What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2026-01-23 compared with 2025-01-24 · 516 added, 496 removed, 1048 unchanged (49% of the section changed)

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As of November 30, 2024 , we were authorized to repurchase up to $700.0 million of our outstanding common stock under

a share repurchase program approved by our board of directors in March 2023.

On April 18, 2024, our board of directors

authorized us to repurchase up to $1.00 billion of our outstanding common stock, replacing the prior board of directors

a share repurchase program approved by our board of directors in April 2024.

On October 9, 2025, our board of directors

authorized us to repurchase up to $1.00 billion of our outstanding common stock.

This authorization replaced the 2024

authorization, which had $261.5 million remaining, as further discussed in Note 19 – Stockholders’ Equity in the Notes to

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repurchases under the board of directors authorization.

The IRA imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31,

All dollar amounts presented in the table above and in this report related to our share repurchases and our share

repurchase authorizations exclude such excise taxes, to the extent applicable, unless otherwise indicated.

The 2022 Inflation Reduction Act (“IRA”) imposed a nondeductible 1% excise tax on the net value of certain stock

repurchases made after December 31, 2022.

All dollar amounts presented in the table above and in this report related to our

share repurchases and our share repurchase authorizations exclude such excise taxes, to the extent applicable, unless otherwise

Stock Performance Graph

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RESULTS OF OPERATIONS

Our discussion and analysis below is focused on our 2024 and 2023 financial results, including comparisons of our year-

over-year performance between these years.

Discussion and analysis of our 2022 fiscal year specifically, as well as the year-

over-year comparison of our 2023 financial performance to 2022 , are located under Part II, Item 7 – Management’s Discussion

and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended

November 30, 2023 , filed with the SEC on January 19, 2024, which is available on our investor relations website at

Our discussion and analysis below is primarily focused on our 2025 and 2024 financial results, including comparisons of

our year-over-year performance between these years.

Discussion and analysis of our 2023 fiscal year specifically, as well as the

year-over-year comparison of our 2024 financial performance to 2023 , are located under Part II, Item 7 – Management’s

Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal

year ended November 30, 2024 , filed with the SEC on January 24, 2025, which is available on our investor relations website at

investor.kbhome.com and the SEC website at www.sec.gov.

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Earnings per share:

In 2024, our operational execution contributed to year-over-year increases in total revenues, net income and diluted

earnings per share.

Our performance for the year reflected, among other things, key longer-term housing market drivers

remaining largely positive, including favorable demographic trends, rising household formations, solid employment, wage

growth and the ongoing undersupply of new and resale homes.

At the same time, affordability constraints stemming largely

from rising mortgage interest rates tempered buyer demand in 2024.

Our net orders in 2024 increased 18% year over year to 13,093 , and the pace of monthly net orders per community rose to

4.4 from 3.8 in 2023, despite uneven market conditions during the current year that were driven primarily by buyer discomfort

with volatile mortgage interest rates, persistent inflationary pressures and general economic concerns.

To navigate this business

environment, we focused on balancing pace, price and construction starts at each community to optimize our return on each

inventory asset within its market context.

With this approach, we implemented price increases in most of our communities in

the 2024 first half, selectively adjusted prices at certain communities in the third quarter to help stimulate demand, and, given

our backlog entering the period, held prices relatively stable in the seasonally slower fourth quarter.

Additionally, we continued

to employ targeted sales strategies throughout the year, as we have to varying degrees since the 2022 second half, including

homebuyer concessions (particularly, mortgage-related concessions such as interest rate buydowns), to help drive order activity

and minimize cancellations, especially during periods of rising mortgage interest rates.

Reflecting these actions, and relatively

soft net order levels in the year-earlier quarter, our 2024 fourth quarter net orders and net order value each grew 41% year over

year, with all of our homebuilding reporting segments generating increases.

Our cancellation rate as a percentage of gross

orders for the 2024 fourth quarter improved to 17% , from 28% for the 2023 fourth quarter and, together with our improved

build times compared to a year ago, our homes delivered as a percentage of backlog at the beginning of the quarter increased to

69% for the 2024 fourth quarter from 49% for the year-earlier quarter.

Homebuilding revenues for 2024 and 2023 were comprised of housing revenues and land sale revenues.

Housing revenues

of $6.90 billion grew 8% from the previous year, due to a 7% increase in the number of homes delivered to 14,169 and a slight

increase in the overall average selling price of those homes to $486,900 .

Approximately 50% of our homes delivered in 2024

were to first-time homebuyers.

Homebuilding operating income for 2024 increased 6% to $763.9 million , compared to $718.7

million for 2023 and, as a percentage of homebuilding revenues was 11.1% , compared to 11.3% .

Our homebuilding operating

income margin for 2024 primarily reflected a 20 basis point decrease in our housing gross profit margin to 21.0% , as s elling,

general and administrative expenses as a percentage of housing revenues were nearly even with the prior year at 10.0% .

income and diluted earnings per share for 2024 grew 11% and 20% , respectively, each as compared to 2023 .

The increase in

diluted earnings per share for 2024 was driven by higher net income and the favorable impact of our common stock repurchases

over the past several quarters.

Our return on equity (“ ROE ”) for 2024 was 16.6% , compared to 15.7% for 2023 .

ROE is calculated as net income for the

year divided by average stockholders’ equity, where average stockholders’ equity is based on the ending stockholders’ equity

balances of the trailing five quarters.

We believe our strong balance sheet and liquidity position helped provide us with the flexibility to operate effectively

through the evolving market conditions during the year and pursue our priorities of investing in land and land development to

support future growth and returning capital to our stockholders.

In 2024, we continued to take a balanced approach in

allocating our capital aligned with these priorities.

Our investments in land and land development for 2024 increased 58% year

over year to $2.84 billion .

In addition, we repurchased approximately 4.7 million shares of our common stock at a total cost of

$350.0 million , which represented about 6% of our shares that were outstanding at the start of the year, and in the 2024 second

quarter, our board of directors increased the quarterly cash dividend on our common stock by 25% to $.25 per share, from $.20

We paid a cash dividend at this higher rate in the 2024 second, third and fourth quarters.

We ended 2024 with total

liquidity of $1.68 billion , comprised of $598.0 million of cash and cash equivalents and $1.08 billion of available capacity

under our Credit Facility.

Housing market conditions in 2025 were challenging despite solid underlying drivers, mainly favorable demographic

trends in population growth and household formation, along with relatively steady employment levels and an ongoing structural

undersupply of new homes.

Compared to 2024, demand was softer as tepid consumer confidence, macroeconomic and

geopolitical uncertainties, affordability challenges and persistently elevated mortgage loan interest rates over the course of the

year limited the pool of actionable buyers and caused many of those buyers to hesitate on making purchase decisions.

same time, during 2025, we believe we executed well operationally, maintaining high customer satisfaction levels , further

improving build times, lowering construction costs and balancing pace and price to optimize each asset.

Additionally, to help

navigate the current environment, we implemented a simplified sales strategy focused on providing a straightforward,

transparent base price, with limited, if any, concessions or incentives, that is intended to offer to our customers a compelling

value competitive with area resale home prices.

With this strategy, which we began instituting on a community-by-community

basis in mid-February 2025 to stimulate demand, we both reduced selling prices relative to applicable market conditions and

lowered or eliminated other homebuyer concessions.

With these market dynamics, our net orders in 2025 decreased 11% year over year to 11,596 , and the pace of monthly net

orders per community was 3.7 compared to 4.4 in 2024 .

Reflecting the price reductions we put in place per our sales strategy,

and expanded on in certain underperforming communities to align with local demand, the value of our net orders for 2025 was

down 17% year over year as a result of the decline in net orders and a 6% decrease in the overall average selling price of net

orders to $463,200 .

In the 2025 fourth quarter, our net orders and net order value decreased 10% and 17% , respectively, year over year.

cancellation rate as a percentage of gross orders for the 2025 fourth quarter was 18% , compared to 17% for the 2024 fourth

quarter and, together with our improved build times compared to a year ago, our homes delivered as a percentage of backlog at

the beginning of the quarter increased to 84% for the 2025 fourth quarter from 69% for the year-earlier quarter.

Homebuilding revenues for 2025 and 2024 were comprised of housing revenues and nominal land sale revenues.

housing revenues of $6.21 billion declined 10% from the previous year due to a 9% decrease in the number of homes delivered

to 12,902 and a slight decrease in the overall average selling price of those homes to $481,400 .

Approximately 50% of our

homes delivered in 2025 were to first-time homebuyers.

Homebuilding operating income for 2025 was $507.1 million ,

compared to $763.9 million for 2024 and, as a percentage of homebuilding revenues was 8.2% , compared to 11.1% .

homebuilding operating income margin for 2025 primarily reflected 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 2025

was 18.6% , compared to 21.0% for 2024 , due to price reductions, higher relative land costs, geographic mix, and an increase in

inventory-related charges, partly offset by lower construction costs.

Our selling, general and administrative expenses as a

percentage of housing revenues of 10.4% for 2025 increased 40 basis points year over year, primarily reflecting higher

marketing expenses associated with our expanded community count, higher relative general and administrative expenses, and

decreased operating leverage from lower housing revenues.

General and administrative expenses for 2025 included

$16.0 million of stock-based compensation expense recognized on an accelerated basis for certain equity awards granted in

October 2025 that included new provisions for accelerated vesting of restricted stock and continued vesting of PSUs for long-

tenured employees upon retirement.

Total pretax income for 2025 decreased to $554.2 million from $850.9 million for 2024 ,

which included a $12.5 million gain associated with the sale of our ownership interest in a privately held technology company.

Net income and diluted earnings per share for 2025 were $428.8 million and $6.15 , respectively, compared to $655.0 million

and $8.45 , respectively for 2024 .

Our diluted earnings per share for 2025 reflected lower net income, partly offset by the

favorable impact of our common stock repurchases over the past several quarters.

We believe our strong balance sheet and liquidity position helped provide us with flexibility to operate effectively while

navigating the evolving market conditions throughout the year.

We continue to take a disciplined and balanced approach in

allocating capital, guided by market conditions and our priorities of investing in land and land development to support future

growth and returning capital to our stockholders.

Given the prevailing environment and our land pipeline, we began

moderating our investments in land and land development in the 2025 second quarter while increasing our share repurchases.

Even with this shift, we maintained our land investments at a level that we believe will support our current growth projections.

For 2025 , our investments in land and land development totaled $2.61 billion , an 8% decrease year over year.

During this same

period, we repurchased approximately 9.4 million shares of our common stock at a total cost of $538.5 million , compared to 4.7

million shares at a total cost of $350.0 million in 2024.

On November 12, 2025 , we obtained an upsized $1.20 billion five-year Credit Facility , refinancing and replacing our prior

$1.09 billion unsecured revolving credit facility, which we voluntarily terminated on the same date.

We also extended the

maturity of our $360.0 million Term Loan to 2029 .

Our next senior note maturity is on June 15, 2027 .

We ended 2025 with

total liquidity of $1.43 billion , comprised of $228.6 million of cash and cash equivalents and nearly $1.20 billion of available

capacity under our Credit Facility .

We had no cash borrowings outstanding under the Credit Facility at November 30, 2025 .

Reflecting our increased investments in land and land development, we ended 2024 with 258 active communities, up 7%

year over year.

Although the number of homes in our ending backlog at November 30, 2024 was down 20% year over year to

4,434 , mainly reflecting a 28% improvement in our 2024 average build time , we believe we are well-positioned for 2025, as

described below under “Outlook.”

Reflecting our investments in land and land development, we ended 2025 with 271 active communities, up 5% year over

The number of homes in our ending backlog at November 30, 2025 was down 29% year over year to 3,128 , partly due to

an 18% improvement in our 2025 average build time.

At the same time, with our planned new community openings in 2026,

we believe we are well-positioned to achieve our projections for the 2026 first quarter and full year, as described below under

Financial Results .

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Homebuilding pretax income

Years Ended November 30,

Homes delivered

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Operating income as a percentage of homebuilding revenues

Homebuilding revenues of $6.90 billion for 2024 grew 8% from the prior year due to an increase in housing

revenues, partly offset by a decrease in land sale revenues.

In 2024 , housing revenues grew 8% from the previous year, reflecting a 7% increase in the number of homes delivered and

a slight increase in their overall average selling price.

The year-over-year growth in the number of homes delivered reflected

increases of 28% , 9% and 7% in our West Coast, Southeast and Southwest homebuilding reporting segments, respectively,

partially offset by a 10% decrease in our Central segment.

The slightly higher average selling price primarily resulted from the

combined effect of product and geographic mix factors, particularly a greater proportion of homes delivered from our higher-

priced West Coast homebuilding reporting segment, and a decrease in homebuyer concessions.

Homebuilding revenues for 2025 and 2024 were comprised of housing revenues and land sale revenues.

2025 , homebuilding revenues totaled $6.21 billion , representing a 10% decrease from the prior year mostly due to lower

housing revenues.

In 2025 , housing revenues declined 10% from the previous year, reflecting a 9% decrease in the number of homes

delivered and a slight decrease in their overall average selling price.

Our 2025 housing revenues were down year over year in

each of our homebuilding reporting segments, ranging from 5% in our Southwest segment to 19% in our Central segment.

slightly lower average selling price primarily reflected a combination of product and geographic mix factors, as well as the

strategic price reductions we implemented in response to softer market conditions in 2025.

We generated $1.3 million of land sale revenues in 2025 , compared to $3.6 million of such revenues in 2024 .

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Operating Income .

Our homebuilding operating income increased 6% in 2024 , as compared to the previous year, primarily

reflecting higher housing gross profits, partly offset by higher selling, general and administrative expenses.

In 2024 and 2023 ,

homebuilding operating income included total inventory-related charges of $4.6 million and $11.4 million , respectively, as

discussed in Note 7 – Inventory Impairments and Land Option Contract Abandonments in the Notes to Consolidated Financial

Statements in this report.

As a percentage of homebuilding revenues, our homebuilding operating income for 2024 decreased

20 basis points year over year to 11.1% , mainly due to a lower housing gross profit margin.

Excluding inventory-related

charges for both periods, our homebuilding operating income margin declined 30 basis points to 11.1% in 2024 from 11.4% in

• Housing Gross Profits – In 2024 , housing gross profits of $1.45 billion grew 7% from the previous year, reflecting an

increase in housing revenues, partly offset by a decrease in our housing gross profit margin.

Our homebuilding operating income decreased 34% in 2025 , as compared to the previous year,

primarily reflecting lower housing gross profits, partly offset by lower selling, general and administrative expenses.

and 2024 , homebuilding operating income included total inventory-related charges of $32.1 million and $4.6 million ,

respectively, as discussed in Note 7 – Inventory Impairments and Land Option Contract Abandonments in the Notes to

Consolidated Financial Statements in this report.

As a percentage of homebuilding revenues, our homebuilding operating

income for 2025 decreased 290 basis points year over year to 8.2% , 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

for both periods, our homebuilding operating income margin declined 240 basis points to 8.7% in 2025 from 11.1% in 2024 .

• Housing Gross Profits – In 2025 , housing gross profits of $1.15 billion were down 20% from the previous year,

reflecting both lower housing revenues and a decrease in our housing gross profit margin.

Housing gross profits for

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million , respectively.

Our housing gross profit margin for 2024 was 21.0% , down 20 basis points from the previous year, primarily due to

product and geographic mix shifts of homes delivered and higher relative construction and land costs, largely offset by

decreases in both inventory-related charges and homebuyer concessions.

As a percentage of housing revenues, the

amortization of previously capitalized interest associated with housing operations was 1.7% for 2024 and 1.9% for

Excluding the inventory-related charges associated with housing operations described above, our adjusted

Our housing gross profit margin for 2025 was 18.6% , down 240 basis points from the previous year due to price

reductions, higher relative land costs, geographic mix, and an increase in inventory-related charges, 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 1.8% for 2025 and 1.7% for

Excluding the above-mentioned inventory-related charges associated with housing operations, our adjusted

housing gross profit margin decreased 200 basis points year over year to 19.1% in 2025 .

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described below under “Non-GAAP Financial Measures.”

• Land Sale Profits – Land sale profits totaled $1.5 million for 2024 , compared to $1.2 million for 2023 .

• Land Sale Profits – Land sales generated break-even results in 2025 .

Land sale profits for 2024 totaled $1.5 million .

• Selling, General and Administrative Expenses – The following table presents the components of our selling, general

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external real estate brokers.

Selling, general and administrative expenses for 2024 increased 9% from the prior year.

As a percentage of housing

revenues, selling, general and administrative expenses for 2024 were nearly even with 2023 , primarily reflecting

higher costs, including marketing and other expenses associated with the increase in our community count during the

year to position our operations for growth, mostly offset by increased operating leverage from higher housing

Reflecting our continued focus on prudently managing our costs and generally aligning our overhead structure with

our volume of homes delivered, selling, general and administrative expenses for 2025 decreased 6% from the prior

As a percentage of housing revenues, selling, general and administrative expenses for 2025 increased 40 basis

points, compared to 2024 , primarily reflecting decreased operating leverage from lower housing revenues.

and administrative expenses for 2025 included $16.0 million of stock-based compensation expense recognized on an

accelerated basis for certain equity awards granted in October 2025 that included new provisions for accelerated

vesting of restricted stock and continued vesting of PSUs for long-tenured employees upon retirement.

Interest Income/Expense and Other .

In 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 held an ownership interest.

information regarding this gain is provided in Note 11 – Other Assets in the Notes to Consolidated Financial Statements in this

In 2025 , interest income and other was comprised solely of interest income.

Interest income, which is generated from

short-term investments, increased to $19.6 million in 2024 , compared to $13.8 million in 2023 due to our higher average

balance of cash equivalents and a higher average interest rate in 2024 .

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

interest income and other was comprised of interest income and a $12.5 million gain associated with the sale of our ownership

interest in a privately held technology company.

Further information regarding this gain is provided in Note 11 – Other Assets

in the Notes to Consolidated Financial Statements in this report.

Interest income, which is generated from short-term investments, was $7.4 million in 2025 , compared to $19.6 million in

2024 due to our lower average balance of cash equivalents and a lower average interest rate in 2025 .

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 borrowings used to finance land acquisitions, land development, home construction and

other operating and capital needs.

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outstanding for the period and the interest rate on that debt.

In 2024 , total interest incurred of $105.6 million decreased from

$107.1 million in 2023 primarily due to there being no borrowings under the Credit Facility in 2024.

All interest incurred

during 2024 and 2023 was capitalized as the average amount of our inventory qualifying for interest capitalization was higher

than our average debt level for each period.

As a result, we had no interest expense for 2024 or 2023 .

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 .

In 2025 , total interest incurred was $113.9 million , compared to

$105.6 million in 2024 , primarily due to borrowings during 2025 under the unsecured revolving credit facility we had in place

prior to entering into the Credit Facility in November.

As of November 30, 2025 , no cash borrowings were outstanding under

the Credit Facility .

All interest incurred in 2025 and 2024 was capitalized, as the average amount of inventory qualifying for

interest capitalization exceeded the average debt level for each period.

Consequently, we had no interest expense for 2025 or

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 of Unconsolidated Joint Ventures .

Our equity in income of unconsolidated joint ventures was $5.7

$6.0 million for 2024 , compared to a nominal equity in loss of unconsolidated joint ventures for 2023 .

The year-over-year

improvement in 2024 mainly reflected homes delivered by an unconsolidated joint venture in California.

unconsolidated joint ventures did not deliver any homes.

million for 2025 , compared to $6.0 million for 2024 .

Further information regarding our investments in unconsolidated joint

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Statements in this report.

Loss on Early Extinguishment of Debt.

In 2025 , we recognized a $1.0 million loss on the early extinguishment of debt in

connection with our obtaining a $1.20 billion Credit Facility , which refinanced and replaced our prior $1.09 billion unsecured

revolving credit facility that had a February 18, 2027 maturity date, and the amendment of our Term Loan , extending its

maturity to 2029 .

Further information regarding these transactions is provided in Note 15 – Notes Payable in the Notes to

Consolidated Financial Statements in this report.

Net Orders, Backlog and Community Count.

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(gross) orders for new homes generated during the same period.

Net orders from our homebuilding operations for the year ended November 30, 2024 grew 18% from the

previous year, reflecting an increase in the pace of monthly net orders per community to 4.4 in 2024 , compared to 3.8 in 2023 .

The value of our 2024 net orders rose 21% year over year as a result of the net order growth and a 3% increase in the overall

average selling price of net orders to $494,500 .

In 2024 , the year-over-year growth in our overall net order value reflected

increases in each of our homebuilding reporting segments, ranging from 13% in our Southeast segment to 48% in our Central

Our cancellation rate as a percentage of gross orders for the year ended November 30, 2024 improved year over year,

reflecting buyers’ ability and willingness to close on their homes when available for delivery.

Net orders from our homebuilding operations for the year ended November 30, 2025 decreased 11% from the

previous year, and the pace of monthly net orders per community was 3.7 in 2025 , compared to 4.4 in 2024 .

The decreases in

our net orders and monthly pace per community reflected softer market conditions in 2025 .

In navigating the current environment, we implemented a simplified sales strategy focused on providing a straightforward,

transparent base price, with limited, if any, concessions or incentives, that is intended to offer to our customers a compelling

value competitive with area resale home prices.

With this strategy, which we began instituting on a community-by-community

basis in mid-February 2025 to stimulate demand, we both reduced selling prices relative to applicable market conditions and

lowered or eliminated other homebuyer concessions.

Reflecting the price reductions we put in place per our sales strategy, and

expanded on in certain underperforming communities to align with local demand, the value of our net orders for 2025 was

down 17% year over year as a result of the decline in net orders and a 6% decrease in the overall average selling price of net

orders to $463,200 .

In 2025 , the year-over-year decline in our overall net order value reflected decreases in each of our

homebuilding reporting segments, ranging from 3% in our Southeast segment to 27% in our Central segment.

Our cancellation rate as a percentage of gross orders for the year ended November 30, 2025 was 17% compared to 14% in

the previous year.

The number of homes in our backlog at November 30, 2025 decreased 29% from the previous year mainly due to

a 28% improvement in our 2024 average build tim e.

Th e potential future housing revenues in our backlog at November 30,

2024 were down 16% year over year, reflecting fewer homes in our backlog, partially offset by a 4% increase in the average

selling price of those homes.

Backlog value decreased in each of our four homebuilding reporting segments, with decreases in

value ranging from 5% in our Central segment to 29% in our Southeast segment.

Based on our historical experience, a portion

of the homes in backlog will not result in homes delivered due to cancellations.

an 18% improvement in our 2025 average build time as well as the decrease in our net orders.

The potential future housing

revenues in our backlog at November 30, 2025 were down 37% year over year, reflecting fewer homes in our backlog and an

11% decrease in the average selling price of those homes.

Backlog value decreased in each of our four homebuilding reporting

segments, ranging from 21% in our Southeast segment to 59% 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.

Community Count .

Our average community count for 2024 expanded slightly from the previous year, and our ending

community count grew 7% .

The year-over-year increase in our ending community count primarily reflected our investments in

In 2025 , our average community count and our ending community count each expanded 5% from the

previous year.

The year-over-year increase in our average and ending community counts primarily reflected our investments in

land and land development in 2024 and 2025 generating new community openings over the past 12 months that exceeded the

number of communities selling out during the same period.

Our ending community count for 2024 also reflected a 58% year-

over-year increase in our investments in land and land development for the year, as discussed below under “Liquidity and

Capital Resources.”

Our investments in land and land development for the year are

discussed below under “Liquidity and Capital Resources.”

HOMEBUILDING REPORTING SEGMENTS

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operating income (loss) and pretax income (loss) is generally due to the equity in income (loss) of unconsolidated joint

ventures, which is also presented in Note 2 – Segment Information in the Notes to Consolidated Financial Statements in this

report, and/or interest income and expense.

ventures, and/or interest income and expense.

In addition to the results of our homebuilding reporting segments presented below, our consolidated homebuilding

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$157.8 million in 2025 , $149.0 million in 2024 and $142.6 million in 2023 .

The financial results of our homebuilding reporting segments for 2024 and 2023 were impacted to varying degrees by

homebuyer concessions we selectively extended to buyers in conjunction with our targeted sales strategies, as well as product

and geographic mix shifts of homes delivered.

The financial results of our homebuilding reporting segments for 2025 and 2024 were impacted to varying degrees by price

reductions and homebuyer concessions selectively extended to buyers in conjunction with our sales strategies, as well as

product and geographic mix shifts of homes delivered.

The following table presents financial information related to our West Coast homebuilding reporting segment

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Operating income as a percentage of

In 2024 , this segment’s revenues were comprised of housing revenues and nominal land sale revenues.

In 2023 , revenues

were generated solely from housing revenues.

Housing revenues for 2024 grew 26% from 2023 due to an increase in the

number of homes delivered, partly offset by a decrease in their average selling price.

Operating income for 2024 was also up

year over year, reflecting higher housing gross profits, partially offset by higher selling, general and administrative expenses.

As a percentage of revenues, this segment’s 2024 operating income increased from the previous year, reflecting a 70 basis-point

expansion in the housing gross profit margin to 19.3% and a 40 basis-point improvement in selling, general and administrative

expenses as a percentage of housing revenues to 6.7% .

The housing gross profit margin expansion primarily reflected lower

relative construction and land costs, increased operating leverage from higher housing revenues, a decrease in homebuyer

concessions and product and geographic mix shifts of homes delivered.

Inventory-related charges associated with housing

operations decreased to $2.9 million in 2024 , compared to $4.9 million in 2023 .

The year-over-year improvement in selling,

general and administrative expenses as a percentage of housing revenues was mainly due to improved operating leverage from

increased housing revenues, partly offset by higher costs including marketing and other expenses associated with our expanded

community count in this segment.

In 2025 and 2024 , this segment’s revenues consisted of housing revenues and nominal land sale revenues.

revenues of $2.69 billion for 2025 declined 8% from $2.93 billion in 2024 due to a decrease in the number of homes delivered,

as the average selling price was about the same as the prior year.

Operating income for 2025 was down year over year,

reflecting lower housing gross profits, partially offset by lower selling, general and administrative expenses.

As a percentage of

revenues, this segment’s 2025 operating income decreased from the previous year, reflecting a 140 basis-point decline in the

housing gross profit margin to 17.9% and a 10 basis-point increase in selling, general and administrative expenses as a

percentage of housing revenues to 6.8% .

The housing gross profit margin decline primarily reflected higher relative land costs,

partly offset by lower construction costs.

Inventory-related charges associated with housing operations were $4.3 million in

2025 , compared to $2.9 million in 2024 .

The following table presents financial information related to our Southwest homebuilding reporting segment

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Operating income as a percentage of

This segment’s revenues in 2024 were generated solely from housing revenues.

In 2023 , revenues were comprised of both

housing revenues and land sale revenues.

Housing revenues for 2024 grew 13% year over year, reflecting increases in both the

number of homes delivered and their average selling price.

Land sale revenues totaled $6.0 million in 2023 .

Operating income

rose from the previous year, primarily due to higher housing gross profits, partly offset by higher selling, general and

administrative expenses and the absence of land sale profits in 2024.

Land sale profits totaled $1.1 million in 2023 .

percentage of revenues, operating income increased year over year, primarily due to a 140 basis-point expansion in the housing

gross profit margin to 24.8% , with selling, general and administrative expenses as a percentage of housing revenues nearly even

The year-over-year improvement in the housing gross profit margin mainly reflected lower relative construction and

land costs, increased operating leverage from higher housing revenues, a decrease in homebuyer concessions, and product and

geographic mix shifts of homes delivered.

This segment’s revenues in 2025 and 2024 were generated solely from housing revenues.

Housing revenues for 2025

declined 5% year over year, reflecting a decrease in the number of homes delivered, partly offset by an increase in their average

selling price.

Operating income was down from the previous year, primarily due to lower housing gross profits, partly offset by

lower selling, general and administrative expenses.

As a percentage of revenues, operating income decreased due to a 50 basis-

point decline in the housing gross profit margin to 24.3% , partially offset by a 20 basis-point improvement in selling, general

and administrative expenses as a percentage of housing revenues to 7.2% .

The year-over-year decrease in the housing gross

profit margin mainly reflected higher relative land costs, partially offset by lower construction costs.

Inventory-related charges

associated with housing operations were $1.6 million in 2025 , compared to $.3 million in 2024 .

The following table presents financial information related to our Central homebuilding reporting segment for the

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Operating income as a percentage of

This segment’s revenues in 2024 and 2023 were comprised of both housing revenues and land sale revenues.

revenues for 2024 declined 21% from the prior year to $1.45 billion , reflecting decreases in both the number of homes delivered

and the average selling price of those homes.

Land sale revenues were $3.2 million in 2024 , compared to $4.7 million in 2023 .

Operating income for 2024 was down year over year mainly due to lower housing gross profits, partly offset by lower selling,

general and administrative expenses.

Land sale profits were $1.1 million in 2024 , compared to $.1 million in 2023 .

percentage of revenues, operating income declined from the previous year, reflecting an 80 basis-point decrease in the housing

This segment’s revenues in 2025 were generated solely from housing operations.

In 2024 , revenues were comprised of

both housing revenues and land sale revenues.

Housing revenues for 2025 declined 19% from $1.45 billion in the prior year,

reflecting decreases in both the number of homes delivered and the average selling price of those homes.

Land sale revenues

were $3.2 million in 2024 .

Operating income for 2025 was down year over year mainly due to lower housing gross profits,

partly offset by lower selling, general and administrative expenses.

Land sale profits were $1.1 million in 2024 .

percentage of revenues, operating income declined from the previous year, reflecting a 510 basis-point decrease in the housing

gross profit margin to 16.6% and a 40 basis-point increase in selling, general and administrative expenses as a percentage of

housing revenues to 10.4% .

The year-over-year decline in the housing gross profit margin was mainly driven by higher relative

construction and land costs, product and geographic mix shifts of homes delivered, and reduced operating leverage from lower

housing revenues, partly offset by a decrease in amortization of previously capitalized interest.

The housing gross profit margin

for 2024 included inventory-related charges of $.8 million , compared to $2.5 million in 2023 .

The year-over-year increase in

selling, general and administrative expenses as a percentage of housing revenues was primarily due to reduced operating

leverage from lower housing revenues.

The year-over-year decline in the housing gross profit margin was mainly driven by price

reductions, higher relative land costs, geographic mix, an increase in inventory-related charges, and reduced operating leverage

from lower housing revenues.

The housing gross profit margin for 2025 included inventory-related charges of $20.4 million ,

compared to $.8 million in 2024 .

The year-over-year increase in selling, general and administrative expenses as a percentage of

housing revenues was primarily due to reduced operating leverage from lower housing revenues.

The following table presents financial information related to our Southeast homebuilding reporting segment for

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Operating income as a percentage of

This segment’s revenues for 2024 and 2023 were generated solely from housing operations.

In 2024 , housing revenues

grew year over year due to increases in both the number of homes delivered and the average selling price of those homes.

Operating income was down from 2023 , reflecting higher selling, general and administrative expenses, partly offset by higher

housing gross profits.

As a percentage of revenues, operating income decreased from 2023 primarily due to a 210 basis-point

decline in the housing gross profit margin to 20.8% that mainly reflected higher relative construction and land costs, and

product and geographic mix shifts of homes delivered, partly offset by a decrease in inventory-related charges and improved

operating leverage from higher housing revenues .

In 2024 , inventory-related charges associated with housing operations were

$.5 million , compared to $4.0 million in 2023 .

Selling, general and administrative expenses as a percentage of housing

revenues improved 10 basis points year over year to 8.9% .

In 2025 , this segment’s revenues were comprised of housing revenues and nominal land sale revenues.

This segment’s

revenues for 2024 were generated solely from housing operations.

In 2025 , housing revenues declined 9% year over year to

$1.10 billion , largely due to a decrease in the average selling price of homes delivered, as the number of homes delivered was

nearly even with the prior year.

Operating income was down from 2024 , reflecting lower housing gross profits, partially offset

by lower selling, general and administrative expenses.

As a percentage of revenues, operating income decreased from 2024

primarily due to a 430 basis-point decline in the housing gross profit margin to 16.5% and a 50 basis-point increase in selling,

general and administrative expenses as a percentage of housing revenues to 9.4% .

The year-over-year decrease in the housing

gross profit margin for 2025 mainly reflected price reductions, higher relative land costs, geographic mix, increased inventory-

related charges and decreased operating leverage from lower housing revenues.

In 2025 , inventory-related charges associated

with housing operations were $5.7 million , compared to $.5 million in 2024 .

The year-over-year increase in selling, general

and administrative expenses as a percentage of housing revenues was primarily due to reduced operating leverage from lower

housing revenues as well as higher marketing and other expenses associated with our expanded community count in this

FINANCIAL SERVICES REPORTING SEGMENT

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Average FICO score

Years Ended November 30,

Loans sold (a):

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Pretax income.

Our financial services pretax income for 2024 grew 24% from the previous year, reflecting an increase in

the equity in income of our unconsolidated joint venture, KBHS , partly offset by a decrease in operating income from our

insurance and title services businesses.

In 2024 , the equity in income of our unconsolidated joint ventures rose 73% year over

year as a result of an increase in KBHS ’ income.

The year-over-year growth in KBHS ’ income was primarily due to a gain of

$2.1 million in the fair value of interest rate lock commitments (“ IRLCs ”) in 2024 , compared to losses of $16.0 million in 2023.

Also contributing to the year-over-year increase in KBHS ’ income was a higher principal amount of loans originated, which

mainly reflected increases in both the number of homes we delivered and the percentage of homebuyers using KBHS .

87% of the buyers financing their home purchases used KBHS , compared to 83% in the prior year.

Further information

regarding our investments in unconsolidated joint ventures is provided in Note 9 – Investments in Unconsolidated Joint

Ventures in the Notes to Consolidated Financial Statements in this report.

Our financial services pretax income for 2025 declined 28% from the previous year due to a decrease in

the equity in income of our unconsolidated joint venture, KBHS , as well as lower operating income from our insurance and title

services businesses.

In 2025 , the equity in income of our unconsolidated joint ventures decreased 38% year over year,

reflecting KBHS ’ lower income.

The year-over-year decrease in KBHS ’ income was primarily due to a loss of $11.4 million in

the fair value of interest rate lock commitments (“ IRLCs ”) in 2025 , compared to a gain of $2.1 million in 2024.

contributing to the year-over-year decrease in KBHS ’ income was a lower principal amount of loans originated, which mainly

reflected decreases in both the number of homes we delivered and the percentage of homebuyers using KBHS .

In 2025 , 85% of

the buyers financing their home purchases used KBHS , compared to 87% in the prior year.

Further information regarding our

investments in unconsolidated joint ventures is provided in Note 9 – Investments in Unconsolidated Joint Ventures in the Notes

to Consolidated Financial Statements in this report.

Income Tax Expense .

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Effective income tax rate

Our effective tax rate for 2024 was slightly lower than the previous year, mainly due to a $4.0 million decrease in state

taxes, a $2.4 million increase in excess tax benefits related to stock-based compensation and a $1.5 million decrease in non-

deductible compensation expense, partly offset by a $5.9 million decline in Section 45L tax credits we recognized primarily

from building energy-efficient homes.

The IRA tied Section 45L tax credit qualification for energy-efficient homes built on and after January 1, 2023 to new

homes achieving ENERGY STAR certification.

Based on guidance the IRS issued in September 2023, fewer of the ENERGY

STAR homes we build in California meet the heightened qualification standard the IRS selected for homes built in that state

relative to other states.

The heightened tax credit qualifications contributed to our recognizing less Section 45L tax credits in

2024 than in 2023.

Subject to future guidance, regulation or legislation, we have opted to build homes in many of our markets

beginning in 2025 to an alternate version of ENERGY STAR under which our homes delivered will continue to be highly

energy efficient and qualify for ENERGY STAR certification but not qualify for Section 45L tax credits, as we believe the

additional costs necessary for some of our homes to satisfy the higher Section 45L standards outweigh the possible benefits

from meeting them for both our business and our buyers.

Therefore, we expect to realize fewer such tax credits compared to

prior periods, including in 2025 and future years as compared to 2024 .

Our effective tax rate for 2025 was slightly lower than the previous year, mainly due to a decrease in our blended state tax

On June 27, 2024, California enacted Senate Bill 167 (“SB-167”), which, among other things, suspended California net

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extended carryover period for the suspended California NOL s with an additional year carryforward for each year of suspension.

T his act had no impact on our income tax expense for the year ended November 30, 2024 and will have no impact on our

This act had no impact on our income tax expense for the year ended November 30, 2025 and will have no impact on our

income tax expense in future periods.

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California NOLs can be utilized.

Internal Revenue Service (“ IRS ”) guidance issued in 2023 heightened the Section 45L energy-efficiency qualification

standard for homes built in California relative to other states.

This guidance, along with 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, impacted the tax credits we recognized for 2025 relative to 2024.

We believe the additional costs

necessary to satisfy the higher standards for some of our homes outweigh the possible 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.

not expect the other tax-related provisions of the OBBBA to have a material effect on our effective tax rate for the year ending

November 30, 2026.

Under current accounting standards, we expect volatility in our income tax expense in future periods, the magnitude of

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construction were previously incurred.

We ended 2024 with total liquidity of $1.68 billion , including cash and cash equivalents and $1.08 billion of available

capacity under the Credit Facility .

Cash and cash equivalents totaled $598.0 million at November 30, 2024 , compared to

$727.1 million at November 30, 2023.

We ended 2025 with total liquidity of $1.43 billion , including cash and cash equivalents and nearly $1.20 billion of

available capacity under the Credit Facility .

Cash and cash equivalents totaled $228.6 million at November 30, 2025 , compared

to $598.0 million at November 30, 2024 .

Cash equivalents included in the total were $152.6 million at November 30, 2025 and

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with our Credit Facility , totaled $379.5 million as of November 30, 2025 , with $97.2 million payable within 12 months.

Term Loan will mature on August 25, 2026 .

Our next senior note maturity is our $300.0 million in aggregate principal amount

of 6.875% Senior Notes due 2027 .

Further information regarding our notes payable is provided in Note 15 – Notes Payable in

the Notes to Consolidated Financial Statements in this report.

Term Loan will mature on November 12, 2029 .

Our next senior note maturity is our $300.0 million in aggregate principal

amount of 6.875% Senior Notes due 2027 .

Further information regarding our notes payable is provided in Note 15 – Notes

Payable in the Notes to Consolidated Financial Statements in this report.

We have operating leases for certain property and equipment with an expected term at the commencement date of

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Investments in Land and Land Development.

Our investments in land and land development increased 58% to

$2.84 billion in 2024 , compared to $1.80 billion in 2023 .

Land acquisition expenditures, which are included in our investments

in land and land development, increased 166% to $1.24 billion from $465.8 million in the year-earlier period.

Approximately

44% of our total investments in land and land development in 2024 were related to land acquisitions, compared to

approximately 26% in 2023 .

While we made strategic investments in land and land development in each of our homebuilding

reporting segments during 2024 and 2023 , approximately 58% and 56% , respectively, of these investments for each year were

made in our West Coast homebuilding reporting segment.

Our investments in land and land development decreased 8% to $2.61 billion

in 2025 , compared to $2.84 billion in 2024 .

Land acquisition expenditures, which are included in our investments in land and

land development, decreased 20% to $992.1 million from $1.24 billion in the year-earlier period.

Approximately 38% of our

total investments in land and land development in 2025 were related to land acquisitions, compared to approximately 44% in

While we made strategic investments in land and land development in each of our homebuilding reporting segments

during 2025 and 2024 , approximately 51% and 58% , respectively, of these investments for each year were made in our West

Coast homebuilding reporting segment.

In 2026, 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.

While we expect our land acquisition activity to increase in

2025 as compared to 2024 , our investments in land and land development in the future will depend significantly on market

conditions and available opportunities that meet our investment return standards.

Our investments in land and land development in the future will

depend significantly on market conditions, our expectations for future growth 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

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Carrying Value

The number and carrying value of lots we owned or controlled under land option contracts and other similar contracts at

November 30, 2024 increased year over year, reflecting land investments in 2024, partly offset by homes delivered and our

abandonment of 8,389 previously controlled lots.

The number of lots we owned and controlled as of November 30, 2024

increased 37% from November 30, 2023 .

The number of lots in inventory as of November 30, 2024 included 18,923 lots under

contract where the associated deposits were refundable at our discretion, compared to 6,260 of such lots at November 30, 2023 .

Our lots controlled under land option contracts and other similar contracts as a percentage of total lots was 49% at

November 30, 2024 , compared to 27% at November 30, 2023 .

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.

The carrying value of lots we owned or controlled under land option contracts and other similar contracts at November 30,

2025 increased 3% year over year, mainly due to investments in land and land development in 2025.

The number of lots we

owned and controlled as of November 30, 2025 decreased 16% from November 30, 2024 , largely reflecting homes delivered

and our decision to abandon 24,596 previously controlled lots, partly offset by newly optioned lots in 2025.

The number of lots

in inventory as of November 30, 2025 included 7,715 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 43% at November 30, 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.

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2029 – $100.5 million ;

2029 – $58.1 million ;

and thereafter – $0 .

and 2030 and thereafter – $0 .

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

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Mortgages and land contracts due to land sellers and other loans

Our financial leverage, as measured by the ratio of debt to capital, improved 130 basis points to 29.4% at November 30,

2024 , compared to 30.7% at November 30, 2023 .

The ratio of debt to capital is calculated by dividing notes payable by capital

(notes payable plus stockholders’ equity).

Our financial leverage, as measured by the ratio of debt to capital, was 30.3% at November 30, 2025 , compared to 29.4% at

November 30, 2024 .

The ratio of debt to capital is calculated by dividing notes payable by capital (notes payable plus

stockholders’ equity).

LOC Facility .

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our business.

On September 12, 2024, we entered into an amendment to the LOC Facility that increased the limit of letters of

credit we may issue under it from $75.0 million to $100.0 million, and extended the expiration date from February 18, 2027 to

February 13, 2028.

As of November 30, 2024 and 2023 , we had letters of credit outstanding under the LOC Facility of $73.3

million and $12.5 million , respectively.

Under the LOC Facility , which expires on February 13, 2028 , we may issue up to $100.0 million of letters of

As of November 30, 2025 and 2024 , we had letters of credit outstanding under the LOC Facility of $68.2 million and

$73.3 million , respectively.

Performance Bonds .

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Unsecured Revolving Credit Facility .

We have a $1.09 billion Credit Facility that will mature on February 18, 2027 .

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.

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 November 30, 2024 , we had no cash borrowings and $8.3 million of letters of credit outstanding under

the Credit Facility .

The Credit Facility is further described in Note 15 – Notes Payable in the Notes to Consolidated Financial

Statements in this report.

On November 12, 2025 , we obtained a $1.20 billion Credit Facility , which

refinanced and replaced our prior $1.09 billion unsecured revolving credit facility that was due to mature on February 18, 2027 .

The Credit Facility will mature on November 12, 2030 and contains an uncommitted accordion feature under which its

aggregate principal amount of available loans can be increased to a maximum of $1.70 billion under certain conditions,

including obtaining additional bank commitments.

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 November 30, 2025 , we had no cash borrowings

and $1.6 million of letters of credit outstanding under the Credit Facility .

The Credit Facility is further described in Note 15 –

Notes Payable in the Notes to Consolidated Financial Statements in this report.

Under the terms of the Credit Facility and the Term Loan , we are required, among other things, to maintain compliance

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greater than or equal to the sum of (a) $2.70 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

November 30, 2021.

cumulative consolidated net income for each fiscal quarter commencing after August 31, 2025 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 August

• Leverage Ratio – We must also maintain a Leverage Ratio of less than or equal to .60 at the end of each fiscal quarter.

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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).

base (a measure relating to our inventory and in certain cases unrestricted cash assets).

The covenants and other requirements under the Credit Facility and the Term Loan represent the most restrictive covenants

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$ 106.5 million

$ 598.0 million

$ 1.43 billion

Investments in joint ventures and Non-Guarantor Subsidiaries

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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 15 – Notes Payable in the Notes to Consolidated Financial

Statements in this report.

On November 12, 2025 , we entered into an amendment to our $360.0 million Term Loan

with the lenders party thereto that extended its maturity from August 25, 2026 to November 12, 2029 .

The Term Loan is

further described in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report.

Unconsolidated Joint Ventures.

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As of November 30, 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

borrowings outstanding under a term loan with a third-party lender, secured by the underlying property and related project

None of our other unconsolidated joint ventures had outstanding debt at November 30, 2025 .

Credit Ratings.

Our credit ratings are periodically reviewed by rating agencies.

In March 2024, S&P Global Ratings

upgraded our corporate credit rating to BB+ from BB and maintained its rating outlook at stable.

In May 2024, Moody’s

Ratings upgraded our corporate credit rating to Ba1 from Ba2 and changed its rating outlook to stable from positive.

Consolidated Cash Flows.

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Net cash provided by operating activities in 2024

primarily reflected net income of $590.2 million and a net decrease in inventories of $426.8 million , partly offset by a net

decrease in accounts payable, accrued expenses and other liabilities of $62.2 million and a net increase in receivables of $12.9

primarily reflected net income of $655.0 million and a net decrease in receivables of $16.6 million , partly offset by a net

increase in inventories of $385.8 million and a net decrease in accounts payable, accrued expenses and other liabilities of $7.2

Investing Activities .

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These uses of cash were partially offset by

a $2.0 million return of investments in unconsolidated joint ventures and $1.7 million of proceeds from the sale of an

In 2023 , our uses of cash included $35.5 million for net purchases of property and equipment and $27.7 million for

contributions to unconsolidated joint ventures.

These uses of cash were partly offset by a $5.1 million return of investments in

unconsolidated joint ventures.

a $3.0 million return of investments in unconsolidated joint ventures.

In 2024 , our uses of cash included $39.3 million for net

purchases of property and equipment and $14.5 million for contributions to unconsolidated joint ventures.

These uses of cash

were partly offset by a $2.0 million return of investments in unconsolidated joint ventures and $1.7 million of proceeds from the

sale of an investment.

Financing Activities .

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cash used was partially offset by $1.1 million of issuances of common stock under employee stock plans.

In 2023 , net cash

was used for stock repurchases totaling $411.4 million , net repayments under the Credit Facility of $150.0 million , dividend

payments on our common stock of $56.8 million , tax payments associated with stock-based compensation awards of $14.2

million , and payments on mortgages and land contracts due to land sellers and other loans of $3.8 million .

The cash used was

partially offset by $8.9 million of issuances of common stock under employee stock plans.

In the 2024 first quarter, our board of directors declared a quarterly cash dividend of $.20 per share of common

Our board of directors approved a $.05 per share increase in the quarterly cash dividend on our common stock to $.25

per share in the 2024 second quarter, and declared quarterly dividends at the new higher rate for the 2024 second, third and

fourth quarters.

In the 2023 first and second quarters, our board of directors declared quarterly cash dividends of $.15 per share

of common stock.

Our board of directors approved a $.05 per share increase in the quarterly cash dividend on our common

stock to $.20 per share in the 2023 third quarter, and declared quarterly dividends at the new higher rate for the 2023 third and

fourth quarters.

All dividends declared during 2024 and 2023 were also paid during those years.

Quarterly cash dividends

declared and paid during the years ended November 30, 2024 and 2023 totaled $.95 per share and $.70 per share of common

stock, respectively.

The declaration and payment of future cash dividends on our common stock, whether at current levels or at

all, are at the discretion of our board of directors, and depend upon, among other things, our expected future earnings, cash

flows, capital requirements, access to external financing, debt structure and any adjustments thereto, operational and financial

investment strategy and general financial condition, as well as general business conditions.

In 2024 , net cash was

used for stock repurchases totaling $353.7 million , dividend payments on our common stock of $71.6 million , tax payments

associated with stock-based compensation awards of $25.0 million , and payments on mortgages and land contracts due to land

sellers and other loans of $.9 million .

The cash used was partially offset by $10.4 million of issuances of common stock under

employee stock plans.

In 2025 , our board of directors declared four quarterly cash dividends of $.25 per share of common stock.

the 2024 first quarter, our board of directors declared a quarterly cash dividend of $.20 per share of common stock.

of directors approved a $.05 per share increase in the quarterly cash dividend on our common stock to $.25 per share in the

2024 second quarter, and declared quarterly dividends at the new higher rate for the 2024 second, third and fourth quarters.

dividends declared during 2025 and 2024 were also paid during those years.

Quarterly cash dividends declared and paid during

the years ended November 30, 2025 and 2024 totaled $1.00 per share and $.95 per share of common stock, respectively.

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.

Shelf Registration Statement.

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Share Repurchase Program.

As of November 30, 2022, we had $150.0 million of availability to repurchase up to $300.0

million of our outstanding common stock under an April 7, 2022 board authorization.

As of November 30, 2023 , there was $163.6 million of remaining availability under a share

repurchase authorization that our board of directors approved on March 21, 2023.

In the 2024 first quarter, we repurchased

1,965,442 shares of our common stock on the open market pursuant to this authorization at a total cost of $75.0 million .

March 21, 2023, our board of directors authorized us to repurchase up to $500.0 million of our outstanding common stock.

This authorization replaced the 2022 board of directors authorization , which had $75.0 million of remaining availability .

2023 second, third and fourth quarters, we repurchased 7,278,995 shares of our common stock on the open market pursuant to

this authorization at a total cost of $336.4 million , bringing our total repurchases for the year ended November 30, 2023 to

826,663 shares of our common stock in the open market pursuant to the 2023 board of directors authorization at a total cost of

$50.0 million .

On April 18, 2024, our board of directors authorized us to repurchase up to $1.00 billion of our outstanding

common stock.

This authorization replaced the 2023 board of directors authorization, which had $113.6 million remaining.

the 2024 second, third and fourth quarters, we repurchased 3,898,518 shares of our common stock at a total cost of $300.0

million , bringing our total repurchases for the year ended November 30, 2024 to 4,725,181 shares of common stock at a total

cost of $350.0 million .

In the 2025 first, second and third quarters, we repurchased 7,788,113 shares of our common stock at a

total cost of $438.5 million .

On October 9, 2025, our board of directors authorized us to repurchase up to $1.00 billion of our

outstanding common stock.

This authorization replaced the 2024 board of directors authorization, which had $261.5 million

In the 2025 fourth quarter, we repurchased 1,597,196 shares of our common stock on the open market pursuant to

the 2025 authorization at a total cost of $100.0 million , bringing our total repurchases for the year ended November 30, 2025 to

9,385,309 shares of common stock at a total cost of $538.5 million .

Repurchases under the current 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

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 November 30, 2025 , there was $900.0 million of

remaining availability under this share repurchase authorization.

In the 2024 first quarter, we repurchased 826,663 shares of our common stock in the open market pursuant to the 2023

board of directors authorization at a total cost of $50.0 million .

On April 18, 2024, our board of directors authorized us to

repurchase up to $1.00 billion of our outstanding common stock.

This authorization replaced the 2023 board of directors

authorization , which had $113.6 million of remaining availability .

In the 2024 second, third and fourth quarters, we

repurchased 3,898,518 shares of our common stock at a total cost of $300.0 million , bringing our total repurchases for the year

ended November 30, 2024 to 4,725,181 shares of common stock at a total cost of $350.0 million .

Repurchases under the

current 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.

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 November 30, 2024 , there was $700.0 million of remaining availability

under this share repurchase authorization.

As of the date of this report, we believe we have adequate capital resources and sufficient access to external financing

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liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented,

Actual results could differ from those estimates and assumptions.

See Note 1 – Summary of Significant Accounting Policies in

the Notes to Consolidated Financial Statements in this report for a discussion of our significant accounting policies.

following are accounting policies that we believe are critical because of the significance of the activity to which they relate or

because they require the use of significant estimates, judgments and/or other assumptions in their application.

and could affect the comparability of such information over different reporting periods.

Actual results could differ from those

estimates and assumptions, and the difference may have a material impact on our consolidated financial statements.

– Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in this report for a discussion

of our significant accounting policies.

The following are accounting policies that we believe are critical because of the

significance of the activity to which they relate or because they require the use of significant estimates, judgments and/or other

assumptions in their application.

Homebuilding Revenue Recognition.

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Our overall housing gross profit margin in the 2025 fourth quarter was

20.9% , and as of November 30, 2024 , fewer than 10 communit ies were evaluated for recoverability based on their gross

However, if there is a sustained economic slowdown or other factor(s) that lead to moderate or significant decreases

in new home prices in certain submarkets, more communities could begin to approach gross margin levels where we would

17.0% , and as of November 30, 2025 , 11 communities were evaluated for recoverability based on their gross profit margins.

However, if there is a sustained economic slowdown or other factor(s) that lead to moderate or significant decreases in new

home prices in certain submarkets, more communities could begin to approach gross profit margin levels where we would

conduct a fair value analysis.

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Land option contract abandonments charges

The inventory impairment charges in 2025 were principally driven by increased land development costs imposed by a

municipality affecting certain communities, and our decisions to make changes in our operational strategies aimed at more

quickly monetizing our investment in certain communities, mainly by accelerating the overall pace for selling, building and

delivering homes therein.

There were no inventory impairment charges in 2024 or 2023.

The inventory impairment charges in 2022 reflected our

decisions to make changes in our operational strategies aimed at more quickly monetizing our investment in certain

communities, mainly by accelerating the overall pace for selling, building and delivering homes therein, including communities

on land previously held for future development.

As further described in Note 7 – Inventory Impairments and Land Option Contract Abandonments in the Notes to

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inventory balance (dollars in millions):

November 30, 2025

November 30, 2024

The inventory balances in the 0-2 years and 3-5 years categories were located throughout all of our homebuilding reporting

segments and collectively represented 94% and 98% of our total inventories as of November 30, 2025 and 2024 , respectively.

The inventory balances in the 6-10 years category were primarily located in our Central and Southeast segments and were

mostly comprised of active, multi-phase communities with large remaining land positions.

As of November 30, 2025, the inventory balance in the 6-10 years category was primarily located in our Southwest and Central

segments and mostly comprised of active, multi-phase communities with large remaining land positions.

Due to the judgment and assumptions applied in our inventory impairment and land option contract abandonment

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years are recorded in the period in which a change in our estimate occurs.

During 2024 , 2023 and 2022, we recorded

adjustments to increase our previously recorded liabilities by $5.5 million , $6.5 million and $7.0 million , respectively.

adjustments in 2024 , 2023 and 2022 resulted from changes in estimates due to actual claims experience differing from previous

actuarial projections and, in turn, impacting actuarial estimates for existing and potential future claims.

We have not made any

material changes in our methodology used to establish our self-insurance liabilities during 2024 , 2023 or 2022.

During 2024 and 2023, we recorded adjustments to

increase our previously recorded liabilities by $5.5 million and $6.5 million , respectively.

There were no such adjustments

during 2025 .

The adjustments in 2024 and 2023 resulted from changes in estimates due to actual claims experience differing

from previous actuarial projections and, in turn, impacting actuarial estimates for existing and potential future claims.

not made any material changes in our methodology used to establish our self-insurance liabilities during 2025 , 2024 or 2023.

The projection of losses related to these liabilities requires the use of actuarial assumptions.

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Consolidated Financial Statements in this report.

Key longer-term housing market drivers have remained largely positive during 2023 and 2024, including favorable

demographic trends, rising household formations, solid employment, wage growth and the ongoing undersupply of new and

resale homes.

While market conditions were uneven during 2024, we generated favorable operational and financial results.

believe we are well-positioned to achieve our goals for 2025 based on our differentiated, highly customer-centric Built to Order

business model, operational capabilities, affordable product offerings, lot supply, strong balance sheet and liquidity, substantial

backlog value of $2.24 billion at November 30, 2024 , improved build times, normalizing cancellation rates and planned

community count growth, subject to the factors and risks described in this report.

We expect to be able to drive our build times

lower in 2025 as we progress toward our goal of four months from start to home completion, which is at the lower end of our

historical range, subject to the availability of skilled trades and building materials.

Our ke y longer-term objectives remain to increase our scale, profitability and returns, as well as generate cash flows, by

expanding our lot count through land acquisitions that meet our underwriting standards, opening new communities on time,

driving net orders and balancing pace, price and construction starts at each community to optimize our return on each inventory

asset within its market context.

To do so, we expect to continue to calibrate at each community our home pricing and

homebuyer concessions, if any, and inventory levels, based on homebuyer demand.

Our use of homebuyer concessions in 2025

will depend on, among other things, market dynamics, including mortgage interest rates and overall housing affordability, as

well as community-specific considerations, including the size and construction stage of the backlog, net order pace and lots

remaining available for sale.

While we expect our land acquisition and development investment activity to increase in 2025 as compared to 2024 to

support future growth, depending significantly on market conditions and available opportunities that meet our investment return

standards, we will 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, we will plan to continue returning capital to our stockholders.

As of November 30, 2024 , we had $700.0

million remaining under our current board of directors share repurchase authorization.

This provides us the opportunity to

continue to repurchase our common stock in 2025, with the 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.

Since our 2024 fiscal year ended, buyer hesitancy due to discomfort with volatile mortgage interest rates has continued to

Through the first seven weeks of our 2025 first quarter, we generated 1,252 net orders, compared to 1,456 in the

year-earlier period.

As we are entering the stronger selling months of the quarter and with a meaningful number of community

openings projected, we expect to close the gap on net orders relative to last year’s quarter.

We estimate that our net order

comparison for the full 2025 first quarter will be roughly flat versus a strong comparable in our 2024 first quarter.

We remain optimistic about the long-term prospects for the housing market, given solid underlying drivers, mainly

favorable demographic trends in population growth and household formation, supporting higher demand over time, together

with the ongoing structural undersupply of new homes.

While 2025 presented challenging market conditions and our results

declined year over year, we believe we executed well operationally, maintaining high customer satisfaction levels, further

improving build times, lowering construction costs and balancing pace and price to optimize each asset, and delivered solid

operational and financial results.

We expect challenging conditions to persist in 2026, as tepid consumer confidence,

macroeconomic and geopolitical uncertainties, affordability challenges and persistently elevated mortgage interest rates

continue to constrain the pool of actionable buyers and cause buyers to hesitate on making purchasing decisions.

time, we believe we are well-positioned to achieve our projections for the first quarter and full year based on our operational

capabilities, affordable product offerings, improved build times, planned community openings, lot supply, strong balance sheet

and liquidity, and substantial backlog value of $1.40 billion at November 30, 2025 , subject to the factors and risks described in

Reflecting the prevailing environment, and despite a steady level of traffic in our communities, we experienced year-over-

year decreases in our 2025 fourth quarter net orders of 10% , ending backlog of 29% and ending backlog value of 37% .

value of our net orders for the 2025 fourth quarter was down 17% year over year driven by the decline in net orders and a 7%

decrease in their average selling price to $455,400 , largely due to price reductions we implemented beginning in mid-February

2025 as part of a simplified sales strategy focused on providing a straightforward, transparent base price, with limited, if any,

concessions or incentives, that is intended to offer to our customers a compelling value competitive with area resale home

We expect these price reductions to moderate our overall average selling price and housing gross profit margin on

homes delivered for the 2026 first quarter.

Looking ahead, we intend to continue to balance pace and price at the community level to optimize our assets for the

highest possible returns.

While selling through our current inventory, we intend to emphasize sales of our Built to Order homes

with the goal of bringing their proportion in our mix of homes delivered closer to our historical average of 60% to 70%, up

from around 55% in 2025.

The 2025 Built to Order mix largely reflects strategies we adopted during the 2020-2024 period to

navigate supply chain disruptions that substantially lengthened our average build time and hindered our even-flow home

production process, and market dynamics in areas with then-low resale home inventory.

Our Built to Order homes are our core

competency, a key competitive differentiator that typically generate higher gross profit margins than inventory homes started

without a corresponding buyer, and an appealing proposition to prospective customers, particularly with the meaningful

reduction in our build times we have achieved since the 2023 second quarter, the highly customer-centric personalized

homebuilding process we offer, and the simplified sales approach we implemented in 2025.

We were encouraged to see a shift

toward more Built to Order sales during November and December 2025.

We are entering 2026 with a strong financial position and enhanced financial flexibility, supported by our new expanded

Credit Facility and the recent extension of our Term Loan maturity to 2029.

In 2026, in order to maintain our long-term growth

platform, we intend, subject to the operating environment and available opportunities, to acquire and control additional land

positions within attractive submarkets in our served markets that meet our investment standards and develop land we own in a

manner that prioritizes capital efficiency, including developing lots where possible in smaller phases and aligning development

with our starts pace to optimally manage our inventory of finished lots.

Consistent with our balanced approach to capital allocation, we also plan to continue returning capital to our stockholders,

primarily through additional share repurchases.

As of November 30, 2025 , we had $900.0 million remaining under our current

board of directors share repurchase authorization.

This provides us the opportunity to continue to repurchase our common

stock in 2026, 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

Subject to these factors, we expect to repurchase between $50.0 million and $100.0 million of our common stock in

our 2026 first quarter.

In considering the foregoing, our present outlook for the 2026 first quarter and the 2026 full year as to certain metrics is as

2026 First Quarter –

• We expect deliveries to be in the range of 2,300 to 2,500 homes , compared to 2,770 in the year-earlier period.

• We expect to generate housing revenues in the range of $1.05 billion to $1.15 billion , compared to $1.39 billion for the

corresponding 2024 period, and anticipate our average selling price to be approximately $501,000 , compared to

$480,100 in the year-earlier period.

• We expect our homebuilding operating income margin as a percentage of revenues to be approximately 9.5% ,

assuming no inventory-related charges, compared to 10.9% for the year-earlier quarter.

corresponding 2025 period.

• We expect our housing gross profit margin to be in the range of 15.4% to 16.0% , assuming no inventory-related

charges, compared to 20.3% for the corresponding 2025 quarter.

◦ We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range

of 10.5% to 10.9% , compared to 10.8% for the 2024 first quarter.

• We expect our selling, general and administrative expenses as a percentage of housing revenues to be in the range of

12.2% to 12.8% , compared to 11.0% for the 2025 first quarter.

• We expect our effective tax rate will be approximately 19.0% .

The effective tax rate for the year-earlier quarter was

• We expect our ending community count to be approximately 260 , which would result in an 8% year-over-year increase

in our average community count.

2026 Full Year –

• We expect our housing revenues to be in the range of $7.00 billion to $7.50 billio n , an increase from $6.90 billion for

• We expect our average selling price to be in the range of $488,000 to $498,000 , compared to $486,900 for 2024 .

• We expect our homebuilding operating income margin as a percentage of revenues to be approximately 10.7% ,

assuming no inventory-related charges, compared to 11.1% for 2024 .

◦ We expect our housing gross profit margin to be in the range of 20.0% to 21.0% , 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 9.6% to 10.0% , compared to 10.0% for 2024 .

• We expect our effective tax rate to be approximately 24.0% , compared to 23.0% for 2024 .

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

• We expect deliveries to be in the range of 11,000 to 12,500 , compared to 12,902 for 2025 .

• We expect our housing revenues to be in the range of $5.10 billion to $6.10 billion , compared to $6.21 billion for

• We expect our effective tax rate will be in the range of 24% to 26%, compared to 22.6% for 2025 .

In addition to factors discussed elsewhere in this report, our future performance and the strategies we implement (and

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environment (particularly in regard to housing and mortgage loan financing policies).

For instance, the Federal Reserve’s

aggressive raising of the federal funds interest rate and other measures during 2022 and 2023 to moderate persistent U.S.

inflation created significant and ongoing headwinds for the housing market, tempering consumer demand for homes and

disrupting credit and lending markets.

While the Federal Reserve reduced interest rates three times in 2024, 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

In addition, while we experienced improvement with respect to supply chain-related disruptions as described in this

Management’s Discussion and Analysis of Financial Condition and Results of Operations, we believe they could persist or

possibly worsen to various degrees in 2025.

Further, and though the extent is uncertain and none of our communities or

operations have been directly affected as of the date of this report, given the scope of the unprecedented wildfires in the Los

Angeles County area in January 2025, we may experience some disruption in our homebuilding activities, and potentially with

our orders and homes delivered, in the Southern California region during the year and beyond.

The potential extent and effect

of these factors on our business is highly uncertain, unpredictable and outside our control, and our past performance, including

in 2024, 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 and returns.

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, October and December 2025,

and may lower rates further in 2026 or later periods, we cannot provide any assurance it will or that any interest rate

reduction(s), or other monetary policy changes, will meaningfully lower mortgage interest rates or 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 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.

FORWARD-LOOKING STATEMENTS

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• consumer and producer price inflation;

• changes in interest rates, including those set by the Federal Reserve, which the Federal Reserve may increase to

moderate inflation, as it did in 2022 and 2023 , and those available in the capital markets or from financial institutions

and other lenders, and applicable to mortgage loans;

• 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;

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

• competition from other sellers of new and resale homes;

• competition from other sellers of new and resale homes, particularly homebuilders with significant unsold inventory;

• weather events, significant natural disasters and other climate and environmental factors, such as a lack of adequate

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County area in January 2025;

• 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;

• potential regulatory instability associated with the upcoming change in the U.S.

presidential administrations;

• lingering economic and financial market impacts from the prolonged shutdown of the federal government’s operations

in October and November 2025, and 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;

• potential instability associated with the regulatory and executive policies, proposals and orders of the U.S.

administration, including any directed at our operations, business practices or capital allocation strategies;

• government actions, policies, programs and regulations directed at or affecting the housing market (including the tax

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and interpretations issued with respect thereto, such as IRS guidance regarding heightened qualification requirements

for federal tax credits for building energy-efficient homes;

for federal tax credits for building energy-efficient homes and the pending expiration of such tax credits in 2026;

• changes in U.S.

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and related trade disputes with and retaliatory measures taken by other countries;

• 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;

• disruptions in world and regional trade flows, economic activity and supply chains due to the 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

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• 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;

• consumer interest in and responsiveness to our new home communities, products and simplified selling process and

transparent pricing initiatives, 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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity