What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-01-23 compared with 2025-01-24 · 447 added, 397 removed, 1536 unchanged (35% of the section changed)

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Net actuarial gain arising during the period

Amortization of net actuarial (gain) loss

Amortization of net actuarial gain

Other comprehensive income (loss) before tax

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Accumulated other comprehensive loss

Grantor stock ownership trust, at cost:

6,705,247 shares at November 30, 2023

Treasury stock, at cost:

2,253,156 and 18,703,704 shares at November 30, 2024 and

Treasury stock, at cost — 11,303,643 and 2,253,156 shares at November 30, 2025 and

2024, respectively

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Dividends on common stock

Employee stock options/other

Stock-based compensation

Stock repurchases

Stock repurchases, including

Tax payments associated with

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Balance at November 30, 2023

Other comprehensive income,

Other comprehensive loss, net

Dividends on common stock

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stock-based compensation

Termination of grantor stock

ownership trust

Retirement of treasury stock

Balance at November 30, 2024

Other comprehensive loss, net

Other comprehensive income,

Dividends on common stock

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stock-based compensation

Termination of grantor stock

ownership trust

Retirement of treasury stock

Balance at November 30, 2025

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Distributions of earnings from unconsolidated joint ventures

Amortization of debt issuance costs and premiums

Amortization of debt issuance costs

Depreciation and amortization

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Cash flows from financing activities:

Proceeds from issuance of debt

Repayment of senior notes

Payment of issuance costs

Borrowings under revolving credit facility

Repayments under revolving credit facility

( 1,535,000 )

Borrowings under senior unsecured term loan

Payment of issuance costs

Payments on mortgages and land contracts due to land sellers and

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transactions for an identical or similar investment of the same issuer.

These investments, which totaled $ 15.2 million at

November 30, 2024 and zero as of November 30, 2023 , are included in other assets in our consolidated balance sheets.

These investments, which totaled $ 15.2 million at both

November 30, 2025 and 2024 , are included in other assets in our consolidated balance sheets.

Homebuilding Operations.

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to sold but undelivered homes are included in accrued expenses and other liabilities.

Concurrent with the recognition of revenues in our consolidated statements of operations, sales incentives in the form of

price concessions on the selling price of a home or mortgage-related concessions are recorded as a reduction of revenues.

When we provide sales incentives in the form of free products or services to homebuyers, the costs of the free products or

services are reflected as construction and land costs because such incentives are identified in our home sales contracts with

homebuyers as an intrinsic part of our single performance obligation to deliver and transfer title to their home for the

transaction price stated in the contracts.

Sales incentives that we may provide in the form of closing cost allowances are

immaterial to the related revenues.

Cash proceeds from home sale closings held by third-party escrow agents for our benefit,

typically for less than five days, are considered deposits in-transit and classified as cash.

Concurrent with the recognition of revenues in our consolidated statements of operations, all sales incentives are recorded

as a reduction of revenues.

Sales incentives vary by community and may be in the form of price concessions on the selling

price of a home, mortgage-related concessions, closing cost allowances and/or free products or services.

When we provide

sales incentives in the form of free products or services to homebuyers, their costs are reflected as construction and land costs

because such incentives are identified in our home sales contracts with homebuyers as an intrinsic part of our single

performance obligation to deliver and transfer title to their home for the transaction price stated in the contracts.

Cash proceeds

from home sale closings held by third-party escrow agents for our benefit, typically for less than five days, are considered

deposits in-transit and classified as cash.

We may periodically elect to sell parcels of land to third parties if such assets no longer fit into our strategic operating plans

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Homebuilding revenues include forfeited deposits, which occur when home sales or land sales contracts, if any, that

involve a nonrefundable deposit are cancelled.

involve a non-refundable deposit are cancelled.

Revenues from forfeited deposits are immaterial.

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construction and land costs as the related inventories are delivered to homebuyers or land buyers (as applicable).

In the case of

land held for future development and land held for sale, applicable interest is expensed as incurred.

capitalize interest on land held for future development and land held for sale.

F air Value Measurements.

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awards at an amount equal to the fair value of share-based payments granted under compensation arrangements over the vesting

We estimate the fair value of stock options granted using the Black-Scholes option-pricing model with assumptions

based primarily on historical data.

We estimate the fair value of other equity-based awards using the closing price of our

common stock on the grant date.

For PSU s, we recognize compensation expense ratably over the vesting period when it is

probable that stated performance targets will be achieved and record cumulative adjustments in the period in which estimates

We account for forfeitures of equity-based awards as they occur.

For certain equity-based awards granted in October 2025 containing new provisions that accelerate or continue vesting

upon retirement, we recognize compensation expense over the period from the grant date to the date that retirement eligibility is

achieved, if that is expected to occur during the standard vesting period.

Additionally, for such awards granted to retirement-

eligible employees, the full compensation cost of the award is recognized immediately upon grant.

We estimate the fair value

of stock options granted using the Black-Scholes option-pricing model with assumptions based primarily on historical data.

estimate the fair value of other equity-based awards using the closing price of our common stock on the grant date.

we recognize compensation expense ratably over the vesting period when it is probable that stated performance targets will be

achieved and record cumulative adjustments in the period in which estimates change.

We account for forfeitures of equity-

based awards as they occur.

Income Taxes.

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2025 , 2024 or 2023 .

Recent Accounting Pronouncements Not Yet Adopted.

In November 2023, the FASB issued Accounting Standards Update

Adoption of New Accounting Pronouncement.

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

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The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within

fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The guidance is to be applied retrospectively to

all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed

in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial

statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

fiscal years beginning after December 15, 2024, with retrospective application required for all prior periods presented.

adopted ASU 2023-07 for 2025 and included the related disclosures in Note 2 – Segment Information .

The adoption of this

guidance, which is related to disclosures only, had no impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted.

In December 2023, the FASB issued Accounting Standards Update

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require

entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before

income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing

operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments

to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods

beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or

made available for issuance.

ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and

related disclosures.

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the

rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or

loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income

tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities

to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements

that have not yet been issued or made available for issuance.

ASU 2023-09 should be applied on a prospective basis, but

retrospective application is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our

consolidated financial statements and related disclosures.

In November 2024, the FASB issued Accounting Standards Update No.

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impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Reclassifications.

Certain amounts in our consolidated financial statements of prior years have been reclassified to

conform to the current period presentation.

In September 2025, the FASB issued Accounting Standards Update No.

2025-06, “Intangibles-Goodwill and Other-

Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU

2025-06”), which modernizes the accounting for costs related to internal-use software by removing all references to project

stages and clarifying the threshold entities apply to begin capitalizing costs.

The guidance is effective for annual reporting

periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, and may be

applied using a prospective, retrospective or modified transition approach.

Early adoption is permitted as of the beginning of an

annual reporting period.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated

financial statements and related disclosures.

Segment Information

An operating segment is defined as a component of an enterprise for which separate financial information is available and

for which segment results are evaluated regularly by the chief operating decision maker in deciding how to allocate resources

and in assessing performance.

We have identified each of our homebuilding divisions as an operating segment.

homebuilding operating segments have been aggregated into four homebuilding reporting segments based primarily on

similarities in economic and geographic characteristics, product types, regulatory environments, methods used to sell and

construct homes and land acquisition characteristics.

We also have one financial services reporting segment.

evaluates segment performance primarily based on segment pretax results.

We operate two principal businesses:

homebuilding and financial services.

An operating segment is defined as a

component of an enterprise for which separate financial information is available and for which segment results are evaluated

regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.

Each of our homebuilding divisions has been identified as an operating segment.

Our homebuilding operating segments

have been aggregated into four homebuilding reporting segments, based primarily on similarities in economic and geographic

characteristics, product types, regulatory environments, methods used to sell and construct homes and land acquisition

characteristics.

Our CODM, identified as our chief executive officer and chief operating officer for purposes of our reportable

segment disclosures, regularly reviews operating results for the individual operating segments that comprise our reporting

The CODM evaluates the performance of our homebuilding operating segments primarily based on their respective

housing gross profit margin and pretax income (loss).

These profitability measures are used by the CODM in making operating

and capital resource allocation decisions at the segment level, including their review and approval of land acquisition and land

sale transactions.

The CODM also uses these measures in business planning and forecasting, and considers budget-to-actual

variances for these measures when assessing segment performance.

In addition, segment pretax income (loss) is used by the

CODM in determining the compensation of certain employees.

As of November 30, 2025 , our homebuilding reporting segments conducted ongoing operations in the following states:

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earn revenues from the sale of land.

We also have one financial services reporting segment.

The CODM reviews pretax income for our financial services

segment to assess performance and to inform decisions about the allocation of resources to the segment and as to financial

services product offerings.

Our financial services reporting segment earns revenues primarily from insurance commissions and from the provision of

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The financial

services reporting segment is separately reported in our consolidated financial statements.

services reporting segment is separately reported in our consolidated financial statements and in Note 3 – Financial Services .

Corporate and other is a non-operating segment that develops and oversees the implementation of company-wide strategic

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are they indicative of the results to be expected in future perio d s.

The following tables present financial information relating to our homebuilding reporting segments (in thousands):

Years Ended November 30,

The following tables present certain statements of operations information relating to our homebuilding reporting segments

(in thousands):

Year Ended November 30, 2025

Construction and land costs:

( 2,205,357 )

( 5,025,261 )

Inventory-related charges

( 2,210,493 )

( 5,058,660 )

Gross profits:

Marketing expenses

Commission expenses

General and administrative expenses

Operating income (loss)

Homebuilding pretax income (loss)

$ ( 151,378 )

Housing gross profit margin as a percentage

of housing revenues

Year Ended November 30, 2024

Construction and land costs:

( 2,364,046 )

( 1,133,497 )

( 5,444,785 )

Inventory-related charges

( 2,367,008 )

( 1,136,420 )

( 5,451,483 )

Gross profits:

Marketing expenses

Commission expenses

General and administrative expenses

Operating income (loss)

Homebuilding pretax income (loss)

$ ( 116,976 )

Housing gross profit margin as a percentage

of housing revenues

Year Ended November 30, 2023

Construction and land costs:

( 1,883,520 )

( 1,413,021 )

( 5,009,359 )

Inventory-related charges

( 1,888,422 )

( 1,420,063 )

( 5,030,275 )

Gross profits:

Marketing expenses

Commission expenses

General and administrative expenses

Operating income (loss)

Homebuilding pretax income (loss)

$ ( 128,840 )

Housing gross profit margin as a percentage

of housing revenues

(a) Housing gross profits are calculated by subtracting housing construction and land costs and inventory-related charges from housing revenues .

(b) Other is primarily comprised of interest income, interest expense and equity in income (loss) of unconsolidated joint ventures.

For the year ended

November 30, 2024 , Corporate and Other also includes a gain associated with the sale of our ownership interest in a privately held technology company,

as described in Note 11 – Other Assets .

The following table summarizes the equity in income (loss) of unconsolidated joint ventures by homebuilding

reporting segment (in thousands):

Years Ended November 30,

Pretax income (loss):

Corporate and other

Equity in income (loss) of unconsolidated joint ventures:

Inventory impairment and land option contract abandonment charges:

The following tables present certain balance sheet information relating to our homebuilding reporting segments (in

Investments in unconsolidated joint ventures:

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Numerator for diluted earnings per share

Years Ended November 30,

Weighted average shares outstanding — basic

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Recoveries related to self-insurance and other legal claims

Refundable deposits and bonds

Income taxes receivable

Refundable deposits and bonds

Allowance for doubtful accounts

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If indicators of potential impairment exist for a community or land parcel, the identified asset is evaluated for recoverability.

We evaluated eight , five and five communities or land parcels for recoverability as of November 30, 2024 , 2023 and 2022 ,

We evaluated 11 , eight and five communities or land parcels for recoverability as of November 30, 2025 , 2024 and 2023 ,

respectively.

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located, rather than fluctuations in prevailing market conditions .

Based on the results of our evaluations, we recognized no inventory impairment charges in 2024 or 2023 .

recognized inventory impairment charges of $ 24.1 million related to four communities with a post-impairment fair value of

$ 41.3 million .

The 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.

If we change our

strategy or if there are changes in market conditions for any given asset, it is possible that we may recognize additional

inventory impairment charges.

As of November 30, 2024 , the aggregate carrying value of our inventory that had been impacted by previous inventory

impairment charges was $ 32.1 million , representing four communities and various other land parcels.

As of November 30,

2023 , the aggregate carrying value of our inventory that had been impacted by previous inventory impairment charges was

$ 73.9 million , representing five communities and various other land parcels.

Based on the results of our evaluations, we recognized inventory impairment charges of $ 15.5 million in 2025 related to

four communities with a post-impairment fair value of $ 38.6 million .

We recognized no inventory impairment charges in 2024

The 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.

If we change our strategy or if there are changes in market conditions for any given asset, it is

possible that we may recognize additional inventory impairment charges.

As of November 30, 2025 , the aggregate carrying value of our inventory that had been impacted by inventory impairment

charges was $ 38.0 million , representing seven communities and various other land parcels.

As of November 30, 2024 , the

aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $ 32.1 million ,

representing four communities and various other land parcels.

Our inventory controlled under land option contracts and other similar contracts is assessed to determine whether it

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Income (loss)

The combined revenues and construction and land costs for 2024 primarily related to homes delivered by an

unconsolidated joint venture in California.

In 2023 and 2022 , our unconsolidated joint ventures did not deliver any homes.

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

The combined revenues and construction and land costs for November 30, 2025 and 2024 primarily related to homes

delivered by an unconsolidated joint venture in California.

In 2023 , our unconsolidated joint ventures did not deliver any

The following table presents combined condensed balance sheet information for our homebuilding unconsolidated joint

ventures (in thousands):

Liabilities and equity

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Total liabilities and equity

(a) As of both November 30, 2024 and 2023 , the unconsolidated joint venture in California that delivered homes in 2024 had

borrowings outstanding under a revolving line of credit it entered into with a third-party lender in April 2022 to finance its

land acquisition, development and construction activities.

In April 2024, the revolving line of credit was amended,

increasing the aggregate commitment to $ 70.0 million from $ 62.0 million , with the amount of all advances through

October 2024 not to exceed $ 80.0 million .

Principal repayments are made as homes are delivered, which began in May

Pursuant to the amendment, the revolving line of credit converted to a term loan and the aggregate commitment was

reduced to $ 55.0 million effective October 31, 2024, and will be reduced to $ 25.0 million by April 30, 2025.

under this term loan are secured by the underlying property and related project assets.

This term loan is scheduled to

mature on April 19, 2026 , unless extended or terminated pursuant to its applicable terms.

None of our other

unconsolidated joint ventures had outstanding debt at November 30, 2024 or 2023 .

(a) As of both November 30, 2025 and 2024 , the unconsolidated joint venture in California that delivered homes in 2025 and

2024 had borrowings outstanding under a term loan with a third-party lender to finance its land acquisition, development

and construction activities.

In January 2025, the term loan was amended, increasing the aggregate commitment to

$ 60.0 million from $ 55.0 million , and providing an eight -month loan extension option, which replaced two previous six -

month extension options.

Pursuant to the amendment, the aggregate commitment was reduced to $ 55.2 million on August

31, 2025, and is to be reduced to $ 40.0 million on February 28, 2026.

This term loan is scheduled to mature on April 19,

2026 , unless extended or terminated pursuant to its applicable terms.

If the term loan is extended, the aggregate

commitment would be reduced to $ 28.0 million effective April 19, 2026.

Borrowings under the term loan are secured by

the underlying property and related project assets.

None of our other unconsolidated joint ventures had outstanding debt at

November 30, 2025 or 2024 .

We provide certain guarantees and indemnities to the lender in connection with the above-described revolving line of

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Total liabilities and equity

(a) Cash and cash equivalents i ncludes restricted cash of $ 1.3 million at November 30, 2024 and 2023 .

(a) Cash and cash equivalents includes restricted cash of $.9 million at November 30, 2025 and $ 1.3 million at November 30,

Mortgage loans held for sale .

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fund within the terms of the IRLCs .

The fair value of IRLCs included in other assets in KBHS ’ balance sheets was

$ 16.0 million at November 30, 2024 and $ 13.9 million at November 30, 2023 .

The changes in the fair value of IRLCs , which

were reported in revenues for the applicable periods, were gains of $ 2.1 million for 2024 and $ 20.3 million for 2022 and a loss

of $ 16.0 million for 2023 .

The fair value of IRLCs included in other assets in KBHS ’ balance sheets was $ 4.6 million

at November 30, 2025 and $ 16.0 million at November 30, 2024 .

The changes in the fair value of IRLCs , which were reported

in revenues for the applicable periods, were losses of $ 11.4 million for 2025 and $ 16.0 million for 2023 and a gain of $ 2.1

million for 2024 .

KBHS manages the interest rate and price risk associated w ith its outstanding IRLCs by entering into best efforts forward

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Prepaid expenses

On March 1, 2024, substantially all the assets of an investee company, in which we had an aggregate ownership interest of

approximately 13.5 % , held largely through a limited liability company we established to hold the investment, were sold to a

privately held buyer through a merger.

Prior to the sale, certain assets of the investee company that were not included in the

sale were distributed to a separate privately held entity in which we received the same proportionate equity interest.

sale, we received cash plus certain preferred and common equity interests in the buyer.

The estimated fair value of the private

equity interests is included in other assets as of November 30, 2024 .

In connection with the sale, we recognized a gain of

$ 12.5 million , which is included in interest income and other in our consolidated statements of operations for the year ended

November 30, 2024 .

Certain of our executives are entitled to receive a portion of the proceeds from the sale transaction,

including any later distributions, pursuant to ownership interests they initially acquired, including our chairman and chief

executive officer who acquired a 3.3 % interest, in the relevant limited liability company in 2000 through an incentive program

described in the Proxy Statement for our 2001 Annual Meeting of Stockholders.

These executives vested in their respective

interests three years after their initial acquisition.

(a) Other includes investments in equity securities without readily determinable fair values, totaling $ 15.2 million at

November 30, 2025 and 2024 .

We received these securities in connection with the March 1, 2024 sale of substantially all

the assets of an investee company, in which we had an aggregate ownership interest of approximately 13.5 % , to a privately

held buyer through a merger.

From the sale, we received cash plus certain preferred and common equity interests in the

In connection with the sale, we recognized a gain of $ 12.5 million , which was included in interest income and other

in our consolidated statements of operations for the year ended November 30, 2024 .

Accrued Expenses and Other Liabilities

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Inventory-related obligations (a)

Customer deposits

Accrued interest payable

Customer deposits

Lease liabilities

Real estate and business taxes

Federal and state taxes payable

(a) Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities , as well as liabilities for

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$ ( 111,700 )

$ ( 178,800 )

Income tax expense

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$ ( 178,800 )

$ ( 140,400 )

Income tax expense

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$ 12.2 million of non-deductible executive compensation expense.

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.

In 2025, Section 45L tax credits decreased year over year, largely reflecting the impact of guidance the IRS issued in 2023

that heightened the Section 45L energy-efficiency qualification standard for homes built in California relative to other states

and our decision to build homes in many of our markets beginning in 2025 that are highly energy efficient and qualify for

ENERGY STAR certification but do not qualify for Section 45L tax credits.

We believe the additional costs necessary to

satisfy the higher standards for some of our homes outweigh the possible benefits of meeting those higher standards for both

our business and our buyers.

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.

other tax-related provisions of the OBBBA are not expected to have a material impact on our consolidated financial statements.

Deferred Tax Assets, Net.

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Employee benefits

Capitalized expenses

NOLs from 2006 through 2025

Capitalized expenses

Inventory impairment and land option contract abandonment charges

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Stock compensation

Dividend received deduction

Valuation allowance for deferred tax assets

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not” realization standard at those dates.

As a result of our utilization of certain state NOL s, we reduced the valuation allowance

by $.1 million in 2024 .

As of November 30, 2024 , we would need to generate approximately $ 408.0 million of pretax income

in future periods before 2043 to realize our deferred tax assets.

Based on the evaluation of our deferred tax assets as of

November 30, 2024 and 2023 , we determined that most of our deferred tax assets would be realized.

As a result of changes in state income tax rates and our utilization of certain state

NOL s, we reduced the valuation allowance by $ 1.3 million in 2025 .

As of November 30, 2025 , we would need to generate

approximately $ 356.0 million of pretax income within certain states in future periods before 2044 to realize our deferred tax

Based on the evaluation of our deferred tax assets as of November 30, 2025 and 2024 , we determined that most of our

deferred tax assets would be realized.

We will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a

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expire between 2026 and 2044 .

In 2025, $.1 million of state NOLs expired.

No state NOL s expired in 2024 or 2023.

State NOL s of $.1 million expired in 2022 .

Unrecognized Tax Benefits.

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Balance at beginning of year

Increase related to prior years’ tax positions

Increase (decrease) related to prior years’ tax positions

Balance at end of year

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Our total accrued interest and penalties related to unrecognized income tax benefits was

approximately $.2 million at November 30, 2024 and approximately $.1 million at November 30, 2023 .

Because of the impact

of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not

affect our annual effective tax rate but would accelerate the payment of cash to a tax authority to an earlier period.

November 30, 2024, the fiscal years ending 2021 and later remain open to federal examinations, while 2020 and later remain

open to state examinations.

approximately $.2 million at November 30, 2025 and 2024 .

Because of the impact of deferred tax accounting, other than

interest and penalties, the disallowance of the shorter deductibility period would not affect our annual effective tax rate but

would accelerate the payment of cash to a tax authority to an earlier period.

As of November 30, 2025, the fiscal years ending

2022 and later remain open to federal examinations, while 2021 and later remain open to state examinations.

The benefits of our deferred tax assets, including our NOL s, built-in losses and tax credits would be reduced or potentially

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Notes payable consisted of the following (in thousands):

Senior unsecured term loan due August 25, 2026

Senior unsecured term loan due November 12, 2029

6.875 % Senior notes due June 15, 2027

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Mortgages and land contracts due to land sellers and other loans (at an interest rate of 4.3 %

at November 30, 2024 and 3.0 % to 4.5 % at November 30, 2023)

at November 30, 2025 and 2024)

The carrying amounts of the Term Loan and senior notes listed above are net of debt issuance costs, which totaled $ 10.1

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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.

Credit Facility also contains a sublimit of $ 250.0 million for the issuance of letters of credit.

Interest on amounts borrowed

under the Credit Facility accrues at an adjusted term SOFR or a base rate, plus a spread that depends on our Leverage Ratio , as

defined under the Credit Facility .

Interest is payable quarterly (base rate) or each month or three months (adjusted term SOFR ).

The Credit Facility also requires the payment of a commitment fee at a per annum rate ranging from .15 % to .35 % of the

unused commitment, based on our Leverage Ratio .

Under the terms of the Credit Facility , we are required, among other things,

to maintain compliance with various covenants, including financial covenants relating to our consolidated tangible net worth,

Leverage Ratio , and either an Interest Coverage Ratio or a minimum level of liquidity, each as defined therein.

Our obligations

to pay borrowings under the Credit Facility are guaranteed on a joint and several basis by our Guarantor Subsidiaries.

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 .

Therefore, as of November 30, 2024 , we had $ 1.08 billion available for cash borrowings under the Credit

Facility , with up to $ 241.7 million of that amount available for the issuance of letters of credit.

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 Credit Facility also contains a sublimit of $ 250.0 million for the

issuance of letters of credit.

Interest on amounts borrowed under the Credit Facility accrues at a term SOFR, daily SOFR or a

base rate, plus a spread that depends on our Leverage Ratio , as defined under the Credit Facility .

Interest is payable monthly

(base rate or daily SOFR borrowings) or each month or three months (term SOFR borrowings).

The Credit Facility also

requires the payment of a commitment fee at a per annum rate ranging from .15 % to .35 % of the unused commitment, based on

our Leverage Ratio .

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

various covenants, including financial covenants relating to our consolidated tangible net worth, Leverage Ratio , and either an

Interest Coverage Ratio or a minimum level of liquidity, each as defined therein.

Our obligations to pay borrowings under the

Credit Facility are guaranteed on a joint and several basis by our Guarantor Subsidiaries.

The amount of the Credit Facility

available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit

outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility .

November 30, 2025 , we had no cash borrowings and $ 1.6 million of letters of credit outstanding under the Credit Facility .

Therefore, as of November 30, 2025 , we had nearly $ 1.20 billion available for cash borrowings under the Credit Facility , with

up to $ 248.4 million of that amount available for the issuance of letters of credit.

Senior Unsecured Term Loan.

We have a 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

Interest under the Term Loan accrues at an adjusted term SOFR or a base rate, plus a spread that depends on our

Leverage Ratio .

Interest is payable quarterly (base rate) or each month or three months (adjusted term SOFR).

The Term Loan

contains various covenants that are substantially the same as those under the Credit Facility .

The proceeds drawn under the

Term Loan are guaranteed on a joint and several basis by our Guarantor Subsidiaries.

As of November 30, 2024 and 2023 , the

weighted average annual interest rates on our outstanding borrowings under the Term Loan were 6.0 % and 6.8 % , respectively.

On November 12, 2025, we also entered into an amendment to our Term Loan with the

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

Interest under the Term Loan

accrues at a term SOFR , daily SOFR or base rate, plus a spread that depends on our Leverage Ratio .

Interest is payable

quarterly (base rate borrowing), monthly (daily SOFR loans), or each month or three months (term SOFR borrowing).

Term Loan contains various covenants that are substantially the same as those under the Credit Facility .

The proceeds drawn

under the Term Loan are guaranteed on a joint and several basis by our Guarantor Subsidiaries.

As of November 30, 2025 and

2024 , the weighted average annual interest rates on our outstanding borrowings under the Term Loan were 5.4 % and 6.0 % ,

respectively.

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.

Senior Notes.

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redeemed, plus accrued and unpaid interest on the notes being redeemed to, but excluding, the applicable redemption date.

(b) At our option, these notes may be redeemed, in whole at any time or in part from time to time prior to July 15, 2025, at a

redemption price equal to 100 % of the principal amount of the notes being redeemed plus a “make whole” premium, plus

accrued and unpaid interest, if any, to the redemption date.

In addition, at any time or from time to time prior to July 15,

2025, an amount not to exceed the net proceeds of qualified equity offerings may be used at our option to redeem up to

40 % of the aggregate principal amount of these notes, at a redemption price equal to 107.250 % of the principal amount of

the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date.

elect to redeem the notes in whole at any time or in part from time to time, on or after July 15, 2025, at the applicable

specified redemption price, including accrued and unpaid interest, if any, to the redemption date.

(b) At our option, these notes may be redeemed, in whole at any time or in part from time to time, on or after July 15, 2025, at

the applicable specified redemption price, including accrued and unpaid interest, if any, to, but excluding, the applicable

redemption date.

Depending on the redemption date, the applicable redemption price ranges from 100 % to 103.625 % of

the principal amount of the notes to be redeemed.

If a change in control occurs as defined in the instruments governing our senior notes, we would be required to offer to

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carrying value is not recoverable.

Our inventories are generally Level 3 assets.

We had no inventories with carrying values that

were adjusted to fair value during the years ended November 30, 2024 or 2023 .

See Note 7 – Inventory Impairments and Land

Option Contract Abandonments for information regarding the valuation of these assets.

These measurements are generally Level 3 within the fair value hierarchy.

Inventory Impairments and Land Option Contract Abandonments for information regarding the valuation of these assets.

November 30, 2025

November 30, 2024

Fair Value (a)

(a) Amounts represent the aggregate fair value for real estate assets impacted by inventory impairment charges during the

applicable period, as of the date that the fair value measurements were made.

The carrying value for these real estate assets

may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the

measurement date.

The following table presents the fair value hierarchy, carrying values and estimated fair values of our financial instruments,

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owners of property located near our communities.

Our self-insurance liability at each reporting date represents the estimated costs of reported claims, claims incurred but not

yet reported, and claim adjustment expenses.

As of November 30, 2025 and 2024, our self-insurance liability was primarily related to construction defect claims.

self-insurance liability at each reporting date represents the estimated costs of reported claims, claims incurred but not yet

reported, and claim adjustment expenses.

The amount of our self-insurance liability is based on an analysis performed by a

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Balance at end of year

(a) Represents net changes in estimated probable recoveries related to self-insurance, which are recorded in receivables, to

present our self-insurance liability on a gross basis, and an adjustment to increase our previously recorded liability by

$ 5.5 million in 2024, $ 6.5 million in 2023 and $ 7.0 million in 2022 .

The 2022 amount was largely impacted by a change

in the actuarially determined estimate of probable recoveries associated with higher self-insured retention levels in our

more recent coverage years, and an insurance carrier’s payment of a portion of a townhome claim settlement reached in the

2022 first quarter.

(a) Represents net changes in the portion of our self-insurance liability estimated to be recoverable from our insurers or other

parties, and/or actual recoveries funded directly by our insurers or other parties, if any , and an adjustment to increase our

previously recorded liability by $ 5.5 million in 2024 and $ 6.5 million in 2023 .

For most of our claims, there is no interaction between our warranty liability and self-insurance liability.

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with resolving the legal matter (including any additional repair work) are covered by our self-insurance liability.

The payments we make in connection with claims and related repair work, whether covered within our warranty liability

and/or our self-insurance liability, may be recovered from our insurers to the extent such payments exceed the self-insured

retentions or deductibles under our general liability insurance policies.

Also, in certain instances, in the course of resolving a

claim, we pay amounts in advance of and/or on behalf of an independent contractor(s) or their insurer(s) and believe we will be

reimbursed for such payments.

Estimates of all such amounts, if any, are recorded as receivables in our consolidated balance

sheets when any such recovery is considered probable.

The payments we make in connection with claims and related repair work may be recovered from our insurers to the extent

such payments exceed the self-insured retentions or deductibles under, and are within the scope of coverage provided by, our

general liability insurance policies.

Also, in certain instances, in the course of resolving a claim, we pay amounts in advance of

and/or on behalf of an independent contractor(s) or their insurer(s) and believe we will be reimbursed for such payments.

Estimates of all such amounts, if any, are recorded as receivables in our consolidated balance sheets when any such recovery is

considered probable.

In addition to the risk that is effectively self-insured through our captive insurance subsidiary, we often obtain project-

specific insurance coverage for construction defect risk on attached projects ( e.g.

, condominiums or townhomes) with policy

deductibles generally ranging from $ 50,000 to $ 250,000 .

We record estimated liabilities and recoveries for projected losses

related to these projects on a gross basis, including for known claims as well as estimates for claims incurred but not yet

, condominiums or townhomes) with self-

insured retentions generally ranging from $ 50,000 to $ 250,000 .

We record estimated liabilities and recoveries for projected

losses related to these projects on a gross basis, including for known claims as well as estimates for claims incurred but not yet

reported, to the extent such amounts are considered probable and estimable.

Florida Chapter 558 Actions .

We and certain of our trade partners continue to receive claims from attorneys on behalf of

individual owners of our homes and/or homeowners’ associations that allege, pursuant to Chapter 558 of the Florida Statutes,

various construction defects, with most relating to stucco and water-intrusion issues.

The claims primarily involve homes in

our Jacksonville, Orlando, and Tampa operations.

Under Chapter 558, homeowners must serve written notice of a construction

defect(s) and provide the served construction and/or design contractor(s) with an opportunity to respond to the noticed issue(s)

before they can file a lawsuit.

Although we have resolved many of these claims without litigation, and a number of others have

been resolved with applicable trade partners or their insurers covering the related costs, as of November 30, 2024 , we had

approximately 414 outstanding noticed claims, and some are scheduled for trial over the next few quarters and beyond.

addition, some of our trade partners’ insurers in some of these cases have informed us of their inability to continue to pay

claims-related costs.

At November 30, 2024 , we had an accrual for our estimated probable loss for these matters and a

receivable for estimated probable insurance recoveries, including an estimate for claims incurred but not yet reported.

is reasonably possible that our losses could exceed the amounts accrued and our recoveries could be less than the amounts

recorded, at this time, we are unable to estimate the total amount of the loss in excess of the accrued amount and/or associated

with a shortfall in the recoveries that is reasonably possible as each of these is dependent on several factors, including the extent

of additional claims to be reported in future periods;

the nature of any specific claims;

our evaluation of the particular facts

surrounding each such claim;

and the actions of third parties over which we have no control.

Pe r formance Bonds and Letters of Credit.

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Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a related accrual

or if an accrual had not been made, could be material to our consolidated financial statements.

or if an accrual has not been made, could be material to our consolidated financial statements.

Pursuant to SEC rules, we will

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Common Stock.

On April 7, 2022, our board of directors authorized us to repurchase up to $ 300.0 million of our

outstanding common stock.

This authorization replaced a previous board of directors authorization, which had 331,400 shares

remaining for repurchase.

In 2022, we repurchased 4,927,499 shares of our common stock on the open market pursuant to the

2022 authorization at a total cost of $ 150.0 million .

As of November 30, 2022, there was $ 150.0 million of remaining

availability under this share repurchase authorization.

In the 2023 first quarter, we repurchased 1,965,442 shares of our common stock on the open market

pursuant to a 2022 board of directors authorization at a total cost of $ 75.0 million .

On 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

authorization.

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

market pursuant to the 2023 authorization at a total cost of $ 336.4 million , bringing our total repurchases for the year ended

November 30, 2023 to 9,244,437 shares of common stock at a total cost of $ 411.4 million .

As of November 30, 2023, there

was $ 163.6 million of remaining availability under this share repurchase authorization.

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

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

On 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 authorization.

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

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

9,244,437 shares of common stock at a total cost of $ 411.4 million .

As of November 30, 2023, there was $ 163.6 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

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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 the 2024 share repurchase authorization.

As of November 30,

2024 , there was $ 700.0 million of remaining availability under the 2024 share repurchase authorization.

In the 2025 first, second and third quarters, we repurchased 7,788,113 shares of our common stock on the open market

pursuant to the 2024 board of directors authorization 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 authorization, which had $ 261.5 million remaining.

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 the 2025 share repurchase authorization.

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

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

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

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

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

In 2022 , our board of directors declared four quarterly cash dividends of $ .15 per share.

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

In the 2024 first

quarter, our board of directors declared a quarterly cash dividend of $ .20 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 $ .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.

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 second

quarter, and declared quarterly dividends at this higher rate for the 2023 third and fourth quarters.

All dividends declared

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Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Income tax expense related to items of other comprehensive income

Other comprehensive income, net of tax

Balance at November 30, 2023

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive loss

Amounts reclassified from accumulated other comprehensive loss (a)

Income tax expense related to items of other comprehensive loss

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Balance at November 30, 2024

The amounts reclassified from accumulated other comprehensive loss consisted of the following (in thousands):

Years Ended November 30,

Details About Accumulated Other Comprehensive Loss Components

Postretirement benefit plan adjustments

Amortization of net actuarial (gain) loss (a)

(a) The accumulated other comprehensive loss component is included in the computation of net periodic benefit costs as

further discussed in Note 22 – Postretirement Benefits .

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive loss (a)

Income tax expense related to items of other comprehensive income

Other comprehensive income, net of tax

Balance at November 30, 2025

(a) Amount is comprised solely of the amortization of net actuarial gain.

The accumulated other comprehensive loss

component is included in the computation of net periodic benefit costs as further discussed in Note 22 – Postretirement

There is no estimated prior service cost expected to be amortized from accumulated other comprehensive loss into net

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available grant capacity in the same manner in which they were initially deducted ( i.e ., 1-for-1 or 1.78-for-1).

and Restated 2014 Plan provides stock options may be awarded for periods of up to 10 years , and enables us to grant other

and Restated 2014 Plan provides that stock options may be awarded for periods of up to 10 years , and enables us to grant other

stock-based awards and cash bonuses.

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related to equity-based awards is included in selling, general and administrative expenses in our consolidated statements of

The following table presents our stock-based compensation expense (in thousands):

Stock-based compensation expense for 2025 included $ 16.0 million 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.

The following table presents our stock-based compensation

expense (in thousands):

Years Ended November 30,

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We have not granted any stock option awards since 2016.

The total intrinsic value of stock options exercised was $ 32.7 million in 2024 and $ 17.4 million in 2023 .

There were no stock

options exercised in 2022 .

The aggregate intrinsic value of both stock options outstanding and stock options exercisable was

$ 27.8 million at November 30, 2024 , $ 40.6 million at November 30, 2023 , and $ 26.5 million at November 30, 2022 .

intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the price of the

Stock options outstanding and stock options exercisable at November 30, 2024 are summarized as follows:

Options Outstanding

Options Exercisable

Exercise Price

$ 14.92 to $ 16.21

At November 30, 2024 , there was no unrecognized stock-based compensation expense related to stock option awards as all

these awards were fully vested.

The total intrinsic value of stock options exercised was $ 3.2 million in 2025 , $ 32.7 million in 2024 and $ 17.4 million in 2023 .

The aggregate intrinsic value of both stock options outstanding and stock options exercisable was $ 16.9 million at

November 30, 2025 , $ 27.8 million at November 30, 2024 , and $ 40.6 million at November 30, 2023 .

The intrinsic value of a

stock option is the amount by which the market value of the underlying stock exceeds the price of the option.

All of the stock options outstanding and stock options exercisable at November 30, 2025 had an exercise price of $ 16.21

and a remaining contractual life of .8 years .

At November 30, 2025 , there was no unrecognized stock-based compensation

expense related to stock option awards as all these awards were fully vested.

Restricted Stock.

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restriction periods, these employees are entitled to vote and to receive cash dividends on such shares.

The restrictions imposed

with respect to the shares granted lapse in installments within, or in full at the end of, three years after their grant date if certain

conditions are met.

Except as to recipients of

the restricted stock awards granted in October 2025 who were retirement-eligible on the grant date or who become retirement-

eligible during the standard vesting period, the restrictions imposed with respect to the shares granted lapse in installments

within, or in full at the end of, three years after their grant date if certain conditions are met.

Restricted stock transactions are summarized as follows:

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On October 10, 2024, we granted PSUs to certain employees with

similar terms as the 2024 PSU grants, except that the applicable performance period commenced on December 1, 2023 and

ends on November 30, 2026.

generally similar terms as the 2025 PSU grants, except that the applicable performance period commenced on December 1,

2024 and ends on November 30, 2027.

The grant date fair value of each such PSU was $ 79.81 .

On November 14, 2022, we granted

PSUs to certain employees with similar terms as the 2024 PSU grants, except that the applicable performance period

commenced on December 1, 2022 and ends on November 30, 2025.

On October 5, 2023, we

granted PSUs to certain employees with generally similar terms as the 2025 PSU grants, except that the applicable performance

period commenced on December 1, 2023 and ends on November 30, 2026.

The grant date fair value of each such PSU was

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Outstanding at end

The number of shares of our common stock actually granted to a recipient, if any, when a PSU vests will depend on the

degree of achievement of the applicable performance measures during the applicable three -year period.

The shares of our

common stock that were granted under the terms of PSUs that vested in 2024 included an aggregate of 259,818 additional

shares above the target amount awarded to the eligible recipients based on our achievement of certain levels of the three above-

described metrics over the three -year period from December 1, 2020 through November 30, 2023.

Similarly, the shares of our

common stock that were granted under the terms of PSUs that vested in 2023 included an aggregate of 267,674 additional

shares above the target amount based on our achievement of certain levels of the three above-described metrics over the period

from December 1, 2019 through November 30, 2022, and the shares of our common stock that were granted under the terms of

PSUs that vested in 2022 included an aggregate of 265,782 additional shares above the target amount based on our achievement

of certain levels of the three above-described metrics over the period from December 1, 2018 through November 30, 2021.

PSUs do not have dividend or voting rights during the performance period.

Compensation cost for PSUs is initially estimated

based on target performance achievement and adjusted as appropriate throughout the performance period.

The number of shares of our common stock actually granted to a recipient, if any, upon the vesting of a PSU depends on

the degree of achievement of the applicable performance measures during the designated three -year performance period.

shares of our common stock that were granted under the terms of PSUs that vested in 2025 included an aggregate of 235,562

shares above the target amount awarded to the eligible recipients based on performance from December 1, 2021 through

November 30, 2024.

PSUs that vested in 2024 included an aggregate of 259,818 shares above the target amount based on

performance from December 1, 2020 through November 30, 2023, and PSUs that vested in 2023 included an aggregate of

267,674 shares above the target amount based on our performance from December 1, 2019 through November 30, 2022.

do not have dividend or voting rights during the performance period.

Compensation cost for PSUs is initially estimated based

on target performance achievement and adjusted as appropriate throughout the performance period.

Accordingly, future

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achievement with respect to the applicable performance measures.

At November 30, 2024 , we had $ 47.1 million of total

unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted-average period

of approximately three years .

At November 30, 2025 , total unrecognized compensation

cost related to unvested PSUs was $ 32.1 million , which is expected to be recognized over a weighted-average period of

approximately three years .

Director Awards.

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recognized investment gains on the cash surrender value of the Retirement Plan life insurance contracts of $.3 million in 2025 ,

and $.1 million in 2023 , and an investment loss of $ 3.1 million in 2022 .

In 2024 , 2023 and 2022 , we paid $ 2.4 million , $ 2.3

million and $ 2.0 million , respectively, in benefits under the Retirement Plan to eligible former employees.

The cash surrender

value of the DBO Plan life insurance contracts was $ 17.3 million at November 30, 2024 and $ 16.9 million at November 30,

We recognized investment gains on the cash surrender value of the DBO Plan life insurance contracts of $.5 million in

2024 and $.1 million in 2023 , and an investment loss of $ 1.5 million in 2022 .

In 2024 and 2022, we paid $.3 million and $.7

million , respectively, in benefits under the DBO Plan.

We paid no benefits under the DBO Plan in 2023.

$.8 million in 2024 and $.1 million in 2023 .

In 2025 , 2024 and 2023 , we paid $ 2.5 million , $ 2.4 million and $ 2.3 million ,

respectively, in benefits under the Retirement Plan to eligible former employees.

The cash surrender value of the DBO Plan life

insurance contracts was $ 17.7 million at November 30, 2025 and $ 17.3 million at November 30, 2024 .

We recognized

investment gains on the cash surrender value of the DBO Plan life insurance contracts of $.4 million in 2025 , $.5 million in

2024 and $.1 million in 2023 .

In 2024, we paid $.3 million in benefits under the DBO Plan.

We paid no benefits under the

DBO Plan in 2025 and 2023.

The net periodic benefit cost of our Retirement Plan and DBO Plan is included in selling, general and administrative

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Interest cost

Amortization of net actuarial (gain) loss

Amortization of net actuarial gain

The liabilities related to these plans were $ 61.6 million at November 30, 2025 and $ 60.8 million at November 30, 2024 ,

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2025 and 2024 , the discount rates we used for the plans were approximately 4.8 % and 4.9 % , respectively.

B enefit payments under our Retirement Plan and DBO Plan are expected to be paid during each year ending November 30

Benefit payments under our Retirement Plan and DBO Plan are expected to be paid during each year ending November 30

2026 — $ 3.7 million ;

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as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit

matter or on the accounts or disclosures to which it relates.

Self-insurance Liabilities and Recoveries

matter or on the account or disclosures to which it relates.

Self-insurance Liabilities

Description of the Matter

At November 30, 2024 , the Company’s self-insurance liability was $185.4 million , and

receivables for estimated probable insurance and other recoveries related to self-insurance

claims totaled $22.6 million .

As disclosed in Note 17 to the consolidated financial

statements, the Company’s self-insurance liability for construction defects is based on an

analysis prepared by a third-party actuary that uses historical claim and expense data as

well as industry data to estimate the cost of all unpaid losses, including estimates related

to claims incurred but not yet reported.

Key assumptions used in developing these

estimates include claim frequencies, severities and resolution patterns, which can occur

over an extended period of time.

Self-insurance recoveries are principally based on

actuarially determined amounts and consider the claim cost estimates described above,

applicable insurance policy coverage limits, historical recovery rates, and other factors.

Auditing the Company’s self-insurance liability and related recoveries is complex and

highly judgmental due to the complexity of the actuarial methods used to estimate the

losses and related recoveries and degree of subjective judgment required to assess the

underlying assumptions, which required us to involve our actuarial specialists.

estimates are subject to variability due to the length of time between the delivery of a

home to a homebuyer and when a construction defect claim is made and ultimately

uncertainties regarding such claims relative to the markets and types of products

and legal or regulatory actions and interpretations, among other factors.

At November 30, 2025 , the Company’s self-insurance liability of $179.2 million was

primarily related to construction defect claims.

As disclosed in Note 17 to the

consolidated financial statements, the Company’s self-insurance liability for construction

defects is based on an analysis prepared by a third-party actuary that uses historical claim

and expense data as well as industry data to estimate the cost of all unpaid losses,

including estimates related to claims incurred but not yet reported.

Key assumptions used

in developing these estimates include claim frequencies, severities and resolution patterns,

which can occur over an extended period of time.

Auditing the Company’s self-insurance liability is complex and highly judgmental due to

the complexity of the actuarial methods used to estimate losses and the degree of

subjective judgment required to assess the underlying assumptions, which required us to

involve our actuarial specialists.

These estimates are subject to variability due to the

length of time between the delivery of a home to a homebuyer and when a construction

defect claim is made and ultimately resolved;

uncertainties regarding such claims relative

to the markets and types of products built;

and legal or regulatory actions and

interpretations, among other factors.

How We Addressed the Matter in

We obtained an understanding, evaluated the design, and tested the operating

effectiveness of controls over the Company’s self-insurance liability and recoveries

estimation process including controls over the data and assumptions used in the analysis.

To test the Company’s self-insurance liability and related recoveries, our audit procedures

included, among others, testing the completeness and accuracy of the underlying claims

and recovery data utilized by the Company’s third-party actuary, testing the existence and

terms of third-party insurance policies, and involving our actuarial specialist to assist in

our evaluation of the methodologies and assumptions applied by management’s third-

party actuary.

Additionally, we compared the Company’s recorded self-insurance

liability and related recoveries to estimated ranges which our actuarial specialist

developed based on independently selected assumptions.

effectiveness of controls over the Company’s self-insurance liability estimation process

including controls over the data and assumptions used in the analysis.

To test the Company’s self-insurance liability, our audit procedures included, among

others, testing the completeness and accuracy of the underlying claims data utilized by the

Company’s third-party actuary, testing the existence and terms of third-party insurance

policies, and involving our actuarial specialists to assist in our evaluation of the

methodologies and assumptions applied by management’s third-party actuary.

Additionally, we compared the Company’s recorded self-insurance liability to estimated

ranges which our actuarial specialist developed based on independently selected

/s/ Ernst & Young LLP

4 unchanged sentences

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 8. Financial Statements and Supplementary Data