Stockholders' Equity

9 Months Ended

Aug. 31, 2021

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.