Supplemental Guarantor Information

6 Months Ended

May 31, 2011

Supplemental Guarantor Information [Abstract]

20.

Supplemental Guarantor Information

The Company’s obligation to pay principal, premium, if any, and interest under its senior notes are guaranteed on a joint and several basis by the Guarantor Subsidiaries. The guarantees are full and unconditional and the Guarantor Subsidiaries are 100% owned by the Company. The Company has determined that separate, full financial statements of the Guarantor Subsidiaries would not be material to investors and therefore only supplemental financial information for the Guarantor Subsidiaries is presented.

In connection with the Company’s voluntary termination of the Credit Facility effective March 31, 2010, the Released Subsidiaries were released and discharged from guaranteeing any obligations with respect to the Company’s senior notes. Accordingly, the supplemental financial information presented below reflects the relevant subsidiaries that were Guarantor Subsidiaries as of the respective periods then ended.

Condensed Consolidated Statements of Operations
Six Months Ended May 31, 2011 (in thousands)


	KB Home			Guarantor			Non-Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total

Revenues	$	—		$	131,894		$	336,784		$	—	$	468,678


Homebuilding:
Revenues	$	—		$	131,894		$	333,390		$	—	$	465,284
Construction and land costs		—			(114,128	)		(307,049	)		—		(421,177	)
Selling, general and administrative expenses		(33,839	)		(9,935	)		(68,351	)		—		(112,125	)
Loss on loan guaranty		—			—			(37,330	)		—		(37,330	)


Operating income (loss)		(33,839	)		7,831			(79,340	)		—		(105,348	)
Interest income		534			4			115			—		653
Interest expense		23,779			(21,392	)		(26,947	)		—		(24,560	)
Equity in loss of unconsolidated joint ventures		—			(72	)		(55,857	)		—		(55,929	)


Homebuilding pretax loss		(9,526	)		(13,629	)		(162,029	)		—		(185,184	)

Financial services pretax income		—			—			2,254			—		2,254


Total pretax loss		(9,526	)		(13,629	)		(159,775	)		—		(182,930	)
Income tax expense		—			—			(100	)		—		(100	)
Equity in net loss of subsidiaries		(173,504	)		—			—			173,504		—


Net loss	$	(183,030	)	$	(13,629	)	$	(159,875	)	$	173,504	$	(183,030	)

Six Months Ended May 31, 2010 (in thousands)


	KB Home			Guarantor			Non-Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total

Revenues	$	—		$	182,893		$	455,137		$	—	$	638,030


Homebuilding:
Revenues	$	—		$	182,893		$	452,132		$	—	$	635,025
Construction and land costs		—			(156,652	)		(376,731	)		—		(533,383	)
Selling, general and administrative expenses		(47,029	)		(28,209	)		(79,955	)		—		(155,193	)


Operating loss		(47,029	)		(1,968	)		(4,554	)		—		(53,551	)
Interest income		865			6			154			—		1,025
Interest expense		4,183			(17,957	)		(22,151	)		—		(35,925	)
Equity in loss of unconsolidated joint ventures		—			(79	)		(2,653	)		—		(2,732	)


Homebuilding pretax loss		(41,981	)		(19,998	)		(29,204	)		—		(91,183	)

Financial services pretax income		—			—			6,070			—		6,070


Total pretax loss		(41,981	)		(19,998	)		(23,134	)		—		(85,113	)
Income tax expense		(100	)		(100	)		(100	)		—		(300	)
Equity in net loss of subsidiaries		(43,332	)		—			—			43,332		—


Net loss	$	(85,413	)	$	(20,098	)	$	(23,234	)	$	43,332	$	(85,413	)

Condensed Consolidated Statements of Operations
Three Months Ended May 31, 2011 (in thousands)


	KB Home			Guarantor			Non-Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total

Revenues	$	—		$	82,687		$	189,051		$	—	$	271,738


Homebuilding:
Revenues	$	—		$	82,687		$	187,296		$	—	$	269,983
Construction and land costs		—			(67,551	)		(182,830	)		—		(250,381	)
Selling, general and administrative expenses		(15,169	)		(11,060	)		(36,291	)		—		(62,520	)
Loss on loan guaranty		—			—			(14,572	)		—		(14,572	)


Operating income (loss)		(15,169	)		4,076			(46,397	)		—		(57,490	)
Interest income		221			—			49			—		270
Interest expense		13,929			(13,085	)		(13,965	)		—		(13,121	)
Equity in loss of unconsolidated joint ventures		—			(29	)		(63	)		—		(92	)


Homebuilding pretax loss		(1,019	)		(9,038	)		(60,376	)		—		(70,433	)

Financial services pretax income		—			—			1,629			—		1,629


Total pretax loss		(1,019	)		(9,038	)		(58,747	)		—		(68,804	)
Income tax benefit		—			100			200			—		300
Equity in net loss of subsidiaries		(67,485	)		—			—			67,485		—


Net loss	$	(68,504	)	$	(8,938	)	$	(58,547	)	$	67,485	$	(68,504	)

Three Months Ended May 31, 2010 (in thousands)


	KB Home			Guarantor			Non-Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total

Revenues	$	—		$	113,497		$	260,555		$	—	$	374,052


Homebuilding:
Revenues	$	—		$	113,497		$	259,017		$	—	$	372,514
Construction and land costs		—			(95,690	)		(211,153	)		—		(306,843	)
Selling, general and administrative expenses		(23,891	)		(14,425	)		(44,674	)		—		(82,990	)


Operating income (loss)		(23,891	)		3,382			3,190			—		(17,319	)
Interest income		506			6			89			—		601
Interest expense		6,022			(10,224	)		(12,316	)		—		(16,518	)
Equity in loss of unconsolidated joint ventures		—			(35	)		(1,513	)		—		(1,548	)


Homebuilding pretax loss		(17,363	)		(6,871	)		(10,550	)		—		(34,784	)

Financial services pretax income		—			—			4,175			—		4,175


Total pretax loss		(17,363	)		(6,871	)		(6,375	)		—		(30,609	)
Income tax expense		(100	)		—			—			—		(100	)
Equity in net loss of subsidiaries		(13,246	)		—			—			13,246		—


Net loss	$	(30,709	)	$	(6,871	)	$	(6,375	)	$	13,246	$	(30,709	)

Condensed Consolidated Balance Sheets
May 31, 2011 (in thousands)


	KB Home			Guarantor		Non-Guarantor		Consolidating
	Corporate			Subsidiaries		Subsidiaries		Adjustments			Total

Assets
Homebuilding:
Cash and cash equivalents	$	491,384		$	7,524	$	122,396	$	—		$	621,304
Restricted cash		87,200			—		26,763		—			113,963
Receivables		3,865			10,011		56,477		—			70,353
Inventories		—			846,864		1,048,117		—			1,894,981
Investments in unconsolidated joint ventures		—			38,203		12,933		—			51,136
Other assets		74,580			560		8,411		—			83,551

		657,029			903,162		1,275,097		—			2,835,288

Financial services		—			—		25,060		—			25,060
Investments in subsidiaries		31,260			—		—		(31,260	)		—


Total assets	$	688,289		$	903,162	$	1,300,157	$	(31,260	)	$	2,860,348


Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	128,981		$	149,642	$	443,338	$	—		$	721,961
Mortgages and notes payable		1,632,929			29,286		29,444		—			1,691,659

		1,761,910			178,928		472,782		—			2,413,620

Financial services		—			—		3,276		—			3,276
Intercompany		(1,517,073	)		724,234		792,839		—			—
Stockholders’ equity		443,452			—		31,260		(31,260	)		443,452


Total liabilities and stockholders’ equity	$	688,289		$	903,162	$	1,300,157	$	(31,260	)	$	2,860,348

November 30, 2010 (in thousands)


	KB Home			Guarantor		Non-Guarantor		Consolidating
	Corporate			Subsidiaries		Subsidiaries		Adjustments			Total

Assets
Homebuilding:
Cash and cash equivalents	$	770,603		$	3,619	$	130,179	$	—		$	904,401
Restricted cash		88,714			—		26,763		—			115,477
Receivables		4,205			6,271		97,572		—			108,048
Inventories		—			774,102		922,619		—			1,696,721
Investments in unconsolidated joint ventures		—			37,007		68,576		—			105,583
Other assets		68,166			72,805		9,105		—			150,076

		931,688			893,804		1,254,814		—			3,080,306

Financial services		—			—		29,443		—			29,443
Investments in subsidiaries		36,279			—		—		(36,279	)		—


Total assets	$	967,967		$	893,804	$	1,284,257	$	(36,279	)	$	3,109,749


Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	124,609		$	150,260	$	424,853	$	—		$	699,722
Mortgages and notes payable		1,632,362			112,368		30,799		—			1,775,529

		1,756,971			262,628		455,652		—			2,475,251

Financial services		—			—		2,620		—			2,620
Intercompany		(1,420,882	)		631,176		789,706		—			—
Stockholders’ equity		631,878			—		36,279		(36,279	)		631,878


Total liabilities and stockholders’ equity	$	967,967		$	893,804	$	1,284,257	$	(36,279	)	$	3,109,749

Condensed Consolidated Statements of Cash Flows
Six Months Ended May 31, 2011 (in thousands)


	KB Home			Guarantor			Non-Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments			Total

Cash flows from operating activities:
Net loss	$	(183,030	)	$	(13,629	)	$	(159,875	)	$	173,504		$	(183,030	)
Adjustments to reconcile net loss to net cash used by operating activities:
Equity in loss of unconsolidated joint ventures		—			72			55,345			—			55,417
Loss on loan guaranty		—			—			37,330			—			37,330
Gain on sale of operating property		—			(8,825	)		—			—			(8,825	)
Inventory impairments and land option contract abandonments		—			663			21,682			—			22,345
Changes in assets and liabilities:
Receivables		340			(3,740	)		1,957			—			(1,443	)
Inventories		—			(60,612	)		(107,180	)		—			(167,792	)
Accounts payable, accrued expenses and other liabilities		4,374			(13,431	)		(19,023	)		—			(28,080	)
Other, net		(512	)		(3,007	)		6,273			—			2,754


Net cash used by operating activities		(178,828	)		(102,509	)		(163,491	)		173,504			(271,324	)


Cash flows from investing activities:
Investments in unconsolidated joint ventures		—			(1,388	)		(531	)		—			(1,919	)
Proceeds from sale of operating property		—			80,600			—			—			80,600
Sales (purchases) of property and equipment, net		(289	)		(14	)		195			—			(108	)


Net cash provided (used) by investing activities		(289	)		79,198			(336	)		—			78,573


Cash flows from financing activities:
Change in restricted cash		1,514			—			—			—			1,514
Payments on mortgages and land contracts due to land sellers and other loans		—			(79,471	)		(1,355	)		—			(80,826	)
Issuance of common stock under employee stock plans		442			—			—			—			442
Payments of cash dividends		(9,613	)		—			—			—			(9,613	)
Intercompany		(92,445	)		106,687			159,262			(173,504	)		—


Net cash provided (used) by financing activities		(100,102	)		27,216			157,907			(173,504	)		(88,483	)


Net increase (decrease) in cash and cash equivalents		(279,219	)		3,905			(5,920	)		—			(281,234	)
Cash and cash equivalents at beginning of period		770,603			3,619			134,208			—			908,430


Cash and cash equivalents at end of period	$	491,384		$	7,524		$	128,288		$	—		$	627,196

Six Months Ended May 31, 2010 (in thousands)


	KB Home			Guarantor			Non-Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments			Total

Cash flows from operating activities:
Net loss	$	(85,413	)	$	(20,098	)	$	(23,234	)	$	43,332		$	(85,413	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Inventory impairments and land option contract abandonments		—			1,196			12,166			—			13,362
Changes in assets and liabilities:
Receivables		187,918			(6,535	)		2,034			—			183,417
Inventories		—			(17,601	)		(137,613	)		—			(155,214	)
Accounts payable, accrued expenses and other liabilities		(787	)		(16,996	)		(63,826	)		—			(81,609	)
Other, net		478			23			12,352			—			12,853


Net cash provided (used) by operating activities		102,196			(60,011	)		(198,121	)		43,332			(112,604	)


Cash flows from investing activities:
Investments in unconsolidated joint ventures		—			(56	)		(1,700	)		—			(1,756	)
Purchases of property and equipment, net		(21	)		(58	)		(375	)		—			(454	)


Net cash used by investing activities		(21	)		(114	)		(2,075	)		—			(2,210	)


Cash flows from financing activities:
Change in restricted cash		31,614			(25,079	)		—			—			6,535
Payments on mortgages and land contracts due to land sellers and other loans		—			(53,354	)		(18,474	)		—			(71,828	)
Issuance of common stock under employee stock plans		897			—			—			—			897
Excess tax benefit associated with exercise of stock options		583			—			—			—			583
Payments of cash dividends		(9,607	)		—			—			—			(9,607	)
Repurchases of common stock		(350	)		—			—			—			(350	)
Intercompany		(284,899	)		105,104			223,127			(43,332	)		—


Net cash provided (used) by financing activities		(261,762	)		26,671			204,653			(43,332	)		(73,770	)


Net increase (decrease) in cash and cash equivalents		(159,587	)		(33,454	)		4,457			—			(188,584	)
Cash and cash equivalents at beginning of period		995,122			44,478			138,361			—			1,177,961


Cash and cash equivalents at end of period	$	835,535		$	11,024		$	142,818		$	—		$	989,377