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 ~~May~~August 31, 2025.

☐ 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

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 6864,~~050~~764,~~184~~685 shares of the registrant’s common stock, par value $1.00 per share, outstanding on ~~May~~August 31, 2025.

KB HOME

FORM 10-Q

INDEX

			PageNumber
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations - Three Months and Six Months Ended May 31, 2025 and 2024			3
Consolidated Statements of Operations - Three Months and Nine Months Ended August 31, 2025 and 2024			3
Consolidated Balance Sheets - May 31, 2025 and November 30, 2024			4
Consolidated Balance Sheets - August 31, 2025 and November 30, 2024			4
Consolidated Statements of Stockholders’ Equity - Three Months and Six Months Ended May 31, 2025 and 2024			5
Consolidated Statements of Stockholders’ Equity - Three Months and Nine Months Ended August 31, 2025 and 2024			5
Consolidated Statements of Cash Flows - Six Months Ended May 31, 2025 and 2024			6
Consolidated Statements of Cash Flows - Nine Months Ended August 31, 2025 and 2024			6
Notes to Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2526
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4648
Item 4. Controls and Procedures			4648
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			4748
Item 1A. Risk Factors			4749
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4749
Item 5. Other Information			4749
Item 6. Exhibits			4850
SIGNATURES			4951

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

KB HOME

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts – Unaudited)

Three Months Ended May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Total revenues

1,~~529~~620,~~585~~474

1,~~709~~752,~~813~~608

24,~~921~~541,~~362~~836

34,~~177~~930,~~579~~187

Homebuilding:

Revenues

1,~~524~~614,~~716~~462

1,~~701~~745,~~512~~979

24,~~911~~526,~~757~~219

34,~~163~~909,~~210~~189

Construction and land costs

(1,~~230~~321,~~055~~147)

(1,~~342~~385,~~102~~563)

(23,~~337~~658,~~469~~616)

(23,~~488~~874,~~630~~193)

Selling, general and administrative expenses

(~~163~~162,~~198~~152)

(171,~~227~~466)

(~~315~~477,~~486~~638)

(~~328~~500,~~721~~187)

Operating income

131,~~463~~163

188,~~183~~950

~~258~~389,~~802~~965

~~345~~534,~~859~~809

Interest income and other

1,~~679~~870

194,~~449~~073

35,~~758~~628

2529,~~306~~379

Equity in income (loss) of unconsolidated joint ventures

1,080

224

3,493

(221)

Equity in income of unconsolidated joint ventures

1,509

3,453

5,002

3,232

Homebuilding pretax income

134,~~222~~542

~~207~~196,~~856~~476

~~266~~400,~~053~~595

~~370~~567,~~944~~420

Financial services:

Revenues

46,~~869~~012

86,~~301~~629

915,~~605~~617

1420,~~369~~998

Expenses

(1,~~570~~580)

(1,~~473~~608)

(34,~~109~~689)

(34,~~019~~627)

Equity in income of unconsolidated joint venture

4,~~862~~254

65,~~435~~932

913,~~191~~445

1319,~~490~~422

Financial services pretax income

8,~~161~~686

1310,~~263~~953

1524,~~687~~373

2435,~~840~~793

Total pretax income

~~142~~143,~~383~~228

~~221~~207,~~119~~429

~~281~~424,~~740~~968

~~395~~603,~~784~~213

Income tax expense

(3433,~~500~~400)

(5250,~~700~~100)

(6497,~~300~~700)

(88138,~~700~~800)

Net income

~~107~~109,~~883~~828

~~168~~157,~~419~~329

~~217~~327,~~440~~268

~~307~~464,~~084~~413

Earnings per share:

Basic

1.5364

2.2110

34.0569

46.0212

Diluted

1.5061

2.1504

34.0060

35.9194

Weighted average shares outstanding:

Basic

6966,~~976~~368

7574,~~653~~476

7069,~~745~~279

75,~~773~~339

Diluted

7167,~~226~~737

7776,~~806~~630

7270,~~108~~643

7877,~~034~~565

See accompanying notes.

KB HOME

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Shares – Unaudited)

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Assets
Homebuilding:
Cash and cash equivalents	$	~~308~~330,~~861~~586	$	597,973
Receivables	~~371~~386,~~354~~486		377,533
Inventories	5,~~913~~838,~~348~~816		5,528,020
Investments in unconsolidated joint ventures	5767,~~597~~075		67,020
Property and equipment, net	9597,~~054~~530		90,359
Deferred tax assets, net	102,421		102,421
Other assets	~~107~~102,~~530~~880		105,920
	6,956,165		6,869,246
	6,925,794		6,869,246
Financial services	6159,~~431~~778		66,923
Total assets	$	76,~~017~~985,~~596~~572	$	6,936,169
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable	$	~~359~~366,~~323~~194	$	384,894
Accrued expenses and other liabilities	~~771~~770,~~840~~450		796,261
Notes payable	1,~~892~~943,~~941~~582		1,691,679
	3,024,104		2,872,834
	3,080,226		2,872,834
Financial services	2,~~954~~983		2,719
Stockholders’ equity:
Common stock — 74,437,477 and 74,409,977 shares issued at May 31, 2025 and November 30, 2024, respectively	74,437		74,410
Common stock — 74,451,477 and 74,409,977 shares issued at August 31, 2025 and November 30, 2024, respectively	74,451		74,410
Paid-in capital	~~840~~848,~~296~~909		862,049
Retained earnings	3,~~450~~543,~~350~~885		3,269,423
Accumulated other comprehensive loss	(3,704)		(3,704)
Treasury stock, at cost: 6,387,293 and 2,253,156 shares at May 31, 2025 and November 30, 2024, respectively	(370,841)		(141,562)
Treasury stock, at cost — 9,686,792 and 2,253,156 shares at August 31, 2025 and November 30, 2024, respectively	(561,178)		(141,562)
Total stockholders’ equity	3,~~990~~902,~~538~~363		4,060,616
Total liabilities and stockholders’ equity	$	76,~~017~~985,~~596~~572	$	6,936,169

See accompanying notes.

KB HOME

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In Thousands – Unaudited)

	Three Months Ended May 31, 2025 and 2024
	Three Months Ended August 31, 2025 and 2024
	Number of Shares
	CommonStock	GrantorStockOwnershipTrust	TreasuryStock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor StockOwnership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at February 28, 2025	74,437	—	(2,704)	$	74,437	$	834,306	$	3,359,669	$	(3,704)	$	—	$	(172,030)	$	4,092,678
Net income	—	—	—	—		—		107,883		—		—		—		107,883
Dividends on common stock	—	—	—	—		—		(17,202)		—		—		—		(17,202)
Stock awards	—	—	51	—		(3,163)		—		—		—		3,163		—
Stock-based compensation	—	—	—	—		9,153		—		—		—		—		9,153
Stock repurchases, including excise tax	—	—	(3,734)	—		—		—		—		—		(201,974)		(201,974)
Balance at May 31, 2025	74,437	—	(6,387)	$	74,437	$	840,296	$	3,450,350	$	(3,704)	$	—	$	(370,841)	$	3,990,538
Balance at February 29, 2024	101,862	(6,705)	(19,241)	$	101,862	$	839,772	$	3,799,234	$	(3,671)	$	(72,718)	$	(781,809)	$	3,882,670
Net income	—	—	—	—		—		109,828		—		—		—		109,828
Net income	—	—	—	—		—		168,419		—		—		—		168,419
Dividends on common stock	—	—	—	—		—		(16,293)		—		—		—		(16,293)
Dividends on common stock	—	—	—	—		—		(18,775)		—		—		—		(18,775)
Employee stock options/other	14	—	—	14		193		—		—		—		—		207
Employee stock options/other	30	—	—	30		438		—		—		—		—		468
Stock-based compensation	—	—	—	—		8,420		—		—		—		—		8,420
Stock awards	—	—	23	—		(938)		—		—		—		938		—
Stock repurchases, including excise tax	—	—	(3,300)	—		—		—		—		—		(190,337)		(190,337)
Stock-based compensation	—	—	—	—		9,363		—		—		—		—		9,363
Balance at August 31, 2025	74,451	—	(9,687)	$	74,451	$	848,909	$	3,543,885	$	(3,704)	$	—	$	(561,178)	$	3,902,363
Stock repurchases, including excise tax	—	—	(765)	—		—		—		—		—		(50,441)		(50,441)
Balance at May 31, 2024	101,892	(6,705)	(19,983)	$	101,892	$	848,635	$	3,948,878	$	(3,671)	$	(72,718)	$	(831,312)	$	3,991,704
	Six Months Ended May 31, 2025 and 2024
Net income	—	—	—	—		—		157,329		—		—		—		157,329
Dividends on common stock	—	—	—	—		—		(18,407)		—		—		—		(18,407)
Stock-based compensation	—	—	—	—		7,968		—		—		—		—		7,968
Stock repurchases, including excise tax	—	—	(1,869)	—		—		—		—		—		(151,500)		(151,500)
Balance at August 31, 2024	101,892	(6,705)	(21,852)	$	101,892	$	856,603	$	4,087,800	$	(3,671)	$	(72,718)	$	(982,812)	$	3,987,094
	Nine Months Ended August 31, 2025 and 2024
	Number of Shares
	CommonStock	GrantorStockOwnershipTrust	TreasuryStock	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Grantor StockOwnership Trust		Treasury Stock		Total Stockholders’ Equity
Balance at November 30, 2024	74,410	—	(2,253)	$	74,410	$	862,049	$	3,269,423	$	(3,704)	$	—	$	(141,562)	$	4,060,616
Net income	—	—	—	—		—		~~217~~327,~~440~~268		—		—		—		~~217~~327,~~440~~268
Dividends on common stock	—	—	—	—		—		(3652,~~513~~806)		—		—		—		(3652,~~513~~806)
Employee stock options/other	2741	—	—	2741		~~418~~611		—		—		—		—		~~445~~652
Stock awards	—	—	612	—		(38,882)		—		—		—		38,882		—
Stock-based compensation	—	—	—	—		1625,~~711~~131		—		—		—		—		1625,~~711~~131
Stock repurchases, including excise tax	—	—	(47,~~488~~788)	—		—		—		—		—		(~~252~~442,~~277~~614)		(~~252~~442,~~277~~614)
Tax payments associated with stock-based compensation awards	—	—	(258)	—		—		—		—		—		(15,884)		(15,884)
Balance at May 31, 2025	74,437	—	(6,387)	$	74,437	$	840,296	$	3,450,350	$	(3,704)	$	—	$	(370,841)	$	3,990,538
Balance at August 31, 2025	74,451	—	(9,687)	$	74,451	$	848,909	$	3,543,885	$	(3,704)	$	—	$	(561,178)	$	3,902,363
Balance at November 30, 2023	101,276	(6,705)	(18,704)	$	101,276	$	845,693	$	3,676,924	$	(3,671)	$	(72,718)	$	(737,364)	$	3,810,140
Net income	—	—	—	—		—		~~307~~464,~~084~~413		—		—		—		~~307~~464,~~084~~413
Dividends on common stock	—	—	—	—		—		(3553,~~130~~537)		—		—		—		(3553,~~130~~537)
Employee stock options/other	616	—	—	616		8,656		—		—		—		—		9,272
Stock awards	—	—	571	—		(22,998)		—		—		—		22,998		—
Stock-based compensation	—	—	—	—		1725,~~284~~252		—		—		—		—		1725,~~284~~252
Stock repurchases, including excise tax	—	—	(13,~~592~~461)	—		—		—		—		—		(~~100~~251,~~441~~941)		(~~100~~251,~~441~~941)
Tax payments associated with stock-based compensation awards	—	—	(258)	—		—		—		—		—		(16,505)		(16,505)
Balance at May 31, 2024	101,892	(6,705)	(19,983)	$	101,892	$	848,635	$	3,948,878	$	(3,671)	$	(72,718)	$	(831,312)	$	3,991,704
Balance at August 31, 2024	101,892	(6,705)	(21,852)	$	101,892	$	856,603	$	4,087,800	$	(3,671)	$	(72,718)	$	(982,812)	$	3,987,094

KB HOME

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands – Unaudited)

	Six Months Ended May 31,
	Nine Months Ended August 31,
	2025		2024
Cash flows from operating activities:
Net income	$	~~217~~327,~~440~~268	$	~~307~~464,~~084~~413
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of unconsolidated joint ventures	(1218,~~684~~447)		(1322,~~269~~654)
Distributions of earnings from unconsolidated joint ventures	2027,~~241~~741		721,~~533~~275
Amortization of debt issuance costs	12,~~784~~686		12,~~729~~602
Depreciation and amortization	1827,~~034~~440		1828,~~843~~259
Deferred income taxes	—		5,~~000~~700
Gain on sale of investment	—		(12,516)
Stock-based compensation	1625,~~711~~131		1725,~~284~~252
Inventory impairments and land option contract abandonments	718,~~013~~351		23,~~508~~685
Changes in assets and liabilities:
Receivables	207,~~677~~166		~~(52)~~6,205
Inventories	(~~390~~330,~~558~~019)		(~~195~~504,~~291~~436)
Accounts payable, accrued expenses and other liabilities	(6863,~~338~~835)		(4014,~~632~~405)
Other, net	38,~~797~~358		(83,~~227~~299)
Net cash provided by (used in) operating activities	(165,883)		89,994
Net cash provided by operating activities	31,840		81
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—(10,593)		(1012,~~937~~611)
Return of investments in unconsolidated joint ventures	2,~~315~~965		—1,992
Proceeds from sale of investment	—		1,709
Purchases of property and equipment, net	(2234,~~731~~609)		(1929,~~754~~228)
Net cash used in investing activities	(2042,~~416~~237)		(2838,~~982~~138)
Cash flows from financing activities:
Borrowings under revolving credit facility	~~380~~555,000		—
Repayments under revolving credit facility	(~~180~~305,000)		—
Payments on mortgages and land contracts due to land sellers and other loans	—		(12,~~739~~822)
Issuance of common stock under employee stock plans	~~445~~652		9,272
Stock repurchases	(~~250~~438,~~000~~460)		(~~100~~250,000)
Tax payments associated with stock-based compensation awards	(15,884)		(16,505)
Payments of cash dividends	(3652,~~513~~806)		(3553,~~130~~537)
Net cash used in financing activities	(~~101~~256,~~952~~498)		(~~144~~313,~~102~~592)
Net decrease in cash and cash equivalents	(~~288~~266,~~251~~895)		(83351,~~090~~649)
Cash and cash equivalents at beginning of period	599,193		727,342
Cash and cash equivalents at end of period	$	~~310~~332,~~942~~298	$	~~644~~375,~~252~~693

See accompanying notes.

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, they do not include all the information and footnotes required by GAAP for complete financial statements. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended November 30, 2024, which are contained in our Annual Report on Form 10-K for that period. The consolidated balance sheet at November 30, 2024 has been taken from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation of our results for the interim periods presented. The results of our consolidated operations for the three months and ~~six~~nine months ended ~~May~~August 31, 2025 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operating results and other factors.

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 $~~161~~164.27 million at ~~May~~August 31, 2025 and $385.1 million at November 30, 2024. At ~~May~~August 31, 2025 and November 30, 2024, our cash equivalents were mainly invested in interest-bearing bank deposit accounts and money market funds.

Comprehensive Income. Our comprehensive income was $~~107~~109.98 million for the three months ended ~~May~~August 31, 2025 and $~~168~~157.43 million for the three months ended ~~May~~August 31, 2024. For the ~~six~~nine months ended ~~May~~August 31, 2025 and 2024, our comprehensive income was $~~217~~327.43 million and $~~307~~464.14 million, respectively. Our comprehensive income for each of the three-month and ~~six~~nine-month periods ended ~~May~~August 31, 2025 and 2024 was equal to our net income for the respective periods.

Recent Accounting Pronouncements Not Yet Adopted. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements. The guidance is effective for annual reporting periods beginning after ~~December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early~~

December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

2.Segment Information

We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment. As of ~~May~~August 31, 2025, our homebuilding reporting segments conducted ongoing operations in the following states:


West Coast:			California, Idaho 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”), our unconsolidated joint venture with GR Alliance Ventures, LLC (“GR Alliance”), a subsidiary of Guaranteed Rate, Inc. We and GR Alliance each have a 50.0% ownership interest, with GR Alliance providing management oversight of KBHS’ operations.

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 May 31,				Six Months Ended May 31,
	Three Months Ended August 31,				Nine Months Ended August 31,
	2025		2024		2025		2024
Revenues:
West Coast	$	~~660~~664,~~193~~880	$	~~698~~760,~~417~~617	$	1,~~261~~926,~~842~~722	$	12,~~256~~017,~~719~~336
Southwest	~~314~~335,~~102~~505		~~318~~312,~~665~~812		~~626~~962,~~981~~486		~~641~~954,~~790~~602
Central	~~282~~310,~~966~~603		~~375~~372,~~790~~862		~~558~~869,~~579~~182		~~696~~1,~~274~~069,136
Southeast	~~267~~303,~~455~~474		~~308~~299,~~640~~688		~~464~~767,~~355~~829		~~568~~868,~~427~~115
Total	$	1,~~524~~614,~~716~~462	$	1,~~701~~745,~~512~~979	$	24,~~911~~526,~~757~~219	$	34,~~163~~909,~~210~~189
Pretax income (loss):
West Coast	$	76,754	$	87,137	$	145,645	$	152,877
Southwest	55,302		54,765		114,094		110,476
Central	20,683		46,567		46,176		85,142
Southeast	20,230		38,559		33,304		70,824
Corporate and other	(38,747)		(19,172)		(73,166)		(48,375)
Total	$	134,222	$	207,856	$	266,053	$	370,944

			Three Months Ended May 31,								Six Months Ended May 31,
	Three Months Ended August 31,								Nine Months Ended August 31,
	2025		~~2025~~		2024		~~2024~~		2025		~~2025~~		2024		~~2024~~
Inventory impairment and land option contract abandonment charges:
Pretax income (loss):
West Coast	$	71,280	$	~~1,194~~	$	99,222	$	~~647~~	$	216,925	$	~~1,840~~	$	252,099	$	~~1,945~~
Southwest	57,338		~~821~~		54,826		~~116~~		171,432		~~1,131~~		165,302		~~116~~
Central	18,211		~~1,814~~		43,304		~~256~~		64,387		~~2,132~~		128,446		~~256~~
Southeast	22,225		~~1,729~~		33,003		~~191~~		55,529		~~1,910~~		103,827		~~191~~
Total			$	5,558			$	1,210			$	7,013			$	2,508
Corporate and other	(34,512)				(33,879)				(107,678)				(82,254)
Total	$	134,542			$	196,476			$	400,595			$	567,420

	May 31,2025				November 30,2024
Inventory impairment and land option contract abandonment charges:
Assets:
West Coast			$	1,133			$	496	$	2,973	$	2,441
West Coast	$	3,326,207			$	3,178,188
Southwest			511				—		1,642		116
Southwest	1,061,255				915,072
Central			7,240				469		9,372		725
Central	1,031,024				1,001,393
Southeast			2,454				212		4,364		403
Southeast	1,052,008				972,993
Total			$	11,338			$	1,177	$	18,351	$	3,685
Corporate and other	485,671				801,600
Total	$	6,956,165			$	6,869,246


	August 31, 2025		November 30, 2024
Assets:
West Coast	$	3,426,768	$	3,178,188
Southwest	981,884		915,072
Central	1,008,330		1,001,393
Southeast	1,008,395		972,993
Corporate and other	500,417		801,600
Total	$	6,925,794	$	6,869,246

3. Financial Services

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

Three Months Ended May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Revenues

Insurance commissions

23,~~376~~331

53,~~402~~691

48,~~937~~268

812,~~994~~685

Title services

2,~~493~~681

2,~~899~~938

47,~~668~~349

58,~~375~~313

Total

46,~~869~~012

86,~~301~~629

915,~~605~~617

1420,~~369~~998

Expenses

General and administrative

(1,~~570~~580)

(1,~~473~~608)

(34,~~109~~689)

(34,~~019~~627)

Operating income

34,~~299~~432

65,~~828~~021

610,~~496~~928

1116,~~350~~371

Equity in income of unconsolidated joint venture

4,~~862~~254

65,~~435~~932

913,~~191~~445

1319,~~490~~422

Pretax income

8,~~161~~686

1310,~~263~~953

1524,~~687~~373

2435,~~840~~793

	May 31,2025		November 30,2024
Assets
Cash and cash equivalents	$	2,081	$	1,220
Receivables	3,380		5,407
Investment in unconsolidated joint venture	17,632		21,997
Other assets (a)	38,338		38,299
Total assets	$	61,431	$	66,923

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Assets
Cash and cash equivalents	$	1,712	$	1,220
Receivables	4,256		5,407
Investment in unconsolidated joint venture	15,386		21,997
Other assets (a)	38,424		38,299
Total assets	$	59,778	$	66,923
Liabilities
Accounts payable and accrued expenses	$	2,~~954~~983	$	2,719
Total liabilities	$	2,~~954~~983	$	2,719

(a)Other assets at ~~May~~August 31, 2025 and November 30, 2024 included $38.34 million and $38.2 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 May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Numerator:

Net income

~~107~~109,~~883~~828

~~168~~157,~~419~~329

~~217~~327,~~440~~268

~~307~~464,~~084~~413

Less: Distributed earnings allocated to participating securities

(~~114~~113)

(~~145~~143)

(~~228~~339)

(~~262~~406)

Less: Undistributed earnings allocated to participating securities

(~~588~~633)

(1,~~136~~062)

(1,~~161~~779)

(23,~~072~~137)

Numerator for basic earnings per share

~~107~~109,~~181~~082

~~167~~156,~~138~~124

~~216~~325,~~051~~150

~~304~~460,~~750~~870

Effect of dilutive securities:

Add: Undistributed earnings allocated to participating securities

~~588~~633

1,~~136~~062

1,~~161~~779

23,~~072~~137

Less: Undistributed earnings reallocated to participating securities

(~~578~~620)

(1,~~105~~032)

(1,~~139~~745)

(23,~~013~~047)

Numerator for diluted earnings per share

~~107~~109,~~191~~095

~~167~~156,~~169~~154

~~216~~325,~~073~~184

~~304~~460,~~809~~960

Denominator:

Weighted average shares outstanding — basic

6966,~~976~~368

7574,~~653~~476

7069,~~745~~279

75,~~773~~339

Effect of dilutive securities:

Share-based payments

1,~~250~~369

2,~~153~~154

1,~~363~~364

2,~~261~~226

Weighted average shares outstanding — diluted

7167,~~226~~737

7776,~~806~~630

7270,~~108~~643

7877,~~034~~565

Basic earnings per share

1.5364

2.2110

34.0569

46.0212

Diluted earnings per share

1.5061

2.1504

34.0060

35.9194

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 ~~May~~August 31, 2025 and 2024.

For the three-month and six-month periods ended May 31, 2025 and 2024, 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.

For the three-month and nine-month periods ended August 31, 2025 and 2024, 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):

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Due from utility companies, improvement districts and municipalities	$	~~175~~186,~~245~~226	$	173,733
Recoveries related to self-insurance and other legal claims	~~149~~151,~~421~~918		136,949
Refundable deposits and bonds	9,~~888~~217		10,667
Income taxes receivable	105,~~435~~674		10,543
Other	3038,~~600~~102		49,887
Subtotal	~~375~~391,~~589~~137		381,779
Allowance for doubtful accounts	(4,~~235~~651)		(4,246)
Total	$	~~371~~386,~~354~~486	$	377,533

6. Inventories

Inventories consisted of the following (in thousands):

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Homes completed or under construction	$	2,~~117~~047,~~671~~954	$	1,990,113
Land under development	3,~~795~~790,~~677~~862		3,537,907
Total	$	5,~~913~~838,~~348~~816	$	5,528,020

Land under development at ~~May~~August 31, 2025 and November 30, 2024 included land held for future development of $3237.18 million and $21.2 million, respectively.

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). We do not capitalize interest on land held for future development and land held for sale.

Our interest costs were as follows (in thousands):

Three Months Ended May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Capitalized interest at beginning of period

~~125~~128,~~356~~676

~~134~~131,~~377~~765

122,387

134,375

Interest incurred

2829,~~626~~658

26,~~577~~583

5584,~~018~~676

5379,~~082~~665

Interest amortized to construction and land costs (a)

(2527,~~306~~026)

(2928,~~189~~180)

(4875,~~729~~755)

(5583,~~692~~872)

Capitalized interest at end of period

~~128~~131,~~676~~308

~~131~~130,~~765~~168

~~128~~131,~~676~~308

~~131~~130,~~765~~168

(a)Interest amortized to construction and land costs for the ~~six~~three-month and nine-month periods ended August 31, 2025 and the nine months ended ~~May~~August 31, 2024 included a nominal ~~amount~~amounts related to land sales during the ~~period~~periods.

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

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 1014 active communities or land parcels for recoverability as of ~~May~~August 31, 2025 with a carrying value of $~~143~~168.27 million. As of November 30, 2024, we evaluated eight active communities or land parcels for recoverability with a carrying value of $139.5 million. In addition, we evaluated land held for future development for recoverability as of both ~~May~~August 31, 2025 and November 30, 2024. ~~Based on the results of our evaluations, we recognized no inventory impairment charges for the three-month and six-month periods ended May 31, 2025 and 2024.~~

AsBased on the results of ~~May~~our evaluations, we recognized inventory impairment charges of $7.3 million for the three-month and nine-month periods ended August 31, 2025, ~~the~~primarily ~~aggregate~~related ~~carrying~~to ~~value~~one ofcommunity. These ~~our~~charges ~~inventory~~were ~~that~~principally ~~had~~driven ~~been~~by ~~impacted~~both increased costs imposed by ~~previous~~a ~~inventory~~municipality ~~impairment~~affecting ~~charges~~the ~~was~~community, ~~$13.0~~and ~~million~~our decision to make changes in our operational strategy aimed at more quickly monetizing our investment in this community, ~~representing~~mainly ~~four~~by ~~communities~~accelerating ~~and~~the ~~various~~overall ~~other~~pace ~~land~~for ~~parcels~~selling, building and delivering homes therein. AsFor ofthe ~~November~~three-month and nine-month periods ended August 3031, 2024, ~~the~~we ~~aggregate~~recognized ~~carrying~~no ~~value~~inventory ofimpairment ~~our~~charges. If ~~inventory~~we ~~that~~change ~~had~~our ~~been~~strategy ~~impacted~~or byif ~~previous~~there ~~inventory~~are ~~impairment~~changes ~~charges~~in ~~was~~market ~~$32.1~~conditions ~~million,~~for ~~representing~~any ~~four~~given ~~communities~~asset, ~~and~~we ~~various~~may ~~other~~recognize ~~land~~additional ~~parcels~~impairment charges.

~~Our~~The ~~inventory~~following ~~controlled~~table ~~under~~summarizes ~~land~~significant ~~option~~quantitative ~~contracts~~unobservable ~~and~~inputs ~~other~~we ~~similar~~utilized ~~contracts~~in ~~is assessed on a quarterly basis to determine whether it continues to meet~~ our ~~investment~~fair ~~return~~value ~~standards. When~~measurements awith ~~decision~~respect ~~is made not~~ to ~~exercise~~the ~~certain~~impaired ~~land~~communities ~~option~~written ~~contracts~~down ~~and other similar contracts due~~ to ~~market~~fair 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 $5.6 million and $7.0 million for the three-month and six-month periods ended May 31, 2025, respectively. For the three-month and six-month periods ended May 31, 2024, we recognized land option contract abandonment charges of $1.2 million and $2.5 million, respectively. value:


	Three Months Ended August 31,		Nine Months Ended August 31,
Unobservable Input (a)	2025	2024	2025	2024
Average selling price	$394,500 - $578,900	n/a	$394,500 - $578,900	n/a
Deliveries per month	2 - 3	n/a	2 - 3	n/a
Discount rate	17% - 20%	n/a	17% - 20%	n/a

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

As of August 31, 2025, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $26.7 million, representing six communities and various other land parcels. As of November 30, 2024, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $32.1 million, representing four 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 $4.0 million and $11.0 million for the three-month and nine-month periods ended August 31, 2025, respectively. For the three-month and nine-month periods ended August 31, 2024, we recognized land option contract abandonment charges of $1.2 million and $3.7 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 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 May 31, 2025 and November 30, 2024 was a VIE, but we were not the primary beneficiary of the VIE. Therefore, all of our joint ventures at May 31, 2025 and November 30, 2024 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 May 31, 2025 and November 30, 2024, 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.

of our joint ventures at August 31, 2025 and November 30, 2024 was a VIE, but we were not the primary beneficiary of the VIE. Therefore, all of our joint ventures at August 31, 2025 and November 30, 2024 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, 2025 and November 30, 2024, 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.

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

	May 31, 2025				November 30, 2024
	August 31, 2025				November 30, 2024
	Cash Deposits		Aggregate Purchase Price		Cash Deposits		Aggregate Purchase Price
Unconsolidated VIEs	$	4946,~~307~~642	$	1,~~484~~203,~~021~~536	$	50,469	$	1,705,542
Other land option contracts and other similar contracts	3229,~~624~~871		~~929~~749,~~690~~024		31,470		885,588
Total	$	8176,~~931~~513	$	21,~~413~~952,~~711~~560	$	81,939	$	2,591,130

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 $4652.93 million at ~~May~~August 31, 2025 and $34.3 million at November 30, 2024. 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 $2320.92 million at ~~May~~August 31, 2025 and $26.0 million at November 30, 2024.

9. Investments in Unconsolidated Joint Ventures

Homebuilding. 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.

We had investments in six homebuilding unconsolidated joint ventures as of ~~May~~August 31, 2025 and November 30, 2024. The following table presents combined condensed information from the statements of operations for our homebuilding unconsolidated joint ventures (in thousands):

	Three Months Ended May 31,				Six Months Ended May 31,
	2025		2024		2025		2024
Revenues	$	14,371	$	5,298	$	39,740	$	5,298
Construction and land costs	(10,803)		(3,824)		(29,805)		(3,824)
Other expense, net	(1,355)		(993)		(2,907)		(1,847)
Income (loss)	$	2,213	$	481	$	7,028	$	(373)

The combined revenues and construction and land costs for the three-month and six-month periods ended May 31, 2025 and 2024 related to homes delivered by an unconsolidated joint venture in California, which delivered its first homes in the 2024 second quarter.


	Three Months Ended August 31,				Nine Months Ended August 31,
	2025		2024		2025		2024
Revenues	$	19,027	$	32,241	$	58,767	$	37,539
Construction and land costs	(14,371)		(23,580)		(44,176)		(27,404)
Other expense, net	(1,567)		(1,694)		(4,474)		(3,541)
Income	$	3,089	$	6,967	$	10,117	$	6,594

The combined revenues and construction and land costs for the three-month and nine-month periods ended August 31, 2025 and 2024 related to homes delivered by an unconsolidated joint venture in California, which delivered its first homes in the 2024 second quarter.

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

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Assets
Cash	$	1012,~~200~~968	$	18,869
Receivables	15,~~666~~512		2,918
Inventories	~~151~~154,~~328~~112		158,322
Other assets	~~912~~749		1,052
Total assets	$	~~164~~173,~~106~~341	$	181,161
Liabilities and equity
Accounts payable and other liabilities	$	1012,~~407~~076	$	8,091
Notes payable (a)	4441,~~058~~825		47,300
Equity	~~109~~119,~~641~~440		125,770
Total liabilities and equity	$	~~164~~173,~~106~~341	$	181,161

(a) As of both ~~May~~August 31, 2025 and November 30, 2024, the unconsolidated joint venture in California that delivered homes in the three-month and ~~six~~nine-month periods ended ~~May~~August 31, 2025 and 2024 had borrowings outstanding under a term loan with a third-party lender to finance its land acquisition, development and construction activities. In January 2025, the loan agreement was amended, increasing the aggregate commitment to $60.0 million from $55.0 million, and providing an eight-month loan extension option to replace the two previous six-month extension options. Pursuant to the amendment, the aggregate commitment ~~will~~was be reduced to $55.2 million on August 31, 2025, and ~~then~~will be reduced to $40.0 million on February 28, 2026. This term loan is scheduled to mature on April 19, 2026, unless extended or terminated pursuant to its applicable terms. If the term loan is extended, the aggregate commitment would be reduced to $28.0 million effective April 19, 2026. Borrowings under the term loan are secured by the underlying property and related project assets. None of our other unconsolidated joint ventures had outstanding debt at ~~May~~August 31, 2025 or November 30, 2024.

We provide certain guarantees and indemnities to the lender in connection with the above-described term loan, including a guaranty of interest and carry costs; a guaranty to complete the construction of phases of the improvements for the project as such phases are commenced; a guaranty against losses suffered due to certain bad acts or failures to act by the unconsolidated joint venture or its partners; and an indemnity from environmental issues. Except to the extent related to the foregoing guarantees and indemnities, we do not have a guaranty or any other obligation to repay borrowings under term loan or to support the value of the underlying collateral. However, various financial and non-financial covenants apply under the term loan and with respect to the related guaranty and indemnity obligations, and a failure to comply with such covenants could result in a default and cause the lender to seek to enforce such guaranty and indemnity obligations. As of the date of this report, we were in compliance with the relevant covenants. We do not believe that our existing exposure under our guaranty and indemnity obligations related to outstanding borrowings under the term loan is material to our consolidated financial statements.

Financial Services. The following table presents combined condensed information from the statements of operations for our financial services unconsolidated joint venture (in thousands):

Three Months Ended May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Revenues

2726,~~349~~362

31,~~458~~615

5279,~~964~~326

6193,~~870~~485

Expenses

(17,~~626~~854)

(1819,~~589~~751)

(3452,~~583~~437)

(3454,~~890~~641)

Income

98,~~723~~508

1211,~~869~~864

1826,~~381~~889

2638,~~980~~844

Revenues are primarily generated from fees earned on mortgage loan originations, interest earned for the period loans are held by KBHS, and gains on the sales of mortgage loans held for sale. Gains on the sales of mortgage loans held for sale include the realized and unrealized gains and losses associated with changes in the fair value of such loans and any related derivative financial instruments.

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

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Assets
Cash and cash equivalents (a)	$	2623,~~293~~496	$	31,702
Mortgage loans held for sale	~~158~~174,~~466~~920		122,828
Other assets	1613,~~486~~503		22,815
Total assets	$	~~201~~211,~~245~~919	$	177,345
Liabilities and equity
Accounts payable and other liabilities	$	13,~~894~~686	$	15,398
Funding facilities	~~152~~167,~~087~~461		117,953
Equity	3530,~~264~~772		43,994
Total liabilities and equity	$	~~201~~211,~~245~~919	$	177,345

(a)Cash and cash equivalents included restricted cash of $.8 million at ~~May~~August 31, 2025 and $1.3 million at November 30, 2024.

Mortgage loans held for sale. Originated mortgage loans expected to be sold into the secondary market in the foreseeable future are reported as mortgage loans held for sale and carried in KBHS’ balance sheets at fair value, with changes in fair value recognized within revenues in KBHS’ statements of operations.

Interest Rate Lock Commitments (“IRLCs”). KBHS enters into IRLCs in connection with originating certain mortgage loans held for sale, at specified interest rates and within a specified period of time, with customers who have applied for a mortgage loan and meet certain credit and underwriting criteria. KBHS accounts for IRLCs as free-standing derivatives and does not designate any for hedge accounting. As a result, IRLCs are recognized in KBHS’ balance sheets at fair value, and gains or losses resulting from changes in fair value are recognized within revenues in KBHS’ statements of operations. The fair value of IRLCs is based on market prices, which includes an estimate of the fair value of the associated mortgage servicing rights, adjusted for estimated costs to originate the underlying mortgage loans as well as the probability that the mortgage loans will fund within the terms of the IRLCs. The fair value of IRLCs included in other assets in KBHS’ balance sheets was $129.4 million at ~~May~~August 31, 2025 and $16.0 million at November 30, 2024. The changes in the fair value of IRLCs, which were reported in revenues for the applicable periods, were losses of $23.10 million and $36.6 million for the three-month and ~~six~~nine-month periods ended ~~May~~August 31, 2025, respectively, and ~~gains~~a loss of $1.34 million and a gain of $43.28 million for the three-month and ~~six~~nine-month periods ended ~~May~~August 31, 2024, respectively.

KBHS manages the interest rate and price risk associated with its outstanding IRLCs by entering into best efforts forward sale commitments under which mortgage loans locked with a borrower are simultaneously committed to a secondary market investor at a fixed price, subject to the underlying mortgage loans being funded. These best efforts forward sale commitments do not meet the definition of derivative financial instruments and are therefore not recorded in KBHS’ ~~balance sheets. If the mortgage loans underlying the IRLCs do not fund, KBHS has no obligation to fulfill the secondary market investor commitments.~~

Funding facilities. KBHS maintains warehouse lines of credit and master repurchase agreements with various financial institutions to fund its originated mortgage loans, with its mortgage loans held for sale pledged as collateral under these agreements. The agreements contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquid assets, maximum debt to net worth ratio and positive net income, as defined in the agreements. KBHS was in compliance with these covenants as of May 31, 2025. In addition to its compliance with these covenants, KBHS also depends on the ability and willingness of the applicable lenders and financial institutions to extend such credit facilities to KBHS to fund its originated mortgage loans. KBHS intends to renew these facilities when they expire at various dates in 2025. The warehouse lines of credit and master repurchase agreements are not guaranteed by us or any of the subsidiaries that guarantee our senior notes, unsecured revolving credit facility with various banks (“Credit Facility”) and senior unsecured term loan agreement (“Term Loan”), (collectively, “Guarantor Subsidiaries”).

balance sheets. If the mortgage loans underlying the IRLCs do not fund, KBHS has no obligation to fulfill the secondary market investor commitments.

Funding facilities. KBHS maintains warehouse lines of credit and master repurchase agreements with various financial institutions to fund its originated mortgage loans, with its mortgage loans held for sale pledged as collateral under these agreements. The agreements contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquid assets, maximum debt to net worth ratio and positive net income, as defined in the agreements. KBHS was in compliance with these covenants as of August 31, 2025. In addition to its compliance with these covenants, KBHS also depends on the ability and willingness of the applicable lenders and financial institutions to extend such credit facilities to KBHS to fund its originated mortgage loans. KBHS intends to renew these facilities when they expire at various dates in 2025 and 2026. The warehouse lines of credit and master repurchase agreements are not guaranteed by us or any of the subsidiaries that guarantee our senior notes, unsecured revolving credit facility with various banks (“Credit Facility”) and senior unsecured term loan agreement (“Term Loan”) (collectively, “Guarantor Subsidiaries”).

10.Other Assets

Other assets consisted of the following (in thousands):

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Cash surrender value of corporate-owned life insurance contracts	$	50,~~741~~333	$	51,912
Lease right-of-use assets	2018,~~616~~250		18,704
Prepaid expenses	1917,~~190~~575		17,799
Other (a)	16,~~983~~722		17,505
Total	$	~~107~~102,~~530~~880	$	105,920

(a) On March 1, 2024, substantially all the assets of an investee company, in which we had an aggregate ownership interest of approximately 13.5%, held largely through a limited liability company we established to hold the investment, were sold to a privately held buyer through a merger. From the sale, we received cash plus certain preferred and common equity interests in the buyer. Other includes these investments in equity securities without readily determinable fair values of $15.2 million at ~~May~~August 31, 2025 and November 30, 2024. In connection with the sale, we recognized a gain of $12.5 million, which is included in interest income and other in our consolidated statements of operations for the ~~three~~nine months ~~and six months~~ ended ~~May~~August 31, 2024.

11.Accrued Expenses and Other Liabilities

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

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Self-insurance and other legal liabilities	$	~~333~~341,~~844~~147	$	315,851
Employee compensation and related benefits	~~128~~145,~~778~~957		182,460
Warranty liability	9798,~~658~~598		96,026
Inventory-related obligations (a)	4941,~~604~~769		44,408
Customer deposits	4438,~~296~~072		44,029
Accrued interest payable	29,180		28,806
Lease liabilities	20,741		20,859
Lease liabilities	23,396		20,859
Accrued interest payable	17,353		28,806
Real estate and business taxes	1016,~~968~~356		17,056
Federal and state taxes payable	65,~~461~~061		—
Other	4745,~~655~~396		46,766
Total	$	~~771~~770,~~840~~450	$	796,261

(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.

12.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 in our consolidated balance sheets for leases with an expected term at the commencement date of more than 12 months. 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 May 31, 2025 and 2024 was $5.1 million and $5.2 million, respectively, and included short-term lease costs of $1.8 million and $1.9 million, respectively. For the six months ended May 31, 2025 and 2024, our total lease expense was $9.9 million and $10.3 million, respectively, and included short-term lease costs of $3.3 million and $3.7 million, respectively. Variable lease

~~costs~~delivered, ~~and~~our ~~external~~obligation ~~sublease~~to ~~income~~pay ~~for~~ the ~~three-month~~remaining ~~and~~TIFE ~~six-month~~assessments ~~periods~~associated ~~ended~~with ~~May 31~~each underlying lot is transferred to the homebuyer. As such, ~~2025~~these ~~and~~assessment ~~2024~~obligations ~~were~~will ~~immaterial~~be paid by us only to the extent we do not deliver homes on applicable lots before the related TIFE obligations mature.

12.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 in our consolidated balance sheets for leases with an expected term at the commencement date of more than 12 months. 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, 2025 and 2024 was $5.5 million and $5.1 million, respectively, and included short-term lease costs of $2.1 million and $1.9 million, respectively. For both the nine months ended August 31, 2025 and 2024, our total lease expense was $15.4 million, and included short-term lease costs of $5.4 million and $5.6 million, respectively. Variable lease costs and external sublease income for the three-month and nine-month periods ended August 31, 2025 and 2024 were immaterial.

The following table presents our lease right-of-use assets and lease liabilities (in thousands):

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Lease right-of-use assets	$	2018,~~650~~278	$	18,734
Lease liabilities	2320,~~431~~772		20,887

Lease right-of-use assets and lease liabilities are predominately within our homebuilding operations, with nominal amounts in our financial services operations.

13.Income Taxes

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

	Three Months Ended May 31,						Six Months Ended May 31,
	Three Months Ended August 31,						Nine Months Ended August 31,
	2025			2024			2025			2024
Income tax expense	$	3433,~~500~~400		$	5250,~~700~~100		$	6497,~~300~~700		$	88138,~~700~~800
Effective tax rate	2423.23		%	2324.82		%	2223.80		%	2223.40		%

Our income tax expense and effective tax rate for the three months ended ~~May~~August 31, 2025 included the favorable impact of $35.13 million of Internal Revenue Code Section 45L (“Section 45L”) tax credits we recognized primarily from building energy-efficient homes and $.2 million of excess tax benefits related to stock-based compensation, partly offset by $23.86 million of non-deductible executive compensation expense. Our income tax expense and effective tax rate for the three months ended ~~May~~August 31, 2024 reflected the favorable impact of $43.89 million of Section 45L tax credits ~~and $.4 million of excess tax benefits related to stock-based compensation~~, partly offset by $32.04 million of non-deductible executive compensation expense.

For the ~~six~~nine months ended ~~May~~August 31, 2025, our income tax expense and effective tax rate included the favorable impacts of $10.1 million of Section 45L tax credits and $5.46 million of excess tax benefits related to stock-based compensation and ~~$4.8 million of Section 45L tax credits~~, partly offset by $58.28 million of non-deductible executive compensation expense. Our income tax expense and effective tax rate for the ~~six~~nine months ended ~~May~~August 31, 2024 reflected the favorable impacts of $812.98 million of Section 45L tax credits, ~~and~~ $6.5 million of excess tax benefits related to stock-based compensation, partly offset by $57.59 million of non-deductible executive compensation expense.

The year-over-year ~~decreases~~increase in Section 45L tax credits for the three months ~~and~~ended ~~six~~August 31, 2025 was mainly due to additional tax credits recognized based on certifications verified during the quarter. For the nine months ended ~~May~~August 31, 2025, ~~reflect~~Section 45L tax credits decreased year over year, largely reflecting the impact of guidance the Internal Revenue Service (“IRS”) issued in 2023 that heightened the Section 45L energy-efficiency qualification standard for homes built in California relative to other states and our decision to build homes in many of our markets beginning in 2025 that are highly energy efficient and qualify for ENERGY STAR® certification but do not qualify for Section 45L tax credits. We believe the additional costs necessary to satisfy the higher standards for some of our homes outweigh the possible benefits of meeting those higher standards for both our business and our buyers.

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.

As of both May 31, 2025 and November 30, 2024, we had deferred tax assets of $119.2 million that were partly offset by valuation allowances of $16.8 million. The deferred tax asset valuation allowances at May 31, 2025 and November 30, 2024 were primarily related to certain state net operating losses that had not met the “more likely than not” realization standard at those dates. Based on the evaluation of our deferred tax assets as of May 31, 2025, we determined that most of our deferred tax assets would be realized. Therefore, no adjustments to our deferred tax asset valuation allowance were needed for the six months ended May 31, 2025.

ofOn ~~future~~July ~~results. Changes~~4, in2025, ~~positive and negative evidence~~H.R.1, ~~including~~the ~~differences~~One ~~between~~Big ~~estimated~~Beautiful ~~and~~Bill ~~actual~~Act ~~results~~(“OBBBA”), ~~could~~was ~~result~~signed ininto ~~changes~~law. Among inits provisions is the ~~valuation~~repeal of ~~our~~Section ~~deferred~~45L tax ~~assets~~credits ~~that~~for ~~could~~new ~~have~~energy-efficient ahomes ~~material~~delivered ~~impact~~after onJune ~~our~~30, ~~consolidated financial statements~~2026. ~~Changes~~As a result, beginning in ~~existing~~our ~~federal~~2026 ~~and~~third ~~state~~quarter, our income tax ~~laws~~expense and ~~corporate~~effective ~~income~~ tax ~~rates~~rate ~~could~~will ~~also~~no ~~affect~~longer ~~actual~~reflect a benefit from such tax ~~results~~credits ~~and~~as to homes delivered after the ~~realization~~effective date. We are currently evaluating other elements of ~~deferred~~the legislation, but do not expect it to have a material effect on our effective tax ~~assets~~rate ~~over~~for ~~time~~the year ending November 30, 2025.

As of both August 31, 2025 and November 30, 2024, we had deferred tax assets of $119.2 million that were partly offset by valuation allowances of $16.8 million. The deferred tax asset valuation allowances at August 31, 2025 and November 30, 2024 were primarily related to certain state net operating losses that had not met the “more likely than not” realization standard at those dates. Based on the evaluation of our deferred tax assets as of August 31, 2025, we determined that most of our deferred tax assets would be realized. Therefore, no adjustments to our deferred tax asset valuation allowance were needed for the nine months ended August 31, 2025.

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.

14.Notes Payable

Notes payable consisted of the following (in thousands):

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Unsecured revolving credit facility	$	~~200~~250,000	$	—
Senior unsecured term loan due August 25, 2026	359,~~162~~329		358,826
6.875% Senior notes due June 15, 2027	298,~~824~~959		298,560
4.80% Senior notes due November 15, 2029	298,~~118~~213		297,932
7.25% Senior notes due July 15, 2030	346,~~824~~953		346,574
4.00% Senior notes due June 15, 2031	386,~~864~~979		386,638
Mortgages and land contracts due to land sellers and other loans	3,149		3,149
Total	$	1,~~892~~943,~~941~~582	$	1,691,679

The carrying amounts of our senior notes listed above are net of unamortized debt issuance costs, which totaled $109.26 million at ~~May~~August 31, 2025 and $11.5 million at November 30, 2024.

Unsecured Revolving Credit Facility. We have a $1.09 billion Credit Facility that will mature on February 18, 2027. The Credit Facility contains an uncommitted accordion feature under which its aggregate principal amount of available loans can be increased to a maximum of $1.29 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 accrues at an adjusted term Secured Overnight Financing Rate (“SOFR”) or a base rate, plus a spread that depends on our consolidated leverage ratio (“Leverage Ratio”), as defined under the Credit Facility. Interest is payable quarterly (base rate) or each month or three months (adjusted term SOFR). The Credit Facility also requires the payment of a commitment fee at a per annum rate ranging from .15% 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. Our obligations to pay borrowings under the Credit Facility are guaranteed on a joint and several basis by our Guarantor Subsidiaries. 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 May 31, 2025, we had $200.0 million of cash borrowings and $8.3 million of letters of credit outstanding under the Credit Facility. Therefore, as of May 31, 2025, we had $881.7 million available for cash borrowings under the Credit Facility, with up to $241.7 million of that amount available for the issuance of letters of credit. As of May 31, 2025, the weighted average annual interest rate on our outstanding borrowings under the Credit Facility was 5.7%.

Senior Unsecured Term Loan. We have a $360.0 million Term Loan with the lenders party thereto. The Term Loan will mature on August 25, 2026, or earlier if we secure borrowings under the Credit Facility without similarly securing the Term Loan (subject to certain exceptions). Interest under the Term Loan accrues at an adjusted term SOFR or a base rate, plus a spread that depends on our Leverage Ratio. Interest is payable quarterly (base rate) or each month or three months (adjusted term SOFR). The Term Loan contains various covenants that are substantially the same as those under the Credit Facility. The proceeds drawn under the Term Loan are guaranteed on a joint and several basis by our Guarantor Subsidiaries. As of May 31, 2025, the weighted average annual interest rate on our outstanding borrowings under the Term Loan was 5.8%.

Letter of Credit Facility. We maintain an unsecured letter of credit agreement with a financial institution (“LOC Facility”) to obtain letters of credit from time to time in the ordinary course of operating our business. Under the LOC Facility, which expires on February 13, 2028, we may issue up to $100.0 million of letters of credit. As of May 31, 2025 and November 30, 2024, we had letters of credit outstanding under the LOC Facility of $74.4 million and $73.3 million, respectively.

~~Senior~~our ~~Notes~~Guarantor Subsidiaries. ~~All~~The amount of the ~~senior~~Credit ~~notes~~Facility ~~outstanding~~available atfor ~~May 31,~~cash ~~2025~~borrowings and ~~November 30,~~the ~~2024~~issuance ~~represent~~of ~~senior~~letters ~~unsecured~~of ~~obligations~~credit ~~that~~depends ~~are~~on ~~guaranteed~~the bytotal ~~our~~cash ~~Guarantor~~borrowings ~~Subsidiaries~~and letters of credit outstanding under the Credit Facility and ~~rank~~the ~~equally~~maximum inavailable ~~right~~amount under the terms of ~~payment~~the ~~with~~Credit ~~all~~Facility. As of ~~our~~August 31, ~~and~~2025, ~~our~~we ~~Guarantor~~had ~~Subsidiaries’~~$250.0 ~~existing~~million ~~unsecured~~of cash borrowings and ~~unsubordinated~~$8.3 ~~indebtedness~~million of letters of credit outstanding under the Credit Facility. ~~All~~Therefore, as of ~~our~~August 31, ~~senior~~2025, ~~notes~~we ~~were~~had ~~issued~~$831.7 inmillion ~~underwritten~~available ~~public~~for ~~offerings~~cash borrowings under the Credit Facility, with up to $241.7 million of that amount available for the issuance of letters of credit. ~~Interest~~As of August 31, 2025, the weighted average annual interest rate on ~~each~~our ofoutstanding ~~these~~borrowings ~~senior~~under ~~notes~~the isCredit ~~payable~~Facility ~~semi-annually~~was 5. 7%.

Senior Unsecured Term Loan. We have a $360.0 million Term Loan with the lenders party thereto. The Term Loan will mature on August 25, 2026, or earlier if we secure borrowings under the Credit Facility without similarly securing the Term Loan (subject to certain exceptions). Interest under the Term Loan accrues at an adjusted term SOFR or a base rate, plus a spread that depends on our Leverage Ratio. Interest is payable quarterly (base rate) or each month or three months (adjusted term SOFR). The Term Loan contains various covenants that are substantially the same as those under the Credit Facility. The proceeds drawn under the Term Loan are guaranteed on a joint and several basis by our Guarantor Subsidiaries. As of August 31, 2025, the weighted average annual interest rate on our outstanding borrowings under the Term Loan was 5.8%.

Letter of Credit Facility. We maintain an unsecured letter of credit agreement with a financial institution (“LOC Facility”) to obtain letters of credit from time to time in the ordinary course of operating our business. Under the LOC Facility, which expires on February 13, 2028, we may issue up to $100.0 million of letters of credit. As of August 31, 2025 and November 30, 2024, we had letters of credit outstanding under the LOC Facility of $62.4 million and $73.3 million, respectively.

Senior Notes. All the senior notes outstanding at August 31, 2025 and November 30, 2024 represent senior unsecured obligations that are guaranteed by our Guarantor 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, the indenture contains certain limitations related to mergers, consolidations, and sales of assets.

As of ~~May~~August 31, 2025, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility, 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. Our ability to access the Credit Facility’s full borrowing capacity, as well as the LOC Facility’s full issuance capacity, also depends on the ability and willingness of the applicable lenders and financial institutions, including any substitute or additional lenders and financial institutions, to meet their commitments to fund loans, extend credit or provide payment guarantees to or for us under those instruments.

Mortgages and Land Contracts Due to Land Sellers and Other Loans. As of ~~May~~August 31, 2025, inventories having a carrying value of $1524.04 million were pledged to collateralize mortgages and land contracts due to land sellers and other loans.

As of ~~May~~August 31, 2025, principal payments on our senior notes, mortgages and land contracts due to land sellers and other loans are due during each year ending November 30 as follows: 2025 – $.31 million; 2026 – $360.87 million; 2027 – $300.89 million; 2028 – $.8 million; 2029 – $300.56 million and thereafter – $740.0 million.

15.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. These measurements are generally Level 3 within the fair value hierarchy. We had no inventories with carrying values that were adjusted to fair value during the six months ended May 31, 2025 or the year ended November 30, 2024. See Note 7 – Inventory Impairments and Land Option Contract Abandonments for information regarding the valuation of these assets. 19



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, 2025 and the year ended November 30, 2024 (in thousands):


		August 31, 2025						November 30, 2024
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	$	24,268	$	(7,341)	$	16,927	$	—	$	—	$	—

(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 values and estimated fair values of our financial instruments, except those for which the carrying values approximate fair values (in thousands):

May 31, 2025

November 30, 2024

August 31, 2025

November 30, 2024

Description

Fair ValueHierarchy

CarryingValue (a)

EstimatedFair Value

CarryingValue (a)

EstimatedFair Value

Financial Liabilities:

Senior notes

Level 2

1,~~330~~331,~~630~~104

1,~~307~~320,~~725~~913

1,329,704

1,309,700

(a)The carrying value for the senior notes, as presented, includes 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, outstanding borrowings under the Credit Facility, if any, the Term Loan, 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.

corporate-owned life insurance is based on the cash surrender value of the policies and, accordingly, approximates fair value.

16.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 the 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 a 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.

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 a 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 May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Balance at beginning of period

9697,~~067~~658

9594,~~920~~803

96,026

98,000

Warranties issued

10,~~029~~642

9,~~702~~731

1929,~~001~~643

1727,~~865~~596

Payments

(89,~~438~~702)

(10,~~819~~864)

(1727,~~369~~071)

(2131,~~062~~926)

Balance at end of period

9798,~~658~~598

9493,~~803~~670

9798,~~658~~598

9493,~~803~~670

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 contractors 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 contractors’ general liability insurance primarily takes the form of a wrap-up policy under a program where eligible independent contractors are enrolled as insureds on each community. Enrolled contractors generally 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 contractors’ 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 $25.2 million and $22.6 million are included in receivables in our consolidated balance sheets at May 31, 2025 and November 30, 2024, 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 May 31,				Six Months Ended May 31,
	2025		2024		2025		2024
Balance at beginning of period	$	180,253	$	177,331	$	185,428	$	179,832
Self-insurance provided	4,360		4,636		8,573		9,263
Payments	(1,609)		(5,270)		(11,341)		(11,480)
Adjustments (a)	4,273		(3,668)		4,617		(4,586)
Balance at end of period	$	187,277	$	173,029	$	187,277	$	173,029

(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.

~~However~~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, ~~there~~among ~~can~~other befactors. Due ~~instances~~to the degree of ~~interaction~~judgment ~~between~~involved and the ~~liabilities~~potential for variability in these underlying assumptions, ~~such~~our asactual ~~where~~future ~~individual~~costs ~~homeowners~~could differ from those estimated. In addition, changes in athe ~~community~~frequency ~~separately~~and ~~request~~severity ~~warranty~~of ~~repairs~~reported toclaims ~~their~~and ~~homes~~the estimates to ~~address~~resolve aclaims ~~similar~~can ~~condition~~impact orthe ~~issue~~trends and ~~subsequently~~assumptions ~~join~~used ~~together~~in tothe ~~initiate~~actuarial analysis, orwhich ~~potentially~~could ~~initiate,~~be amaterial ~~legal~~to ~~process~~our ~~with~~consolidated ~~respect~~financial tostatements. Though ~~that~~state ~~condition~~regulations orvary, ~~issue~~construction defect claims are reported and~~/or~~ ~~the~~resolved ~~repair~~over ~~work~~a welong ~~have~~period ~~undertaken~~of time, which can extend for 10 years or more. InAs ~~these~~a ~~instances~~result, the majority of the estimated self-insurance liability based on the actuarial analysis relates to claims ~~and~~incurred but not yet reported. Therefore, adjustments related ~~repair~~to ~~work~~individual existing claims generally ~~are~~do ~~initially~~not ~~covered~~significantly byimpact ~~our~~the ~~warranty~~overall estimated liability,. Adjustments ~~and~~to ~~the~~our ~~costs~~liabilities ~~associated~~related ~~with~~to ~~resolving~~homes ~~the~~delivered ~~legal~~in ~~matter~~prior ~~(including~~years ~~any~~are ~~additional~~recorded ~~repair~~in ~~work)~~the ~~are~~period ~~covered~~in bywhich a change in our ~~self-insurance~~estimate ~~liability~~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 $22.0 million and $22.6 million are included in receivables in our consolidated balance sheets at August 31, 2025 and November 30, 2024, 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,
	2025		2024		2025		2024
Balance at beginning of period	$	187,277	$	173,029	$	185,428	$	179,832
Self-insurance provided	5,334		5,604		13,907		14,867
Payments	(1,199)		(3,206)		(12,540)		(14,686)
Adjustments (a)	(2,663)		(3,410)		1,954		(7,996)
Balance at end of period	$	188,749	$	172,017	$	188,749	$	172,017

(a)Represents net changes in the portion of our self-insurance liability estimated to be recoverable from our insurers or other parties, and/or actual recoveries funded directly by our insurers or other parties, if any.

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 may be recovered from our insurers to the extent such payments exceed the self-insured retentions or deductibles under, and are within the scope of coverage provided by, 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 an independent contractor(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.

In addition to the risk that is effectively self-insured through our captive insurance subsidiary, we often obtain project-specific insurance coverage for construction defect risk on attached projects (e.g., condominiums or townhomes) with policy deductibles generally ranging from $50,000 to $250,000. We record estimated liabilities and recoveries for projected losses related to these projects on a gross basis, including for known claims as well as estimates for claims incurred but not yet reported, to the extent such amounts are considered probable and estimable.

Florida Chapter 558 Actions. We and certain of our trade partners ~~continue~~have toreceived ~~receive~~ claims in prior quarters 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 trade partners or their insurers covering the related costs, as of May 31, 2025, we had approximately 280 outstanding noticed claims, and some are scheduled for trial over the next few quarters and beyond. In addition, some of our trade partners’ insurers in some of these cases have informed us of their inability to continue to pay claims-related costs. At May 31, 2025, we had an accrual for our estimated probable loss for these matters and a receivable for estimated probable insurance recoveries, including an estimate for claims incurred but not reported. While it is reasonably possible that our losses could exceed the amounts accrued and our recoveries could be less than the amounts 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 as each of these is dependent on several factors, including the extent of additional claims to be reported in future periods; the nature of any specific claims; our evaluation of the particular facts surrounding each such claim; and actions of third parties over which we have no control.

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 May 31, 2025, we had $1.44 billion of performance bonds and $82.7 million of letters of credit outstanding. At November 30, 2024, we had $1.33 billion of performance bonds and $81.6 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 May 31, 2025, we had total cash deposits of $81.9 million to purchase land having an aggregate purchase price of $2.41 billion. Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance.

~~Environmental~~involve ~~Protection~~homes ~~Agency~~in ~~and~~our ~~third-party~~Jacksonville, ~~ENERGY~~Orlando, ~~STAR~~and ~~rating~~Tampa ~~companies~~operations. Under Chapter 558, ~~real~~homeowners ~~estate~~must ~~brokers,~~serve ~~real~~written ~~estate~~notice ~~appraisers,~~of ~~financial~~a ~~institutions~~construction defect(s) and ~~other~~provide ~~parties~~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, asand ~~well~~a asnumber ~~inspection-~~of others have been resolved with applicable trade partners or their insurers covering the related ~~guidelines~~costs, ~~instructions,~~as ~~methods~~of August 31, ~~policies~~2025, ~~processes~~we had approximately 269 outstanding noticed claims, and ~~procedures. We~~some are ~~cooperating~~scheduled ~~with~~for trial over the ~~government,~~next ~~producing~~few ~~documents~~quarters and ~~information~~beyond. AsIn addition, some of ~~the~~our ~~date~~trade partners’ insurers in some of ~~this~~these ~~report~~cases have informed us of their inability to continue to pay claims-related costs. At August 31, 2025, we ~~are~~had ~~unable~~an toaccrual ~~predict~~for ~~what~~our ~~actions~~estimated ~~the~~probable ~~government~~loss ~~will~~for ~~take~~these matters and a receivable for estimated probable insurance recoveries, ifincluding ~~any;~~an ~~the~~estimate ~~timing~~for orclaims ~~nature~~incurred ofbut not reported. While it is reasonably possible that our losses could exceed the ~~ultimate~~amounts ~~outcome~~accrued inand ~~this~~our ~~matter;~~recoveries orcould be less than the ~~impact~~amounts recorded, ifat ~~any~~this time, ~~such~~we ~~outcome~~are ~~may~~unable ~~have~~to onestimate ~~our~~the ~~business~~total oramount ~~consolidated~~of ~~financial~~the ~~statements. As~~loss ain ~~result,~~excess ~~while~~of athe ~~loss~~accrued amount and/or ~~penalty,~~associated ifwith ~~any,~~a shortfall in the recoveries that is reasonably possible inas ~~this~~each ~~matter,~~of itthese is ~~not~~dependent ~~considered~~on several factors, including the extent of additional claims to be ~~probable~~reported orin ~~estimable~~future periods; the nature of any specific claims; our evaluation of the particular facts surrounding each such claim; and actions of third parties over which we have no control.

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, 2025, we had $1.39 billion of performance bonds and $70.7 million of letters of credit outstanding. At November 30, 2024, we had $1.33 billion of performance bonds and $81.6 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, 2025, we had total cash deposits of $76.5 million to purchase land having an aggregate purchase price of $1.95 billion. Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance.

Civil Subpoena. On October 2, 2023, we received a subpoena from the U.S. Department of Justice Civil Division, dated September 27, 2023, to produce certain documents and testimony with respect to the inspection, rating, marketing and advertising of our ENERGY STAR certified homes, including our contracts and/or communications with U.S. Environmental Protection Agency and third-party ENERGY STAR rating companies, real estate brokers, real estate appraisers, financial institutions and other parties, as well as inspection-related guidelines, instructions, methods, policies, processes and procedures. We are cooperating with the government, producing documents and information. As of the date of this report, we are unable to predict what actions the government will take, if any; the timing or nature of the ultimate outcome in this matter; or the impact, if any, such outcome may have on our business or consolidated financial statements. As a result, while a loss or penalty, if any, is reasonably possible in this matter, it is not considered to be probable or estimable.

17.Legal Matters

We are involved in litigation and regulatory proceedings incidental to our business that are in various procedural stages. We believe the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of ~~May~~August 31, 2025, 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 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.

18.Stockholders’ Equity

On February 21, 2025, the management development and compensation committee of our board of directors approved the payout of 530,015 shares of our common stock in connection with the vesting of PSUs that were granted to certain employees on October 7, 2021. 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, 2021 through November 30, 2024. Of the shares of common stock paid out 243,729 shares, or $14.9 million, were purchased by us in the 2025 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 April 18, 2024, our board of directors authorized us to repurchase up to $1.00 billion of our outstanding common stock. As of November 30, 2024, there was $700.0 million of remaining availability under this share repurchase authorization. In the 2025 first half, we repurchased 4,488,614 shares of our common stock at a total cost of $250.0 million. Repurchases under the authorization 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, business and other conditions. 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 shares. As of May 31, 2025, there was $450.0 million of remaining availability under this share repurchase authorization.

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a non-deductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. In the three months and six months ended May 31, 2025 and 2024, we reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued expenses and other liabilities on our consolidated balance sheet. All dollar amounts presented in this report related to our share repurchases and our share repurchase authorization exclude such excise taxes, to the extent applicable, unless otherwise indicated.

Inrecoveries ~~the~~are ~~2025~~considered ~~and~~probable. Based ~~2024~~on ~~second~~our ~~quarters~~experience, we believe the amounts that may be claimed or alleged against us in these proceedings are not a meaningful indicator of our ~~board~~potential liability. The outcome of ~~directors~~any ~~declared~~of these proceedings, including the defense and other litigation-related costs and expenses we ~~paid~~may incur, however, is inherently uncertain and could differ significantly from the estimate reflected in a ~~quarterly~~related ~~cash~~accrual, ~~dividend~~if made. Therefore, it is possible that the ultimate outcome of ~~$.25~~any ~~per~~proceeding, ~~share~~if in excess of a related accrual or if an accrual had not been made, could be material to our consolidated financial statements. ~~Quarterly~~Pursuant ~~dividends~~to ~~declared~~SEC rules, we will disclose any proceeding in which a governmental authority is a party and ~~paid~~that ~~during~~arises under any federal, state or local provisions enacted or adopted regulating the ~~six~~discharge ~~months~~of ~~ended~~materials ~~May 31~~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, ~~2025~~exclusive of interest and ~~2024~~costs, ~~totaled~~above $1.500 million ~~and~~or ~~$.45~~is ~~per~~otherwise ~~share,~~material ~~respectively~~to our consolidated financial statements.

18.Stockholders’ Equity

On February 21, 2025, the management development and compensation committee of our board of directors approved the payout of 530,015 shares of our common stock in connection with the vesting of PSUs that were granted to certain employees on October 7, 2021. 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, 2021 through November 30, 2024. Of the shares of common stock paid out, 243,729 shares, or $14.9 million, were purchased by us in the 2025 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 April 18, 2024, our board of directors authorized us to repurchase up to $1.00 billion of our outstanding common stock. As of November 30, 2024, there was $700.0 million of remaining availability under this share repurchase authorization. In the nine months ended August 31, 2025, we repurchased 7,788,113 shares of our common stock at a total cost of $438.5 million. Repurchases under the authorization 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, business and other conditions. 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 shares. As of August 31, 2025, there was $261.5 million of remaining availability under this share repurchase authorization.

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a non-deductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. In the three months and nine months ended August 31, 2025 and 2024, we reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued expenses and other liabilities on our consolidated balance sheet. All dollar amounts presented in this report related to our share repurchases and our share repurchase authorization exclude such excise taxes, to the extent applicable, unless otherwise indicated.

In the 2025 and 2024 third quarters, our board of directors declared, and we paid, a quarterly cash dividend of $.25 per share. Quarterly dividends declared and paid during the nine months ended August 31, 2025 and 2024 totaled $.75 and $.70 per share, respectively.

19.Stock-Based Compensation

Stock Options. At ~~May~~August 31, 2025 and November 30, 2024, we had ~~390~~376,641 and 418,141 stock options outstanding with a weighted average exercise price of $16.1621 and $16.17, respectively. We have not granted any stock option awards since 2016. During the ~~six~~nine months ended ~~May~~August 31, 2025, a total of 2741,500 stock options with a weighted average exercise price of $1615.2177 were exercised. As of ~~May~~August 31, 2025, stock options outstanding and stock options exercisable each had a weighted average remaining contractual life of 1.42 years. As all outstanding stock options have been fully vested since 2019, there was no stock-based compensation expense associated with stock options for the three-month and ~~six~~nine-month periods ended ~~May~~August 31, 2025 and 2024. Stock options outstanding and stock options exercisable each had an aggregate intrinsic value of $1317.8 million at ~~May~~August 31, 2025. (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 $98.24 million and $98.40 million for the three months ended ~~May~~August 31, 2025 and 2024, respectively, related to restricted stock and PSUs. For the ~~six~~nine months ended ~~May~~August 31, 2025 and 2024, we recognized total compensation expense of $1625.71 million and $1725.3 million, respectively, related to restricted stock and PSUs.

20.Supplemental Disclosure to Consolidated Statements of Cash Flows

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

	Six Months Ended May 31,
	Nine Months Ended August 31,
	2025		2024
Summary of cash and cash equivalents at end of period:
Homebuilding	$	~~308~~330,~~861~~586	$	~~643~~374,~~536~~911
Financial services	21,~~081~~712		~~716~~782
Total	$	~~310~~332,~~942~~298	$	~~644~~375,~~252~~693
Supplemental disclosures of cash flow information:
Interest paid, net of amounts capitalized	$	~~(374)~~1,453	$	~~208~~11,999
Income taxes paid	5888,~~481~~901		96145,~~230~~915
Supplemental disclosures of non-cash activities:
Decrease in consolidated inventories not owned	(2,133)		(1,599)
Increase (decrease) in consolidated inventories not owned	(5,762)		4,616
Increase in inventories due to distributions of land and land development from an unconsolidated joint venture	34,~~916~~890		47,~~525~~753
Inventories acquired through seller financing	—		53,~~830~~149

2425

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 May 31,						Six Months Ended May 31,
	Three Months Ended August 31,						Nine Months Ended August 31,
	2025		2024		Variance		2025		2024		Variance
Revenues:
Homebuilding	$	1,~~524~~614,~~716~~462	$	1,~~701~~745,~~512~~979	(108)	%	$	24,~~911~~526,~~757~~219	$	34,~~163~~909,~~210~~189	(8)	%
Financial services	46,~~869~~012		86,~~301~~629		(419)		915,~~605~~617		1420,~~369~~998		(3326)
Total revenues	$	1,~~529~~620,~~585~~474	$	1,~~709~~752,~~813~~608	(118)	%	$	24,~~921~~541,~~362~~836	$	34,~~177~~930,~~579~~187	(8)	%
Pretax income:
Homebuilding	$	134,~~222~~542	$	~~207~~196,~~856~~476	(3532)	%	$	~~266~~400,~~053~~595	$	~~370~~567,~~944~~420	(2829)	%
Financial services	8,~~161~~686		1310,~~263~~953		(3821)		1524,~~687~~373		2435,~~840~~793		(3732)
Total pretax income	~~142~~143,~~383~~228		~~221~~207,~~119~~429		(3631)		~~281~~424,~~740~~968		~~395~~603,~~784~~213		(2930)
Income tax expense	(3433,~~500~~400)		(5250,~~700~~100)		3533		(6497,~~300~~700)		(88138,~~700~~800)		2830
Net income	$	~~107~~109,~~883~~828	$	~~168~~157,~~419~~329	(3630)	%	$	~~217~~327,~~440~~268	$	~~307~~464,~~084~~413	(2930)	%
Diluted earnings per share	$	1.5061	$	2.1504	(3021)	%	$	34.0060	$	35.9194	(23)	%

InThe ~~the~~ 2025 ~~second~~third quarter, housing market ~~conditions~~environment ~~softened~~was softer compared to the year-earlier period, primarily due to ~~housing~~ongoing affordability concerns, ~~compounded~~and bytepid ~~the~~consumer ~~variability~~confidence inthat ~~persistently~~caused ~~elevated~~homebuyers ~~mortgage~~to ~~interest~~hesitate ~~rates,~~on asmaking ~~well~~purchase asdecisions ~~macroeconomic~~during ~~and~~the ~~geopolitical~~first ~~uncertainties~~nine ~~that~~months ~~have~~of ~~precipitated~~our afiscal ~~marked~~year. Despite ~~weakening~~these innear-term ~~consumer~~headwinds, ~~confidence~~the ~~and~~longer-term ~~caused~~outlook ~~homebuyers~~for tothe ~~hesitate~~housing onmarket ~~making~~remains ~~purchase~~favorable, ~~decisions~~driven by demographic trends and the continued undersupply of homes.

~~Reflecting~~Consumer ~~these~~interest ~~market~~in ~~conditions,~~homebuying ~~demand during the Spring selling season~~ was ~~more~~resilient ~~subdued~~during ~~relative to~~ the ~~past~~third ~~few years~~quarter, ~~and~~as ~~despite~~we experienced a ~~healthy~~steady level of traffic in our communities. Additionally, ~~our~~we ~~3,460~~were ~~net~~encouraged ~~orders~~to ~~for~~see ~~the~~stabilization ~~2025~~in ~~second~~demand ~~quarter~~early ~~were~~in ~~down~~the ~~13%~~third ~~year over year~~quarter, ~~and~~which ~~our~~was ~~monthly~~sustained ~~net~~as ~~order~~the ~~pace~~quarter ~~per~~progressed ~~community~~along ~~was~~with ~~4.5,~~a ~~compared~~moderation toin ~~5.5~~mortgage ~~for~~interest ~~the year-earlier period~~rates. ~~Also~~However, ~~contributing~~reflecting to the ~~year-over-year~~prevailing ~~decline~~market inconditions, our 2,950 net orders ~~were~~for ~~municipal~~the ~~delays~~quarter indecreased a4% ~~number~~year ofover ~~our~~year. We ~~planned~~generated ~~community~~a ~~openings,~~monthly ~~with~~net ~~some~~order ~~shifting~~pace toper ~~later~~community inof ~~the~~3.8, ~~second~~compared ~~quarter~~to or4.1 ~~into~~for the ~~third~~year-earlier quarter~~. Even~~ ~~with~~when ~~the~~we ~~delayed~~had ~~openings,~~a ~~our~~lower average community count. The average community count for the 2025 ~~second~~third quarter increased 53% year over year to ~~254~~259, ~~and~~while our ending community count ~~was~~rose ~~253~~4% to 264, upas 2%we continued to invest in our business to support long-term growth.

In navigating the current environment, we have focused on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach. With this strategy, which we began implementing on a community-by-community basis in mid-February to stimulate demand ~~and continued during the 2025 second quarter~~, we reduced selling prices relative to applicable market conditions. We ~~and~~also lowered or eliminated other homebuyer concessions, which is expected to partly offset the average selling price and housing gross profit margin impacts of those price changes in the reporting period when the corresponding homes are delivered. As most of the net orders in the period since we implemented this approach have not yet closed, the associated pricing adjustments did not significantly affect our average selling price or housing gross profit margin on homes delivered for the three months and six months ended May 31, 2025. While this calibrated repositioning of our communities helped us generate solid net orders in March, with an absorption pace that was approaching a seasonally more normalized level, demand slowed in April and May as weakening consumer confidence and rising and variable mortgage interest rates in those months resulted in heightened hesitancy from homebuyers. Reflecting the price reductions we ~~implemented,~~have ~~and~~made ~~expanded on in certain underperforming communities to align~~ with ~~local~~this ~~demand dynamics~~strategy, the value of our net orders for the 2025 ~~second~~third quarter was down 2115% year over year, driven by the 134% decline in net orders and an 811% decrease in their average selling price to $~~465~~445,600.

Homebuilding revenues for the three months ended ~~May~~August 31, 2025 were comprised of housing revenues and nominal land sale revenues. For the three months ended August 31, 2024, homebuilding revenues were generated solely from housing operations. Our 2025 ~~second~~third-quarter housing revenues ~~declined~~were 10down 8% year over year to $1.5261 billion, due to ana 117% decrease in the number of homes delivered to 3,~~120,~~393 ~~partly~~and ~~offset by~~ a slight ~~increase~~decline in their average selling price to $~~488~~475,700. Approximately 50% of our homes delivered in the 2025 ~~second~~third quarter were to first-time homebuyers. Our homes delivered as a percentage of backlog at the beginning of the quarter grew to 7071% for the 2025 ~~second~~third quarter, from 6158% for the year-earlier quarter, mainly due to our improved build times and an increase in the percentage of homes sold and delivered within the same quarter. Homebuilding operating income for the three months ended August 31, 2025 was $131.2 million, compared to $189.0 million for the year-earlier period. As a percentage of revenues, homebuilding operating income was 8.1% for the 2025 third quarter compared to 10.8% for the corresponding 2024 period, primarily reflecting a lower housing gross profit margin. Excluding total inventory-related charges of $11.3 million for the current quarter and $1.2 million for the year-earlier quarter, the homebuilding operating income margin was 8.8%, compared to 10.9%. Our housing gross profit margin for the 2025 third quarter decreased to 18.2%,

2526

~~Homebuilding operating income for the three months ended May 31, 2025 was $131.5 million,~~ compared to ~~$188~~20.26% ~~million~~ for the year-earlier ~~period. As~~quarter, areflecting ~~percentage~~price ~~of revenues~~reductions, ~~homebuilding~~higher ~~operating~~relative ~~income~~land ~~was~~costs, ~~8.6%~~and ~~for~~geographic ~~the~~mix, ~~2025~~partly ~~second~~offset ~~quarter~~by ~~compared~~lower toconstruction 11costs.1% Excluding ~~for~~ the ~~corresponding~~above-mentioned ~~2024~~inventory-related ~~period~~charges, ~~primarily~~the ~~reflecting a lower~~ housing gross profit margin ~~and an increase in selling, general and administrative expenses as a percentage of housing revenues. Our housing gross profit margin~~ for the ~~2025~~current ~~second~~ quarter ~~decreased~~was ~~to 19~~18.39%, compared to 2120.17% for the year-earlier quarter, due to price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues, partly offset by lower construction costs. Our selling, general and administrative expenses as a percentage of housing revenues of 10.70% for the 2025 ~~second~~third quarter increased 6020 basis points year over year, primarily ~~reflecting~~due ~~higher~~to ~~marketing expenses and~~ decreased operating leverage from lower housing revenues, partly offset by lower general and administrative expenses. Total pretax income for the 2025 ~~second~~third quarter was $~~142~~143.42 million, down from $~~221~~207.14 million for the year-earlier quarter~~, which included a $12~~.~~5 million gain associated with the sale of a privately held technology company in which we had an ownership interest.~~ Net income and diluted earnings per share for the three months ended ~~May~~August 31, 2025 decreased 3630% and 3021%, respectively, year over year. Our diluted earnings per share for the 2025 ~~second~~third quarter reflected lower net income, partly offset by the favorable impact of our common stock repurchases over the past several quarters.

We take a balanced approach in allocating capital, relative to prevailing market conditions, toward our priorities of investing in land and land development to support future growth and returning capital to our stockholders. In the current environment and given our existing land pipeline, we ~~are~~began scaling back our investments in land and land development in the 2025 second quarter while increasing our share repurchases. ~~Reflecting~~In ~~this~~our ~~shift~~2025 third quarter, we ~~reduced~~maintained our land investments at a level that we believe will support our current growth projections. Our investments for the 2025 ~~second~~third quarter decreased by 2339% year over year to $~~513~~514.91 million, and we repurchased $~~200~~188.05 million of our outstanding common stock, compared to $150.0 million in the year-earlier quarter. For the ~~2025~~nine ~~first~~months ~~half~~ended August 31, 2025, we invested $1.4395 billion in land and land development, representing a 147% ~~increase~~decrease from the corresponding year-earlier period, and repurchased approximately 47.8 million shares of our common stock at a total cost of $438.5 million, compared to approximately 3.5 million shares of our common stock at a total cost of $250.0 million in the year-earlier period. We ended the 2025 ~~second~~third quarter with total liquidity of $1.1916 billion, including cash and cash equivalents and $~~881~~831.7 million of available capacity under the Credit Facility. We had $~~200~~250.0 million of cash borrowings outstanding under the Credit Facility at ~~May~~August 31, 2025.

~~Considering the softer market conditions, we have revised our projections for 2025.~~ Although our ending backlog value at ~~May~~August 31, 2025 decreased 2732% year over year to approximately $21.2999 billion, we believe we are well positioned to achieve our updated projections for the 2025 ~~third~~fourth quarter and full year, as described below under “Outlook.”

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 May 31,				Six Months Ended May 31,
	Three Months Ended August 31,				Nine Months Ended August 31,
	2025		2024		2025		2024
Revenues:
Housing	$	1,~~524~~613,~~716~~975	$	1,~~701~~745,~~512~~979	$	24,~~911~~525,~~757~~732	$	34,~~159~~905,~~638~~617
Land	—487		—		—487		3,572
Total	1,~~524~~614,~~716~~462		1,~~701~~745,~~512~~979		24,~~911~~526,~~757~~219		34,~~163~~909,~~210~~189
Costs and expenses:
Construction and land costs
Housing	(1,~~230~~320,~~055~~611)		(1,~~342~~385,~~102~~563)		(23,~~337~~658,~~469~~080)		(23,~~486~~872,~~529~~092)
Land	—(536)		—		—(536)		(2,101)
Total	(1,~~230~~321,~~055~~147)		(1,~~342~~385,~~102~~563)		(23,~~337~~658,~~469~~616)		(23,~~488~~874,~~630~~193)
Selling, general and administrative expenses	(~~163~~162,~~198~~152)		(171,~~227~~466)		(~~315~~477,~~486~~638)		(~~328~~500,~~721~~187)
Total	(1,~~393~~483,~~253~~299)		(1,~~513~~557,~~329~~029)		(24,~~652~~136,~~955~~254)		(24,~~817~~374,~~351~~380)
Operating income	131,~~463~~163		188,~~183~~950		~~258~~389,~~802~~965		~~345~~534,~~859~~809
Interest income	1,679		19,449		3,758		25,306
Interest income and other	1,870		4,073		5,628		29,379
Equity in income (loss) of unconsolidated joint ventures	1,080		224		3,493		(221)
Equity in income of unconsolidated joint ventures	1,509		3,453		5,002		3,232
Homebuilding pretax income	$	134,~~222~~542	$	~~207~~196,~~856~~476	$	~~266~~400,~~053~~595	$	~~370~~567,~~944~~420

	Three Months Ended May 31,						Six Months Ended May 31,
	2025			2024			2025			2024
Homes delivered	3,120			3,523			5,890			6,560
Average selling price	$	488,700		$	483,000		$	494,400		$	481,700
Housing gross profit margin as a percentage of housing revenues	19.3		%	21.1		%	19.7		%	21.3		%
Adjusted housing gross profit margin as a percentage of housing revenues	19.7		%	21.2		%	20.0		%	21.4		%
Selling, general and administrative expenses as a percentage of housing revenues	10.7		%	10.1		%	10.8		%	10.4		%
Operating income as a percentage of revenues	8.6		%	11.1		%	8.9		%	10.9		%

Revenues. Homebuilding revenues for the three months ended May 31, 2025 and 2024 were generated solely from housing operations. Housing revenues for the 2025 second quarter declined 10% from the year-earlier quarter due to an 11% decrease in the number of homes delivered, partly offset by a slight increase in their overall average selling price. Our 2025 second-quarter housing revenues were down year over year in each of our homebuilding reporting segments, with decreases ranging from 1% in our Southwest segment to 25% in our Central segment. The decline in the number of homes delivered mainly reflected our having 23% fewer homes in backlog at the beginning of the 2025 second quarter, as compared to the year-earlier quarter.

For the six months ended May 31, 2025, homebuilding revenues were generated solely from housing operations. In the year-earlier period, homebuilding revenues were generated from housing operations and land sales. Housing revenues for the six months ended May 31, 2025 decreased 8% from the corresponding 2024 period due to a 10% decline in the number of homes delivered, partially offset by a 3% increase in their average selling price.

There were no land sales for the three months and six months ended May 31, 2025 and the three months ended May 31, 2024. Land sale revenues for the six months ended May 31, 2024 totaled $3.6 million. Generally, land sale revenues fluctuate with our decisions to maintain or decrease our land ownership position in certain markets based upon the volume of our holdings, our business strategy, the strength and number of developers and other land buyers in particular markets at given points in time, the availability of opportunities to sell land at acceptable prices and prevailing market conditions.

Operating Income. Our homebuilding operating income for the three months ended May 31, 2025 decreased 30% year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses. Operating income for the 2025 second quarter included inventory-related charges of $5.6 million, compared to $1.2 million in the year-earlier quarter. As a percentage of revenues, our operating income for the three months ended May 31, 2025 was 8.6%, compared to 11.1% for the corresponding 2024 period, mainly due to a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of housing revenues. Excluding inventory-related charges, our operating income as a percentage of revenues was 9.0% for the 2025 second quarter, compared to 11.1% for the year-earlier quarter.

For the six months ended May 31, 2025, our operating income declined 25% from the year-earlier period, reflecting a decrease in housing gross profits and the absence of land sale profits, partly offset by lower selling, general and administrative expenses. Operating income for the six months ended May 31, 2025 included inventory-related charges of $7.0 million, compared to $2.5 million of such charges for the corresponding 2024 period. As a percentage of revenues, our operating income for the six months ended May 31, 2025 decreased 200 basis points year over year to 8.9%, mainly reflecting a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues. Excluding inventory-related charges, our operating income as a percentage of revenues declined 190 basis points to 9.1% for the six months ended May 31, 2025 from 11.0% for the corresponding year-earlier period.

•Housing Gross Profits – Housing gross profits of $294.7 million for the three months ended May 31, 2025 were down 18% year over year, reflecting lower housing revenues and a 180 basis-point decrease in our housing gross profit margin to 19.3%. The decline in the housing gross profit margin was due to price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues, partly offset by lower construction costs. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations, which is included in construction and land costs, was 1.7% for both the three months ended May 31, 2025 and 2024. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 19.7% for the 2025 second quarter decreased 150 basis points year over year.

For the six months ended May 31, 2025, our housing gross profits of $574.3 million decreased from $673.1 million for the year-earlier period due to lower housing revenues and a 160 basis-point decline in our housing gross profit margin. The housing gross profit margin primarily reflected the same factors described above for the three months ended May 31, 2025. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 1.7% for the six months ended May 31, 2025, compared to 1.8% for the corresponding 2024 period. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 20.0% for the six months ended May 31, 2025 decreased 140 basis points year over year.


	Three Months Ended August 31,						Nine Months Ended August 31,
	2025			2024			2025			2024

Homes delivered	3,393			3,631			9,283			10,191
Average selling price	$	475,700		$	480,900		$	487,500		$	481,400
Housing gross profit margin as a percentage of housing revenues	18.2		%	20.6		%	19.2		%	21.1		%
Adjusted housing gross profit margin as a percentage of housing revenues	18.9		%	20.7		%	19.6		%	21.1		%

Selling, general and administrative expenses as a percentage of housing revenues	10.0		%	9.8		%	10.6		%	10.2		%
Operating income as a percentage of revenues	8.1		%	10.8		%	8.6		%	10.9		%

Revenues. Homebuilding revenues for the three months ended August 31, 2025 were comprised of housing revenues and nominal land sale revenues. In the three months ended August 31, 2024, homebuilding revenues were generated solely from housing operations. Housing revenues for the 2025 third quarter declined 8% from the year-earlier quarter, driven by a 7% decrease in the number of homes delivered and a slight decline in their overall average selling price. Our 2025 third-quarter housing revenues reflected year-over-year decreases of 13% in our West Coast homebuilding reporting segment and 17% in our Central segment, partially offset by increases of 7% and 1% in our Southwest and Southeast segments, respectively. The decline in the number of homes delivered mainly reflected our having 24% fewer homes in backlog at the beginning of the 2025 third quarter, as compared to the year-earlier quarter.

For the nine months ended August 31, 2025 and 2024, homebuilding revenues were generated from housing operations and land sales. Housing revenues for the nine months ended August 31, 2025 decreased 8% from the corresponding 2024 period due to a 9% decline in the number of homes delivered, partly offset by a slight increase in their average selling price.

Land sale revenues for the three months and nine months ended August 31, 2025 totaled $.5 million. There were no land sales during the three months ended August 31, 2024. For the nine months ended August 31, 2024, land sale revenues totaled $3.6 million. Generally, land sale revenues fluctuate with our decisions to maintain or decrease our land ownership position in certain markets based upon the volume of our holdings, our business strategy, the strength and number of developers and other land buyers in particular markets at given points in time, the availability of opportunities to sell land at acceptable prices and prevailing market conditions.

Operating Income. Our homebuilding operating income for the three months ended August 31, 2025 decreased 31% year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses. Operating income for the 2025 third quarter included inventory-related charges of $11.3 million, compared to $1.2 million in the year-earlier quarter. As a percentage of revenues, our operating income for the three months ended August 31, 2025 was 8.1%, compared to 10.8% for the corresponding 2024 period, mainly due to a lower housing gross profit margin. Excluding inventory-related charges, our operating income as a percentage of revenues was 8.8% for the 2025 third quarter, compared to 10.9% for the year-earlier quarter.

For the nine months ended August 31, 2025, our homebuilding operating income declined 27% from the year-earlier period, reflecting a decrease in housing gross profits and the absence of land sale profits, partly offset by lower selling, general and administrative expenses. Operating income for the nine months ended August 31, 2025 included inventory-related charges of $18.4 million, compared to $3.7 million of such charges for the corresponding 2024 period. As a percentage of revenues, our operating income for the nine months ended August 31, 2025 decreased 230 basis points year over year to 8.6%, mainly reflecting a lower housing gross profit margin and higher selling, general and administrative expenses as a percentage of revenues. Excluding inventory-related charges, our operating income as a percentage of revenues declined 200 basis points to 9.0% for the nine months ended August 31, 2025 from 11.0% for the corresponding year-earlier period.

•Housing Gross Profits – Housing gross profits of $293.4 million for the three months ended August 31, 2025 were down 19% year over year, reflecting lower housing revenues and a 240 basis-point decrease in our housing gross profit margin to 18.2%. The decline in the housing gross profit margin reflected price reductions, higher relative land costs, and geographic mix, partly offset by lower construction costs. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations, which is included in construction and land costs, was 1.7% for the three months ended August 31, 2025 and 1.6% for the three months ended August 31, 2024. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 18.9% for the 2025 third quarter decreased 180 basis points year over year.

For the nine months ended August 31, 2025, our housing gross profits of $867.7 million decreased from $1.03 billion for the year-earlier period due to lower housing revenues and a 190 basis-point decline in our housing gross profit margin. The housing gross profit margin primarily reflected the same factors described above for the three months ended August 31, 2025. As a percentage of housing revenues, the amortization of previously capitalized interest associated with housing operations was 1.7% for both the nine months ended August 31, 2025 and 2024. Excluding the above-mentioned inventory-related charges, all of which were associated with housing operations, our adjusted housing gross profit margin of 19.6% for the nine months ended August 31, 2025 decreased 150 basis points year over year.

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.”

•Land Sale Profits – ~~There~~Land ~~was~~sales nogenerated ~~land~~essentially ~~sale~~break-even ~~activity~~results infor the three months and ~~six~~nine months ended ~~May~~August 31, 2025. There ~~and~~were no land sales during the three months ended ~~May~~August 31, 2024~~. Land~~, while land sale profits for the ~~six~~nine months ended ~~May~~August 31, 2024 totaled $1.5 million.

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

	Three Months Ended May 31,								Six Months Ended May 31,
	Three Months Ended August 31,								Nine Months Ended August 31,
	2025		% of Housing Revenues		2024		% of Housing Revenues		2025		% of Housing Revenues		2024		% of Housing Revenues
Marketing expenses	$	4239,~~602~~894	2.84	%	$	39,~~884~~700	2.3	%	$	82122,~~265~~159	2.87	%	$	76115,~~244~~944	2.4	%
Commission expenses (a)	5256,~~514~~062		3.45		6059,~~380~~961		3.64		99155,~~680~~742		3.45		~~112~~172,~~210~~171		3.65
General and administrative expenses	6866,~~082~~196		4.51		7071,~~963~~805		4.21		~~133~~199,~~541~~737		4.64		~~140~~212,~~267~~072		4.43
Total	$	~~163~~162,~~198~~152	10.70	%	$	171,~~227~~466	109.18	%	$	~~315~~477,~~486~~638	10.86	%	$	~~328~~500,~~721~~187	10.42	%

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

~~Selling~~Reflecting our continued focus on prudently managing our costs and aligning our overhead structure with our volume of homes delivered, selling, general and administrative expenses for both the three-month ~~months~~and nine-month periods ended ~~May~~August 31, 2025 decreased 5% from the corresponding year-earlier ~~quarter~~periods. As a percentage of housing revenues, our selling, general and administrative expenses for the ~~2025~~three-month ~~second~~and ~~quarter~~nine-month ~~increased~~periods ~~60 basis points. For the six months~~ ended ~~May~~August 31, 2025, ~~selling,~~increased ~~general~~20 basis points and ~~administrative~~40 ~~expenses~~basis ~~decreased~~points, 4%respectively, year over year. AsThe aincrease ~~percentage~~in ~~of housing revenues,~~ selling, general and administrative expenses as a percentage of revenues for the ~~six~~three months ended ~~May~~August 31, 2025 ~~increased~~primarily 40reflected ~~basis~~decreased ~~points~~operating leverage from lower housing revenues, partly offset by lower general and administrative expenses. ~~The~~For ~~year-over-year~~the ~~increases~~nine inmonths ended August 31, 2025, selling, general and administrative expenses as a percentage of revenues ~~for~~rose from the ~~three-month~~corresponding ~~and six~~year-~~month~~earlier ~~periods~~period ~~ended~~mainly ~~May 31,~~due ~~2025~~to ~~primarily reflected~~ higher marketing expenses and decreased operating leverage, ~~from~~partly offset by lower ~~housing~~general ~~revenues.~~and administrative expenses.

Interest Income/Expense and Other. Interest income and other for the three months and ~~six~~nine months ended ~~May~~August 31, 2025 and the three months ended August 31, 2024 was comprised solely of interest income. For the ~~three~~nine months ~~and six months~~ ended ~~May~~August 31, 2024, interest income and other was comprised of interest income and a $12.5 million gain associated with the sale of a privately held technology company in which we had an ownership interest.

Interest income, which is generated from short-term investments, was $1.79 million for the three months ended ~~May~~August 31, 2025, compared to $64.91 million for the year-earlier quarter. For the ~~six~~nine months ended ~~May~~August 31, 2025, interest income was $35.86 million, compared to $1216.89 million for the corresponding 2024 period. The year-over-year decreases for the three-month and ~~six~~nine-month periods ended ~~May~~August 31, 2025 reflected our lower average balance of cash equivalents and a lower interest rate in the 2025 periods. Generally, increases and decreases in interest 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 ~~six~~nine-month periods ended ~~May~~August 31, 2025 and 2024 was capitalized as the average amount of our inventory qualifying for interest capitalization was higher than our average debt level for each period. Accordingly, 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 income of unconsolidated joint ventures was $1.1 million for the three months ended May 31, 2025 and nominal for the three months ended May 31, 2024. For the six months ended May 31, 2025, our equity in income of unconsolidated joint ventures was $3.5 million, compared to a nominal equity in loss of unconsolidated joint ventures for the corresponding 2024 period. The year-over-year improvement for the 2025 periods 29

28interest incurred and capitalized is provided in Note 6 – Inventories in the Notes to Consolidated Financial Statements in this report.

Equity in Income of Unconsolidated Joint Ventures. Our equity in income of unconsolidated joint ventures was $1.5 million for the three months ended August 31, 2025, compared to $3.5 million for the year-earlier period, mainly ~~reflected~~reflecting ana ~~increase~~decrease in the number of homes delivered by an unconsolidated joint venture in California, which delivered its first homes in the 2024 second quarter. For the nine months ended August 31, 2025, our equity in income of unconsolidated joint ventures increased to $5.0 million, compared to $3.2 million for the corresponding 2024 period, primarily due to an increase in the number of homes delivered by the same California-based unconsolidated joint venture. Further information regarding our investments in homebuilding unconsolidated joint ventures is provided in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes to Consolidated Financial Statements in this report.

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

Three Months Ended May 31,

Six Months Ended May 31,

Three Months Ended August 31,

Nine Months Ended August 31,

2025

2024

2025

2024

Net orders

32,~~460~~950

3,~~997~~085

69,~~232~~182

710,~~320~~405

Net order value (a)

1,~~611~~314,~~014~~607

21,~~031~~543,~~903~~148

24,~~957~~271,~~081~~688

35,~~614~~157,~~094~~242

Cancellation rate (b)

1617

1315

1314

Ending backlog — homes

4,~~776~~333

65,~~270~~724

4,~~776~~333

65,~~270~~724

Ending backlog — value

21,~~288~~988,~~231~~863

32,~~122~~919,~~135~~304

21,~~288~~988,~~231~~863

32,~~122~~919,~~135~~304

Ending community count

~~253~~264

~~247~~254

~~253~~264

~~247~~254

Average community count

~~254~~259

~~243~~251

~~255~~258

~~242~~245

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

(b) Cancellation rate represents 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. Net orders for the 2025 ~~second~~third quarter decreased 134%, compared to the year-earlier quarter, and the pace of monthly net orders per community was 43.58 in the 2025 ~~second~~third quarter, compared to 54.51 in the corresponding 2024 quarter, ~~reflecting~~driven by both lower net orders and a higher average community count. The decreases in our net orders and monthly pace per community reflected prevailing market conditions in the 2025 ~~second~~third quarter, with softer demand ~~in the Spring selling season more subdued~~ relative to the ~~past~~year-earlier ~~few~~quarter ~~years~~ due to ~~housing~~ongoing affordability concerns, ~~compounded by the variability in persistently elevated mortgage interest rates, as well as macroeconomic~~ and ~~geopolitical~~tepid ~~uncertainties that have precipitated a marked weakening in~~ consumer confidence ~~and~~that caused homebuyers to hesitate on making purchase decisions~~. Also~~ ~~contributing~~during to the ~~year-over-year~~first ~~decline~~nine inmonths ~~our net orders were municipal delays in a number~~ of our ~~planned~~fiscal ~~community openings, with some shifting to later in the second quarter or into the 2025 third quarter~~year.

In navigating the current environment, we have focused on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach. With this strategy, which we began implementing on a community-by-community basis in mid-February to stimulate demand ~~and continued during the 2025 second quarter~~, we reduced selling prices relative to applicable market conditions. We ~~and~~also lowered or eliminated other homebuyer concessions, which is expected to partly offset the average selling price and housing gross profit margin impacts of those price changes in the reporting period when the corresponding homes are delivered. As most of the net orders in the period since we implemented this approach have not yet closed, the associated pricing adjustments did not significantly affect our average selling price or housing gross profit margin on homes delivered for the three months and six months ended May 31, 2025. While this calibrated repositioning of our communities helped us generate solid net orders in March, with an absorption pace that was approaching a seasonally more normalized level, demand slowed in April and May as weakening consumer confidence and rising and variable mortgage interest rates in those months resulted in heightened hesitancy from homebuyers. Reflecting the price reductions we ~~implemented,~~have ~~and~~made ~~expanded on in certain underperforming communities to align~~ with ~~local~~this ~~demand dynamics~~strategy, the value of our net orders for the 2025 ~~second~~third quarter was down 2115% year over year driven by the 134% decline in net orders and an 811% decrease in their average selling price to $~~465~~445,600.

Our cancellation rate as a percentage of gross orders for the three months ended ~~May~~August 31, 2025 increased slightly from the year-earlier period.

Backlog. The number of homes in our backlog ~~and~~at ~~our~~August 31, 2025 decreased 24% compared to August 31, 2024. Our overall backlog value at ~~May~~August 31, 2025 ~~decreased~~declined 2432% year over year due to the lower number of homes in backlog and 27a 10%, ~~respectively,~~decrease ~~from~~in ~~May 31~~their average selling price, ~~2024. The~~reflecting ~~decline~~the inprice ~~our~~reductions ~~overall~~implemented ~~backlog~~during 2025. Backlog value ~~reflected~~was ~~decreases~~down year over year in each of our homebuilding reporting segments, with decreases ranging from 1814% in our Southeast segment to 3248% in our Southwest segment. Based on our historical experience, a portion of the homes in backlog will not result in homes delivered due to cancellations.

2930

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 ending community count for the 2025 ~~second~~third quarter grew 24% from the year-earlier quarter. Our average community count for the three months ended ~~May~~August 31, 2025 increased 53% from the year-earlier period. While we ~~increased~~continued ~~our~~to ~~investments~~invest in land and land development onduring ~~a year-over-year basis for~~ the ~~six~~nine months ended ~~May~~August 31, 2025 to help drive future growth, as discussed below under “Liquidity and Capital Resources,” ~~with~~we began scaling back these investments in the 2025 second quarter in response to softer market conditions. As wea ~~are~~result, ~~scaling back~~ our investments in land and land development, ~~which~~for in the ~~2025~~three-month ~~second~~and ~~quarter~~nine-month periods ended August 31, 2025 decreased 2339% and 7%, respectively, compared to the corresponding year-earlier ~~quarter~~periods.

HOMEBUILDING REPORTING SEGMENTS

Operational Data. The following tables present information about our 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 May 31,
	Three Months Ended August 31,
	Homes Delivered				Net Orders			Cancellation Rates
Segment	2025		2024		2025		2024	2025		2024
West Coast	~~968~~972		1,~~043~~150		~~1,104~~870		~~1,226~~958	1418	%	1115	%
Southwest	~~661~~681		~~712~~681		~~557~~459		~~785~~616	1315		911
Central	~~811~~943		1,~~028~~073		~~1,030~~795		~~1,300~~871	1517		1215
Southeast	~~680~~797		~~740~~727		~~769~~826		~~686~~640	2017		1918
Total	3,~~120~~393		3,~~523~~631		32,~~460~~950		3,~~997~~085	1617	%	1315	%
	Net Order Value						Average Community Count
Segment	2025		2024		Variance		2025	2024		Variance
West Coast	$	~~728~~550,~~141~~753	$	~~902~~678,~~483~~783	(19)	%	89	7783		167	%
Southwest	~~268~~218,~~921~~931		~~362~~290,~~788~~229		(2625)		36	44		(18)
Central	~~328~~255,~~614~~530		~~485~~313,~~824~~108		(3218)		6366	7877		(1914)
Southeast	~~285~~289,~~338~~393		~~280~~261,~~808~~028		211		6668	4447		5045
Total	$	1,~~611~~314,~~014~~607	$	21,~~031~~543,~~903~~148	(2115)	%	~~254~~259	~~243~~251		53	%
	Six Months Ended May 31,
	Nine Months Ended August 31,
	Homes Delivered				Net Orders			Cancellation Rates
Segment	2025		2024		2025		2024	2025		2024
West Coast	12,~~817~~789		13,~~871~~021		2,~~002~~872		23,~~176~~134	1415	%	1213	%
Southwest	12,~~339~~020		12,~~429~~110		1,~~102~~561		12,~~483~~099	14		10
Central	12,~~562~~505		12,~~898~~971		12,~~750~~545		23,~~317~~188	16		1314
Southeast	1,~~172~~969		12,~~362~~089		12,~~378~~204		1,~~344~~984	2019		2019
Total	59,~~890~~283		610,~~560~~191		69,~~232~~182		710,~~320~~405	16	%	1314	%
	Net Order Value						Average Community Count
Segment	2025		2024		Variance		2025	2024		Variance
West Coast	$	1,335,320	$	1,535,883	(13)	%	88	75		17	%
Southwest	538,143		677,651		(21)		38	44		(14)
Central	568,339		849,747		(33)		66	78		(15)
Southeast	515,279		550,813		(6)		63	45		40
Total	$	2,957,081	$	3,614,094	(18)	%	255	242		5	%

3031

	May 31,
	Nine Months Ended August 31,
	Net Order Value						Average Community Count
Segment	2025		2024		Variance		2025		2024		Variance
West Coast	$	1,886,073	$	2,214,666	(15)	%	88		77		14	%
Southwest	757,074		967,880		(22)		38		44		(14)
Central	823,869		1,162,855		(29)		67		77		(13)
Southeast	804,672		811,841		(1)		65		47		38
Total	$	4,271,688	$	5,157,242	(17)	%	258		245		5	%
	August 31,
	Backlog – Homes						Backlog – Value
Segment	2025		2024		Variance		2025		2024		Variance
West Coast	1,~~396~~294		1,~~850~~658		(2522)	%	$	~~947~~833,~~842~~715	$	1,~~304~~223,~~955~~121	(2732)	%
Southwest	~~897~~675		1,~~433~~368		(3751)		~~443~~326,~~533~~959		~~652~~629,~~578~~995		(3248)
Central	1,~~321~~173		1,~~686~~484		(2221)		~~445~~390,~~853~~780		~~615~~555,~~228~~474		(2830)
Southeast	1,~~162~~191		1,~~301~~214		(112)		~~451~~437,~~003~~409		~~549~~510,~~374~~714		(1814)
Total	4,~~776~~333		65,~~270~~724		(24)	%	$	21,~~288~~988,~~231~~863	$	32,~~122~~919,~~135~~304	(2732)	%

The composition of our homes delivered, net orders and backlog shifts with the product and geographic 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, changing as new communities open and existing communities wind down or sell out in the ordinary course. In addition, with our Built to Order business model, the selling prices of individual homes within a community may vary due to differing lot sizes and locations, home square footage, product premiums and the design choices and options buyers select. These intrinsic variations in our business limit the 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.

In addition to the results of our homebuilding reporting segments presented below, our consolidated homebuilding operating income includes the results of Corporate and other, a non-operating segment. Corporate and other had operating losses of $4036.4 million and $3837.69 million in the three months ended ~~May~~August 31, 2025 and 2024, respectively. For the ~~six~~nine months ended ~~May~~August 31, 2025, Corporate and other had an operating loss of $76113.93 million, compared to ~~an operating loss of~~ $73111.76 million for the corresponding year-earlier period.

The financial results of our homebuilding reporting segments for the three months ended ~~May~~August 31, 2025 and 2024 were impacted to varying degrees by price reductions and other homebuyer concessions we extended to buyers in conjunction with our ~~targeted~~ sales strategies, as well as product and geographic mix shifts of homes delivered.

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

	Three Months Ended May 31,								Six Months Ended May 31,
	Three Months Ended August 31,								Nine Months Ended August 31,
	2025			2024			Variance		2025			2024			Variance
Revenues	$	~~660~~664,~~193~~880		$	~~698~~760,~~417~~617		(513)	%	$	1,~~261~~926,~~842~~722		$	12,~~256~~017,~~719~~336		—(4)	%
Construction and land costs	(~~539~~549,~~124~~332)			(~~564~~617,~~420~~497)			411		(1,~~030~~579,~~292~~624)			(1,~~011~~629,~~853~~350)			~~(2)~~3
Selling, general and administrative expenses	(45,~~475~~899)			(47,~~108~~451)			3		(89135,~~464~~363)			(91139,~~846~~297)			3
Operating income	$	7569,~~594~~649		$	8695,~~889~~669		(1327)	%	$	~~142~~211,~~086~~735		$	~~153~~248,~~020~~689		(715)	%
Homes delivered	968			1,043			(7)	%	1,817			1,871			(3)	%
Average selling price	$	682,000		$	669,600		2	%	$	694,500		$	671,500		3	%
Operating income as a percentage of revenues	11.5		%	12.4		%	(90)	bps	11.3		%	12.2		%	(90)	bps

In the three months and six months ended May 31, 2025 and the three months ended May 31, 2024, this segment’s revenues were generated solely from housing operations. In the six months ended May 31, 2024, this segment’s revenues were comprised of housing revenues and nominal land sale revenues. The year-over-year decline in housing revenues for the three months ended May 31, 2025 reflected a decrease in the number of homes delivered, partly offset by an increase in their average selling price. For the six months ended May 31, 2025, housing revenues of $1.26 billion were essentially even with the

corresponding year-earlier period as a decrease in the number of homes delivered was offset by an increase in their average selling price. Operating income for the three months and six months ended May 31, 2025 declined year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses. Operating income as a percentage of revenues for the 2025 second quarter was down from the year-earlier quarter due to an 80 basis-point decrease in the housing gross profit margin to 18.3% and a 10 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 6.9%. For the six months ended May 31, 2025, operating income as a percentage of revenues declined from the corresponding 2024 period, mainly reflecting a 110 basis-point decrease in the housing gross profit margin to 18.4%, partly offset by a 20 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.1%.

The year-over-year decrease in the housing gross profit margin for the three months and six months ended May 31, 2025 was primarily due to price reductions and other homebuyer concessions and higher relative land costs, partly offset by lower construction costs. For the three months ended May 31, 2025, inventory-related charges associated with housing operations were $1.2 million, compared to $.6 million for the year-earlier period. For the six months ended May 31, 2025, inventory-related charges associated with housing operations were $1.8 million, compared to $1.9 million for the year-earlier period.

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

	Three Months Ended May 31,								Six Months Ended May 31,
	2025			2024			Variance		2025			2024			Variance
Revenues	$	314,102		$	318,665		(1)	%	$	626,981		$	641,790		(2)	%
Construction and land costs	(236,406)			(241,005)			2		(469,124)			(485,496)			3
Selling, general and administrative expenses	(22,315)			(22,851)			2		(43,701)			(45,721)			4
Operating income	$	55,381		$	54,809		1	%	$	114,156		$	110,573		3	%
Homes delivered	661			712			(7)	%	1,339			1,429			(6)	%
Average selling price	$	475,200		$	447,600		6	%	$	468,200		$	449,100		4	%
Operating income as a percentage of revenues	17.6		%	17.2		%	40	bps	18.2		%	17.2		%	100	bps

In the three-month and six-month periods ended May 31, 2025 and 2024, this segment’s revenues were generated solely from housing operations. This segment’s housing revenues for the three-month and six-month periods ended May 31, 2025 declined slightly year over year, reflecting a decrease in the number of homes delivered, largely offset by an increase in their average selling price. Operating income for the three months ended May 31, 2025 increased slightly year over year due to lower selling, general and administrative expenses as housing gross profits were essentially even with the year-earlier period. As a percentage of revenues, this segment’s operating income for the 2025 second quarter grew from the year-earlier quarter, reflecting a 30 basis-point increase in the housing gross profit margin to 24.7% and a 10 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.1%. For the six months ended May 31, 2025, operating income increased from the corresponding year-earlier period due to higher housing gross profits and lower selling, general and administrative expenses. Operating income as a percentage of revenues for the six months ended May 31, 2025 grew from the corresponding 2024 period, reflecting an 80 basis-point increase in the housing gross profit margin to 25.2% and a 20 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.0%.

The year-over-year expansion in the housing gross profit margin for the three-month and six-month periods ended May 31, 2025 primarily reflected lower relative construction and land costs, partly offset by price reductions and other homebuyer concessions. For the three-month and six-month periods ended May 31, 2025, inventory-related charges associated with housing operations were $.8 million and $1.1 million, respectively. For the three-month and six-month periods ended May 31, 2024, inventory-related charges associated with housing operations were nominal.


	Three Months Ended August 31,								Nine Months Ended August 31,
	2025			2024			Variance		2025			2024			Variance
Homes delivered	972			1,150			(15)	%	2,789			3,021			(8)	%
Average selling price	$	684,000		$	661,400		3	%	$	690,800		$	667,600		3	%
Operating income as a percentage of revenues	10.5		%	12.6		%	(210)	bps	11.0		%	12.3		%	(130)	bps

In the three months and nine months ended August 31, 2025 and the three months ended August 31, 2024, this segment’s revenues were generated solely from housing operations. In the nine months ended August 31, 2024, this segment’s revenues were comprised of housing revenues and nominal land sale revenues. The year-over-year decline in housing revenues for the three months ended August 31, 2025 was due to a decrease in the number of homes delivered, partly offset by an increase in their average selling price. For the nine months ended August 31, 2025, housing revenues were down 4% from $2.02 billion for the corresponding year-earlier period, reflecting the same factors. Operating income for the three months and nine months ended August 31, 2025 declined year over year due to lower housing gross profits, partly offset by lower selling, general and administrative expenses. Operating income as a percentage of revenues for the 2025 third quarter was down from the year-earlier quarter due to a 140 basis-point decrease in the housing gross profit margin to 17.4% and a 70 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 6.9%. For the nine months ended August 31, 2025, operating income as a percentage of revenues declined from the corresponding 2024 period, mainly reflecting a 120 basis-point decrease in the housing gross profit margin to 18.0% and a 10 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 7.0%.

The year-over-year decrease in the housing gross profit margin for the three months and nine months ended August 31, 2025 was primarily due to higher relative land costs, partly offset by lower construction costs. For the three months ended August 31, 2025, inventory-related charges associated with housing operations were $1.1 million, compared to $.5 million for the year-earlier period. For the nine months ended August 31, 2025, inventory-related charges associated with housing operations were $3.0 million, compared to $2.4 million for the year-earlier period. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for both the three months and nine months ended August 31, 2025 was primarily due to reduced operating leverage from lower housing revenues and higher marketing and other expenses associated with our expanded community count in this segment. For the nine months ended August 31, 2025, these impacts were partly offset by lower general and administrative costs.

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


	Three Months Ended August 31,								Nine Months Ended August 31,
	2025			2024			Variance		2025			2024			Variance
Revenues	$	335,505		$	312,812		7	%	$	962,486		$	954,602		1	%
Construction and land costs	(254,515)			(233,638)			(9)		(723,639)			(719,134)			(1)
Selling, general and administrative expenses	(23,544)			(24,258)			3		(67,245)			(69,979)			4
Operating income	$	57,446		$	54,916		5	%	$	171,602		$	165,489		4	%


Homes delivered	681			681			—	%	2,020			2,110			(4)	%
Average selling price	$	492,700		$	459,300		7	%	$	476,500		$	452,400		5	%
Operating income as a percentage of revenues	17.1		%	17.6		%	(50)	bps	17.8		%	17.3		%	50	bps

In the three-month and nine-month periods ended August 31, 2025 and 2024, this segment’s revenues were generated solely from housing operations. This segment’s housing revenues for the three months ended August 31, 2025 increased year over year, driven by a higher average selling price of homes delivered, as the number of homes delivered was consistent with the prior-year period. For the nine months ended August 31, 2025, this segment’s housing revenues rose slightly compared to the year-earlier period, reflecting an increase in the average selling price of homes delivered, largely offset by a decrease in the number of homes delivered. Operating income for the three-month and nine-month periods ended August 31, 2025 increased year over year due to higher housing gross profits and lower selling, general and administrative expenses. As a percentage of revenues, this segment’s operating income for the 2025 third quarter declined from the year-earlier quarter, reflecting a 120 basis-point decrease in the housing gross profit margin to 24.1%, partly offset by a 70 basis-point improvement in selling,

general and administrative expenses as a percentage of housing revenues to 7.0%. For the nine months ended August 31, 2025, operating income as a percentage of revenues grew from the corresponding 2024 period due to a 40 basis-point improvement in selling, general and administrative expenses as a percentage of housing revenues to 7.0% and a 10 basis-point increase in the housing gross profit margin to 24.8%.

The year-over-year decrease in the housing gross profit margin for the three months ended August 31, 2025 primarily reflected higher relative land costs, partly offset by lower construction costs and increased operating leverage on higher housing revenues. Inventory-related charges associated with housing operations for the three months ended August 31, 2025 were $.5 million, compared to no such charges for the year-earlier period. For the nine months ended August 31, 2025, the housing gross profit margin mainly reflected lower construction costs, largely offset by higher relative land costs. Inventory-related charges associated with housing operations for the nine months ended August 31, 2025 were $1.6 million, compared to a nominal amount for the corresponding year-earlier period. The year-over-year improvement in selling, general and administrative expenses as a percentage of housing revenues for both the three months and nine months ended August 31, 2025 was primarily due to increased operating leverage from higher housing revenues and lower general and administrative expenses.

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

	Three Months Ended May 31,								Six Months Ended May 31,
	Three Months Ended August 31,								Nine Months Ended August 31,
	2025			2024			Variance		2025			2024			Variance
Revenues	$	~~282~~310,~~966~~603		$	~~375~~372,~~790~~862		(2517)	%	$	~~558~~869,~~579~~182		$	~~696~~1,~~274~~069,136		(2019)	%
Construction and land costs	(~~231~~261,~~321~~299)			(~~292~~291,~~621~~734)			2110		(~~451~~712,~~217~~516)			(~~542~~834,~~461~~195)			1715
Selling, general and administrative expenses	(3031,~~966~~096)			(3637,~~606~~836)			1518		(6192,~~195~~291)			(68106,~~679~~515)			1113
Operating income	$	2018,~~679~~208		$	4643,~~563~~292		(5658)	%	$	4664,~~167~~375		$	85128,~~134~~426		(4650)	%
Homes delivered	~~811~~943			1,~~028~~073			(2112)	%	12,~~562~~505			12,~~898~~971			(1816)	%
Average selling price	$	~~348~~329,~~900~~400		$	~~365~~347,~~600~~500		(5)	%	$	~~357~~347,~~600~~000		$	~~365~~358,~~200~~800		(23)	%
Operating income as a percentage of revenues	75.39		%	1211.46		%	(~~510~~570)	bps	87.34		%	12.20		%	(~~390~~460)	bps

In the three months and ~~six~~nine months ended ~~May~~August 31, 2025 and the three months ended ~~May~~August 31, 2024, this segment’s revenues were generated solely from housing operations. In the ~~six~~nine months ended ~~May~~August 31, 2024, this segment’s revenues were comprised of housing revenues and land sale revenues. Housing revenues for the three months ended ~~May~~August 31, 2025 were down from the year-earlier period due to decreases in both the number of homes delivered and their average selling price. For the ~~six~~nine months ended ~~May~~August 31, 2025, housing revenues decreased 1918% year over year, from $~~693.~~1.07 ~~million~~billion, for the same reasons. Land sale revenues totaled $3.2 million for the ~~six~~nine months ended ~~May~~August 31, 2024. Operating income for the three months and ~~six~~nine months ended ~~May~~August 31, 2025 declined from the corresponding year-earlier periods mainly due to lower housing gross profits, partly offset by lower selling, general and administrative expenses. Also contributing to the year-over-year decrease in operating income for the ~~six~~nine months ended ~~May~~August 31, 2025 was the absence of land ~~sale~~sales ~~profits~~ in the current period, compared to $1.1 million of land sale profits in the corresponding year-earlier period. This segment’s operating income as a percentage of revenues for the 2025 ~~second~~third quarter decreased from the year-earlier period, primarily due to a ~~380~~590 basis-point decline in the housing gross profit margin to 1815.39%, ~~and~~partly offset by a ~~130~~20 basis-point ~~increase~~improvement in selling, general and administrative expenses as a percentage of housing revenues to 10.90%. For the ~~six~~nine months ended ~~May~~August 31, 2025, this segment’s operating income as a percentage of revenues decreased from the year-earlier period, mainly ~~due~~reflecting to a ~~280~~390 basis-point decline in the housing gross profit margin to 1918.20% and a ~~110~~70 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 1110.06%.

The housing gross profit margin for the three months ~~and six months~~ ended ~~May~~August 31, 2025 declined year over year mainly due to price reductions ~~and other homebuyer concessions~~, higher relative land costs, geographic mix, an increase in inventory-related charges and reduced operating leverage from lower housing revenues~~, partly offset by lower construction costs~~. Inventory-related charges associated with housing operations for the three months ended ~~May~~August 31, 2025 were $17.82 million, compared to $.35 million for the year-earlier period. For the ~~six~~nine months ended ~~May~~August 31, 2025, ~~inventory~~the year-over-year decrease in the housing gross profit margin primarily reflected the same reasons described above for the three months ended August 31, 2025, partly offset by lower construction costs. Inventory-related charges associated with housing operations for the nine months ended August 31, 2025 were $29.14 million, compared to $.37 million for the year-earlier period. The ~~year~~inventory-~~over-year~~related ~~increase~~charges in ~~selling, general and administrative expenses as a percentage of housing revenues for~~ the three months and ~~six~~nine months ended ~~May~~ August 31, 2025 ~~was~~ mainly ~~due~~reflected our decisions to ~~higher~~make ~~marketing~~changes ~~expenses~~in ~~and~~our ~~decreased~~operational ~~operating~~strategies ~~leverage~~aimed ~~from~~at ~~lower~~more ~~housing~~quickly ~~revenues.~~monetizing our investment in a certain

community in this segment. For the three months ended August 31, 2025, the year-over-year improvement in selling, general and administrative expenses as a percentage of housing revenues was mainly due to lower general and administrative expenses, partly offset by decreased operating leverage from lower housing revenues. For the nine months ended August 31, 2025, the year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues primarily reflected higher marketing expenses and decreased operating leverage from lower housing revenues.

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

	Three Months Ended May 31,								Six Months Ended May 31,
	Three Months Ended August 31,								Nine Months Ended August 31,
	2025			2024			Variance		2025			2024			Variance
Revenues	$	~~267~~303,~~455~~474		$	~~308~~299,~~640~~688		~~(13)~~1	%	$	~~464~~767,~~355~~829		$	~~568~~868,~~427~~115		(1812)	%
Construction and land costs	(~~221~~254,~~064~~025)			(~~242~~239,~~898~~753)			9(6)		(~~383~~637,~~120~~145)			(~~446~~686,~~689~~442)			147
Selling, general and administrative expenses	(2627,~~161~~224)			(2726,~~205~~932)			4(1)		(4775,~~928~~152)			(5077,~~936~~868)			63
Operating income	$	2022,~~230~~225		$	3833,~~537~~003		(4833)	%	$	3355,~~307~~532		$	70103,~~802~~805		(5347)	%
Homes delivered	797			727			10	%	1,969			2,089			(6)	%
Average selling price	$	380,200		$	412,200		(8)	%	$	389,700		$	415,600		(6)	%
Operating income as a percentage of revenues	7.3		%	11.0		%	(370)	bps	7.2		%	12.0		%	(480)	bps

33This segment’s revenues for the three months and nine months ended August 31, 2025 were comprised of housing revenues and nominal land sale revenues. For the three months and nine months ended August 31, 2024, this segment’s revenues were generated solely from housing operations. Housing revenues for the three months ended August 31, 2025 rose slightly from the year-earlier period to $303.0 million due to an increase in the number of homes delivered, partly offset by a decrease in their average selling price. Housing revenues for the nine months ended August 31, 2025 declined 12% from the corresponding year-earlier period to $767.3 million due to decreases in both the number of homes delivered and their average selling price. Operating income for the three months and nine months ended August 31, 2025 was down year over year, mainly reflecting lower housing gross profits. As a percentage of revenues, operating income for the 2025 third quarter declined from the year-earlier quarter due to a 370 basis-point decline in the housing gross profit margin to 16.3%, with selling, general and administrative expenses as a percentage of housing revenues remaining flat at 9.0%. Operating income as a percentage of revenues for the nine months ended August 31, 2025 decreased from the corresponding year-earlier period due to a 390 basis-point decline in the housing gross profit margin to 17.0% and a 90 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 9.8%.

	Three Months Ended May 31,								Six Months Ended May 31,
	2025			2024			Variance		2025			2024			Variance
Homes delivered	680			740			(8)	%	1,172			1,362			(14)	%
Average selling price	$	393,300		$	417,100		(6)	%	$	396,200		$	417,300		(5)	%
Operating income as a percentage of revenues	7.6		%	12.5		%	(490)	bps	7.2		%	12.5		%	(530)	bps

The year-over-year decrease in the housing gross profit margin for the three months ended August 31, 2025 mainly reflected price reductions, higher relative land costs, geographic mix, and an increase in inventory-related charges, partly offset by increased operating leverage from higher housing revenues. Inventory-related charges associated with housing operations for the three months ended August 31, 2025 were $2.5 million, compared to $.2 million for the year-earlier quarter. For the nine months ended August 31, 2025, the year-over-year decline in the housing gross profit margin was primarily due to price reductions, higher relative land costs, geographic mix, increased inventory-related charges, and decreased operating leverage from lower housing revenues, partly offset by lower construction costs. Inventory-related charges associated with housing operations for the nine months ended August 31, 2025 were $4.4 million, compared to $.4 million for the year-earlier period. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the nine months ended August 31, 2025 was mainly due to decreased operating leverage from lower housing revenues as well as higher costs, including higher marketing and other expenses associated with our expanded community count in this segment.

This segment’s revenues for the three months and six months ended May 31, 2025 and 2024 were generated solely from housing operations. Housing revenues for the three months and six months ended May 31, 2025 declined from the corresponding year-earlier periods due to decreases in both the number of homes delivered and their average selling price. Operating income for the three months and six months ended May 31, 2025 was down year over year, reflecting lower housing gross profits, partly offset by lower selling, general and administrative expenses. As a percentage of revenues, operating income for the 2025 second quarter declined from the year-earlier quarter due to a 400 basis-point decline in the housing gross profit margin to 17.3% and a 90 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 9.8%. Operating income as a percentage of revenues for the six months ended May 31, 2025 decreased from the corresponding year-earlier period due to a 390 basis-point decline in the housing gross profit margin to 17.5% and a 140 basis-point increase in selling, general and administrative expenses as a percentage of housing revenues to 10.3%.

The year-over-year decrease in the housing gross profit margin for the three months and six months ended May 31, 2025 reflected price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage from lower housing revenues. Inventory-related charges associated with housing operations for the three-month and six-month periods ended May 31, 2025 were $1.7 million and $1.9 million, respectively, compared to a nominal amount for each of the year-earlier periods. The year-over-year increase in selling, general and administrative expenses as a percentage of housing revenues for the three months and six months ended May 31, 2025 was mainly due to decreased operating leverage from lower housing revenues as well as higher costs, including higher marketing and other expenses associated with our expanded community count in this segment.

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 May 31,						Six Months Ended May 31,
	2025			2024			2025			2024
Revenues	$	4,869		$	8,301		$	9,605		$	14,369
Expenses	(1,570)			(1,473)			(3,109)			(3,019)
Equity in income of unconsolidated joint venture	4,862			6,435			9,191			13,490
Pretax income	$	8,161		$	13,263		$	15,687		$	24,840
Total originations (a):
Loans	2,249			2,482			4,316			4,628
Principal	$	930,825		$	996,167		$	1,799,480		$	1,836,733
Percentage of homebuyers using KBHS	88		%	86		%	89		%	86		%
Average FICO score	743			744			744			744
Loans sold (a):
Loans sold to GR Alliance	1,814			1,755			3,235			3,994
Principal	$	747,144		$	702,299		$	1,322,444		$	1,588,540
Loans sold to third parties	425			90			988			127
Principal	$	191,697		$	35,412		$	441,674		$	49,565


	Three Months Ended August 31,						Nine Months Ended August 31,
	2025			2024			2025			2024
Revenues	$	6,012		$	6,629		$	15,617		$	20,998
Expenses	(1,580)			(1,608)			(4,689)			(4,627)
Equity in income of unconsolidated joint venture	4,254			5,932			13,445			19,422
Pretax income	$	8,686		$	10,953		$	24,373		$	35,793

Total originations (a):
Loans	2,314			2,704			6,630			7,332
Principal	$	917,658		$	1,080,071		$	2,717,138		$	2,916,804
Percentage of homebuyers using KBHS	83		%	88		%	86		%	87		%
Average FICO score	740			742			743			743

Loans sold (a):
Loans sold to GR Alliance	1,786			2,188			5,021			6,722
Principal	$	712,367		$	857,274		$	2,034,811		$	2,661,191
Loans sold to third parties	469			368			1,457			551
Principal	$	189,837		$	155,094		$	631,511		$	227,610

(a)Loan originations and sales occurred within KBHS.

34Revenues. Financial services revenues for the three months and nine months ended August 31, 2025 declined 9% and 26%, respectively, from the corresponding year-earlier periods due to decreases in both insurance commissions and title services revenues. Insurance commissions were lower in the 2025 periods due to less variability in the contract assets for estimated future renewal commissions, compared to the corresponding prior-year periods. For the three months ended August 31, 2025, a modest increase in the average commission per policy was mostly offset by a modest decrease in the number of policies in force. For the nine months ended August 31, 2025, an increase in the number of policies in force was largely offset by a decrease in the average commission per policy. In contrast, the corresponding 2024 periods benefited from growth in the contract assets for estimated future renewal commissions driven by an increase in the number of policies in force, partly offset by a decrease in the average commission rates. Title services revenues decreased year over year mainly due to fewer homes delivered in the 2025 periods.

~~Revenues~~Pretax income. Financial services ~~revenues~~pretax income for the three months and ~~six~~nine months ended ~~May~~August 31, 2025 ~~declined~~was 41down 21% and 3332%, respectively, from the corresponding year-earlier periods. These declines were due to the above-mentioned decreases in ~~both~~ insurance commissions and title services revenues as well as a decrease in the equity in income of our unconsolidated joint venture, KBHS. ~~Insurance~~For ~~commissions~~the ~~were~~three ~~lower~~months and nine months ended August 31, 2025, the equity in income of our unconsolidated joint venture was down 28% and 31%, respectively, from the ~~2025~~corresponding year-earlier periods, ~~due~~reflecting toa ~~the~~decrease ~~contract~~in ~~assets~~KBHS’ ~~for~~income. The ~~estimated~~year-over-year ~~future~~decline ~~renewal~~in ~~commissions~~KBHS’ ~~remaining~~income ~~relatively~~for ~~steady~~the three months ended August 31, as2025 anmainly ~~increase~~reflected a loss in the ~~number~~fair value of ~~policies~~IRLCs of $3.0 million in ~~force~~the ~~was~~current ~~offset~~period, bycompared to a ~~slight~~$.4 million ~~decrease~~loss in the ~~average~~year-earlier ~~commission per policy~~period. InFor ~~contrast~~the nine months ended August 31, 2025, the ~~corresponding~~decrease ~~2024~~in ~~periods~~KBHS’ ~~benefited~~income ~~from~~primarily ~~growth~~reflected a loss in ~~these~~the ~~contract~~fair ~~assets~~value ~~driven~~of byIRLCs anof ~~increase~~$6.6 million in the ~~number~~current ofperiod, ~~policies~~compared to a gain in ~~force~~the ~~and~~fair ~~fairly~~value ~~stable~~of ~~average~~IRLCs ~~commission~~of ~~rates~~$3. ~~Title~~8 ~~services~~million ~~revenues~~in ~~decreased~~the year-earlier ~~over~~period. Also contributing to the year-over-year ~~mainly~~decrease ~~due~~in toKBHS’ ~~fewer~~income ~~homes~~for ~~delivered~~the three months and nine months ended August 31, 2025 was a decline in the ~~2025~~number ~~periods~~of loans originated, which reflected a decrease in the number of homes we delivered as well as a lower percentage of homebuyers using KBHS.

Pretax income. Financial services pretax income for the three months and six months ended May 31, 2025 was down 38% and 37%, respectively, from the corresponding year-earlier periods, largely due to the above-mentioned decrease in insurance commissions revenues and a decline in the equity in income of our unconsolidated joint venture, KBHS. In the 2025 second quarter, the equity in income of our unconsolidated joint venture was $4.9 million, compared to $6.4 million in the year-earlier quarter, reflecting a decrease in KBHS’ income. The year-over-year decrease in KBHS’ income primarily reflected a loss in the fair value of IRLCs of $2.1 million in the current quarter, compared to a gain in the fair value of IRLCs of $1.3 million in the year-earlier quarter. For the six months ended May 31, 2025, the equity in income of our unconsolidated joint venture was $9.2 million, compared to $13.5 million in the year-earlier quarter, reflecting a decrease in KBHS’ income. The year-over-year decrease in KBHS’ income primarily reflected a loss in the fair value of IRLCs of $3.6 million in the current quarter, compared to a gain in the fair value of IRLCs of $4.2 million in the year-earlier quarter. Also contributing to the year-over-year decrease in KBHS’ income for the three months and six months ended May 31, 2025 was a decline in the number of loans originated, which reflected a decrease in the number of homes we delivered, partly offset by an increase in the percentage of homebuyers using KBHS.

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

INCOME TAXES

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

	Three Months Ended May 31,						Six Months Ended May 31,
	Three Months Ended August 31,						Nine Months Ended August 31,
	2025			2024			2025			2024
Income tax expense	$	3433,~~500~~400		$	5250,~~700~~100		$	6497,~~300~~700		$	88138,~~700~~800
Effective tax rate	2423.23		%	2324.82		%	2223.80		%	2223.40		%

Our effective tax rate for the three months ended ~~May~~August 31, 2025 ~~increased~~decreased from the year-earlier period, ~~mainly~~primarily ~~due~~reflecting to a $1.74 million ~~decrease~~increase in ~~the~~ Section 45L tax credits, wemainly due to additional tax credits recognized ~~primarily~~based ~~from~~on ~~building~~certifications ~~energy-efficient~~verified ~~homes~~during the quarter, and a $.42 million ~~decrease~~increase in excess tax benefits related to stock-based compensation~~. For the six months ended May 31~~, ~~2025,~~partly ~~our~~offset ~~effective~~by ~~tax rate increased from the year-earlier period primarily due to~~ a $4.1 ~~million decrease in Section 45L tax credits and a $1~~.12 million ~~decrease~~increase in ~~excess tax benefits related to stock~~non-~~based~~deductible executive compensation expense. ~~The~~For ~~year-over-year decreases in Section 45L tax credits for~~ the ~~three~~nine months ~~and six months~~ ended ~~May~~August 31, 2025, ~~reflect the impact of guidance the IRS issued in 2023 that heightened the Section 45L energy-efficiency qualification standard for homes built in California relative to other states and~~ our ~~decision~~effective ~~to build homes in many of our markets beginning in 2025 that are highly energy efficient and qualify for ENERGY STAR certification but do not qualify for Section 45L~~ tax ~~credits. We~~rate ~~believe~~remained ~~the~~consistent ~~additional~~with ~~costs necessary to satisfy~~ the ~~higher~~year-earlier ~~standards for some of our homes outweigh the possible benefits of meeting those standards for both our business and our buyers~~period.

~~H.R.1,~~IRS guidance issued in 2023 heightened the ~~One~~Section ~~Big~~45L ~~Beautiful~~energy-efficiency ~~Bill~~qualification ~~Act,~~standard ~~was~~for ~~signed~~homes ~~into~~built ~~law~~in onCalifornia ~~July~~relative 4to other states. This guidance, along with our decision to build homes in many of our markets beginning in 2025, ~~disallowing~~that are highly energy efficient and qualify for ENERGY STAR certification but do not qualify for Section 45L tax credits, ~~for~~impacted ~~new~~the ~~energy-efficient~~tax ~~homes~~credits ~~delivered~~we ~~after~~recognized ~~June~~for ~~30,~~the ~~2026. As~~nine amonths ~~result~~ended August 31, ~~our~~2025 ~~income~~relative ~~tax~~to ~~expense~~the ~~and~~corresponding ~~effective~~prior-year ~~tax~~period. We ~~rate~~believe ~~would~~the ~~not~~additional ~~reflect~~costs anecessary ~~benefit~~to ~~from~~satisfy ~~such~~the ~~tax~~higher ~~credits~~standards asfor tosome of our homes ~~delivered~~outweigh ~~after~~the ~~that~~possible ~~date.~~benefits of meeting those standards for both our business and our buyers.

On July 4, 2025, the OBBBA was signed into law. Among its provisions is the repeal of Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026. As a result, beginning in our 2026 third quarter, our income tax expense and effective tax rate will no longer reflect a benefit from such tax credits as to homes delivered after the effective date. We are currently evaluating other elements of the legislation, but do not expect it to have a material effect on our effective tax rate for the year ending November 30, 2025.

Further information regarding our income taxes is provided in Note 13 – 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, which is not calculated in accordance with GAAP. We believe this non-GAAP financial measure is relevant and useful to investors in understanding 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 it is not calculated in accordance with GAAP, this non-GAAP financial measure 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, this non-GAAP financial measure should be used to supplement the most directly comparable GAAP financial measure in order to provide a greater understanding of the factors and trends affecting our operations.

an alternative to operating performance and/or financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the most directly comparable GAAP financial measure 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 May 31,						Six Months Ended May 31,
	Three Months Ended August 31,						Nine Months Ended August 31,
	2025			2024			2025			2024
Housing revenues	$	1,~~524~~613,~~716~~975		$	1,~~701~~745,~~512~~979		$	24,~~911~~525,~~757~~732		$	34,~~159~~905,~~638~~617
Housing construction and land costs	(1,~~230~~320,~~055~~611)			(1,~~342~~385,~~102~~563)			(23,~~337~~658,~~469~~080)			(23,~~486~~872,~~529~~092)
Housing gross profits	~~294~~293,~~661~~364			~~359~~360,~~410~~416			~~574~~867,~~288~~652			~~673~~1,~~109~~033,525
Add: Inventory-related charges (a)	511,~~558~~338			1,~~210~~177			718,~~013~~351			23,~~508~~685
Adjusted housing gross profits	$	~~300~~304,~~219~~702		$	~~360~~361,~~620~~593		$	~~581~~886,~~301~~003		$	~~675~~1,~~617~~037,210
Housing gross profit margin as a percentage of housing revenues	1918.32		%	2120.16		%	19.72		%	21.31		%
Adjusted housing gross profit margin as a percentage of housing revenues	1918.79		%	2120.27		%	2019.06		%	21.41		%

(a) Represents inventory impairment and land option contract abandonment charges 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 housing inventory impairment and land option contract abandonment charges (as applicable) recorded during a given period, 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 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. This financial measure assists us in making strategic decisions regarding community location and product mix, product pricing and construction pace.

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;

•the Term Loan;

•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 acquisitions and land development;

•home construction;

•operating expenses;

•principal and interest payments on notes payable;

•repayments of borrowings under the Credit Facility;

•dividends paid to stockholders; and

•repurchases of our common stock.

We ended the 2025 ~~second~~third quarter with total liquidity of $1.1916 billion, including cash and cash equivalents and $~~881~~831.7 million of available capacity under the Credit Facility, with $~~200~~250.0 million of cash borrowings outstanding. Cash and cash equivalents totaled $330.6 million at August 31, 2025, compared to $598.0 million at November 30, 2024. Cash equivalents included in the total were $164.7 million at August 31, 2025 and $385.1 million at November 30, 2024, and were mainly invested in interest-bearing bank deposit accounts and money market funds. Based on our financial position as of August 31, 2025, and our business forecast as discussed below under “Outlook,” we have no material concerns related to our liquidity. 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.

36Cash Requirements. In the nine months ended August 31, 2025, there have been no significant changes in our cash requirements 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, 2024.

~~totaled~~Investments ~~$308.9~~in ~~million~~Land atand ~~May 31,~~Land Development. In the 2025 first quarter, ~~compared~~our investments in land and land development increased 57% year over year to $~~598~~920.03 million, atwhich ~~November 30,~~included ~~2024. Cash~~our ~~equivalents~~opportunistic ~~included~~purchase of two sizable land parcels in ~~the~~our ~~total~~Southwest ~~were~~homebuilding ~~$161~~reporting segment to replace a large community that is approaching close out.2 As ~~million~~a atresult ~~May 31~~of the heightened first-quarter investment level, ~~2025~~our ~~and~~existing ~~$385.1~~land ~~million~~pipeline atand ~~November 30~~softer market conditions, ~~2024~~however, ~~and~~we ~~were~~began ~~mainly~~scaling ~~invested~~back our investments in ~~interest-bearing~~land ~~bank~~and ~~deposit~~land ~~accounts~~development ~~and~~in ~~money~~the ~~market~~2025 ~~funds~~second quarter. ~~Based~~In onour 2025 third quarter, we maintained our ~~financial~~land ~~position~~investments asat ofa ~~May 31,~~level ~~2025,~~that ~~and~~we believe will support our ~~business~~current ~~forecast~~growth asprojections. Our ~~discussed~~investments ~~below~~for ~~under~~the ~~“Outlook,”~~2025 wethird ~~have~~quarter nodecreased ~~material~~39% ~~concerns~~year ~~related~~over year to ~~our~~$514.1 ~~liquidity~~million. WeFor ~~believe~~the ~~that~~nine months ended August 31, 2025, our ~~existing~~investments ~~cash~~in land and ~~cash~~land ~~equivalents~~development declined 7% year over year to $1.95 billion. Land acquisition expenditures, ~~our~~which ~~anticipated~~are ~~cash~~included ~~flows~~in ~~from~~our ~~operations~~investments in land and ~~amounts~~land ~~available~~development, ~~under~~decreased to $771.3 million, or 40% of our ~~Credit~~total ~~Facility~~investments, ~~will~~for bethe ~~sufficient~~nine months ended August 31, 2025, compared to ~~fund~~$916.9 million, or approximately 44% of our ~~anticipated~~total ~~operating~~investments, for the corresponding period of 2024. While we made investments in land and land~~-related~~ ~~investment~~development ~~needs~~in ~~for~~each atof ~~least~~our ~~the~~homebuilding ~~next~~reporting 12segments ~~months.~~ during the

Cash Requirements. In the six months ended May 31, 2025, there have been no significant changes in our cash requirements 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, 2024.38

~~Investments~~nine in Land and Land Development. In the 2025 first quarter, our investments in land and land development increased 57% year over year to $920.3 million, which included our opportunistic purchase of two sizable land parcels in our Southwest homebuilding reporting segment to replace a large community that is approaching close out. As a result of the heightened first-quarter investment level, our existing land pipeline and softer market conditions, however, we are scaling back our investments in land and land development. Reflecting this shift, our investments for the 2025 second quarter decreased 23% year over year to $513.9 million. For the six months ended ~~May~~August 31, 2025, ~~our investments in land~~ and land development grew 14% year over year to $1.43 billion. Land acquisition expenditures, which are included in our investments in land and land development, increased to $661.9 million, or 46% of our total investments, for the six months ended May 31, 2025, from $491.9 million, or approximately 39% of our total investments, for the corresponding period of 2024~~. While we made investments in land and land development in each of our homebuilding reporting segments during the six months ended May 31~~, ~~2025 and 2024,~~ approximately 4951% and 5355%, respectively, of these investments for each period were made in our West Coast homebuilding reporting segment.

For the 2025 ~~second~~fourth ~~half~~quarter, although we expect a year-over-year decrease in our land-related investments, we intend to continue to invest in and develop land positions within attractive submarkets and selectively acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities that meet our investment return standards.

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):

May 31, 2025

November 30, 2024

Variance

August 31, 2025

November 30, 2024

Variance

Segment

Lots

Carrying Value

Lots

Carrying Value

Lots

Carrying Value

West Coast

2421,~~185~~030

3,~~050~~116,~~078~~438

23,956

2,915,543

~~229~~(2,926)

~~134~~200,~~535~~895

Southwest

1210,~~199~~666

1925,~~006,016~~458

13,117

845,910

(~~918~~2,451)

~~160~~79,~~106~~548

Central

2320,~~610~~531

~~851~~838,~~966~~656

21,056

839,920

~~2,554~~(525)

12(1,~~046~~264)

Southeast

1413,~~843~~024

1958,~~005,288~~264

18,574

926,647

(35,~~731~~550)

7831,~~641~~617

Total

7465,~~837~~251

5,~~913~~838,~~348~~816

76,703

5,528,020

(111,~~866~~452)

~~385~~310,~~328~~796

The carrying value of lots we owned or controlled under land option contracts and other similar contracts at ~~May~~August 31, 2025 increased 76% from November 30, 2024, ~~reflecting~~mainly due to land and land development investments during the ~~six~~nine months ended ~~May~~August 31, 2025~~, partly offset by homes delivered and our abandonment of 14,271 previously controlled lots~~. The number of lots we owned or controlled as of ~~May~~August 31, 2025 decreased 215% from November 30, 2024, largely reflecting homes delivered and our strategic abandonment of 21,054 previously controlled lots, partly offset by newly optioned lots during the period. The number of lots in inventory as of ~~May~~August 31, 2025 included 136,~~808~~310 lots under contract where the associated deposits were refundable at our discretion, compared to 18,923 of such lots at November 30, 2024. Our lots controlled under land option contracts and other similar contracts as a percentage of total lots was 4742% at ~~May~~August 31, 2025, compared to 49% at November 30, 2024. 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.

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, 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, if applicable, 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, 2025, we estimate the remaining purchase price to be paid would be as follows: 2025 – $392.5 million; 2026 – $894.3 million; 2027 – $372.0 million; 2028 – $148.0 million; 2029 – $69.3 million; and thereafter – $0.

exercise our rights to the underlying land for any reason and, if applicable, 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 May 31, 2025, we estimate the remaining purchase price to be paid would be as follows: 2025 – $750.1 million; 2026 – $1.03 billion; 2027 – $350.0 million; 2028 – $132.6 million; 2029 – $63.0 million; and thereafter – $9.2 million.

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

	May 31,2025		November 30,2024
	August 31,2025		November 30,2024
Cash and cash equivalents	$	~~308~~330,~~861~~586	$	597,973
Credit Facility commitment	1,090,000		1,090,000
Borrowings outstanding under the Credit Facility	(~~200~~250,000)		—
Letters of credit outstanding under the Credit Facility	(8,260)		(8,260)
Credit Facility availability	~~881~~831,740		1,081,740
Total liquidity	$	1,~~190~~162,~~601~~326	$	1,679,713

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

	May 31,2025		November 30,2024		Variance
Credit Facility	$	200,000	$	—	$	200,000
Term Loan	359,162		358,826		336
Senior notes	1,330,630		1,329,704		926
Mortgages and land contracts due to land sellers and other loans	3,149		3,149		—
Total	$	1,892,941	$	1,691,679	$	201,262

Our financial leverage, as measured by the ratio of debt to capital, increased 280 basis points to 32.2% at May 31, 2025, compared to 29.4% at November 30, 2024 due to cash borrowings outstanding under the Credit Facility. The ratio of debt to capital is calculated by dividing notes payable by capital (notes payable plus stockholders’ equity).


	August 31, 2025		November 30, 2024		Variance
Credit Facility	$	250,000	$	—	$	250,000
Term Loan	359,329		358,826		503
Senior notes	1,331,104		1,329,704		1,400
Mortgages and land contracts due to land sellers and other loans	3,149		3,149		—
Total	$	1,943,582	$	1,691,679	$	251,903

~~LOC~~Our ~~Facility. We~~financial ~~maintain~~leverage, ~~the~~as ~~LOC~~measured ~~Facility~~by tothe ~~obtain~~ratio ~~letters~~ of ~~credit~~debt ~~from time~~ to ~~time~~capital, inincreased ~~the~~380 ~~ordinary~~basis ~~course~~points ofto ~~operating our business~~33. ~~Under~~2% ~~the~~at ~~LOC Facility, which expires on February~~August 1331, ~~2028~~2025, wecompared ~~may issue up~~ to ~~$100~~29.04% ~~million~~at ~~of letters of credit. As of May 31, 2025 and~~ November 30, 2024, wedue ~~had~~to ~~letters~~cash ofborrowings ~~credit~~ outstanding under the ~~LOC~~Credit Facility. The ratio of ~~$74.4~~debt ~~million~~to ~~and~~capital ~~$73.3~~is ~~million,~~calculated ~~respectively~~by dividing notes payable by capital (notes payable plus stockholders’ equity).

~~Performance~~LOC ~~Bonds~~Facility. AsWe ~~discussed~~maintain inthe ~~Note~~LOC 16Facility –to ~~Commitments~~obtain ~~and~~letters ~~Contingencies~~of credit from time to time in the ~~Notes~~ordinary tocourse ~~Consolidated~~of ~~Financial~~operating ~~Statements~~our inbusiness. Under ~~this~~the ~~report~~LOC Facility, which expires on February 13, 2028, we ~~had~~may ~~$1.44~~issue ~~billion~~up ~~and~~to $1100.330 ~~billion~~million of ~~performance~~letters ~~bonds~~of ~~outstanding~~credit. As atof ~~May~~August 31, 2025 and November 30, 2024, we had letters of credit outstanding under the LOC Facility of $62.4 million and $73.3 million, respectively.

~~Unsecured~~Performance ~~Revolving Credit Facility~~Bonds. WeAs ~~have~~discussed ain ~~$1.09 billion~~Note ~~Credit~~16 ~~Facility~~– ~~that~~Commitments ~~will~~and ~~mature~~Contingencies onin ~~February 18,~~the ~~2027. The~~Notes ~~Credit~~to ~~Facility~~Consolidated ~~contains~~Financial anStatements ~~uncommitted~~in ~~accordion~~this ~~feature~~report, ~~under~~we ~~which~~had ~~its aggregate principal amount of available loans can be increased to a maximum of~~ $1.2939 billion ~~under~~and ~~certain conditions, including obtaining additional bank commitments~~$1. ~~The~~33 ~~amount~~billion of ~~the~~performance ~~Credit~~bonds ~~Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit~~ outstanding ~~under~~at ~~the Credit Facility and the maximum available amount under the terms of the Credit Facility. As of May~~August 31, 2025, ~~we had $200.0 million of cash borrowings~~ and ~~$8.3~~November 30, ~~million~~2024, ~~of letters of credit outstanding under the Credit Facility~~respectively. ~~The Credit Facility is further described in Note 14 – Notes Payable in the Notes to Consolidated Financial Statements in this report.~~

Under the terms of the Credit Facility and the Term Loan, we are required, among other things, to maintain compliance with various covenants, including financial covenants regarding our consolidated tangible net worth, Leverage Ratio, and either an Interest Coverage Ratio or minimum liquidity level, each as defined therein. Our compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Credit Facility and the Term Loan and can differ in certain respects from comparable GAAP or other commonly used terms. The financial covenant requirements under the Credit Facility and the Term Loan are set forth below:

•Consolidated tangible net worth – We must maintain a consolidated tangible net worth at the end of any fiscal quarter greater than or equal to the sum of (a) $2.09 billion, plus (b) an amount equal to 50% of the aggregate of the cumulative consolidated net income for each fiscal quarter commencing after November 30, 2021 and ending as of the last day of such fiscal quarter (though there is no reduction if there is a consolidated net loss in any fiscal quarter), plus (c) an amount equal to 50% of the cumulative net proceeds we receive from the issuance of our capital stock after November 30, 2021.

•Leverage Ratio – We must also maintain a Leverage Ratio of less than or equal to .60 at the end of each fiscal quarter. The Leverage Ratio is calculated as the ratio of our consolidated total indebtedness to the sum of consolidated total indebtedness and consolidated tangible net worth, all as defined under the Credit Facility and the Term Loan.

•Interest Coverage Ratio or liquidity – We are also required to maintain either (a) an Interest Coverage Ratio of greater than or equal to 1.50 at the end of each fiscal quarter; or (b) a minimum level of liquidity, but not both. The Interest Coverage Ratio is the ratio of our consolidated adjusted EBITDA to consolidated interest incurred, each as defined under the Credit Facility and the Term Loan, in each case for the previous 12 months. Our minimum liquidity is required to be greater than or equal to consolidated interest incurred, as defined under the Credit Facility and the Term Loan, for the four most recently ended fiscal quarters in the aggregate.

In addition, under the Credit Facility and the Term Loan, our equity investments in joint ventures and non-guarantor subsidiaries and other unconsolidated entities as of the end of each fiscal quarter cannot exceed the sum of (a) $104.8 million and (b) 20% of consolidated tangible net worth. Further, for so long as we do not hold an investment grade rating, as defined under the Credit Facility and the Term Loan, the Credit Facility and the Term Loan do not permit our borrowing base indebtedness, which, subject to certain exceptions, is the aggregate principal amount of our and certain of our subsidiaries’ outstanding indebtedness for borrowed money and non-collateralized financial letters of credit, to be greater than our borrowing base (a measure relating to our inventory and unrestricted cash assets).

The covenants and other requirements under the Credit Facility and the Term Loan 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 the Term Loan, and our actual levels or ratios (as applicable) with respect to those covenants and other requirements, in each case as of May 31, 2025:40

Financial Covenants and Other Requirements

Covenant Requirement

Actual

Consolidated tangible net worth

$3.24 billion

$3.95 billion

Leverage Ratio

.600

.325

Interest Coverage Ratio (a)

1.500

9.039

Minimum liquidity (a)

$97.0 million

$108.9 million

Investments in joint ventures and non-guarantor subsidiaries

$894.5 million

$422.5 million

Borrowing base in excess of borrowing base indebtedness (as defined)

n/a

$2.65 billion

indebtedness, which, subject to certain exceptions, is the aggregate principal amount of our and certain of our subsidiaries’ outstanding indebtedness for borrowed money and non-collateralized financial letters of credit, to be greater than our borrowing base (a measure relating to our inventory and unrestricted cash assets).

Financial Covenants and Other Requirements

Covenant Requirement

Actual

Consolidated tangible net worth

$3.29 billion

$3.86 billion

Leverage Ratio

.600

.336

Interest Coverage Ratio (a)

1.500

8.027

Minimum liquidity (a)

$102.3 million

$80.6 million

Investments in joint ventures and non-guarantor subsidiaries

$876.5 million

$445.5 million

Borrowing base in excess of borrowing base indebtedness (as defined)

n/a

$2.55 billion

(a) Under the terms of the Credit Facility and the Term Loan, we are required to maintain either a minimum Interest Coverage Ratio or a minimum level of liquidity.

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-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 ~~May~~August 31, 2025, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility 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. Our ability to access the Credit Facility’s full borrowing capacity, as well as the LOC Facility’s full issuance capacity, also depends on the ability and willingness of the applicable lenders and financial institutions, including any substitute or additional lenders and financial institutions, to meet their commitments to fund loans, extend credit or provide payment guarantees to or for us under those instruments.

There are no agreements that restrict our payment of dividends other than the Credit Facility and the Term Loan, which would restrict our payment of certain dividends, such as cash dividends on our common stock, if a default under the Credit Facility or the Term Loan 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).

39Depending 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, 2025, we had outstanding mortgages and land contracts due to land sellers and other loans payable in connection with such financing of $3.1 million, secured primarily by the underlying property, which had an aggregate carrying value of $24.4 million.

the Term Loan 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 May 31, 2025, we had outstanding mortgages and land contracts due to land sellers and other loans payable in connection with such financing of $3.1 million, secured primarily by the underlying property, which had an aggregate carrying value of $15.0 million.

Senior Unsecured Term Loan. We have a $360.0 million Term Loan with the lenders party thereto that will mature on August 25, 2026, or earlier if we secure borrowings under the Credit Facility without similarly securing the Term Loan (subject to certain exceptions). The Term Loan is further described in Note 14 – Notes Payable in the Notes to Consolidated Financial Statements in this report.

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. As of ~~May~~August 31, 2025, one of our unconsolidated joint ventures had borrowings outstanding under a term loan with a third-party lender and secured by the underlying property and related project assets. None of our other homebuilding unconsolidated joint ventures had outstanding debt at ~~May~~August 31, 2025.

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

	Six Months Ended May 31,
	Nine Months Ended August 31,
	2025		2024
Net cash provided by (used in):
Operating activities	$	~~(165~~31,~~883)~~840	$	~~89,994~~81
Investing activities	(2042,~~416~~237)		(2838,~~982~~138)
Financing activities	(~~101~~256,~~952~~498)		(~~144~~313,~~102~~592)
Net decrease in cash and cash equivalents	$	(~~288~~266,~~251~~895)	$	(83351,~~090~~649)

Operating Activities. Generally, our net operating cash flows fluctuate mainly based on changes in our inventories and our profitability. Our net cash ~~used~~provided inby operating activities for the ~~six~~nine months ended ~~May~~August 31, 2025 mainly reflected a net ~~increase~~income ~~in inventories~~ of $~~390~~327.63 million and a net decrease in ~~accounts~~receivables ~~payable, accrued expenses and other liabilities~~ of $687.32 million, partly offset by a net ~~income~~increase in inventories of $~~217~~330.40 million and a net decrease in ~~receivables~~accounts payable, accrued expenses and other liabilities of $2063.78 million. In the ~~six~~nine months ended ~~May~~August 31, 2024, our net cash provided by operating activities primarily reflected net income of $~~307~~464.14 million and a net decrease in receivables of $6.2 million, partly offset by a net increase in inventories of $~~195~~504.34 million and a net decrease in accounts payable, accrued expenses and other liabilities of $4014.64 million.

Investing Activities. In the ~~six~~nine months ended ~~May~~August 31, 2025, our net cash used in investing activities reflected $2234.76 million used for net purchases of property and equipment and $10.6 million for contributions to unconsolidated joint ventures, partially offset by a $2.3.0 million return of investments in unconsolidated joint ventures. In the ~~six~~nine months ended ~~May~~August 31, 2024, the net cash used ~~for~~in investing activities included $1929.82 million for net purchases of property and equipment and $1012.96 million for contributions to unconsolidated joint ventures, partly offset by a $2.0 million return of investments in unconsolidated joint ventures and $1.7 million of proceeds from the sale of a privately held technology company in which we had an ownership interest.

Financing Activities. In the ~~six~~nine months ended ~~May~~August 31, 2025, cash was ~~provided~~used byfor stock repurchases of $~~200~~438.05 million, ofdividend ~~net~~payments ~~borrowings~~on ~~under~~our ~~the~~common ~~Credit~~stock ~~Facility~~of ~~and~~ $52.48 million, ofand ~~issuances~~tax ofpayments ~~common~~associated with stock-based ~~under~~compensation ~~employee~~awards ~~stock~~of ~~plans~~$15.9 million. The cash ~~provided~~used was partly offset by ~~stock repurchases of~~ $250.0 million, ~~dividend~~of ~~payments~~net onborrowings ~~our~~under ~~common~~the ~~stock~~Credit ofFacility and $36.57 million, ~~and~~of ~~tax~~issuances ~~payments~~of ~~associated~~common ~~with~~ stock~~-based~~ ~~compensation~~under ~~awards~~employee ofstock ~~$15~~plans.~~9 million.~~ In the ~~six~~nine months ended ~~May~~August 31, 2024, our uses of cash included stock repurchases of $~~100~~250.0 million, dividend payments on our common stock of $3553.15 million, tax payments associated with stock-based compensation awards of $16.5 million, and payments on mortgages and land contracts due to land sellers and other loans of $12.78 million. The cash used was partially offset by $9.3 million of issuances of common stock under employee stock plans.

Dividends. In the 2025 and 2024 ~~second~~third quarters, our board of directors declared, and we paid, a quarterly cash dividend of $.25 per share. Quarterly dividends declared and paid during the ~~six~~nine months ended ~~May~~August 31, 2025 and 2024 totaled $.5075 and $.4570 per share, 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.

40Share Repurchase Program. On April 18, 2024, our board of directors authorized us to repurchase up to $1.00 billion of our outstanding common stock. As of November 30, 2024, there was $700.0 million of remaining availability under this share repurchase authorization. In the 2025 first nine months, we repurchased 7.8 million shares of our common stock at a total cost of $438.5 million. Repurchases under the authorization 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, business and other conditions. 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 shares. As of August 31, 2025, there was $261.5 million of remaining availability under this share repurchase authorization.

~~Share~~As ~~Repurchase~~of ~~Program. On~~the ~~April~~date ~~18, 2024, our board~~ of ~~directors~~this ~~authorized~~report, usand toas ~~repurchase~~stated upabove, towe ~~$1.00 billion~~believe ofwe ~~our~~have ~~outstanding~~adequate ~~common~~capital ~~stock. As~~resources ofand ~~November 30,~~sufficient ~~2024,~~access ~~there~~to ~~was~~external ~~$700.0 million~~financing ofsources ~~remaining~~to ~~availability~~satisfy ~~under~~our ~~this~~current ~~share~~and ~~repurchase~~reasonably ~~authorization. In~~anticipated ~~the~~requirements ~~2025~~for ~~first~~funds ~~half,~~to weconduct ~~repurchased~~our ~~4.5~~operations ~~million~~and ~~shares~~meet ofother ~~our~~needs ~~common~~in ~~stock~~the atordinary acourse ~~total cost~~ of ~~$250.0~~our ~~million~~business. ~~Repurchases~~For ~~under~~ the ~~authorization~~2025 ~~may~~fourth ~~occur~~quarter, ~~periodically~~we ~~through~~expect ~~open~~to ~~market~~use ~~purchases,~~or ~~privately~~redeploy ~~negotiated~~our ~~transactions~~cash resources or ~~otherwise,~~cash ~~with~~borrowings under the ~~timing~~Credit ~~and~~Facility ~~amount~~to atsupport ~~management’s~~our ~~discretion~~business ~~and~~within ~~dependent~~the oncontext ~~market,~~of ~~business~~prevailing ~~and~~market ~~other~~ conditions. ~~This~~During ~~share~~this ~~repurchase~~time, ~~authorization~~we ~~will~~may ~~continue~~also engage in ~~effect~~capital ~~until~~markets, ~~fully~~bank ~~used~~loan, orproject ~~earlier~~debt ~~terminated~~ or ~~suspended~~other byfinancial ~~our board of directors~~transactions, ~~and~~including ~~does~~the ~~not~~repurchase ~~obligate~~of usdebt toor ~~purchase~~equity ~~any~~securities ~~shares. As~~or ofpotential ~~May 31,~~new ~~2025,~~issuances ~~there was $450.0 million~~ of ~~remaining~~debt ~~availability~~or ~~under~~equity ~~this~~securities ~~share~~to ~~repurchase~~support ~~authorization.~~our

As of the date of this report, and as stated above, 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 2025, 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 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 or loans to mature or expire. Our ability to engage in such transactions may be constrained by volatile or tight economic, capital, credit and/or financial market conditions or other factors, including those described below under “Outlook,” 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. 42

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 or loans to mature or expire. Our ability to engage in such transactions may be constrained by volatile or tight economic, capital, credit and/or financial market conditions or other factors, including those described below under “Outlook,” 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.

Supplemental Guarantor Financial Information

As of ~~May~~August 31, 2025, we had $1.34 billion in aggregate principal amount of outstanding senior notes, $~~200~~250.0 million of borrowings outstanding under the Credit Facility and $360.0 million in aggregate principal amount of borrowings outstanding under the Term Loan. Our obligations to pay principal and interest on the senior notes and borrowings, if any, under the Credit Facility and the Term Loan are guaranteed on a joint and several basis by our 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 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 14 – Notes Payable in the Notes to Consolidated Financial Statements in this report for additional information regarding the terms of our senior notes, the Credit Facility and the Term Loan.

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 and the Term Loan, 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, the Credit Facility and the Term Loan 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, 2025		November 30, 2024
Summarized Balance Sheet Data (in thousands)
Assets
Cash	$	274,523	$	543,233
Inventories	5,240,220		4,981,097
Amounts due from Non-Guarantor Subsidiaries	520,833		500,321
Total assets	6,672,704		6,657,479

Liabilities and Stockholders’ Equity
Notes payable	$	1,943,582	$	1,691,679
Amounts due to Non-Guarantor Subsidiaries	420,888		382,356
Total liabilities	3,133,492		2,928,169
Stockholders’ equity	3,539,212		3,729,310

	May 31,2025		November 30,2024
Summarized Balance Sheet Data (in thousands)
Assets
Cash	$	256,826	$	543,233
Inventories	5,309,185		4,981,097
Amounts due from Non-Guarantor Subsidiaries	523,171		500,321
Total assets	6,719,196		6,657,479
Liabilities and Stockholders’ Equity
Notes payable	$	1,892,941	$	1,691,679
Amounts due to Non-Guarantor Subsidiaries	407,713		382,356
Total liabilities	3,078,289		2,928,169
Stockholders’ equity	3,640,907		3,729,310

	Six Months Ended May 31, 2025
Summarized Statement of Operations Data (in thousands)	Nine Months Ended August 31, 2025
Summarized Statement of Operations Data (in thousands)
Revenues	$	4,107,293
Revenues	$	2,661,338
Construction and land costs	(3,291,449)
Construction and land costs	(2,118,317)
Selling, general and administrative expenses	(446,500)
Selling, general and administrative expenses	(294,024)
Interest income from Non-Guarantor Subsidiaries	25,865
Interest income from Non-Guarantor Subsidiaries	17,251
Pretax income	399,679
Pretax income	269,306
Net income	307,879
Net income	207,606

Critical Accounting Policies and Estimates

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 ~~six~~nine months ended ~~May~~August 31, 2025 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, 2024.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are expected to have a material impact on our consolidated financial statements.

Outlook

~~Although~~We we continue to view the long-term outlook for the housing market favorably, webased ~~expect~~on ~~the~~demographic ~~softer~~trends ~~market conditions that we experienced in the 2025 first half, driven primarily by housing affordability concerns, compounded by ongoing elevated mortgage interest rates~~ and ~~macroeconomic and geopolitical uncertainties, to persist for~~ the ~~remainder~~continued undersupply of ~~the year~~homes. ~~These~~While market conditions ~~have~~were ~~precipitated~~softer ~~a marked weakening~~ in ~~consumer~~the ~~confidence~~first ~~and~~three ~~caused~~quarters ~~homebuyers~~of to2025 ~~hesitate on making purchase decisions, resulting in subdued demand during the Spring selling season~~ relative to the ~~past~~corresponding ~~few~~year-earlier ~~years. Reflecting this environment~~periods, ~~despite~~demand astabilized ~~healthy level of traffic~~ in ~~our~~the ~~communities~~third quarter, wewhich ~~experienced~~was ~~year-over-year~~sustained ~~decreases~~as inthe ~~our 2025 second~~ quarter ~~net~~progressed ~~orders~~along ofwith ~~13%,~~a ~~ending~~moderation ~~backlog~~in ofmortgage ~~24%~~interest ~~and ending backlog value of 27%~~rates. ~~The~~Looking ~~value~~ahead ofto ~~our net orders for~~ the ~~2025~~fourth ~~second~~ quarter, ~~was~~we ~~down~~expect ~~21%~~ongoing ~~year~~affordability ~~over~~concerns ~~year driven by the 13% decline in net orders~~ and ancautious 8%consumer ~~decrease~~sentiment ~~in their average selling price~~ to ~~$465,600,~~continue ~~largely due~~ to ~~price~~temper ~~reductions~~housing ~~we implemented beginning in mid-February 2025 in conjunction with our strategic focus on delivering the most compelling value to our buyers through pricing transparency and a simplified sales approach~~demand. AsAt ~~most of~~ the ~~net~~same ~~orders~~time, ~~in the period since~~ we ~~implemented~~are ~~this~~encouraged ~~approach~~by ~~have not yet closed,~~ the ~~associated~~moderation ~~pricing~~in ~~adjustments~~mortgage ~~did~~interest ~~not~~rates ~~significantly~~in ~~affect our average selling price or housing gross profit margin on homes delivered for~~ the ~~three~~third ~~months~~quarter and ~~six~~believe ~~months~~that ~~ended~~continued ~~May 31~~moderation, ~~2025. However,~~if ~~we expect~~ it tooccurs, ~~moderate~~should ~~our~~support ~~average~~greater ~~selling~~demand ~~prices and housing gross profit margins~~ for ~~the~~homeownership ~~remainder~~by ofimproving ~~the year~~affordability.

InReflecting ~~navigating~~ the ~~current~~prevailing environment, despite a steady level of traffic in our communities, we ~~intend~~experienced toyear-over-year ~~remain~~decreases ~~nimble~~in our 2025 third quarter net orders of 4%, ~~balancing~~ending ~~pace~~backlog of 24% and ~~price~~ending atbacklog ~~the~~value ~~community~~of ~~level~~32%. The tovalue ~~optimize~~of our ~~assets~~net orders for the ~~highest~~2025 ~~possible~~third ~~returns. For~~quarter was down 15% year over year driven by the ~~remainder~~decline ofin ~~2025~~net orders and an 11% decrease in their average selling price to $445,600, largely due to price reductions we ~~intend~~implemented beginning in mid-February 2025 as part of our strategic focus on delivering the most compelling value to ~~continue~~our buyers through pricing transparency and a simplified sales approach. We expect these price reductions to ~~invest~~moderate inour overall average selling price and ~~develop~~housing ~~land~~gross profit margin on homes delivered for the 2025 fourth quarter.

42In navigating the current environment, we intend to remain nimble, balancing pace and price at the community level to optimize our assets for the highest possible returns. In executing on this approach in the fourth quarter, which is a seasonally inelastic demand period in which other builders have typically pursued aggressive, incentive-oriented sales strategies, we plan to focus on generating net orders that maximize margins, returns and cash flow over volume. We will also emphasize our Built to Order homes while continuing to sell through our inventory. Our Built to Order homes are our core competency, a key competitive differentiator, and, particularly with the significant reduction in our build times since 2024, an appealing proposition to buyers.

In the 2025 fourth quarter, we expect to continue to invest in and develop land positions within attractive submarkets and acquire or control additional land that meets our investment standards, depending significantly on market conditions and available opportunities. However, given our existing land pipeline, since the 2025 second quarter, we ~~are~~have been scaling back our investments in land and land development to align with current conditions. As a result, we anticipate a year-over-year decrease in our land-related investments in the 2025 ~~second~~fourth ~~half~~quarter. Additionally, we intend to continue to prioritize capital efficiency, developing lots where possible in smaller phases and balancing development with our starts pace to manage our inventory of finished lots.

At the same time, and consistent with our balanced approach to capital allocation, we plan to continue returning capital to our stockholders, primarily through additional share repurchases. As of ~~May~~ August 31, 2025, we had $~~450~~261.05 million of remaining availability under our current board of directors share repurchase authorization. This provides us the opportunity to repurchase our common stock in the remainder of 2025, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our common stock, and the housing market and general economic conditions. Subject to these factors, we expect to repurchase between $100.0 million and $200.0 million of our common stock in the 2025 third quarter.

Considering the foregoing, we have revised our projections for 2025 that were made in our Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2025, and our present outlook for the 2025 third quarter and the 2025 full year as to certain metrics is as follows: 44

our common stock in the 2025 ~~Third~~fourth ~~Quarter~~quarter, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our common stock, and the housing market and general economic conditions. Subject to these factors, we expect to repurchase between $50.0 million and $150.0 million of our common stock in our 2025 fourth quarter, and to continue repurchases in our 2026 fiscal year.

~~•We~~Considering ~~expect~~the toforegoing, ~~generate~~we ~~housing~~have ~~revenues~~revised inour ~~the~~projections ~~range~~for of2025 ~~$1.50~~that ~~billion~~were tomade ~~$1.70~~in ~~billion,~~our ~~compared~~Quarterly toReport ~~$1.75~~on ~~billion~~Form 10-Q for the ~~corresponding~~quarterly ~~2024~~ period, ~~and~~ended ~~anticipate~~May ~~our~~31, ~~average~~2025. ~~selling~~Our ~~price~~present tooutlook befor ~~between~~the ~~$470,000~~2025 fourth quarter and ~~$480,000,~~the ~~compared~~2025 full year as to ~~$480,900~~certain inmetrics ~~the~~is ~~year-earlier~~as ~~period.~~follows:

~~•We~~2025 ~~expect~~Fourth ~~our homebuilding operating income margin as a percentage of revenues to be in the range of 7.6% to 8.2%, assuming no inventory-related charges, compared to 10.9% for the year-earlier quarter.~~Quarter

•We expect ~~our~~to generate housing ~~gross~~revenues ~~profit margin will be~~ in the range of ~~18.~~$1%.60 billion to 18$1.~~7%,~~70 ~~assuming no inventory-related charges~~billion, compared to 20$1.7%99 billion for the corresponding 2024 ~~quarter~~period, and anticipate our average selling price to be between $465,000 and $475,000, compared to $501,000 in the year-earlier period.

•We expect our ~~selling,~~homebuilding ~~general~~operating ~~and~~income ~~administrative~~margin ~~expenses~~ as a percentage of ~~housing~~ revenues ~~will~~to be in the range of 108.35% to 108.79%, assuming no inventory-related charges, compared to 911.85% for the ~~2024~~year-earlier ~~third~~ quarter.

•We expect our ~~effective~~housing ~~tax~~gross ~~rate~~profit margin will be ~~approximately~~in 24the range of 18.0% to 18.4%, assuming no inventory-related charges, compared to 2420.29% for the ~~year-earlier~~corresponding 2024 quarter.

•We expect our ~~ending~~selling, ~~community~~general ~~count~~and administrative expenses as a percentage of housing revenues to be ~~roughly~~in ~~250~~the range of 9.3% to 9.7%, compared to ~~254~~9.4% for the ~~corresponding~~ 2024 fourth quarter.

•We expect our effective tax rate will be approximately 23.0%, compared to 23.1% for the year-earlier quarter.

2025 Full Year

•We expect our housing revenues to be in the range of $6.3010 billion to $6.5020 billion, compared to $6.90 billion for 2024.

•We expect our average selling price towill be inapproximately ~~the range of~~ $~~480~~483,000 ~~to $490~~,~~000,~~ compared to $486,900 for 2024.

•We expect our homebuilding operating income margin as a percentage of revenues to be inapproximately ~~the range of~~ 8.~~6% to~~ 9.0%, assuming no inventory-related charges, compared to 11.1% for 2024.

•We expect our housing gross profit margin to be in the range of 19.02% to 19.43%, assuming no inventory-related charges, compared to 21.1% for 2024.

•We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range of 10.2% to 10.63%, compared to 10.0% for 2024.

•We expect our effective tax rate towill be approximately 2423.0%, ~~compared~~essentially tothe ~~23.0%~~same ~~for~~as 2024.

•We expect our ending community count to be approximately ~~250~~260, compared to 258 for 2024.

In addition to factors discussed elsewhere in this report, our future performance and the strategies we implement (and adjust or refine as necessary or appropriate) will depend significantly on prevailing economic, employment, homebuilding industry and capital, credit and financial market conditions and on a fairly stable and constructive political and regulatory environment (particularly in regard to housing and mortgage loan financing policies). This includes U.S. trade policy and recently implemented and proposed tariffs, and other countries’ countervailing measures, on raw building materials, such as steel, lumber, drywall and concrete, and/or finished products. Though certain tariffs and countervailing measures instituted in 2025 have influenced pricing in adjacent sectors, we have not experienced significant cost increases or raw material/finished product availability constraints as of the date of this filing. However, if the U.S. or foreign governments take actions that cause tariff-related cost or availability pressures to escalate or expand, we could experience significant construction cost increases and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods. Additionally, while the Federal Reserve reduced interest rates in September 2025, and may lower rates further in 2025 or later periods, we cannot provide any assurance it will or that any interest rate reduction(s), or other monetary policy changes, will positively affect demand or our business, results of operations or consolidated financial statements. The potential extent and effect of these and other factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including in the three months and nine months ended August 31, 2025, should not be considered indicative of our future results on any metric or set of metrics, including, but not limited to, our net orders, backlog, revenues, margins and returns.

4345

have influenced pricing in adjacent sectors, we have not experienced significant cost increases or raw material/finished product availability constraints as of the date of this filing. However, if the U.S. or foreign governments take actions that cause tariff-related cost or availability pressures to escalate or expand, we could experience significant construction cost increases and/or supply chain disruptions that, in turn, would impact our business and our consolidated financial statements in future reporting periods. Additionally, while the Federal Reserve reduced interest rates three times in 2024, and may lower rates further in 2025 or later periods, it has since December 2024 kept rates unchanged and we cannot provide any assurance it will or that any interest rate reduction(s), or other monetary policy changes, will positively affect demand or our business, results of operations or consolidated financial statements. The potential extent and effect of these and other factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including in the 2025 second quarter, should not be considered indicative of our future results on any metric or set of metrics, including, but not limited to, our net orders, backlog, revenues, margins and returns.

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. If we update or revise any such statement(s), no assumption should be made that we will further update or revise that statement(s) or update or revise any other such statement(s). 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 the greater costs associated with achieving current and expected higher standards for ENERGY STAR certified homes, and delays related to state and municipal construction, permitting, inspection and utility processes, which have been disrupted by key equipment shortages;

•consumer and producer price inflation;

•changes in interest rates, including those set by the Federal Reserve, and those available in the capital markets or from financial institutions and other lenders, and applicable to mortgage loans;

•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 and the Term Loan;

•the ability and willingness of the applicable lenders and financial institutions, or any substitute or additional lenders and financial institutions, to meet their commitments or fund borrowings, extend credit or provide payment guarantees to or for us under the Credit Facility or LOC Facility;

•volatility in the market price of our common stock;

•our obtaining adequate levels of affordable insurance for our business and our ability to cover any incurred costs, liabilities or losses that are not covered by the insurance we have procured or that are due to our deciding not to procure certain types or amounts of insurance coverage;

•home selling prices, including our homes’ selling prices, being unaffordable relative to 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, such as a lack of adequate water supply to permit new home communities in certain areas;

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

•regulatory instability associated with the current U.S. presidential administration, and the impact on the economy or financial markets therefrom;

•government actions, policies, programs and regulations directed at or affecting the housing market (including 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, and the potential significant scaling back or ending of the federal conservatorship of the government-sponsored enterprises), 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 thereto, such as IRS guidance regarding heightened qualification requirements for federal tax credits for building energy-efficient homes, and the potential accelerated phaseout of such tax credits in 2026;

•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, and financial markets’ and businesses’ reactions to any such policies;

•disruptions in world and regional trade flows, economic activity and supply chains due to the military conflict and other attacks in the Middle East region and military conflict in Ukraine, including those stemming from wide-ranging sanctions the U.S. and other countries have imposed or may further impose on Russian business sectors, financial organizations, individuals and raw materials, the impact of which may, among other things, increase our operational costs, exacerbate building materials and appliance shortages and/or reduce our revenues and earnings;

•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 and efficiently develop acquired land parcels and open new home communities;

•impairment, land option contract abandonment or other inventory-related charges, including any stemming from decreases in the value of our land assets;

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

•costs and/or charges arising from regulatory compliance requirements, including implementing state climate-related disclosure rules, 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, through, among other things, our making substantial investments in land and land development, which, in some cases, involves putting significant capital over several years into large projects in one location, 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, and the costs and margin impact we incur from ~~the~~any incentives or concessions we may provide to buyers to do so;

•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 or afford homeowners and flood insurance policies, and/or typical or lender-required policies for other hazards or events, for their homes, which may depend on the ability and willingness of insurers or government-funded or -sponsored programs to offer coverage at an affordable price or at all;

•the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services, which may depend on the ability and willingness of lenders and financial institutions to offer such loans and services to our homebuyers;

•the performance of mortgage lenders to our homebuyers;

•the performance of KBHS;

•the ability and willingness of lenders and financial institutions to extend credit facilities to KBHS to fund its originated mortgage loans;

•information technology failures and data security breaches;

•an epidemic, pandemic or significant seasonal or other disease outbreak, 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 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/or civil unrest, whether due to political events, social movements or other reasons; and

•other events outside of our control.

Please see our Annual Report on Form 10-K for the year ended November 30, 2024 and other filings with the SEC for a further discussion of these and other risks and uncertainties applicable to our business.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in our market risk since November 30, 2024, other than our $~~200~~250.0 million of cash borrowings outstanding under the Credit Facility as of ~~May~~August 31, 2025. As disclosed in Note 14 – Notes Payable in the Notes to Consolidated Financial Statements in this report, our Credit Facility is subject to interest rate changes as the borrowing rates are based on SOFR or a base rate, plus a spread that depends on our Leverage Ratio. 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, 2024.

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, 2025.

46There have been no changes in our internal control over financial reporting during the quarter ended August 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of May 31, 2025.

There have been no changes in our internal control over financial reporting during the quarter ended May 31, 2025 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 17 – 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, 2024. However, we cannot provide any assurance that any such risk factor will not materialize.

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

The following table summarizes purchases of our own equity securities during the three months ended ~~May~~August 31, 2025 (dollars in thousands, except per share amounts):

Period	Total Number of Shares Purchased	Average Price Paid per Share		Dollar Value of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (a)
March 1-31	—	$	—	$	—	$	650,000
June 1-30	—	$	—	$	—	$	450,000
April 1-30	2,072,237	52.56		108,921		541,079
July 1-31	2,135,092	56.20		119,999		330,001
May 1-31	1,662,438	54.79		91,079		450,000
August 1-31	1,164,407	58.79		68,461		261,540
Total	3,~~734~~299,~~675~~499	$	5357.5512	$	~~200~~188,~~000~~460

(a) On April 18, 2024, our board of directors authorized us to repurchase up to $1.00 billion of our outstanding common stock. As of November 30, 2024, there was $700.0 million of remaining availability under this share repurchase authorization. In the 2025 ~~second~~third quarter, we repurchased 3,~~734~~299,~~675~~499 shares of our common stock on the open market pursuant to this authorization at a total cost of $~~200~~188.05 million. As of ~~May~~August 31, 2025, we were authorized to repurchase up to $~~450~~261.05 million of our outstanding common stock.

Item 5.Other Information

None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended ~~May~~August 31, 2025, as such terms are defined under Item 408(a) of Regulation S-K. Additionally, we did not adopt or terminate a Rule 10b5–1 trading arrangement during the quarter ended ~~May~~August 31, 2025.

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Item 6.Exhibits

Exhibits
10.28						Amended and Restated KB Home 2014 Equity Incentive Plan Performance-Based Restricted Stock Unit Award Agreement (2025).
10.29						Amended and Restated KB Home 2014 Equity Incentive Plan Restricted Stock Award Agreement (2025).
22						List of Guarantor Subsidiaries, filed as an exhibit to our Annual Report on Form 10-K for the year ended November 30, 2024 (File No. 001-09195), is incorporated by reference herein.
31.1						Certification of Jeffrey T. Mezger, Chairman and Chief Executive Officer of KB Home Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification of Robert R. Dillard, 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 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 Robert R. Dillard, 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

~~July~~October 109, 2025

By:

/s/ ROBERT R. DILLARD

Robert R. DillardExecutive Vice President and Chief Financial Officer(Principal Financial Officer)

Dated

~~July~~October 109, 2025

By:

/s/ WILLIAM R. HOLLINGER

William R. HollingerSenior Vice President and Chief Accounting Officer(Principal Accounting Officer)

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