Supplemental Guarantor Information

9 Months Ended

Aug. 31, 2011

Supplemental Guarantor Information [Abstract]

Supplemental Guarantor Information

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
Nine Months Ended August 31, 2011 (in thousands)

							Non-
	KB Home			Guarantor			Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total
Revenues	$	—		$	241,702		$	594,292		$	—	$	835,994
Homebuilding:
Revenues	$	—		$	241,702		$	588,114		$	—	$	829,816
Construction and land costs		—			(206,373	)		(517,712	)		—		(724,085	)
Selling, general and administrative expenses		(39,361	)		(23,735	)		(109,214	)		—		(172,310	)
Loss on loan guaranty		—			—			(37,330	)		—		(37,330	)
Operating income (loss)		(39,361	)		11,594			(76,142	)		—		(103,909	)
Interest income		631			4			141			—		776
Interest expense		37,025			(35,582	)		(38,345	)		—		(36,902	)
Equity in loss of unconsolidated joint ventures		—			(5	)		(55,860	)		—		(55,865	)
Homebuilding pretax loss		(1,705	)		(23,989	)		(170,206	)		—		(195,900	)
Financial services pretax income		—			—			3,321			—		3,321
Total pretax loss		(1,705	)		(23,989	)		(166,885	)		—		(192,579	)
Income tax expense		—			—			(100	)		—		(100	)
Equity in net loss of subsidiaries		(190,974	)		—			—			190,974		—
Net loss	$	(192,679	)	$	(23,989	)	$	(166,985	)	$	190,974	$	(192,679	)

Nine Months Ended August 31, 2010 (in thousands)

							Non-
	KB Home			Guarantor			Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total
Revenues	$	—		$	307,427		$	831,606		$	—	$	1,139,033
Homebuilding:
Revenues	$	—		$	307,427		$	826,419		$	—	$	1,133,846
Construction and land costs		—			(263,301	)		(681,895	)		—		(945,196	)
Selling, general and administrative expenses		(59,796	)		(41,940	)		(132,059	)		—		(233,795	)
Operating income (loss)		(59,796	)		2,186			12,465			—		(45,145	)
Interest income		1,377			21			230			—		1,628
Interest expense		11,430			(29,002	)		(34,536	)		—		(52,108	)
Equity in loss of unconsolidated joint ventures		—			(148	)		(4,531	)		—		(4,679	)
Homebuilding pretax loss		(46,989	)		(26,943	)		(26,372	)		—		(100,304	)
Financial services pretax income		—			—			8,494			—		8,494
Total pretax loss		(46,989	)		(26,943	)		(17,878	)		—		(91,810	)
Income tax expense		2,600			1,500			900			—		5,000
Equity in net loss of subsidiaries		(42,221	)		—			—			42,221		—
Net loss	$	(86,610	)	$	(25,443	)	$	(16,978	)	$	42,221	$	(86,810	)

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

							Non-
	KB Home			Guarantor			Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total
Revenues	$	—		$	109,808		$	257,508		$	—	$	367,316
Homebuilding:
Revenues	$	—		$	109,808		$	254,724		$	—	$	364,532
Construction and land costs		—			(92,245	)		(210,663	)		—		(302,908	)
Selling, general and administrative expenses		(5,522	)		(13,800	)		(40,863	)		—		(60,185	)
Loss on loan guaranty		—			—			—			—		—
Operating income (loss)		(5,522	)		3,763			3,198			—		1,439
Interest income		97			—			26			—		123
Interest expense		13,246			(14,190	)		(11,398	)		—		(12,342	)
Equity in income (loss) of unconsolidated joint ventures		—			67			(3	)		—		64
Homebuilding pretax income (loss)		7,821			(10,360	)		(8,177	)		—		(10,716	)
Financial services pretax income		—			—			1,067			—		1,067
Total pretax income (loss)		7,821			(10,360	)		(7,110	)		—		(9,649	)
Income tax expense		—			—			—			—		—
Equity in net loss of subsidiaries		(17,470	)		—			—			17,470		—
Net loss	$	(9,649	)	$	(10,360	)	$	(7,110	)	$	17,470	$	(9,649	)

Three Months Ended August 31, 2010 (in thousands)

							Non-
	KB Home			Guarantor			Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments		Total
Revenues	$	—		$	124,534		$	376,469		$	—	$	501,003
Homebuilding:
Revenues	$	—		$	124,534		$	374,287		$	—	$	498,821
Construction and land costs		—			(106,649	)		(305,164	)		—		(411,813	)
Selling, general and administrative expenses		(12,767	)		(13,731	)		(52,104	)		—		(78,602	)
Operating income (loss)		(12,767	)		4,154			17,019			—		8,406
Interest income		512			15			76			—		603
Interest expense		7,247			(11,045	)		(12,385	)		—		(16,183	)
Equity in loss of unconsolidated joint ventures		—			(69	)		(1,878	)		—		(1,947	)
Homebuilding pretax income (loss)		(5,008	)		(6,945	)		2,832			—		(9,121	)
Financial services pretax income		—			—			2,424			—		2,424
Total pretax income (loss)		(5,008	)		(6,945	)		5,256			—		(6,697	)
Income tax expense		3,900			5,500			(4,100	)		—		5,300
Equity in net loss of subsidiaries		(289	)		—			—			289		—
Net income (loss)	$	(1,397	)	$	(1,445	)	$	1,156		$	289	$	(1,397	)

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

							Non-
	KB Home			Guarantor			Guarantor		Consolidating
	Corporate			Subsidiaries			Subsidiaries		Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	422,406		$	13,466		$	41,534	$	—		$	477,406
Restricted cash		65,021			—			48,165		—			113,186
Receivables		(72,889	)		10,518			141,551		—			79,180
Inventories		—			832,252			1,068,328		—			1,900,580
Investments in unconsolidated joint ventures		—			38,216			13,039		—			51,255
Other assets		69,662			607			8,113		—			78,382
		484,200			895,059			1,320,730		—			2,699,989
Financial services		—			—			21,828		—			21,828
Investments in subsidiaries		10,641			—			—		(10,641	)		—
Total assets	$	494,841		$	895,059		$	1,342,558	$	(10,641	)	$	2,721,817
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	121,480		$	140,274		$	438,072	$	—		$	699,826
Mortgages and notes payable		1,533,212			24,118			29,373		—			1,586,703
		1,654,692			164,392			467,445		—			2,286,529
Financial services		—			—			3,321		—			3,321
Intercompany		(1,591,818	)		741,030			850,788		—			—
Stockholders’ equity		431,967			(10,363	)		21,004		(10,641	)		431,967
Total liabilities and stockholders’ equity	$	494,841		$	895,059		$	1,342,558	$	(10,641	)	$	2,721,817

November 30, 2010 (in thousands)

						Non-
	KB Home			Guarantor		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
Nine Months Ended August 31, 2011 (in thousands)

							Non-
	KB Home			Guarantor			Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments			Total
Cash flows from operating activities:
Net loss	$	(192,679	)	$	(23,989	)	$	(166,985	)	$	190,974		$	(192,679	)
Adjustments to reconcile net loss to net cash used by operating activities:
Equity in loss of unconsolidated joint ventures		—			5			56,236			—			56,241
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		—			991			22,516			—			23,507
Changes in assets and liabilities:
Receivables		77,094			(4,247	)		(83,787	)		—			(10,940	)
Inventories		—			(49,142	)		(128,628	)		—			(177,770	)
Accounts payable, accrued expenses and other liabilities		(3,127	)		(19,985	)		(23,841	)		—			(46,953	)
Other, net		6,566			(2,989	)		6,573			—			10,150
Net cash used by operating activities		(112,146	)		(108,181	)		(280,586	)		190,974			(309,939	)
Cash flows from investing activities:
Investments in unconsolidated joint ventures		—			(1,334	)		(640	)		—			(1,974	)
Proceeds from sale of operating property		—			80,600			—			—			80,600
Sales (purchases) of property and equipment, net		(178	)		(81	)		185			—			(74	)
Net cash provided (used) by investing activities		(178	)		79,185			(455	)		—			78,552
Cash flows from financing activities:
Change in restricted cash		23,692			—			(21,401	)		—			2,291
Repayment of senior notes		(100,000	)		—			—			—			(100,000	)
Payments on mortgages and land contracts due to land sellers and other loans		—			(84,638	)		(1,426	)		—			(86,064	)
Issuance of common stock under employee stock plans		1,426			—			—			—			1,426
Payments of cash dividends		(14,423	)		—			—			—			(14,423	)
Intercompany		(146,568	)		123,481			214,061			(190,974	)		—
Net cash provided (used) by financing activities		(235,873	)		38,843			191,234			(190,974	)		(196,770	)
Net increase (decrease) in cash and cash equivalents		(348,197	)		9,847			(89,807	)		—			(428,157	)
Cash and cash equivalents at beginning of period		770,603			3,619			134,208			—			908,430
Cash and cash equivalents at end of period	$	422,406		$	13,466		$	44,401		$	—		$	480,273

Nine Months Ended August 31, 2010 (in thousands)

							Non-
	KB Home			Guarantor			Guarantor			Consolidating
	Corporate			Subsidiaries			Subsidiaries			Adjustments			Total
Cash flows from operating activities:
Net loss	$	(86,610	)	$	(25,443	)	$	(16,978	)	$	42,221		$	(86,810	)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Equity in (income) loss of unconsolidated joint ventures		—			148			(1,415	)		—			(1,267	)
Inventory impairments and land option contract abandonments		—			1,671			15,068			—			16,739
Changes in assets and liabilities:
Receivables		182,187			(3,027	)		3,602			—			182,762
Inventories		—			(60,018	)		(89,003	)		—			(149,021	)
Accounts payable, accrued expenses and other liabilities		(27,757	)		(29,692	)		(89,874	)		—			(147,323	)
Other, net		(7,304	)		867			27,214			—			20,777
Net cash provided (used) by operating activities		60,516			(115,494	)		(151,386	)		42,221			(164,143	)
Cash flows from investing activities:
Investments in unconsolidated joint ventures		—			(212	)		(1,321	)		—			(1,533	)
Purchases of property and equipment, net		(213	)		(63	)		(366	)		—			(642	)
Net cash used by investing activities		(213	)		(275	)		(1,687	)		—			(2,175	)
Cash flows from financing activities:
Change in restricted cash		22,689			(24,781	)		—			—			(2,092	)
Payments on mortgages and land contracts due to land sellers and other loans		—			(53,354	)		(20,017	)		—			(73,371	)
Issuance of common stock under employee stock plans		1,609			—			—			—			1,609
Excess tax benefit associated with exercise of stock options		583			—			—			—			583
Payments of cash dividends		(14,415	)		—			—			—			(14,415	)
Repurchases of common stock		(350	)		—			—			—			(350	)
Intercompany		(288,924	)		154,796			176,349			(42,221	)		—
Net cash provided (used) by financing activities		(278,808	)		76,661			156,332			(42,221	)		(88,036	)
Net increase (decrease) in cash and cash equivalents		(218,505	)		(39,108	)		3,259			—			(254,354	)
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	$	776,617		$	5,370		$	141,620		$	—		$	923,607