These claims are generally made directly by a homeowner and involve their individual home.

We estimate the costs that may be incurred under each limited warranty and record a liability in the amount of such costs at the time the revenue associated with the sale of each home is recognized. Our primary assumption in estimating the amounts we accrue for warranty costs is that historical claims experience is a strong indicator of future claims experience. Factors that affect our warranty liability include the number of homes delivered, historical and anticipated rates of warranty claims, and cost per claim. We periodically assess the adequacy of our accrued warranty liability, which is included in accrued expenses and other liabilities in our consolidated balance sheets, and adjust the amount as necessary based on our assessment. Our assessment includes the review of our actual warranty costs incurred to identify trends and changes in our

warranty claims experience, and considers our home construction quality and customer service initiatives and outside events. While we believe the warranty liability currently reflected in our consolidated balance sheets to be adequate, unanticipated changes or developments in the legal environment, local weather, land or environmental conditions, quality of materials or methods used in the construction of homes or customer service practices and/or our warranty claims experience could have a significant impact on our actual warranty costs in future periods and such amounts could differ significantly from our current estimates.

Stock-Based Compensation (ASC 718)

We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model.

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Inventory (Policies)	3 Months Ended
	Aug. 31, 2021
Inventory Disclosure [Abstract]
Interest Capitalization, Policy	Interest is capitalized to inventories while the related communities or land parcels are being actively developed and until homes are completed or the land is available for immediate sale. Capitalized interest is amortized to construction and land costs as the related inventories are delivered to homebuyers or land buyers (as applicable). In the case of land held for future development and land held for sale, applicable interest is expensed as incurred.

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Leases (Policies)	3 Months Ended
	Aug. 31, 2021
Leases [Abstract]
Lessee, Leases	We lease certain property and equipment for use in our operations. We recognize lease expense for these leases generally on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Lease right-of-use assets and lease liabilities are recorded on our consolidated balance sheets for leases with an expected term at the commencement date of more than 12 months in accordance with Accounting Standards Codification Topic 842, “Leases” (“ASC 842”). Some of our leases include one or more renewal options, the exercise of which is generally at our discretion. Such options are excluded from the expected term of the lease unless we determine it is reasonably certain the option will be exercised. Lease liabilities are equal to the present value of the remaining lease payments while the amount of lease right-of-use assets is based on the lease liabilities, subject to adjustment, such as for lease incentives. Our leases do not provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term, market interest rates, current interest rates on our senior notes and the effects of collateralization. Our lease population at August 31, 2021 was comprised of operating leases where we are the lessee, primarily real estate leases for our corporate offices, division offices and design studios, as well as certain equipment leases. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.Lease expense is included in selling, general and administrative expenses in our consolidated statements of operations and includes costs for leases with terms of more than 12 months as well as short-term leases with terms of 12 months or less.

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Segment Information (Tables)

9 Months Ended

Aug. 31, 2021

Segment Reporting [Abstract]

Financial Information Relating to Company Reporting Segments

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

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues:
West Coast	$	663,563	$	379,025	$	1,803,769	$	1,195,404
Southwest	234,933		223,096		680,679		589,665
Central	384,532		297,022		1,084,795		864,728
Southeast	178,868		96,005		466,696		328,013
Total	$	1,461,896	$	995,148	$	4,035,939	$	2,977,810
Pretax income (loss):
West Coast	$	93,247	$	34,353	$	228,508	$	96,202
Southwest	46,021		39,295		127,985		96,298
Central	53,375		35,422		150,650		84,996
Southeast	19,979		5,986		50,955		15,245
Corporate and other	(47,806)		(23,405)		(115,215)		(77,870)
Total	$	164,816	$	91,651	$	442,883	$	214,871

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Inventory impairment and land option contract abandonment charges:
West Coast	$	6,458	$	5,546	$	10,376	$	10,610
Southwest	243		—		536		171
Central	—		1,084		70		5,520
Southeast	—		258		240		638
Total	$	6,701	$	6,888	$	11,222	$	16,939

	August 31, 2021		November 30, 2020
Assets:
West Coast	$	2,439,635	$	2,057,362
Southwest	954,983		738,765
Central	1,125,069		998,612
Southeast	610,634		448,388
Corporate and other	588,608		1,077,113
Total	$	5,718,929	$	5,320,240

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Financial Services (Tables)

9 Months Ended

Aug. 31, 2021

Segment Reporting Information [Line Items]

Financial Services Income (Loss)

The following tables present financial information relating to our financial services reporting segment (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues
Insurance commissions	$	2,771	$	2,150	$	7,051	$	6,133
Title services	2,435		1,715		6,742		4,975
Total	5,206		3,865		13,793		11,108
Expenses
General and administrative	(1,234)		(1,056)		(3,687)		(2,901)
Operating income	3,972		2,809		10,106		8,207
Equity in income of unconsolidated joint ventures	5,409		6,855		18,423		14,874
Pretax income	$	9,381	$	9,664	$	28,529	$	23,081

Financial Service [Member]

Segment Reporting Information [Line Items]

Schedule of Financial Services Assets and Liabilities

	August 31, 2021		November 30, 2020
Assets
Cash and cash equivalents	$	1,204	$	1,339
Receivables	1,708		1,988
Investments in unconsolidated joint ventures	11,151		10,978
Other assets (a)	23,355		21,897
Total assets	$	37,418	$	36,202
Liabilities
Accounts payable and accrued expenses	$	2,308	$	2,629
Total liabilities	$	2,308	$	2,629

(a)Other assets at August 31, 2021 and November 30, 2020 included $23.1 million and $21.5 million, respectively, of contract assets for estimated future renewal commissions.

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Earnings Per Share (Tables)

9 Months Ended

Aug. 31, 2021

Earnings Per Share, Basic and Diluted [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Numerator:
Net income	$	150,097	$	78,415	$	390,512	$	190,152
Less: Distributed earnings allocated to nonvested restricted stock	(62)		(42)		(188)		(129)
Less: Undistributed earnings allocated to nonvested restricted stock	(625)		(360)		(1,594)		(875)
Numerator for basic earnings per share	149,410		78,013		388,730		189,148
Effect of dilutive securities:
Add: Undistributed earnings allocated to nonvested restricted stock	625		360		1,594		875
Less: Undistributed earnings reallocated to nonvested restricted stock	(604)		(346)		(1,540)		(843)
Numerator for diluted earnings per share	$	149,431	$	78,027	$	388,784	$	189,180
Denominator:
Weighted average shares outstanding — basic	90,076		90,535		91,290		90,292
Effect of dilutive securities:
Share-based payments	3,188		3,570		3,222		3,496
Weighted average shares outstanding — diluted	93,264		94,105		94,512		93,788
Basic earnings per share	$	1.66	$	.86	$	4.26	$	2.09
Diluted earnings per share	$	1.60	$	.83	$	4.11	$	2.02

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Receivables (Tables)

9 Months Ended

Aug. 31, 2021

Receivables [Abstract]

Schedule of Receivables

Receivables consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Due from utility companies, improvement districts and municipalities	$	154,401	$	107,569
Recoveries related to self-insurance and other legal claims	77,944		82,018
Refundable deposits and bonds	13,948		10,897
Income taxes receivable	—		41,323
Other	54,058		38,151
Subtotal	300,351		279,958
Allowance for doubtful accounts	(5,259)		(7,299)
Total	$	295,092	$	272,659

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Inventories (Tables)

9 Months Ended

Aug. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Homes completed or under construction	$	2,022,354	$	1,437,911
Land under development	2,633,521		2,459,571
Total	$	4,655,875	$	3,897,482

Land under development included land held for future development and land held for sale of $64.5 million and $2.6 million, respectively, at August 31, 2021 and $74.0 million and $1.3 million, respectively, at November 30, 2020

Schedule of Capitalized Interest Costs

Our interest costs were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Capitalized interest at beginning of period	$	180,065	$	194,434	$	190,113	$	195,738
Interest incurred	29,605		31,054		91,807		93,071
Interest amortized to construction and land costs (a)	(37,544)		(30,628)		(109,794)		(93,949)
Capitalized interest at end of period	$	172,126	$	194,860	$	172,126	$	194,860

(a)There was no interest amortized to construction and land costs related to land sales for the three months ended August 31, 2021. Interest amortized to construction and land costs for the nine months ended August 31, 2021 included $.2 million related to land sales. For the three months and nine months ended August 31, 2020, interest amortized to construction and land costs included $.4 million related to land sales.

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Inventory Impairments and Land Option Contract Abandonments (Tables)

9 Months Ended

Aug. 31, 2021

Inventory Impairments and Land Option Contract Abandonments [Abstract]

Schedule of Significant Unobservable Inputs

The following table summarizes significant quantitative unobservable inputs we utilized in our fair value measurements with respect to the impaired communities written down to fair value during the periods presented:

	Three Months Ended August 31,		Nine Months Ended August 31,
Unobservable Input (a)	2021	2020	2021	2020
Average selling price	$949,400	$301,600 - $1,010,100	$471,000 - $949,400	$301,600 - $1,010,100
Deliveries per month	4	2	4 - 5	1 - 4
Discount rate	18%	17% - 18%	18% - 19%	17% - 18%

(a)Ranges of inputs presented primarily reflect differences between the housing markets where each impacted community is located, rather than fluctuations in prevailing market conditions.

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Variable Interest Entities (Tables)

9 Months Ended

Aug. 31, 2021

Variable Interest Entities [Abstract]

Summary of Interests in Land Option Contracts

The following table presents a summary of our interests in land option contracts and other similar contracts (in thousands):

	August 31, 2021				November 30, 2020
	Cash Deposits		Aggregate Purchase Price		Cash Deposits		Aggregate Purchase Price
Unconsolidated VIEs	$	57,968	$	1,002,812	$	20,962	$	910,495
Other land option contracts and other similar contracts	38,876		648,499		33,672		507,934
Total	$	96,844	$	1,651,311	$	54,634	$	1,418,429

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Investments in Unconsolidated Joint Ventures (Tables)

9 Months Ended

Aug. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Statements of Operations of Unconsolidated Joint Ventures

The following table presents combined condensed information from the statements of operations for our unconsolidated joint ventures (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Revenues	$	1,979	$	21,473	$	14,818	$	115,893
Construction and land costs	(1,453)		(15,960)		(12,397)		(84,228)
Other expense, net	(591)		(1,606)		(2,000)		(7,455)
Income (loss)	$	(65)	$	3,907	$	421	$	24,210

Balance Sheets of Unconsolidated Joint Ventures

The following table presents combined condensed balance sheet information for our unconsolidated joint ventures (in thousands):

	August 31, 2021		November 30, 2020
Assets
Cash	$	21,320	$	38,837
Receivables	842		96
Inventories	63,067		65,233
Other assets	263		593
Total assets	$	85,492	$	104,759
Liabilities and equity
Accounts payable and other liabilities	$	11,608	$	14,037
Equity	73,884		90,722
Total liabilities and equity	$	85,492	$	104,759

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Property and Equipment, Net (Tables)

9 Months Ended

Aug. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Computer software and equipment	$	37,610	$	32,902
Model furnishings and sales office improvements	86,717		83,882
Leasehold improvements, office furniture and equipment	17,735		17,245
Subtotal	142,062		134,029
Less: Accumulated depreciation	(69,592)		(68,482)
Total	$	72,470	$	65,547

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Other Assets (Tables)

9 Months Ended

Aug. 31, 2021

Other Assets [Abstract]

Schedule of Other Assets

Other assets consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Cash surrender value and benefit receivable from corporate-owned life insurance contracts	$	68,776	$	73,227
Lease right-of-use assets	29,896		35,967
Prepaid expenses	10,585		13,916
Debt issuance costs associated with unsecured revolving credit facility, net	1,765		2,400
Total	$	111,022	$	125,510

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Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Aug. 31, 2021

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Self-insurance and other legal liabilities	$	228,312	$	232,556
Employee compensation and related benefits	171,126		165,342
Warranty liability	97,813		91,646
Customer deposits	66,372		26,243
Accrued interest payable	34,575		31,641
Inventory-related obligations (a)	33,768		31,094
Lease liabilities	31,773		37,668
Real estate and business taxes	16,656		14,249
Other	27,870		37,062
Total	$	708,265	$	667,501

(a)Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities, as well as liabilities for fixed or determinable amounts associated with tax increment financing entity (“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.

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Leases (Tables)

9 Months Ended

Aug. 31, 2021

Leases [Abstract]

Operating Lease, Lease Income [Table Text Block]

The following table presents our lease right-of-use assets, lease liabilities and the weighted average remaining lease term and weighted average discount rate (incremental borrowing rate) used in calculating the lease liabilities (dollars in thousands):

	August 31, 2021			November 30, 2020
Lease right-of-use assets (a)	$	30,112		$	36,270
Lease liabilities (b)	32,011			38,000
Weighted average remaining lease term	4.0 years			4.5 years
Weighted average discount rate (incremental borrowing rate)	5.1		%	5.1		%

(a)Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020.

(b)Represents lease liabilities within our homebuilding operations and financial services operations of $31.8 million and $.2 million, respectively, at August 31, 2021, and $37.7 million and $.3 million, respectively, at November 30, 2020.

The following table presents additional information about our leases (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Lease right-of-use assets obtained in exchange for new lease liabilities	$	18	$	2,977	$	1,517	$	9,045
Cash payments on lease liabilities	2,979		2,831		8,648		8,468

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

As of August 31, 2021, the future minimum lease payments required under our leases are as follows (in thousands):

Years Ending November 30,
2021	$	2,962
2022	10,549
2023	8,280
2024	6,139
2025	4,503
Thereafter	3,112
Total lease payments	35,545
Less: Interest	(3,534)
Present value of lease liabilities	$	32,011

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Income Taxes (Tables)

9 Months Ended

Aug. 31, 2021

Income Tax Disclosure [Abstract]

Income tax benefit computed at the statutory U.S federal income tax rate and income tax benefit (expense) provided in the consolidated statements of operations

Our income tax expense and effective tax rates were as follows (dollars in thousands):

	Three Months Ended August 31,						Nine Months Ended August 31,
	2021			2020			2021			2020
Income tax expense	$	24,100		$	22,900		$	80,900		$	47,800
Effective tax rate	13.8		%	22.6		%	17.2		%	20.1		%

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Notes Payable (Tables)

9 Months Ended

Aug. 31, 2021

Debt Disclosure [Abstract]

Schedule of Mortgages and Notes Payable

Notes payable consisted of the following (in thousands):

	August 31, 2021		November 30, 2020
Mortgages and land contracts due to land sellers and other loans	$	4,067	$	4,667
7.00% Senior notes due December 15, 2021	180,051		449,029
7.50% Senior notes due September 15, 2022	349,310		348,846
7.625% Senior notes due May 15, 2023	350,914		351,281
6.875% Senior notes due June 15, 2027	297,057		296,757
4.80% Senior notes due November 15, 2029	296,826		296,595
4.00% Senior notes due June 15, 2031	385,276		—
Total	$	1,863,501	$	1,747,175

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Fair Value Disclosures (Tables)

9 Months Ended

Aug. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

The following table presents the fair value hierarchy and our assets measured at fair value on a nonrecurring basis for the nine months ended August 31, 2021 and the year ended November 30, 2020 (in thousands): 

		August 31, 2021						November 30, 2020
Description	Fair Value Hierarchy	Pre-Impairment Value		Inventory Impairment Charges		Fair Value (a)		Pre-Impairment Value		Inventory Impairment Charges		Fair Value (a)
Inventories	Level 3	$	27,923	$	(9,903)	$	18,020	$	69,211	$	(22,723)	$	46,488

(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.

Schedule of Fair Value Hierarchy, Carrying Values, and Estimated Fair Values of Financial Instruments

The following table presents the fair value hierarchy, carrying value and estimated fair value of our financial instruments, except those for which the carrying values approximate fair values (in thousands):

		August 31, 2021				November 30, 2020
Description	Fair Value Hierarchy	Carrying Value (a)		Estimated Fair Value		Carrying Value (a)		Estimated Fair Value
Financial Liabilities:
Senior notes	Level 2	$	1,859,434	$	2,024,346	$	1,742,508	$	1,924,250

(a)The carrying values for the senior notes include unamortized debt issuance costs. Debt issuance costs are not factored into the estimated fair values of these notes.

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Commitments and Contingencies (Tables)

9 Months Ended

Aug. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Changes in the Warranty Liability

The changes in our warranty liability were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Balance at beginning of period	$	95,853	$	92,844	$	91,646	$	88,839
Warranties issued	8,264		6,326		25,099		21,960
Payments	(6,304)		(4,823)		(18,932)		(16,452)
Adjustments	—		—		—		—
Balance at end of period	$	97,813	$	94,347	$	97,813	$	94,347

Schedule of Self-Insurance Liability

The changes in our self-insurance liability were as follows (in thousands):

	Three Months Ended August 31,				Nine Months Ended August 31,
	2021		2020		2021		2020
Balance at beginning of period	$	194,269	$	178,081	$	194,180	$	177,765
Self-insurance provided	5,168		3,545		15,679		9,522
Payments	(4,699)		(616)		(20,296)		(3,588)
Adjustments (a)	(8,072)		3,099		(2,897)		410
Balance at end of period	$	186,666	$	184,109	$	186,666	$	184,109

(a)Represents net changes in estimated probable recoveries related to self-insurance, which are recorded in receivables, to present our self-insurance liability on a gross basis.

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Stockholders' Equity (Tables)

9 Months Ended

Aug. 31, 2021

Equity [Abstract]

Summary of Changes in Stockholders’ Equity

A summary of changes in stockholders’ equity is presented below (in thousands):

	Three Months Ended August 31, 2021 and 2020
	Number of Shares
	Common Stock	Grantor Stock Ownership Trust	Treasury Stock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor Stock Ownership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at May 31, 2021	100,151	(6,705)	(1,303)	$	100,151	$	836,353	$	2,081,288	$	(22,276)	$	(72,718)	$	(35,933)	$	2,886,865
Net income	—	—	—	—		—		150,097		—		—		—		150,097
Dividends on common stock	—	—	—	—		—		(13,168)		—		—		—		(13,168)
Stock awards	—	—	3	—		(87)		—		—		—		87		—
Stock-based compensation	—	—	—	—		6,114		—		—		—		—		6,114
Stock repurchases	—	—	(4,669)	—		—		—		—		—		(188,175)		(188,175)
Balance at August 31, 2021	100,151	(6,705)	(5,969)	$	100,151	$	842,380	$	2,218,217	$	(22,276)	$	(72,718)	$	(224,021)	$	2,841,733
Balance at May 31, 2020	122,370	(7,317)	(24,526)	$	122,370	$	806,700	$	2,255,742	$	(17,149)	$	(79,359)	$	(597,950)	$	2,490,354
Net income	—	—	—	—		—		78,415		—		—		—		78,415
Dividends on common stock	—	—	—	—		—		(8,097)		—		—		—		(8,097)
Employee stock options/other	—	—	17	—		(421)		—		—		—		421		—
Stock-based compensation	—	—	—	—		4,636		—		—		—		—		4,636
Balance at August 31, 2020	122,370	(7,317)	(24,509)	$	122,370	$	810,915	$	2,326,060	$	(17,149)	$	(79,359)	$	(597,529)	$	2,565,308
	Nine Months Ended August 31, 2021 and 2020
	Number of Shares
	Common Stock	Grantor Stock Ownership Trust	Treasury Stock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor Stock Ownership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at November 30, 2020	99,869	(7,124)	(1,107)	$	99,869	$	824,306	$	1,868,896	$	(22,276)	$	(77,265)	$	(27,761)	$	2,665,769
Cumulative effect of adoption of ASU 2016-13	—	—	—	—		—		(226)		—		—		—		(226)
Net income	—	—	—	—		—		390,512		—		—		—		390,512
Dividends on common stock	—	—	—	—		—		(40,965)		—		—		—		(40,965)
Employee stock options/other	238	—	—	238		3,268		—		—		—		—		3,506
Stock awards	44	419	15	44		(4,962)		—		—		4,547		371		—
Stock-based compensation	—	—	—	—		19,768		—		—		—		—		19,768
Stock repurchases	—	—	(4,669)	—		—		—		—		—		(188,175)		(188,175)
Tax payments associated with stock-based compensation awards	—	—	(208)	—		—		—		—		—		(8,456)		(8,456)
Balance at August 31, 2021	100,151	(6,705)	(5,969)	$	100,151	$	842,380	$	2,218,217	$	(22,276)	$	(72,718)	$	(224,021)	$	2,841,733
Balance at November 30, 2019	121,593	(7,631)	(24,356)	$	121,593	$	793,954	$	2,157,183	$	(15,506)	$	(82,758)	$	(591,344)	$	2,383,122
Cumulative effect of adoption of ASC 842	—	—	—	—		—		1,510		—		—		—		1,510
Reclassification of stranded tax effects	—	—	—	—		—		1,643		(1,643)		—		—		—
Net income	—	—	—	—		—		190,152		—		—		—		190,152
Dividends on common stock	—	—	—	—		—		(24,428)		—		—		—		(24,428)
Employee stock options/other	709	—	17	709		7,274		—		—		—		421		8,404
Stock awards	68	314	(15)	68		(3,080)		—		—		3,399		(387)		—
Stock-based compensation	—	—	—	—		12,767		—		—		—		—		12,767
Tax payments associated with stock-based compensation awards	—	—	(155)	—		—		—		—		—		(6,219)		(6,219)
Balance at August 31, 2020	122,370	(7,317)	(24,509)	$	122,370	$	810,915	$	2,326,060	$	(17,149)	$	(79,359)	$	(597,529)	$	2,565,308

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Stock-Based Compensation (Tables)

9 Months Ended

Aug. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Outstanding and Exercisable Stock Options

The following table summarizes stock option transactions for the nine months ended August 31, 2021:

	Options	Weighted Average Exercise Price
Options outstanding at beginning of period	2,462,714	$	15.32
Granted	—	—
Exercised	(228,651)	15.35
Cancelled	—	—
Options outstanding at end of period	2,234,063	$	15.32
Options exercisable at end of period	2,234,063	$	15.32

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Basis of Presentation and Significant Accounting Policies (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	May 31, 2021	Nov. 30, 2020	May 31, 2020	Nov. 30, 2019
Equity	$ 2,841,733	$ 2,565,308	$ 2,841,733	$ 2,565,308	$ 2,886,865	$ 2,665,769	$ 2,490,354	$ 2,383,122
Cash equivalents	126,700		126,700			508,500
Other comprehensive income (loss)	150,100	78,400	390,500	190,200
Retained earnings	2,218,217		2,218,217			1,868,896
Financial Service [Member]
Contract assets	23,100		23,100			21,500
Retained Earnings [Member]
Equity	$ 2,218,217	$ 2,326,060	$ 2,218,217	$ 2,326,060	$ 2,081,288	1,868,896	$ 2,255,742	2,157,183
Cumulative Effect, Period of Adoption, Adjustment [Member]
Equity								1,510
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-02 [Member]
Equity						(226)
Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member]
Equity								$ 1,510
Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member] | Accounting Standards Update 2016-02 [Member]
Equity						$ (226)

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Basis of Presentation and Significant Accounting Policies (Cumulative Effect of Changes on Consolidated Balance Sheets Resulting From Adoption of ASC 606) (Details) - USD ($) $ in Thousands	Aug. 31, 2021	May 31, 2021	Nov. 30, 2020	Aug. 31, 2020	May 31, 2020	Nov. 30, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Inventories	$ 4,655,875		$ 3,897,482
Property and equipment, net	72,470		65,547
Total assets	5,756,347		5,356,442
Retained earnings	2,218,217		1,868,896
Equity	2,841,733	$ 2,886,865	2,665,769	$ 2,565,308	$ 2,490,354	$ 2,383,122
Retained Earnings [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Equity	2,218,217	$ 2,081,288	1,868,896	$ 2,326,060	$ 2,255,742	2,157,183
Cumulative Effect, Period of Adoption, Adjustment [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Equity						1,510
Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Equity						$ 1,510
Accounting Standards Update 2016-02 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Equity			(226)
Accounting Standards Update 2016-02 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Equity			(226)
Home Building [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Inventories	4,655,875		3,897,482
Deferred tax assets, net	194,845		231,067
Property and equipment, net	72,470		65,547
Total assets	5,718,929		5,320,240
Financial Service [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total assets	37,418		36,202
Contract assets	$ 23,100		$ 21,500

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Basis of Presentation and Significant Accounting Policies (Impacts of Adopting ASC 606) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	Nov. 30, 2020
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Lease right-of-use assets	[1]	$ 30,112		$ 30,112		$ 36,270
Total revenues		1,467,102	$ 999,013	4,049,732	$ 2,988,918
Total pretax income		174,197	101,315	471,412	237,952
Income tax expense		(24,100)	(22,900)	(80,900)	(47,800)
Net income		$ 150,097	$ 78,415	$ 390,512	$ 190,152
Diluted earnings per share (in dollars per share)		$ 1.60	$ 0.83	$ 4.11	$ 2.02
Assets
Inventories		$ 4,655,875		$ 4,655,875		3,897,482
Property and equipment, net		72,470		72,470		65,547
Total assets		5,756,347		5,756,347		5,356,442
Stockholders’ equity:
Retained earnings		2,218,217		2,218,217		1,868,896
Financial Service [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Lease right-of-use assets		200		200		300
Contract assets		23,100		23,100		21,500
Total revenues		5,206	$ 3,865	13,793	$ 11,108
Selling, general and administrative expenses		(1,234)	(1,056)	(3,687)	(2,901)
Operating income		3,972	2,809	10,106	8,207
Total pretax income		9,381	9,664	28,529	23,081
Assets
Total assets		37,418		37,418		36,202
Home Building [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Lease right-of-use assets		29,896		29,896		35,967
Total revenues		1,461,896	995,148	4,035,939	2,977,810
Construction and land costs		(1,147,642)	(798,495)	(3,177,569)	(2,429,001)
Selling, general and administrative expenses		(144,325)	(107,710)	(411,445)	(348,082)
Operating income		169,929	88,943	446,925	200,727
Total pretax income		164,816	$ 91,651	442,883	$ 214,871
Assets
Inventories		4,655,875		4,655,875		3,897,482
Deferred tax assets, net		194,845		194,845		231,067
Property and equipment, net		72,470		72,470		65,547
Total assets		$ 5,718,929		$ 5,718,929		$ 5,320,240

[1] Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020

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Segment Information (Narratives) (Details)	3 Months Ended
	Aug. 31, 2021 segment
Schedule of Equity Method Investments [Line Items]
Number of reporting segments	5
KBHS, LLC [Member] | Stearns Lending, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest in the venture	50.00%
KBHS, LLC [Member] | Financial Service [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest in the venture	50.00%
Home Building [Member]
Schedule of Equity Method Investments [Line Items]
Number of reporting segments	4
Financial Service [Member]
Schedule of Equity Method Investments [Line Items]
Number of reporting segments	1

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Segment Information (Segment Financial Information) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	Nov. 30, 2020
Segment Reporting Information [Line Items]
Inventory impairments and land option contract abandonments			$ 11,222	$ 16,939
Revenues:
Total revenues	$ 1,467,102	$ 999,013	4,049,732	2,988,918
Pretax income (loss):
Pretax income (loss)	174,197	101,315	471,412	237,952
Inventories: Homes under Construction	2,022,354		2,022,354		$ 1,437,911
Inventories: Land under development	2,633,521		2,633,521		2,459,571
Inventories: Land held for future development or sale	64,500		64,500		74,000
Inventories	4,655,875		4,655,875		3,897,482
Assets
Total assets	5,756,347		5,756,347		5,356,442
Land Option Contract Abandonment [Member]
Pretax income (loss):
Land option contract abandonment charges	400	400	1,300	5,400
Home Building [Member]
Segment Reporting Information [Line Items]
Inventory impairments and land option contract abandonments	6,701	6,888	11,222	16,939
Revenues:
Total revenues	1,461,896	995,148	4,035,939	2,977,810
Pretax income (loss):
Pretax income (loss)	164,816	91,651	442,883	214,871
Inventories	4,655,875		4,655,875		3,897,482
Assets
Total assets	5,718,929		5,718,929		5,320,240
Home Building [Member] | West Coast [Member]
Segment Reporting Information [Line Items]
Inventory impairments and land option contract abandonments	6,458	5,546	10,376	10,610
Revenues:
Total revenues	663,563	379,025	1,803,769	1,195,404
Pretax income (loss):
Pretax income (loss)	93,247	34,353	228,508	96,202
Assets
Total assets	2,439,635		2,439,635		2,057,362
Home Building [Member] | Southwest [Member]
Segment Reporting Information [Line Items]
Inventory impairments and land option contract abandonments	243	0	536	171
Revenues:
Total revenues	234,933	223,096	680,679	589,665
Pretax income (loss):
Pretax income (loss)	46,021	39,295	127,985	96,298
Assets
Total assets	954,983		954,983		738,765
Home Building [Member] | Central [Member]
Segment Reporting Information [Line Items]
Inventory impairments and land option contract abandonments	0	1,084	70	5,520
Revenues:
Total revenues	384,532	297,022	1,084,795	864,728
Pretax income (loss):
Pretax income (loss)	53,375	35,422	150,650	84,996
Assets
Total assets	1,125,069		1,125,069		998,612
Home Building [Member] | Southeast [Member]
Segment Reporting Information [Line Items]
Inventory impairments and land option contract abandonments	0	258	240	638
Revenues:
Total revenues	178,868	96,005	466,696	328,013
Pretax income (loss):
Pretax income (loss)	19,979	5,986	50,955	15,245
Assets
Total assets	610,634		610,634		448,388
Home Building [Member] | Corporate and Other [Member]
Pretax income (loss):
Pretax income (loss)	(47,806)	$ (23,405)	(115,215)	$ (77,870)
Assets
Total assets	$ 588,608		$ 588,608		$ 1,077,113

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Financial Services (Schedule of Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020
Revenues
Revenue from Contract with Customer, Excluding Assessed Tax	$ 1,467,102	$ 999,013	$ 4,049,732	$ 2,988,918
Expenses
Equity in income of unconsolidated joint ventures			18,418	26,855
Pretax income	174,197	101,315	471,412	237,952
Financial Service [Member]
Revenues
Insurance commissions	2,771	2,150	7,051	6,133
Title services	2,435	1,715	6,742	4,975
Revenue from Contract with Customer, Excluding Assessed Tax	5,206	3,865	13,793	11,108
Selling, General and Administrative Expense	1,234	1,056	3,687	2,901
Expenses
Operating income	3,972	2,809	10,106	8,207
Equity in income of unconsolidated joint ventures	5,409	6,855	18,423	14,874
Pretax income	$ 9,381	$ 9,664	$ 28,529	$ 23,081

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Financial Services (Schedule of Assets and Liabilities) (Details) - USD ($) $ in Thousands		Aug. 31, 2021	Nov. 30, 2020	Aug. 31, 2020	Nov. 30, 2019
Assets
Cash and cash equivalents		$ 351,345	$ 682,529	$ 723,126	$ 454,858
Receivables		295,092	272,659
Other assets		111,022	125,510
Total assets		5,756,347	5,356,442
Financial Service [Member]
Assets
Cash and cash equivalents		1,204	1,339	$ 1,093
Receivables		1,708	1,988
Investments in unconsolidated joint ventures		11,151	10,978
Other assets	[1]	23,355	21,897
Total assets		37,418	36,202
Liabilities
Accounts payable and accrued expenses		2,308	2,629
Total liabilities		2,308	2,629
Contract assets		$ 23,100	$ 21,500

[1] Other assets at August 31, 2021 and November 30, 2020 included $23.1 million and $21.5 million, respectively, of contract assets for estimated future renewal commissions.

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Earnings Per Share (Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	Nov. 30, 2020
Numerator:
Net income	$ 150,097	$ 78,415	$ 390,512	$ 190,152
Less: Distributed earnings allocated to nonvested restricted stock	(62)	(42)	(188)	(129)
Less: Undistributed earnings allocated to nonvested restricted stock	(625)	(360)	(1,594)	(875)
Numerator for basic earnings per share	149,410	78,013	388,730	189,148
Add: Undistributed earnings allocated to nonvested restricted stock	625	360	1,594	875
Less: Undistributed earnings reallocated to nonvested restricted stock	(604)	(346)	(1,540)	(843)
Numerator for diluted earnings per share	$ 149,431	$ 78,027	$ 388,784	$ 189,180
Denominator:
Weighted average shares outstanding — basic (in shares)	90,076	90,535	91,290	90,292
Effect of dilutive securities: Share-based payments (in shares)	3,188	3,570	3,222	3,496
Weighted average shares outstanding — diluted (in shares)	93,264	94,105	94,512	93,788
Basic earnings (loss) per share (in dollars per share)	$ 1.66	$ 0.86	$ 4.26	$ 2.09
Diluted earnings (loss) per share (in dollars per share)	$ 1.60	$ 0.83	$ 4.11	$ 2.02
Antidilutive securities excluded from computation of earnings per share (in shares)	0		0	0
Mortgages and notes payable	$ 1,863,501		$ 1,863,501		$ 1,747,175
Antidilutive Securities Excluded from Computation of EPS, Number of Shares		0

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Receivables (Details) - USD ($) $ in Thousands	Aug. 31, 2021	Nov. 30, 2020
Receivables [Abstract]
Due from utility companies, improvement districts and municipalities	$ 154,401	$ 107,569
Recoveries related to self-insurance and other legal claims	77,944	82,018
Income taxes receivable	0	41,323
Refundable deposits and bonds	13,948	10,897
Other	54,058	38,151
Subtotal	300,351	279,958
Allowance for doubtful accounts	(5,259)	(7,299)
Total	$ 295,092	$ 272,659

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Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Aug. 31, 2021	Nov. 30, 2020
Inventories
Homes completed or under construction	$ 2,022,354	$ 1,437,911
Land under development	2,633,521	2,459,571
Total	4,655,875	3,897,482
Land held for future development	64,500	74,000
Inventory, Land Held-for-sale	$ 2,600	$ 1,300

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Inventories (Schedule of Capitalized Interest Costs) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020
Interest Costs
Capitalized interest at beginning of period		$ 180,065	$ 194,434	$ 190,113	$ 195,738
Interest incurred		29,605	31,054	91,807	93,071
Interest amortized to construction and land costs	[1]	(37,544)	(30,628)	(109,794)	(93,949)
Capitalized interest at end of period		172,126	194,860	172,126	194,860
Land [Member]
Interest Costs
Interest amortized to construction and land costs		$ 0	$ (400)	$ (200)	$ (400)

[1] amortized to construction and land costs related to land sales for the three months ended August 31, 2021. Interest amortized to construction and land costs for the nine months ended August 31, 2021 included $.2 million related to land sales. For the three months and nine months ended August 31, 2020, interest amortized to construction and land costs included $.4 million related to land sales.

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Inventory Impairments and Land Option Contract Abandonments (Narratives) (Details)		3 Months Ended				9 Months Ended
		Aug. 31, 2021 USD ($) delivery lot property Rate	Nov. 30, 2020 USD ($) property	Aug. 31, 2020 USD ($) delivery		Aug. 31, 2021 USD ($) delivery lot Rate		Aug. 31, 2020 USD ($) delivery
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Number of land parcels or communities evaluated for recoverability | property		4	11
Carrying value of communities or land parcels evaluated for impairment		$ 31,400,000	$ 123,400,000			$ 31,400,000
Inventory impairment charges		6,300,000		$ 6,500,000		9,900,000		$ 11,600,000
Aggregate carrying value of inventory impacted by pretax, noncash inventory impairment charges		$ 98,000,000	$ 113,100,000			$ 98,000,000
Number of communities and various other land parcels impacted by pretax, noncash inventory impairment charges		12	16			12
Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Average Selling price	[1]	$ 949,400		$ 301,600		$ 471,000		$ 301,600
Deliveries per month | delivery	[1]	4		2		4		1
Discount Rate, Percent	[1]	18.00%		17.00%				17.00%
Minimum [Member] | Measurement Input, Discount Rate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Discount Rate, Percent | Rate	[1]					18.00%
Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Average Selling price		$ 949,400		$ 1,010,100	[1]	$ 949,400	[1]	$ 1,010,100	[1]
Deliveries per month | delivery		4		2	[1]	5	[1]	4	[1]
Discount Rate, Percent		18.00%		18.00%				18.00%
Maximum [Member] | Measurement Input, Discount Rate [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Discount Rate, Percent | Rate	[1]	0.00%				19.00%
Land Option Contract Abandonment [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items] (Deprecated 2018-01-31)
Land option contract abandonment charges		$ 400,000		$ 400,000		$ 1,300,000		$ 5,400,000

[1] 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.

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Variable Interest Entities (Details) $ in Thousands	Aug. 31, 2021 USD ($) joint_venture	Nov. 30, 2020 USD ($) joint_venture
Variable Interest Entity [Line Items]
Number of investments in unconsolidated joint ventures | joint_venture	6	5
Cash Deposits	$ 96,844	$ 54,634
Aggregate Purchase Price	1,651,311	1,418,429
Pre-acquisition costs related to land option contracts and other similar contracts	39,600	31,100
Increase in inventories and accrued expenses and other liabilities	$ 23,400	$ 19,400
Variable Interest Entity, Not Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Number of investments in unconsolidated joint ventures | joint_venture	1	1
Cash Deposits	$ 57,968	$ 20,962
Aggregate Purchase Price	1,002,812	910,495
Non-VIE Land Option Contracts And Other Similar Contracts [Member]
Variable Interest Entity [Line Items]
Cash Deposits	38,876	33,672
Aggregate Purchase Price	$ 648,499	$ 507,934

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Investments in Unconsolidated Joint Ventures (Financial Information for Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	May 31, 2021	Nov. 30, 2020	May 31, 2020	Nov. 30, 2019
Assets
Other Assets	$ 111,022		$ 111,022			$ 125,510
Total assets	5,756,347		5,756,347			5,356,442
Liabilities and equity
Equity	2,841,733	$ 2,565,308	2,841,733	$ 2,565,308	$ 2,886,865	2,665,769	$ 2,490,354	$ 2,383,122
Total liabilities and stockholders’ equity	5,756,347		5,756,347			5,356,442
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Statements of operations of unconsolidated joint venture
Revenues	1,979	21,473	14,818	115,893
Cost of Revenue	(1,453)	(15,960)	(12,397)	(84,228)
Other Nonoperating Income (Expense)	(591)	(1,606)	(2,000)	(7,455)
Income (loss)	(65)	$ 3,907	421	$ 24,210
Assets
Cash	21,320		21,320			38,837
Receivables	842		842			96
Inventory, Real Estate	63,067		63,067			65,233
Other Assets	263		263			593
Total assets	85,492		85,492			104,759
Liabilities and equity
Accounts payable and other liabilities	11,608		11,608			14,037
Equity	73,884		73,884			90,722
Total liabilities and stockholders’ equity	$ 85,492		$ 85,492			$ 104,759

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Investments in Unconsolidated Joint Ventures (Information for Investments in Unconsolidated Joint Ventures) (Details)	3 Months Ended		9 Months Ended
	Aug. 31, 2021 home joint_venture	Aug. 31, 2020 home	Aug. 31, 2021 home joint_venture	Aug. 31, 2020 home	Nov. 30, 2020 joint_venture
Schedule of Equity Method Investments [Line Items]
Number of investments in unconsolidated joint ventures | joint_venture	6		6		5
Unconsolidated Joint Venture in California [Member]
Schedule of Equity Method Investments [Line Items]
Number of homes delivered | home	0	17	10	90

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Property and Equipment, Net (Details) - USD ($) $ in Thousands	Aug. 31, 2021	Nov. 30, 2020
Property, Plant and Equipment [Abstract]
Computer software and equipment	$ 37,610	$ 32,902
Model furnishings and sales office improvements	86,717	83,882
Leasehold improvements, office furniture and equipment	17,735	17,245
Subtotal	142,062	134,029
Less accumulated depreciation	(69,592)	(68,482)
Total	$ 72,470	$ 65,547

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Other Assets (Details) - USD ($) $ in Thousands		Aug. 31, 2021	Nov. 30, 2020
Cash surrender value and benefit receivable from corporate-owned life insurance contracts		$ 68,776	$ 73,227
Lease right-of-use assets	[1]	30,112	36,270
Prepaid expenses		10,585	13,916
Debt issuance costs associated with unsecured revolving credit facility, net		1,765	2,400
Total		111,022	125,510
Home Building [Member]
Lease right-of-use assets		29,896	35,967
Total		$ 111,022	$ 125,510

[1] Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020

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Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands		Aug. 31, 2021		May 31, 2021	Nov. 30, 2020		Aug. 31, 2020	May 31, 2020	Dec. 01, 2019	Nov. 30, 2019
Self-insurance and other legal liabilities		$ 228,312			$ 232,556
Employee compensation and related benefits		171,126			165,342
Warranty liability		97,813		$ 95,853	91,646		$ 94,347	$ 92,844		$ 88,839
Inventory-related obligations (a)		34,575			31,641
Contract with Customer, Liability, Noncurrent		66,372			26,243
Operating Lease, Liability		32,011	[1]		38,000	[1]			$ 0
Inventory-related liabilities	[2]	33,768			31,094
Real estate and business taxes		16,656			14,249
Other		27,870			37,062
Total		708,265			667,501
Home Building [Member]
Operating Lease, Liability		31,773			37,668
Total		$ 708,265			$ 667,501

[1] Represents lease liabilities within our homebuilding operations and financial services operations of $31.8 million and $.2 million, respectively, at August 31, 2021, and $37.7 million and $.3 million, respectively, at November 30, 2020.

[2] Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities, as well as liabilities for fixed or determinable amounts associated with tax increment financing entity (“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.

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Leases (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Aug. 31, 2021		Aug. 31, 2020	Aug. 31, 2021		Aug. 31, 2020	Nov. 30, 2020		Dec. 01, 2019
Lease, Cost		$ 4,300		$ 4,200	$ 12,900		$ 13,600
Lessee, Operating Lease, Liability, to be Paid, Year One		2,962			2,962
Lease right-of-use assets	[1]	30,112			30,112			$ 36,270
Operating Lease, Liability		32,011	[2]		32,011	[2]		$ 38,000	[2]	$ 0
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability		18		2,977	1,517		9,045
Operating Lease, Payments		$ 2,979		2,831	$ 8,648		8,468
Operating Lease, Weighted Average Remaining Lease Term		4 years			4 years			4 years 6 months
Operating Lease, Weighted Average Discount Rate, Percent		5.10%			5.10%			5.10%
Lessee, Operating Lease, Liability, to be Paid, Year Two		$ 10,549			$ 10,549
Lessee, Operating Lease, Liability, to be Paid, Year Three		8,280			8,280
Lessee, Operating Lease, Liability, to be Paid, Year Four		6,139			6,139
Lessee, Operating Lease, Liability, to be Paid, Year Five		4,503			4,503
Lessee, Operating Lease, Liability, to be Paid, after Year Five		3,112			3,112
Lessee, Operating Lease, Liability, to be Paid		35,545			35,545
Lessee, Operating Lease, Liability, Undiscounted Excess Amount		(3,534)			(3,534)
Short-term Lease, Cost		1,200		$ 1,100	3,700		$ 4,800
Home Building [Member]
Lease right-of-use assets		29,896			29,896			$ 35,967
Operating Lease, Liability		31,773			31,773			37,668
Financial Service [Member]
Lease right-of-use assets		200			200			300
Operating Lease, Liability		$ 200			$ 200			$ 300

[1] Represents lease right-of-use assets within our homebuilding operations and financial services operations of $29.9 million and $.2 million, respectively, at August 31, 2021, and $36.0 million and $.3 million, respectively, at November 30, 2020

[2] Represents lease liabilities within our homebuilding operations and financial services operations of $31.8 million and $.2 million, respectively, at August 31, 2021, and $37.7 million and $.3 million, respectively, at November 30, 2020.

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Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended		10 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	Dec. 31, 2020	Nov. 30, 2020
Income Tax Expense (Benefit), Continuing Operations [Abstract]
Income tax expense	$ 24,100,000	$ 22,900,000	$ 80,900,000	$ 47,800,000
Effective tax rate	13.80%	22.60%	17.20%	20.10%
Net (increase) reduction in valuation allowance	$ 300,000
Excess tax benefits related to stock-based compensation			$ (3,900,000)	$ (5,600,000)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Amount	2,500,000	$ 1,200,000	5,800,000	3,200,000
Income Taxes Receivable, Alternative Minimum Tax, CARES Act		39,300,000
Tax credits	(21,500,000)	(3,100,000)	(39,000,000)	(10,100,000)
Deferred tax assets	213,100,000		213,100,000			$ 249,100,000
Valuation allowance	18,300,000		18,300,000			18,000,000
Deferred Tax Assets, Tax Credit Carryforwards	0	$ 82,617,000	0	82,617,000
Adjustments to deferred tax valuation allowance			0
Gross unrecognized tax benefits (including interest and penalties)	900,000		900,000			0
CARES Act Employee Retention Credit			4,300,000
Income Tax Contingency [Line Items]
Share-based Payment Arrangement, Expense, Tax Benefit			3,900,000	$ 5,600,000
Net (increase) reduction in valuation allowance	300,000
Gross unrecognized tax benefits (including interest and penalties)	$ 900,000		$ 900,000			$ 0
Maximum [Member]
Income Tax Contingency [Line Items]
RefundableTaxCreditAllowedPerEmployeeCARESAct					$ 5,000

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Notes Payable (Schedule Notes Payable) (Details) - USD ($) $ in Thousands	Aug. 31, 2021	Jun. 09, 2021	Nov. 30, 2020
Debt Instrument [Line Items]
Mortgages and notes payable	$ 1,863,501		$ 1,747,175
Mortgages and land contracts due to land sellers and other loans
Debt Instrument [Line Items]
Mortgages and notes payable	$ 4,067		4,667
Senior Notes [Member] | 7.00% Senior notes due December 15, 2021 [Member]
Debt Instrument [Line Items]
Senior notes, rate	7.00%
Mortgages and notes payable	$ 180,051		449,029
Senior Notes [Member] | 7.50% Senior notes due September 15, 2022 [Member]
Debt Instrument [Line Items]
Senior notes, rate	7.50%
Mortgages and notes payable	$ 349,310		348,846
Senior Notes [Member] | 7.625% Senior notes due May 15, 2023 [Member]
Debt Instrument [Line Items]
Senior notes, rate	7.625%
Mortgages and notes payable	$ 350,914		351,281
Senior Notes [Member] | 6.875% Senior notes due June 15, 2027 [Member]
Debt Instrument [Line Items]
Senior notes, rate	6.875%
Mortgages and notes payable	$ 297,057		296,757
Senior Notes [Member] | Senior Notes Due Two Thousand Twenty Nine At Four Point Eight Percent
Debt Instrument [Line Items]
Senior notes, rate	4.80%
Mortgages and notes payable	$ 296,826		296,595
Senior Notes [Member] | Senior Notes Due Two Thousand Thirty One At Four Point Zero Zero Percent
Debt Instrument [Line Items]
Senior notes, rate	4.00%	4.00%
Mortgages and notes payable	$ 385,276		$ 0

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Notes Payable (Narratives) (Details) - USD ($)		3 Months Ended	6 Months Ended	9 Months Ended
	Jun. 09, 2021	Aug. 31, 2021	May 31, 2021	Aug. 31, 2021	Aug. 31, 2020	Sep. 15, 2021	Aug. 11, 2021	Nov. 30, 2020
Debt Instrument [Line Items]
Unamortized debt issuance costs, premiums and discounts		$ 10,700,000		$ 10,700,000				$ 7,500,000
Letters of credit outstanding		43,600,000		43,600,000				42,100,000
Inventories pledged to collateralize mortgages and land contracts, carrying value		16,600,000		16,600,000
Repayment of senior notes				274,904,000	$ 0
Proceeds from issuance of debt				390,000,000	0
Repayments of principal, 2019		1,100,000		1,100,000
Repayments of principal, 2020		531,300,000		531,300,000
Repayments of principal, 2021		351,200,000		351,200,000
Repayments of principal, 2022		700,000		700,000
Repayments of principal, thereafter		990,000,000		990,000,000
Repayments of principal, 2023		$ 0		0
Proceeds from (Repayments of) Notes Payable	$ 274,900,000
Loss on early extinguishment of debt	5,100,000			$ 5,075,000	$ 0
6.875% Senior notes due June 15, 2027 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes, rate		6.875%		6.875%
7.625% Senior notes due May 15, 2023 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes, rate		7.625%		7.625%
7.00% Senior notes due December 15, 2021 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes, rate		7.00%		7.00%
Debt Instrument, Repurchased Face Amount	$ 269,800,000
Debt Instrument, Face Amount		$ 450,000,000		$ 450,000,000
Senior Notes Due Two Thousand Thirty One At Four Point Zero Zero Percent | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes, rate	4.00%	4.00%		4.00%
Debt Instrument, Face Amount	$ 390,000,000
Conversion Price Premium	100.00%
Proceeds from Issuance of Debt	$ 385,200,000
Senior Notes Due Two Thousand Twenty Nine At Four Point Eight Percent | Senior Notes [Member]
Debt Instrument [Line Items]
Senior notes, rate		4.80%		4.80%
Senior Notes Due September Two Thousand Twenty One At Seven Point Zero Zero Percent | Senior Notes [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Senior notes, rate						7.00%
Debt Instrument, Face Amount						$ 180,200,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Unsecured revolving credit facility, borrowing capacity		$ 800,000,000		$ 800,000,000
Unsecured revolving credit facility, expiration date		Oct. 07, 2023
Unsecured revolving credit facility, maximum borrowing capacity		$ 1,000,000,000		1,000,000,000
Credit facility, letters of credit outstanding		0		0
Unsecured revolving credit facility, remaining borrowing capacity		791,400,000		$ 791,400,000
Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage				0.20%
Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage				0.35%
Letter of Credit [Member]
Debt Instrument [Line Items]
Unsecured revolving credit facility, maximum borrowing capacity		250,000,000		$ 250,000,000
Credit facility, letters of credit outstanding		8,600,000		8,600,000
Unsecured revolving credit facility, remaining borrowing capacity		241,400,000		241,400,000
LOC Facilities [Member]
Debt Instrument [Line Items]
Unsecured revolving credit facility, borrowing capacity		$ 75,000,000		75,000,000			$ 50,000,000
Unsecured revolving credit facility, expiration date		Feb. 13, 2025	Feb. 13, 2022
Letters of credit outstanding		$ 35,000,000		$ 35,000,000				$ 29,700,000

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Fair Value Disclosures (Assets Measured at Fair Value on Nonrecurring Basis) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
		Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	Nov. 30, 2020
Assets measured at fair value on a nonrecurring basis
Inventory Impairment Charges		$ (6,300)	$ (6,500)	$ (9,900)	$ (11,600)
Fair Value, Nonrecurring [Member] | Level 3
Assets measured at fair value on a nonrecurring basis
Pre-Impairment Value		27,923		27,923		$ 69,211
Inventory Impairment Charges				(9,903)		(22,723)
Fair Value	[1]	$ 18,020		$ 18,020		$ 46,488

[1] 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.

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Fair Value Disclosures (Fair Value Hierarchy, Carrying Values, and Estimated Fair Values of Financial Instruments) (Details) - Level 2 - Senior Notes [Member] - USD ($) $ in Thousands		Aug. 31, 2021	Nov. 30, 2020
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes	[1]	$ 1,859,434	$ 1,742,508
Estimate of Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior notes		$ 2,024,346	$ 1,924,250

[1] The carrying values for the senior notes include unamortized debt issuance costs. Debt issuance costs are not factored into the estimated fair values of these notes.

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Commitments and Contingencies (Narratives) (Details)	3 Months Ended	9 Months Ended
	Aug. 31, 2021 USD ($) claim_filed	Aug. 31, 2021 USD ($) claim_filed home	Nov. 30, 2020 USD ($)	Nov. 30, 2016 USD ($)
Loss Contingencies [Line Items]
Minimum warranty on electrical and other building systems (in years)		2 years
Maximum warranty on electrical and other building systems (in years)		5 years
Warranty for other components of the home (in years)		1 year
Performance bonds	$ 1,060,000,000.00	$ 1,060,000,000.00	$ 897,600,000
Letters of credit outstanding	43,600,000	$ 43,600,000	42,100,000
Warranty for other components of a home (in years)		1 year
Cash deposits	96,844,000	$ 96,844,000	54,634,000
Aggregate purchase price of land	1,651,311,000	$ 1,651,311,000	1,418,429,000
Damages from Product Defects [Member]
Loss Contingencies [Line Items]
Structural warranty provided by the company (in years)		10 years
Minimum number of affected homes for construction defect claims | home		2
Warranty Obligations [Member]
Loss Contingencies [Line Items]
Structural warranty provided by the company (in years)		10 years
Self Insurance [Member]
Loss Contingencies [Line Items]
Recoveries related to warranty and other claims	$ 57,100,000	$ 57,100,000	$ 60,000,000
Northern California Townhome Community [Member]
Loss Contingencies [Line Items]
Loss Contingency Accrual				$ 25,000,000
Chapter 558 of the Florida Statutes [Member]
Loss Contingencies [Line Items]
Outstanding noticed claims | claim_filed	650	650
Maximum [Member] | Northern California Townhome Community [Member]
Loss Contingencies [Line Items]
Product Liability Contingency, Loss Exposure in Excess of Accrual, Best Estimate	$ 3,000,000
Minimum [Member] | Northern California Townhome Community [Member]
Loss Contingencies [Line Items]
Product Liability Contingency, Loss Exposure in Excess of Accrual, Best Estimate	$ 0

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Commitments and Contingencies (Changes in the Warranty and Self-Insurance Liability) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020
Changes in the Warranty Liability
Balance at beginning of period		$ 95,853	$ 92,844	$ 91,646	$ 88,839
Warranties issued		8,264	6,326	25,099	21,960
Payments		(6,304)	(4,823)	(18,932)	(16,452)
Standard and Extended Product Warranty Accrual, Increase (Decrease) for Preexisting Warranties		0	0	0	0
Balance at end of period		97,813	94,347	97,813	94,347
Movement In Self Insurance Reserve [Roll Forward]
Balance at beginning of period		194,269	178,081	194,180	177,765
Self-insurance expense		5,168	3,545	15,679	9,522
Payments		(4,699)	(616)	(20,296)	(3,588)
Balance at end of period		186,666	184,109	186,666	184,109
Self Insurance [Member]
Movement In Self Insurance Reserve [Roll Forward]
Increase (Decrease) in Insurance Liabilities	[1]	$ (8,072)	$ 3,099	$ (2,897)	$ 410

[1] Represents net changes in estimated probable recoveries related to self-insurance, which are recorded in receivables, to present our self-insurance liability on a gross basis.

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Legal Matters (Details)	3 Months Ended
	Aug. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Applicability and Impact of Environmental Laws	Pursuant to SEC rules, we will disclose any proceeding in which a governmental authority is a party and that arises under any federal, state or local provisions enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment only where we believe that such proceeding will result in monetary sanctions on us, exclusive of interest and costs, above $1.0 million or is otherwise material to our consolidated financial statements

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Stockholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020
Beginning balance	$ 2,886,865	$ 2,490,354	$ 2,665,769	$ 2,383,122
Net income	150,097	78,415	390,512	190,152
Dividends on common stock	(13,168)	(8,097)	$ (40,965)	(24,428)
Employee stock options/other (in shares)			(228,651)
Employee stock options/other		0	$ 3,506	8,404
Stock awards	0		0	0
Stock-based compensation	6,114	4,636	19,768	12,767
Tax payments associated with stock-based compensation awards	(188,175)		(188,175)
Tax payments associated with stock-based compensation awards			8,456	6,219
Ending balance	$ 2,841,733	$ 2,565,308	2,841,733	2,565,308
Cumulative Effect, Period of Adoption, Adjustment [Member]
Beginning balance				$ 1,510
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-02 [Member]
Beginning balance			$ (226)
Grantor Stock Ownership Trust
Beginning balance (in shares)	(6,705,000)	(7,317,000)	(7,124,000)	(7,631,000)
Beginning balance	$ (72,718)	$ (79,359)	$ (77,265)	$ (82,758)
Stock awards (in shares)			419,000	314,000
Stock awards			$ 4,547	$ 3,399
Ending balance (in shares)	(6,705,000)	(7,317,000)	(6,705,000)	(7,317,000)
Ending balance	$ (72,718)	$ (79,359)	$ (72,718)	$ (79,359)
Accumulated Other Comprehensive Income
Beginning balance	(22,276)	(17,149)	(22,276)	(15,506)
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect				(1,643)
Ending balance	$ (22,276)	$ (17,149)	$ (22,276)	$ (17,149)
Treasury Stock
Beginning balance (in shares)	(1,303,000)	(24,526,000)	(1,107,000)	(24,356,000)
Beginning balance	$ (35,933)	$ (597,950)	$ (27,761)	$ (591,344)
Employee stock options/other (in shares)	(17,000)		0	(17,000)
Employee stock options/other		$ 421	$ 0	$ 421
Stock awards (in shares)	3,000		15,000	(15,000)
Stock awards	$ 87		$ 371	$ (387)
Common stock repurchased (in shares)	(4,668,600)		(4,669,000)
Tax payments associated with stock-based compensation awards	$ (188,175)		$ (188,175)
Tax payments associated with stock-based compensation awards ( in shares)			(208,000)	(155,000)
Tax payments associated with stock-based compensation awards			$ 8,456	$ 6,219
Ending balance (in shares)	(5,969,000)	(24,509,000)	(5,969,000)	(24,509,000)
Ending balance	$ (224,021)	$ (597,529)	$ (224,021)	$ (597,529)
Paid-in Capital
Beginning balance	836,353	806,700	824,306	793,954
Employee stock options/other		(421)	3,268	7,274
Stock awards	(87)		(4,962)	(3,080)
Stock-based compensation	6,114	4,636	19,768	12,767
Ending balance	$ 842,380	$ 810,915	$ 842,380	$ 810,915
Common Stock
Beginning balance (in shares)	(100,151,000)	(122,370,000)	(99,869,000)	(121,593,000)
Beginning balance	$ 100,151	$ 122,370	$ 99,869	$ 121,593
Employee stock options/other (in shares)		0	(238,000)	(709,000)
Employee stock options/other		$ 0	$ 238	$ 709
Stock awards (in shares)	0		44,000	68,000
Stock awards	$ 0		$ 44	$ 68
Ending balance (in shares)	(100,151,000)	(122,370,000)	(100,151,000)	(122,370,000)
Ending balance	$ 100,151	$ 122,370	$ 100,151	$ 122,370
Retained Earnings [Member]
Beginning balance	2,081,288	2,255,742	1,868,896	2,157,183
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect				1,643
Net income	150,097	78,415	390,512	190,152
Dividends on common stock	(13,168)	(8,097)	(40,965)	(24,428)
Ending balance	$ 2,218,217	$ 2,326,060	2,218,217	2,326,060
Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]
Beginning balance				$ 1,510
Retained Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-02 [Member]
Beginning balance			$ (226)

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Stockholders' Equity (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020	Jul. 08, 2021	Feb. 18, 2021	Jul. 17, 2014
Debt Instrument [Line Items]
Payment, Tax Withholding, Share-based Payment Arrangement			$ 8,456	$ 6,219
Treasury Stock, Value, Acquired, Cost Method	$ 188,175		$ 188,175
Cash dividends declared per common share (in dollars per share)	$ 0.15	$ 0.09	$ 0.45	$ 0.27
Dividend paid in each quarter (in dollars per share)	$ 0.15	$ 0.09	$ 0.45	$ 0.27
Treasury Stock
Debt Instrument [Line Items]
Common stock repurchased (in shares)	4,668,600		4,669,000
Treasury Stock, Value, Acquired, Cost Method	$ 188,175		$ 188,175
Shares Withheld to Pay Taxes [Member]
Debt Instrument [Line Items]
Common stock repurchased (in shares)			207,775
Payment, Tax Withholding, Share-based Payment Arrangement			$ 8,500
July 2021 Stock Repurchase Program
Debt Instrument [Line Items]
Number of common stock, authorized, approved under a board approved stock repurchase program (in shares)					5,000,000
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	331,400		331,400
May 2018 Stock Repurchase Program
Debt Instrument [Line Items]
Number of common stock, authorized, approved under a board approved stock repurchase program (in shares)	2,193,947		2,193,947
Director Plan SARs [Domain]
Debt Instrument [Line Items]
Number of common stock, authorized, approved under a board approved stock repurchase program (in shares)							680,000
2014 Equity Incentive Plan [Domain]
Debt Instrument [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	680,000		680,000
Performance Shares [Member] | PSU 2017 [Domain]
Debt Instrument [Line Items]
Common Stock, Shares, Issued (in shares)						419,070

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Stock-Based Compensation (Outstanding and Exercisable Stock Options) (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Aug. 31, 2021
Options
Options outstanding at beginning of period, options (in shares)	2,462,714
Granted, options (in shares)	0
Exercised, options (in shares)	(228,651)
Cancelled, options (in shares)	0
Options outstanding at end of period, options (in shares)	2,234,063
Options exercisable at end of period (in shares)	2,234,063
Weighted Average Exercise Price in dollars per share
Options outstanding at beginning of period, weighted average exercise price (in dollars per share)	$ 15.32
Granted, weighted average exercise price (in dollars per share)	0
Exercised, weighted average exercise price (in dollars per share)	15.35
Cancelled, weighted average exercise price (in dollars per share)	0
Options outstanding at end of period, weighted average exercise price (in dollars per share)	15.32
Options exercisable at end of period (in dollars per share)	$ 15.32
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 61.9
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	3 years 10 months 24 days

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Stock-Based Compensation (Narratives) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2021	Aug. 31, 2020	Aug. 31, 2021	Aug. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining contractual life of stock options outstanding			3 years 10 months 24 days
Weighted average remaining contractual life of stock options exercisable			3 years 10 months 24 days
Aggregate intrinsic value of stock options outstanding	$ 61,900		$ 61,900
Aggregate intrinsic value of stock options exercisable	61,900		61,900
Equity Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	0		0
Stock-based compensation expense (income) associated with stock options, total	0	$ 0	0	$ 0
Restricted Stock and Performance Unit Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense (income) associated with stock options, total	$ 6,100	$ 4,600	$ 19,800	$ 12,700

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Subsequent Events (Details) - Senior Notes Due September Two Thousand Twenty One At Seven Point Zero Zero Percent - Senior Notes [Member] - Subsequent Event [Member]	Sep. 15, 2021 USD ($)
Subsequent Event [Line Items]
Debt Instrument, Face Amount	$ 180,200,000
Debt Instrument, Interest Rate, Stated Percentage	7.00%