What changed in this filing

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Item 1. Financial Statements

2026-04-09 compared with 2025-10-09 · 223 added, 238 removed, 580 unchanged (44% of the section changed)

2 unchanged sentences

(In Thousands, Except Per Share Amounts – Unaudited)

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Total revenues $ 1,077,011 $ 1,391,777

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Operating income 32,986 127,339

Interest income and other

1,870 4,073 5,628 29,379

Interest income

Equity in income of unconsolidated joint ventures

1,509 3,453 5,002 3,232

Homebuilding pretax income 34,789 131,831

3 unchanged sentences

Equity in income of unconsolidated joint venture

4,254 5,932 13,445 19,422

Financial services pretax income 5,535 7,526

38 unchanged sentences

Stockholders’ equity:

Common stock — 74,451,477 and 74,409,977 shares issued at August 31, 2025 and November 30, 2024, respectively

Common stock — 74,506,740 and 74,477,254 shares issued at February 28, 2026 and November 30, 2025, respectively

74,507 74,477

4 unchanged sentences

( 3,538 ) ( 3,538 )

Treasury stock, at cost — 9,686,792 and 2,253,156 shares at August 31, 2025 and November 30, 2024, respectively

Treasury stock, at cost — 11,858,494 and 11,303,643 shares at February 28, 2026 and November 30, 2025, respectively

( 698,523 ) ( 663,437 )

5 unchanged sentences

(In Thousands – Unaudited)

Three Months Ended August 31, 2025 and 2024

Three Months Ended February 28, 2026 and 2025

Number of Shares

Stock Grantor

Trust Treasury

Stock Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Grantor Stock

Ownership Trust Treasury Stock Total Stockholders’ Equity

Balance at May 31, 2025

Stock Treasury

Stock Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity

Balance at November 30, 2025

74,477 ( 11,304 ) $ 74,477 $ 863,718 $ 3,629,638 $ ( 3,538 ) $ ( 663,437 ) $ 3,900,858

2 unchanged sentences

Employee stock options/other 30 — 30 447 — — — 477

Stock-based compensation — — — — 8,420 — — — — 8,420

Stock repurchases, including excise tax

— 569 — ( 33,405 ) — — 33,405 —

Balance at August 31, 2025

74,451 — ( 9,687 ) $ 74,451 $ 848,909 $ 3,543,885 $ ( 3,704 ) $ — $ ( 561,178 ) $ 3,902,363

Balance at May 31, 2024

101,892 ( 6,705 ) ( 19,983 ) $ 101,892 $ 848,635 $ 3,948,878 $ ( 3,671 ) $ ( 72,718 ) $ ( 831,312 ) $ 3,991,704

Net income — — — — — 157,329 — — — 157,329

Dividends on common stock — — — — — ( 18,407 ) — — — ( 18,407 )

Stock-based compensation — — — 5,995 — — — 5,995

1 unchanged sentence

— ( 843 ) — — — — ( 50,279 ) ( 50,279 )

Balance at August 31, 2024

101,892 ( 6,705 ) ( 21,852 ) $ 101,892 $ 856,603 $ 4,087,800 $ ( 3,671 ) $ ( 72,718 ) $ ( 982,812 ) $ 3,987,094

Nine Months Ended August 31, 2025 and 2024

Number of Shares

Stock Grantor

Trust Treasury

Stock Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Grantor Stock

Ownership Trust Treasury Stock Total Stockholders’ Equity

Balance at November 30, 2024

74,410 — ( 2,253 ) $ 74,410 $ 862,049 $ 3,269,423 $ ( 3,704 ) $ — $ ( 141,562 ) $ 4,060,616

Net income — — — — — 327,268 — — — 327,268

Dividends on common stock — — — — — ( 52,806 ) — — — ( 52,806 )

Employee stock options/other 41 — — 41 611 — — — — 652

Stock awards — — 612 — ( 38,882 ) — — — 38,882 —

Stock-based compensation — — — — 25,131 — — — — 25,131

Stock repurchases, including excise tax — — ( 7,788 ) — — — — — ( 442,614 ) ( 442,614 )

Tax payments associated with stock-based compensation awards

Balance at August 31, 2025

— ( 280 ) — — — — ( 18,212 ) ( 18,212 )

Balance at February 28, 2026

74,507 ( 11,858 ) $ 74,507 $ 836,755 $ 3,645,806 $ ( 3,538 ) $ ( 698,523 ) $ 3,855,007

Balance at November 30, 2024

6 unchanged sentences

Stock repurchases, including excise tax

— ( 754 ) — — — — ( 50,303 ) ( 50,303 )

Tax payments associated with stock-based compensation awards — ( 258 ) — — — — ( 15,884 ) ( 15,884 )

Balance at August 31, 2024

Balance at February 28, 2025

74,437 ( 2,704 ) $ 74,437 $ 834,306 $ 3,359,669 $ ( 3,704 ) $ ( 172,030 ) $ 4,092,678

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands – Unaudited)

Nine Months Ended August 31,

Three Months Ended February 28,

Cash flows from operating activities:

$ 33,424 $ 109,557

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Equity in income of unconsolidated joint ventures ( 2,655 ) ( 6,742 )

Distributions of earnings from unconsolidated joint ventures

27,741 21,275

Amortization of debt issuance costs

Depreciation and amortization

27,440 28,259

Deferred income taxes

Gain on sale of investment — ( 12,516 )

Stock-based compensation

25,131 25,252

Inventory impairments and land option contract abandonments

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( 148,131 ) ( 99,031 )

Net cash used in operating activities

( 125,367 ) ( 334,321 )

Net cash provided by operating activities

Cash flows from investing activities:

Contributions to unconsolidated joint ventures

( 10,593 ) ( 12,611 )

Return of investments in unconsolidated joint ventures

Proceeds from sale of investment

Purchases of property and equipment, net

3 unchanged sentences

Borrowings under revolving credit facility

350,000 180,000

Repayments under revolving credit facility

7 unchanged sentences

( 17,256 ) ( 19,311 )

Net cash used in financing activities

Net cash provided by financing activities

114,694 15,250

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In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation of our results for the interim periods presented.

The results of our consolidated operations for the three months and nine months ended August 31, 2025 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operating results and other factors.

The results of our consolidated operations for the three months ended February 28, 2026 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operating results and other factors.

Unless the context indicates otherwise, the terms “we,” “our,” and “us” used in this report refer to KB Home, a Delaware corporation, and its subsidiaries.

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We consider all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents.

Our cash equivalents totaled $ 164.7 million at August 31, 2025 and $ 385.1 million at November 30, 2024.

At August 31, 2025 and November 30, 2024, our cash equivalents were mainly invested in interest-bearing bank deposit accounts and money market funds.

Our cash equivalents totaled $ 45.0 million at February 28, 2026 and $ 152.6 million at November 30, 2025.

At February 28, 2026 and November 30, 2025, our cash equivalents were mainly invested in interest-bearing bank deposit accounts and money market funds.

Comprehensive Income.

Our comprehensive income was $ 109.8 million for the three months ended August 31, 2025 and $ 157.3 million for the three months ended August 31, 2024.

For the nine months ended August 31, 2025 and 2024, our comprehensive income was $ 327.3 million and $ 464.4 million, respectively.

Our comprehensive income for each of the three-month and nine-month periods ended August 31, 2025 and 2024 was equal to our net income for the respective periods.

Our comprehensive income was $ 33.4 million for the three months ended February 28, 2026 and $ 109.6 million for the three months ended February 28, 2025.

Our comprehensive income for each of the three-month periods ended February 28, 2026 and 2025 was equal to our net income for the respective periods.

Recent Accounting Pronouncements Not Yet Adopted.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

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

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

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

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

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740):

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Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the consolidated financial statements.

The guidance is effective for annual reporting periods beginning after

December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027.

The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The guidance is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements.

ASU 2024-03 is to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements.

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

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

We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment.

As of August 31, 2025, our homebuilding reporting segments conducted ongoing operations in the following states:

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.

Through February 28, 2026, our chief executive officer and chief operating officer together served as our CODM for purposes of our reportable segment disclosures and regularly reviewed the operating results for the individual operating segments that comprise our reporting segments.

Effective March 1, 2026, our chief executive officer transitioned to executive chairman of the board and our chief operating officer was promoted to chief executive officer.

As a result, effective March 1, 2026, our CODM is our executive chairman of the board and our chief executive officer.

This CODM transition did not affect the CODM’s approach to deciding how to allocate resources or to assessing performance with respect to our operating segments.

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 February 28, 2026, our homebuilding reporting segments conducted ongoing operations in the following states:

California, Idaho and Washington

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They also 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 offers property and casualty insurance and, in certain instances, earthquake, flood and personal property insurance to our homebuyers in the same markets as our homebuilding reporting segments, and provides title services in the majority of our markets located within our Southwest, Central and Southeast homebuilding reporting segments.

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We and GR Alliance each have a 50.0 % ownership interest, with GR Alliance providing management oversight of KBHS’ operations.

The financial 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 initiatives and provides support to our reporting segments by centralizing certain administrative functions.

management is responsible for, among other things, evaluating and selecting the geographic markets in which we operate, consistent with our overall business strategy;

allocating capital resources to markets for land acquisition and development activities;

making major personnel decisions related to employee compensation and benefits;

and monitoring the financial and operational performance of our divisions.

Corporate and other includes general and administrative expenses related to operating our corporate headquarters.

A portion of the expenses incurred by Corporate and other is allocated to our homebuilding reporting segments.

Our reporting segments follow the same accounting policies used for our consolidated financial statements.

The results of each reporting segment are not necessarily indicative of the results that would have occurred had the segment been an independent, stand-alone entity during the periods presented, nor are they indicative of the results to be expected in future periods.

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

Three Months Ended August 31, Nine Months Ended August 31,

The following tables present certain statements of operations information relating to our homebuilding reporting segments (dollars in thousands):

Three Months Ended February 28, 2026

West Coast Southwest Central Southeast Corporate and Other Total

Housing $ 449,209 $ 180,232 $ 223,608 $ 218,425 $ — $ 1,071,474

Land — — — 585 — 585

Total 449,209 180,232 223,608 219,010 — 1,072,059

Construction and land costs:

Housing ( 383,687 ) ( 141,919 ) ( 189,805 ) ( 187,692 ) ( 2,255 ) ( 905,358 )

Land — — — ( 516 ) — ( 516 )

Inventory-related charges ( 645 ) — ( 649 ) ( 861 ) — ( 2,155 )

Total ( 384,332 ) ( 141,919 ) ( 190,454 ) ( 189,069 ) ( 2,255 ) ( 908,029 )

Gross profits:

Housing (a) 64,877 38,313 33,154 29,872 ( 2,255 ) 163,961

Land — — — 69 — 69

Total 64,877 38,313 33,154 29,941 ( 2,255 ) 164,030

Marketing expenses ( 15,535 ) ( 5,375 ) ( 8,667 ) ( 7,094 ) ( 2,044 ) ( 38,715 )

Commission expenses ( 15,202 ) ( 5,928 ) ( 9,752 ) ( 8,698 ) — ( 39,580 )

General and administrative expenses ( 8,921 ) ( 4,403 ) ( 4,641 ) ( 5,312 ) ( 29,472 ) ( 52,749 )

Operating income (loss)

25,219 22,607 10,094 8,837 ( 33,771 ) 32,986

West Coast $ 664,880 $ 760,617 $ 1,926,722 $ 2,017,336

Southwest 335,505 312,812 962,486 954,602

Central 310,603 372,862 869,182 1,069,136

Southeast 303,474 299,688 767,829 868,115

562 ( 37 ) 1 ( 3 ) 1,280 1,803

Three Months Ended August 31, Nine Months Ended August 31,

Homebuilding pretax income (loss)

$ 25,781 $ 22,570 $ 10,095 $ 8,834 $ ( 32,491 ) $ 34,789

Pretax income (loss):

Housing gross profit margin as a percentage of housing revenues 14.4 % 21.3 % 14.8 % 13.7 % — % 15.3 %

Three Months Ended February 28, 2025

West Coast Southwest Central Southeast Corporate and Other Total

Housing $ 601,649 $ 312,879 $ 275,613 $ 196,900 $ — $ 1,387,041

Land — — — — — —

Total 601,649 312,879 275,613 196,900 — 1,387,041

Construction and land costs:

Housing ( 490,522 ) ( 232,408 ) ( 219,578 ) ( 161,875 ) ( 1,576 ) ( 1,105,959 )

Land — — — — — —

Inventory-related charges ( 646 ) ( 310 ) ( 318 ) ( 181 ) — ( 1,455 )

Total ( 491,168 ) ( 232,718 ) ( 219,896 ) ( 162,056 ) ( 1,576 ) ( 1,107,414 )

Gross profits:

Housing (a) 110,481 80,161 55,717 34,844 ( 1,576 ) 279,627

Land — — — — — —

Total 110,481 80,161 55,717 34,844 ( 1,576 ) 279,627

Marketing expenses ( 14,324 ) ( 5,762 ) ( 9,772 ) ( 6,623 ) ( 3,182 ) ( 39,663 )

Commission expenses ( 16,883 ) ( 10,101 ) ( 12,048 ) ( 8,134 ) — ( 47,166 )

General and administrative expenses ( 12,782 ) ( 5,523 ) ( 8,409 ) ( 7,010 ) ( 31,735 ) ( 65,459 )

Operating income (loss)

66,492 58,775 25,488 13,077 ( 36,493 ) 127,339

2,399 17 5 ( 3 ) 2,074 4,492

Homebuilding pretax income (loss)

$ 68,891 $ 58,792 $ 25,493 $ 13,074 $ ( 34,419 ) $ 131,831

Housing gross profit margin as a percentage of housing revenues 18.4 % 25.6 % 20.2 % 17.7 % — % 20.2 %

(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.

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

Three Months Ended February 28,

Equity in income (loss) of unconsolidated joint ventures:

West Coast $ 562 $ 2,399

Southwest ( 37 ) 17

Central 18,211 43,304 64,387 128,446

Southeast ( 3 ) ( 3 )

Corporate and other ( 34,512 ) ( 33,879 ) ( 107,678 ) ( 82,254 )

Total $ 522 $ 2,413

Inventory impairment and land option contract abandonment charges:

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

2026 November 30,

West Coast $ 3,075,043 $ 3,048,056

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2026 November 30,

Investments in unconsolidated joint ventures:

West Coast $ 72,018 $ 68,708

Southwest 2,272 1,180

Southeast 2,545 2,548

Total $ 76,835 $ 72,436

West Coast $ 3,365,518 $ 3,300,212

Southwest 1,105,748 1,019,475

Central 879,742 910,307

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

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Insurance commissions $ 3,127 $ 2,561

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Equity in income of unconsolidated joint venture

4,254 5,932 13,445 19,422

Pretax income $ 5,535 $ 7,526

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Total liabilities $ 1,929 $ 3,210

(a) Other assets at August 31, 2025 and November 30, 2024 included $ 38.4 million and $ 38.2 million, respectively, of contract assets for estimated future renewal commissions.

(a) Other assets at February 28, 2026 and November 30, 2025 included $ 39.8 million and $ 39.1 million, respectively, of contract assets for estimated future renewal commissions.

Earnings Per Share

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Net income $ 33,424 $ 109,557

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Undistributed earnings allocated to participating securities

633 1,062 1,779 3,137

Undistributed earnings reallocated to participating securities

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Our outstanding nonvested shares of restricted stock contain non-forfeitable rights to dividends and, therefore, are considered participating securities for purposes of computing earnings per share pursuant to the two-class method.

We had no other participating securities at August 31, 2025 and 2024.

For the three-month and nine-month periods ended August 31, 2025 and 2024, no outstanding stock options were excluded from the diluted earnings per share calculations.

We had no other participating securities at February 28, 2026 and 2025.

For the three-month periods ended February 28, 2026 and 2025, no outstanding stock options were excluded from the diluted earnings per share calculations.

Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented, as the applicable vesting conditions had not been satisfied.

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Total $ 5,703,970 $ 5,670,802

Land under development at August 31, 2025 and November 30, 2024 included land held for future development of $ 37.8 million and $ 21.2 million, respectively.

Land under development at February 28, 2026 and November 30, 2025 included land held for future development of $ 27.5 million and $ 27.3 million, respectively.

Interest is capitalized to inventories while the related communities or land parcels are being actively developed and until homes are completed or the land is available for immediate sale.

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Our interest costs were as follows (in thousands):

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Capitalized interest at beginning of period $ 125,627 $ 122,387

Interest incurred 28,134 26,392

Interest amortized to construction and land costs (a)

( 27,026 ) ( 28,180 ) ( 75,755 ) ( 83,872 )

Interest amortized to construction and land costs ( 18,857 ) ( 23,423 )

Capitalized interest at end of period $ 134,904 $ 125,356

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

Inventory Impairments and Land Option Contract Abandonments

Each community or land parcel in our owned inventory is assessed on a quarterly basis to determine if indicators of potential impairment exist.

We record an inventory impairment charge on a community or land parcel that is active or held

for future development when indicators of potential impairment exist and the carrying value of the real estate asset is greater than the undiscounted future net cash flows the asset is expected to generate.

We record an inventory impairment charge on a community or land parcel that is active or held for future development when indicators of potential impairment exist and the carrying value of the real estate asset is greater than the undiscounted future net cash flows the asset is expected to generate.

These real estate assets are written down to fair value, which is primarily determined based on the estimated future net cash flows discounted for inherent risk associated with each such asset, or other valuation techniques.

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The estimated fair values of such assets are generally based on bona fide letters of intent from outside parties, executed sales contracts, broker quotes or similar information.

We evaluated 14 active communities or land parcels for recoverability as of August 31, 2025 with a carrying value of $ 168.7 million.

As of November 30, 2024, we evaluated eight active communities or land parcels for recoverability with a carrying value of $ 139.5 million.

In addition, we evaluated land held for future development for recoverability as of both August 31, 2025 and November 30, 2024.

Based on the results of our evaluations, we recognized inventory impairment charges of $ 7.3 million for the three-month and nine-month periods ended August 31, 2025 primarily related to one community.

These charges were principally driven by both increased costs imposed by a municipality affecting the community, and our decision to make changes in our operational strategy aimed at more quickly monetizing our investment in this community, mainly by accelerating the overall pace for selling, building and delivering homes therein.

For the three-month and nine-month periods ended August 31, 2024, we recognized no inventory impairment charges.

If we change our strategy or if there are changes in market conditions for any given asset, we may recognize additional impairment charges.

The following table summarizes significant quantitative unobservable inputs we utilized in our fair value measurements with respect to the impaired communities written down to fair value:

Three Months Ended August 31, Nine Months Ended August 31,

Unobservable Input (a) 2025 2024 2025 2024

Average selling price $ 394,500 - $ 578,900

$ 394,500 - $ 578,900

Deliveries per month 2 - 3

Discount rate 17 % - 20 %

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

As of August 31, 2025, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $ 26.7 million, representing six communities and various other land parcels.

As of November 30, 2024, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $ 32.1 million, representing four communities and various other land parcels.

We evaluated 16 active communities or land parcels for recoverability as of February 28, 2026 with a carrying value of $ 196.1 million.

As of November 30, 2025, we evaluated 11 active communities or land parcels for recoverability with a carrying value of $ 154.1 million.

In addition, we evaluated land held for future development for recoverability as of both February 28, 2026 and November 30, 2025.

Based on the results of our evaluations, we recognized no inventory impairment charges for the three-month periods ended February 28, 2026 and 2025.

As of February 28, 2026, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $ 23.9 million, representing six communities and various other land parcels.

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.

Our inventory controlled under land option contracts and other similar contracts is assessed on a quarterly basis to determine whether it continues to meet our investment return standards.

When a decision is made not to exercise certain land option contracts and other similar contracts due to market conditions and/or changes in our marketing strategy, we write off the related inventory costs, including non-refundable deposits and unrecoverable pre-acquisition costs.

Based on the results of our assessments, we recognized land option contract abandonment charges of $ 4.0 million and $ 11.0 million for the three-month and nine-month periods ended August 31, 2025, respectively.

For the three-month and nine-month periods ended August 31, 2024, we recognized land option contract abandonment charges of $ 1.2 million and $ 3.7 million, respectively.

Due to the judgment and assumptions applied in our inventory impairment and land option contract abandonment assessment processes, and in our estimations of the remaining operating lives of our inventory assets and the realization of our inventory balances, particularly as to land held for future development, it is possible that actual results could differ substantially from those estimated.

Based on the results of our assessments, we recognized land option contract abandonment charges of $ 2.2 million and $ 1.5 million for the three-month periods ended February 28, 2026 and 2025, respectively.

Variable Interest Entities

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We analyze our joint ventures under the variable interest model to determine whether they are VIEs and, if so, whether we are the primary beneficiary.

Based on our analyses, we determined that one

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

Therefore, all of our joint ventures at August 31, 2025 and November 30, 2024 were unconsolidated and accounted for under the equity method because we did not have a controlling financial interest.

Based on our analyses, we determined that one of our joint ventures at February 28, 2026 and November 30, 2025 was a VIE, but we were not the primary beneficiary of the VIE.

Therefore, all of our joint ventures at February 28, 2026 and November 30, 2025 were unconsolidated and accounted for under the equity method because we did not have a controlling financial interest.

Land Option Contracts and Other Similar Contracts.

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Although we do not have legal title to the underlying land, we are required to consolidate a VIE if we are the primary beneficiary.

As a result of our analyses, we determined that as of August 31, 2025 and November 30, 2024, we were not the primary beneficiary of any VIEs from which we have acquired rights to land under land option contracts and other similar contracts.

As a result of our analyses, we determined that as of February 28, 2026 and November 30, 2025, we were not the primary beneficiary of any VIEs from which we have acquired rights to land under land option contracts and other similar contracts.

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

August 31, 2025 November 30, 2024

February 28, 2026 November 30, 2025

Deposits Aggregate

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$ 71,489 $ 1,896,060 $ 80,886 $ 2,063,294

In addition to the cash deposits presented in the table above, our exposure to loss related to our land option contracts and other similar contracts with third parties and unconsolidated entities consisted of pre-acquisition costs of $ 52.3 million at August 31, 2025 and $ 34.3 million at November 30, 2024.

In addition to the cash deposits presented in the table above, our exposure to loss related to our land option contracts and other similar contracts with third parties and unconsolidated entities consisted of pre-acquisition costs of $ 64.0 million at February 28, 2026 and $ 62.8 million at November 30, 2025.

These pre-acquisition costs and cash deposits were included in inventories in our consolidated balance sheets.

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For these land option contracts and other similar contracts, we record the remaining purchase price of the associated land parcel(s) in inventories in our consolidated balance sheets with a corresponding financing obligation if we determine that we are effectively compelled to exercise the option to purchase the land parcel(s).

As a result of our evaluations of land option contracts and other similar contracts for financing arrangements, we recorded inventories in our consolidated balance sheets, with a corresponding increase to accrued expenses and other liabilities, of $ 20.2 million at August 31, 2025 and $ 26.0 million at November 30, 2024.

As a result of our evaluations of land option contracts and other similar contracts for financing arrangements, we recorded inventories in our consolidated balance sheets, with a corresponding increase to accrued expenses and other liabilities, of $ 13.8 million at February 28, 2026 and $ 15.4 million at November 30, 2025.

Investments in Unconsolidated Joint Ventures

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The obligations to make capital contributions are governed by each such unconsolidated joint venture’s respective operating agreement and related governing documents.

We had investments in six homebuilding unconsolidated joint ventures as of August 31, 2025 and November 30, 2024.

We had investments in six homebuilding unconsolidated joint ventures as of February 28, 2026 and November 30, 2025.

The following table presents combined condensed information from the statements of operations for our homebuilding unconsolidated joint ventures (in thousands):

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Revenues $ 11,056 $ 25,369

2 unchanged sentences

$ 1,068 $ 4,815

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

All the combined revenues and most of the construction and land costs for the three-month periods ended February 28, 2026 and 2025 related to homes delivered by an unconsolidated joint venture in California.

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

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Total liabilities and equity $ 180,982 $ 175,499

(a) As of both August 31, 2025 and November 30, 2024, the unconsolidated joint venture in California that delivered homes in the three-month and nine-month periods ended August 31, 2025 and 2024 had borrowings outstanding under a term loan with a third-party lender to finance its land acquisition, development and construction activities.

(a) As of both February 28, 2026 and November 30, 2025, the unconsolidated joint venture in California that delivered homes in the three-month periods ended February 28, 2026 and 2025 had borrowings outstanding under a term loan with a third-party lender to finance its land acquisition, development and construction activities.

In January 2025, the loan agreement was amended, increasing the aggregate commitment to $ 60.0 million from $ 55.0 million, and providing an eight-month loan extension option to replace the two previous six-month extension options.

Pursuant to the amendment, the aggregate commitment was reduced to $ 55.2 million on August 31, 2025, and will be reduced to $ 40.0 million on February 28, 2026.

Pursuant to the amendment, the aggregate commitment was reduced to $ 55.2 million on August 31, 2025, and 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.

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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 August 31, 2025 or November 30, 2024 .

None of our other unconsolidated joint ventures had outstanding debt at February 28, 2026 or November 30, 2025 .

We provide certain guarantees and indemnities to the lender in connection with the above-described term loan, including a guaranty of interest and carry costs;

a guaranty to complete the construction of phases of the improvements for the project as such phases are commenced;

a guaranty to complete the construction of phases of the improvements for the project

as such phases are commenced;

a guaranty against losses suffered due to certain bad acts or failures to act by the unconsolidated joint venture or its partners;

and an indemnity from environmental issues.

Except to the extent related to the foregoing guarantees and indemnities, we do not have a guaranty or any other obligation to repay borrowings under term loan or to support the value of the underlying collateral.

Except to the extent related to the foregoing guarantees and indemnities, we do not have a guaranty or any other obligation to repay borrowings under the term loan or to support the value of the underlying collateral.

However, various financial and non-financial covenants apply under the term loan and with respect to the related guaranty and indemnity obligations, and a failure to comply with such covenants could result in a default and cause the lender to seek to enforce such guaranty and indemnity obligations.

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

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Revenues $ 18,559 $ 25,615

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Total liabilities and equity $ 174,019 $ 208,565

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

(a) Cash and cash equivalents included restricted cash of $ .9 million at both February 28, 2026 and November 30, 2025 .

Mortgage loans held for sale .

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The fair value of IRLCs is based on market prices, which includes an estimate of the fair value of the associated mortgage servicing rights, adjusted for estimated costs to originate the underlying mortgage loans as well as the probability that the mortgage loans will fund within the terms of the IRLCs.

The fair value of IRLCs included in other assets in KBHS’ balance sheets was $ 9.4 million at August 31, 2025 and $ 16.0 million at November 30, 2024.

The changes in the fair value of IRLCs, which were reported in revenues for the applicable periods, were losses of $ 3.0 million and $ 6.6 million for the three-month and nine-month periods ended August 31, 2025, respectively, and a loss of $.4 million and a gain of $ 3.8 million for the three-month and nine-month periods ended August 31, 2024, respectively.

The fair value of IRLCs included in other assets in KBHS’ balance sheets was $ 4.8 million at February 28, 2026 and $ 4.6 million at November 30, 2025.

The changes in the fair

value of IRLCs, which were reported in revenues for the applicable periods, were a gain of $ .2 million for the three months ended February 28, 2026 and a loss of $ 1.5 million for the three months ended February 28, 2025.

KBHS manages the interest rate and price risk associated with its outstanding IRLCs by entering into best efforts forward sale commitments under which mortgage loans locked with a borrower are simultaneously committed to a secondary market investor at a fixed price, subject to the underlying mortgage loans being funded.

These best efforts forward sale commitments do not meet the definition of derivative financial instruments and are therefore not recorded in KBHS’

balance sheets.

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

These best efforts forward sale commitments do not meet the definition of derivative financial instruments and are therefore not recorded in KBHS’ balance sheets.

If the mortgage loans underlying the IRLCs do not fund, KBHS does not have an obligation to fulfill the secondary market investor commitments.

Funding facilities .

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The agreements contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquid assets, maximum debt to net worth ratio and positive net income, as defined in the agreements.

KBHS was in compliance with these covenants as of August 31, 2025.

KBHS was in compliance with these covenants as of February 28, 2026.

In addition to its compliance with these covenants, KBHS also depends on the ability and willingness of the applicable lenders and financial institutions to extend such credit facilities to KBHS to fund its originated mortgage loans.

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Total $ 113,832 $ 107,833

(a) On March 1, 2024, substantially all the assets of an investee company, in which we had an aggregate ownership interest of approximately 13.5 %, held largely through a limited liability company we established to hold the investment, were sold to a privately held buyer through a merger.

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

Other includes these investments in equity securities without readily determinable fair values of $ 15.2 million at August 31, 2025 and November 30, 2024 .

In connection with the sale, we recognized a gain of $ 12.5 million, which is included in interest income and other in our consolidated statements of operations for the nine months ended August 31, 2024.

(a) Other includes investments in equity securities without readily determinable fair values of $ 15.2 million at February 28, 2026 and November 30, 2025 .

Accrued Expenses and Other Liabilities

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Self-insurance and other legal liabilities $ 291,853 $ 290,107

Employee compensation and related benefits 145,957 182,460

Warranty liability 102,539 101,245

Employee compensation and related benefits 98,390 157,170

Inventory-related obligations (a) 43,731 48,243

Customer deposits 38,072 44,029

Lease liabilities 28,453 19,775

Customer deposits 27,330 28,033

Accrued interest payable 17,998 29,219

Real estate and business taxes 11,999 13,612

Federal and state taxes payable 5,061 —

Other 44,427 44,542

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(a) Represents liabilities for financing arrangements discussed in Note 8 – Variable Interest Entities, as well as liabilities for fixed or determinable amounts associated with tax increment financing entity (“TIFE”) assessments.

delivered, our obligation to pay the remaining TIFE assessments associated with each underlying lot is transferred to the homebuyer.

As homes are delivered, our obligation to pay the remaining TIFE assessments associated with each underlying lot is transferred to the homebuyer.

As such, these assessment obligations will be paid by us only to the extent we do not deliver homes on applicable lots before the related TIFE obligations mature.

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Lease expense is included in selling, general and administrative expenses in our consolidated statements of operations and includes costs for leases with terms of more than 12 months as well as short-term leases with terms of 12 months or less.

Our total lease expense for the three months ended August 31, 2025 and 2024 was $ 5.5 million and $ 5.1 million, respectively , and included short-term lease costs of $ 2.1 million and $ 1.9 million, respectively.

For both the nine months ended August 31, 2025 and 2024, our total lease expense was $ 15.4 million, and included short-term lease costs of $ 5.4 million and $ 5.6 million, respectively.

Variable lease costs and external sublease income for the three-month and nine-month periods ended August 31, 2025 and 2024 were immaterial.

Our total lease expense for the three months ended February 28, 2026 and 2025 was $ 5.2 million and $ 4.8 million, respectively , and included short-term lease costs of $ 1.8 million and $ 1.5 million, respectively.

Variable lease costs and external sublease income for the three-month periods ended February 28, 2026 and 2025 were immaterial.

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

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

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Income tax expense $ 6,900 $ 29,800

1 unchanged sentence

17.1 % 21.4 %

Our income tax expense and effective tax rate for the three months ended August 31, 2025 included the favorable impact of $ 5.3 million of Internal Revenue Code Section 45L (“Section 45L”) tax credits we recognized primarily from building energy-efficient homes and $.2 million of excess tax benefits related to stock-based compensation, partly offset by $ 3.6 million of non-deductible executive compensation expense.

Our income tax expense and effective tax rate for the three months ended August 31, 2024 reflected the favorable impact of $ 3.9 million of Section 45L tax credits, partly offset by $ 2.4 million of non-deductible executive compensation expense.

For the nine months ended August 31, 2025, our income tax expense and effective tax rate included the favorable impacts of $ 10.1 million of Section 45L tax credits and $ 5.6 million of excess tax benefits related to stock-based compensation and, partly offset by $ 8.8 million of non-deductible executive compensation expense.

Our income tax expense and effective tax rate for the nine months ended August 31, 2024 reflected the favorable impacts of $ 12.8 million of Section 45L tax credits, $ 6.5 million of excess tax benefits related to stock-based compensation, partly offset by $ 7.9 million of non-deductible executive compensation expense.

The year-over-year increase in Section 45L tax credits for the three months ended August 31, 2025 was mainly due to additional tax credits recognized based on certifications verified during the quarter.

For the nine months ended August 31, 2025, Section 45L tax credits decreased year over year, largely reflecting the impact of guidance the Internal Revenue Service (“IRS”) issued in 2023 that heightened the Section 45L energy-efficiency qualification standard for homes built in California relative to other states and our decision to build homes in many of our markets beginning in 2025 that are highly energy efficient and qualify for ENERGY STAR® certification but do not qualify for Section 45L tax credits.

We believe the additional costs necessary to satisfy the higher standards for some of our homes outweigh the possible benefits of meeting those higher standards for both our business and our buyers.

Our income tax expense and effective tax rate for the three months ended February 28, 2026 included the favorable impact of $ 3.8 million of excess tax benefits related to stock-based compensation and $ .4 million of Internal Revenue Code Section 45L (“Section 45L”) tax credits we recognized primarily from building energy-efficient homes, partly offset by $ 1.1 million of non-deductible executive compensation expense.

Our income tax expense and effective tax rate for the three months ended February 28, 2025 reflected the favorable impact of $ 5.4 million of excess tax benefits related to stock-based compensation and $ 1.7 million of Section 45L tax credits, partly offset by $ 2.4 million of non-deductible executive compensation expense.

On July 4, 2025, H.R.1, the One Big Beautiful Bill Act (“OBBBA”), was signed into law.

Among its provisions is the repeal of Section 45L tax credits for new energy-efficient homes delivered after June 30, 2026.

As a result, beginning in our 2026 third quarter, our income tax expense and effective tax rate will no longer reflect a benefit from such tax credits as to homes delivered after the effective date.

We are currently evaluating other elements of the legislation, but do not expect it to have a material effect on our effective tax rate for the year ending November 30, 2025.

As a result, our income tax expense and effective tax rate take into account the anticipated lower Section 45L benefit for the homes delivered after the effective date.

The other tax-related provisions of the OBBBA did not have a material impact on our consolidated financial statements.

Deferred Tax Asset Valuation Allowance.

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The value of our deferred tax assets depends on applicable income tax rates.

As of both August 31, 2025 and November 30, 2024, we had deferred tax assets of $ 119.2 million that were partly offset by valuation allowances of $ 16.8 million.

The deferred tax asset valuation allowances at August 31, 2025 and November 30, 2024 were primarily related to certain state net operating losses that had not met the “more likely than not” realization standard at those dates.

Based on the evaluation of our deferred tax assets as of August 31, 2025, we determined that most of our deferred tax assets would be realized.

Therefore, no adjustments to our deferred tax asset valuation allowance were needed for the nine months ended August 31, 2025.

As of both February 28, 2026 and November 30, 2025, we had deferred tax assets of $ 104.2 million that were partly offset by valuation allowances of $ 15.5 million.

The deferred tax asset valuation allowances at February 28, 2026 and November 30, 2025 were primarily related to certain state net operating losses that had not met the “more likely than not” realization standard at those dates.

Based on the evaluation of our deferred tax assets as of February 28, 2026, we determined that most of our deferred tax assets would be realized.

Therefore, no adjustments to our deferred tax asset valuation allowance were needed for the three months ended February 28, 2026.

We will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to our deferred tax assets.

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Unsecured revolving credit facility $ 200,000 $ —

Senior unsecured term loan due August 25, 2026 359,329 358,826

Senior unsecured term loan due November 12, 2029

358,425 358,317

6.875 % Senior notes due June 15, 2027

8 unchanged sentences

$ 1,893,258 $ 1,692,977

The carrying amounts of our senior notes listed above are net of unamortized debt issuance costs, which totaled $ 9.6 million at August 31, 2025 and $ 11.5 million at November 30, 2024.

The carrying amounts of our senior notes listed above are net of unamortized debt issuance costs, which totaled $ 9.5 million at February 28, 2026 and $ 10.1 million at November 30, 2025.

Unsecured Revolving Credit Facility.

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

We have a $ 1.20 billion Credit Facility that will mature on November 12, 2030 .

The Credit Facility contains an uncommitted accordion feature under which its aggregate principal amount of available loans can be increased to a maximum of $ 1.70 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 an adjusted term Secured Overnight Financing Rate (“SOFR”) or a base rate, plus a spread that depends on our consolidated leverage ratio (“Leverage Ratio”), as defined under the Credit Facility.

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

Interest on amounts borrowed under the Credit Facility accrues at a term Secured Overnight Financing Rate (“SOFR”), daily SOFR or a base rate, plus a spread that depends on our consolidated leverage ratio (“Leverage Ratio”), as defined under the Credit Facility.

Interest is payable 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 a consolidated interest coverage ratio (“Interest Coverage Ratio”) or minimum level of liquidity, each as defined therein.

Our obligations to pay borrowings under the Credit Facility are guaranteed on a joint and several basis by

our Guarantor Subsidiaries.

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

The amount of the Credit Facility available for cash borrowings and the issuance of letters of credit depends on the total cash borrowings and letters of credit outstanding under the Credit Facility and the maximum available amount under the terms of the Credit Facility.

As of August 31, 2025, we had $ 250.0 million of cash borrowings and $ 8.3 million of letters of credit outstanding under the Credit Facility.

Therefore, as of August 31, 2025, we had $ 831.7 million available for cash borrowings under the Credit Facility, with up to $ 241.7 million of that amount available for the issuance of letters of credit.

As of August 31, 2025, the weighted average annual interest rate on our outstanding borrowings under the Credit Facility was 5.7 %.

As of February 28, 2026, we had $ 200.0 million of cash borrowings and $ 1.6 million of letters of credit outstanding under the Credit Facility.

Therefore, as of February 28, 2026, we had $ 998.4 million 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.

As of February 28, 2026, the weighted average annual interest rate on our outstanding borrowings under the Credit Facility was 5.0 %.

Senior Unsecured Term Loan.

We have a $ 360.0 million Term Loan with the lenders party thereto.

The Term Loan will mature on August 25, 2026 , or earlier if we secure borrowings under the Credit Facility without similarly securing the Term Loan (subject to certain exceptions).

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

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

The Term Loan will mature on November 12, 2029 .

Interest under the Term Loan accrues at a term SOFR, daily SOFR or a base rate, plus a spread that depends on our Leverage Ratio.

Interest is payable quarterly (base rate borrowings), monthly (daily SOFR borrowings), or each month or three months (term SOFR borrowings).

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

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

As of August 31, 2025, the weighted average annual interest rate on our outstanding borrowings under the Term Loan was 5.8 %.

The proceeds drawn under the Term Loan are guaranteed on a

joint and several basis by our Guarantor Subsidiaries.

As of February 28, 2026, the weighted average annual interest rate on our outstanding borrowings under the Term Loan was 5.1 %.

Letter of Credit Facility.

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

As of August 31, 2025 and November 30, 2024, we had letters of credit outstanding under the LOC Facility of $ 62.4 million and $ 73.3 million, respectively.

As of February 28, 2026 and November 30, 2025, we had letters of credit outstanding under the LOC Facility of $ 57.3 million and $ 68.2 million, respectively.

Senior Notes.

All the senior notes outstanding at August 31, 2025 and November 30, 2024 represent senior unsecured obligations that are guaranteed by our Guarantor Subsidiaries and rank equally in right of payment with all of our and our Guarantor Subsidiaries’ existing unsecured and unsubordinated indebtedness.

All the senior notes outstanding at February 28, 2026 and November 30, 2025 represent senior unsecured obligations that are guaranteed by our Guarantor Subsidiaries and rank equally in right of payment with all of our and our Guarantor Subsidiaries’ existing unsecured and unsubordinated indebtedness.

All of our senior notes were issued in underwritten public offerings.

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In addition, the indenture contains certain limitations related to mergers, consolidations, and sales of assets.

As of August 31, 2025, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility, and the mortgages and land contracts due to land sellers and other loans.

As of February 28, 2026, we were in compliance with the applicable terms of all of our covenants and other requirements under the Credit Facility, the Term Loan, the senior notes, the indenture, the LOC Facility, and the mortgages and land contracts due to land sellers and other loans.

Our ability to access the Credit Facility for cash borrowings and letters of credit and our ability to secure future debt financing depend, in part, on our ability to remain in such compliance.

1 unchanged sentence

Mortgages and Land Contracts Due to Land Sellers and Other Loans.

As of August 31, 2025, inventories having a carrying value of $ 24.4 million were pledged to collateralize mortgages and land contracts due to land sellers and other loans.

As of August 31, 2025, principal payments on our senior notes, mortgages and land contracts due to land sellers and other loans are due during each year ending November 30 as follows:

As of February 28, 2026, inventories having a carrying value of $ 20.7 million were pledged to collateralize mortgages and land contracts due to land sellers and other loans.

As of February 28, 2026, principal payments on our senior notes, mortgages and land contracts due to land sellers and other loans are due during each year ending November 30 as follows:

2026 – $ .5 million;

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Fair value measurements are used for inventories on a nonrecurring basis when events and circumstances indicate that their carrying value is not recoverable.

The following table presents the fair value hierarchy and our assets measured at fair value on a nonrecurring basis for the nine months ended August 31, 2025 and the year ended November 30, 2024 (in thousands):

August 31, 2025 November 30, 2024

The following table presents the fair value hierarchy and our assets measured at fair value on a nonrecurring basis for the three months ended February 28, 2026 and the year ended November 30, 2025 (in thousands):

February 28, 2026 November 30, 2025

Description Fair Value Hierarchy Pre-Impairment Value Inventory Impairment Charges Fair Value (a) Pre-Impairment Value Inventory Impairment Charges Fair Value (a)

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The following table presents the fair value hierarchy, carrying values and estimated fair values of our financial instruments, except those for which the carrying values approximate fair values (in thousands):

August 31, 2025 November 30, 2024

February 28, 2026 November 30, 2025

Description Fair Value

25 unchanged sentences

The changes in our warranty liability were as follows (in thousands):

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Balance at beginning of period $ 101,245 $ 96,026

25 unchanged sentences

Key assumptions used in developing these estimates include claim frequencies, severities and resolution patterns, which can occur over an extended period of time.

These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a construction defect claim is made, and the ultimate resolution

of such claim;

These estimates are subject to variability due to the length of time between the delivery of a home to a homebuyer and when a construction defect claim is made, and the ultimate resolution of such claim;

uncertainties regarding such claims relative to our markets and the types of products we build;

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Our self-insurance liability is presented on a gross basis for all periods without consideration of insurance recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any.

Estimated probable insurance and other recoveries of $ 22.0 million and $ 22.6 million are included in receivables in our consolidated balance sheets at August 31, 2025 and November 30, 2024, respectively.

Estimated probable insurance and other recoveries of $ 22.2 million and $ 22.3 million are included in receivables in our consolidated balance sheets at February 28, 2026 and November 30, 2025, respectively.

These self-insurance recoveries are principally based on actuarially determined amounts and depend on various factors, including, among other things, the above-described claim cost estimates, our insurance policy coverage limits for the applicable policy year(s), historical third-party recovery rates, insurance industry practices, the regulatory environment and legal precedent, and are subject to a high degree of variability from period to period.

1 unchanged sentence

The changes in our self-insurance liability were as follows (in thousands):

Three Months Ended August 31, Nine Months Ended August 31,

2025 2024 2025 2024

Three Months Ended February 28,

Balance at beginning of period $ 179,247 $ 185,428

11 unchanged sentences

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 .

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 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 have received claims in prior quarters from attorneys on behalf of individual owners of our homes and/or homeowners’ associations that allege, pursuant to Chapter 558 of the Florida Statutes, various construction defects, with most relating to stucco and water-intrusion issues.

The claims primarily

involve homes in our Jacksonville, Orlando, and Tampa operations.

Under Chapter 558, homeowners must serve written notice of a construction defect(s) and provide the served construction and/or design contractor(s) with an opportunity to respond to the noticed issue(s) before they can file a lawsuit.

Although we have resolved many of these claims without litigation, and a number of others have been resolved with applicable trade partners or their insurers covering the related costs, as of August 31, 2025, we had approximately 269 outstanding noticed claims, and some are scheduled for trial over the next few quarters and beyond.

In addition, some of our trade partners’ insurers in some of these cases have informed us of their inability to continue to pay claims-related costs.

At August 31, 2025, we had an accrual for our estimated probable loss for these matters and a receivable for estimated probable insurance recoveries, including an estimate for claims incurred but not reported.

While it is reasonably possible that our losses could exceed the amounts accrued and our recoveries could be less than the amounts recorded, at this time, we are unable to estimate the total amount of the loss in excess of the accrued amount and/or associated with a shortfall in the recoveries that is reasonably possible as each of these is dependent on several factors, including the extent of additional claims to be reported in future periods;

the nature of any specific claims;

our evaluation of the particular facts surrounding each such claim;

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

Performance Bonds and Letters of Credit .

We are often required to provide to various municipalities and other government agencies performance bonds and/or letters of credit to secure the completion of our projects and/or in support of obligations to build community improvements such as roads, sewers, water systems and other utilities, and to support similar development activities by certain of our unconsolidated joint ventures.

At August 31, 2025, we had $ 1.39 billion of performance bonds and $ 70.7 million of letters of credit outstanding.

At February 28, 2026, we had $ 1.36 billion of performance bonds and $ 58.9 million of letters of credit outstanding.

At November 30, 2025, we had $ 1.37 billion of performance bonds and $ 69.8 million of letters of credit outstanding.

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In the ordinary course of our business, we enter into land option contracts and other similar contracts to acquire rights to land for the construction of homes.

At August 31, 2025, we had total cash deposits of $ 76.5 million to purchase land having an aggregate purchase price of $ 1.95 billion.

At February 28, 2026, we had total cash deposits of $ 71.5 million to purchase land having an aggregate purchase price of $ 1.90 billion.

Our land option contracts and other similar contracts generally do not contain provisions requiring our specific performance.

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Environmental Protection Agency and third-party ENERGY STAR rating companies, real estate brokers, real estate appraisers, financial institutions and other parties, as well as inspection-related guidelines, instructions, methods, policies, processes and procedures.

We are cooperating with the government, producing documents and information.

We are cooperating with the government and have produced documents and information.

As of the date of this report, we are unable to predict what actions the government will take, if any;

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We are involved in litigation and regulatory proceedings incidental to our business that are in various procedural stages.

We believe the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of August 31, 2025, it was not reasonably possible that an additional material loss had been incurred in an amount in excess of the estimated amounts already recognized or disclosed in our consolidated financial statements.

We believe the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of February 28, 2026, it was not reasonably possible that an additional material loss had been incurred in an amount in excess of the estimated amounts already recognized or disclosed in our consolidated financial statements.

We evaluate our accruals for litigation and regulatory proceedings at least quarterly and, as appropriate, adjust them to reflect (a) the facts and circumstances known to us at the time, including information regarding negotiations, settlements, rulings and other relevant events and developments;

3 unchanged sentences

Our accruals for litigation and regulatory proceedings are presented on a gross basis without consideration of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any.

Estimates of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any, are recorded as receivables when such

recoveries are considered probable.

Estimates of recoveries and amounts we have paid on behalf of and expect to recover from other parties, if any, are recorded as receivables when such recoveries are considered probable.

Based on our experience, we believe the amounts that may be claimed or alleged against us in these proceedings are not a meaningful indicator of our potential liability.

The outcome of any of these proceedings, including the defense and other litigation-related costs and expenses we may incur, however, is inherently uncertain and could differ significantly from the estimate reflected in a related accrual, if made.

Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a related accrual or if an accrual had not been made, could be material to our consolidated financial statements.

Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a related accrual or if an accrual has not been made, could be material to our consolidated financial statements.

Pursuant to SEC rules, we will disclose any proceeding in which a governmental authority is a party and that arises under any federal, state or local provisions enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment only where we believe that such proceeding will result in monetary sanctions on us, exclusive of interest and costs, above $1.0 million or is otherwise material to our consolidated financial statements .

Stockholders’ Equity

On February 21, 2025, the management development and compensation committee of our board of directors approved the payout of 530,015 shares of our common stock in connection with the vesting of PSUs that were granted to certain employees on October 7, 2021.

On February 20, 2026, the management development and compensation committee of our board of directors approved the payout of 568,696 shares of our common stock in connection with the vesting of PSUs that were granted to certain employees on November 14, 2022.

The shares paid out under the PSUs reflected our achievement of certain performance measures that were based on cumulative earnings per share, average return on invested capital, and revenue growth relative to a peer group of high-production public homebuilding companies over the three-year period from December 1, 2022 through November 30, 2025.

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The shares purchased were not considered repurchases under the authorizations described below.

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

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

As of November 30, 2025, there was $ 900.0 million of remaining availability under this share repurchase authorization.

In the nine months ended August 31, 2025, we repurchased 7,788,113 shares of our common stock at a total cost of $ 438.5 million.

In the three months ended February 28, 2026, we repurchased 843,339 shares of our common stock at a total cost of $ 50.0 million.

Repurchases under the authorization may occur periodically through open market purchases, privately negotiated transactions or otherwise, with the timing and amount at management’s discretion and dependent on market, business and other conditions.

This share repurchase authorization will continue in effect until fully used or earlier terminated or suspended by our board of directors, and does not obligate us to purchase any shares.

As of August 31, 2025, there was $ 261.5 million of remaining availability under this share repurchase authorization.

As of February 28,

2026, there was $ 850.0 million of remaining availability under this share repurchase authorization.

The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a non-deductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022.

In the three months and nine months ended August 31, 2025 and 2024, we reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued expenses and other liabilities on our consolidated balance sheet.

In the three months ended February 28, 2026 and 2025, we reflected the applicable excise tax in treasury stock as part of the cost basis of the stock repurchased and recorded a corresponding liability for the excise taxes payable in accrued expenses and other liabilities on our consolidated balance sheet.

All dollar amounts presented in this report related to our share repurchases and our share repurchase authorization exclude such excise taxes, to the extent applicable, unless otherwise indicated.

In the 2025 and 2024 third quarters, our board of directors declared, and we paid, a quarterly cash dividend of $ .25 per share.

Quarterly dividends declared and paid during the nine months ended August 31, 2025 and 2024 totaled $ .75 and $ .70 per share, respectively.

In the 2026 and 2025 first quarters, our board of directors declared, and we paid, a quarterly cash dividend of $ .25 per share.

Stock-Based Compensation

Stock Options.

At August 31, 2025 and November 30, 2024, we had 376,641 and 418,141 stock options outstanding with a weighted average exercise price of $ 16.21 and $ 16.17 , respectively.

At February 28, 2026 and November 30, 2025, we had 321,378 and 350,864 stock options outstanding, each with a weighted average exercise price of $ 16.21 .

We have not granted any stock option awards since 2016.

During the nine months ended August 31, 2025, a total of 41,500 stock options with a weighted average exercise price of $ 15.77 were exercised.

As of August 31, 2025, stock options outstanding and stock options exercisable each had a weighted average remaining contractual life of 1.2 years.

As all outstanding stock options have been fully vested since 2019, there was no stock-based compensation expense associated with stock options for the three-month and nine-month periods ended August 31, 2025 and 2024.

Stock options outstanding and stock options exercisable each had an aggregate intrinsic value of $ 17.8 million at August 31, 2025.

During the three months ended February 28, 2026, a total of 29,486 stock options with a weighted average exercise price of $ 16.21 were exercised.

As of February 28, 2026, stock options outstanding and stock options exercisable each had a weighted average remaining contractual life of .6 years.

As all outstanding stock options have been fully vested since 2019, there was no stock-based compensation expense associated with stock options for the three-month periods ended February 28, 2026 and 2025.

Stock options outstanding and stock options exercisable each had an aggregate intrinsic value of $ 15.2 million at February 28, 2026.

(The intrinsic value of a stock option is the amount by which the market value of a share of the underlying common stock exceeds the exercise price of the stock option.)

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From time to time, we grant restricted stock and PSUs to various employees as a compensation benefit.

We recognized total compensation expense of $ 8.4 million and $ 8.0 million for the three months ended August 31, 2025 and 2024, respectively, related to restricted stock and PSUs.

For the nine months ended August 31, 2025 and 2024, we recognized total compensation expense of $ 25.1 million and $ 25.3 million, respectively, related to restricted stock and PSUs.

We recognized total compensation expense of $ 6.0 million and $ 7.6 million for the three months ended February 28, 2026 and 2025, respectively, related to restricted stock and PSUs.

Supplemental Disclosure to Consolidated Statements of Cash Flows

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

Nine Months Ended August 31,

Three Months Ended February 28,

Summary of cash and cash equivalents at end of period:

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Supplemental disclosures of non-cash activities:

Increase (decrease) in consolidated inventories not owned

( 5,762 ) 4,616

Decrease in consolidated inventories not owned ( 1,521 ) ( 2,545 )

Increase in inventories due to distributions of land and land development from an unconsolidated joint venture 753 2,164

Inventories acquired through seller financing — 3,149

Subsequent Event

On April 8, 2026, we announced that we will relocate our corporate headquarters office from Los Angeles, California to Tempe, Arizona in 2027.

The relocation is intended to bring executive leadership and corporate functions together in a more central location and is expected to reduce our cost structure over time.

In connection with the relocation, we expect to incur certain one‑time transition costs, including employee-related severance, retention, and relocation, as well as recruitment and onboarding, and other costs.

We are currently evaluating the potential impact of these costs, which may be material to our consolidated financial statements.

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-Q

Item 1. Financial Statements