What changed in this filing

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Item 1. Financial Statements

2026-07-09 compared with 2026-04-09 · 227 added, 111 removed, 692 unchanged (33% of the section changed)

2 unchanged sentences

(In Thousands, Except Per Share Amounts – Unaudited)

Three Months Ended February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Total revenues $ 1,112,435 $ 1,529,585 $ 2,189,446 $ 2,921,362

5 unchanged sentences

Interest income

1,164 1,679 2,445 3,758

Equity in income of unconsolidated joint ventures

1,269 1,080 1,791 3,493

Homebuilding pretax income 30,584 134,222 65,373 266,053

3 unchanged sentences

Equity in income of unconsolidated joint venture

2,830 4,862 4,963 9,191

Financial services pretax income 6,665 8,161 12,200 15,687

38 unchanged sentences

Stockholders’ equity:

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

Common stock — 63,653,246 and 74,477,254 shares issued at May 31, 2026 and November 30, 2025, respectively

63,653 74,477

4 unchanged sentences

( 3,538 ) ( 3,538 )

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

Treasury stock, at cost — 2,343,518 and 11,303,643 shares at May 31, 2026 and November 30, 2025, respectively

( 136,419 ) ( 663,437 )

5 unchanged sentences

(In Thousands – Unaudited)

Three Months Ended February 28, 2026 and 2025

Three Months Ended May 31, 2026 and 2025

Number of Shares

1 unchanged sentence

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

Balance at February 28, 2026 74,507 ( 11,858 ) $ 74,507 $ 836,755 $ 3,645,806 $ ( 3,538 ) $ ( 698,523 ) $ 3,855,007

Net income — — — — 27,349 — — 27,349

6 unchanged sentences

Tax payments associated with stock-based compensation awards — ( 2 ) — — — — ( 124 ) ( 124 )

Retirement of treasury stock

( 10,859 ) 10,859 ( 10,859 ) — ( 625,123 ) — 635,982 —

Balance at May 31, 2026 63,653 ( 2,344 ) $ 63,653 $ 840,401 $ 3,032,713 $ ( 3,538 ) $ ( 136,419 ) $ 3,796,810

Balance at February 28, 2025

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

Balance at November 30, 2024

Net income — — — — 107,883 — — 107,883

Dividends on common stock — — — — ( 17,202 ) — — ( 17,202 )

Stock awards — 51 — ( 3,163 ) — — 3,163 —

Stock-based compensation — — — 9,153 — — — 9,153

Stock repurchases, including excise tax

— ( 3,734 ) — — — — ( 201,974 ) ( 201,974 )

Balance at May 31, 2025

74,437 ( 6,387 ) $ 74,437 $ 840,296 $ 3,450,350 $ ( 3,704 ) $ ( 370,841 ) $ 3,990,538

Six Months Ended May 31, 2026 and 2025

Number of Shares

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

Net income — — — — 60,773 — — 60,773

4 unchanged sentences

Stock repurchases, including excise tax — ( 2,216 ) — — — — ( 125,981 ) ( 125,981 )

Tax payments associated with stock-based compensation awards — ( 282 ) — — — — ( 18,336 ) ( 18,336 )

Retirement of treasury stock

( 10,859 ) 10,859 ( 10,859 ) — ( 625,123 ) — 635,982 —

Balance at May 31, 2026 63,653 ( 2,344 ) $ 63,653 $ 840,401 $ 3,032,713 $ ( 3,538 ) $ ( 136,419 ) $ 3,796,810

Balance at November 30, 2024 74,410 ( 2,253 ) $ 74,410 $ 862,049 $ 3,269,423 $ ( 3,704 ) $ ( 141,562 ) $ 4,060,616

Net income — — — — 217,440 — — 217,440

Dividends on common stock — — — — ( 36,513 ) — — ( 36,513 )

Employee stock options/other 27 — 27 418 — — — 445

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

Stock-based compensation — — — 16,711 — — — 16,711

Stock repurchases, including excise tax — ( 4,488 ) — — — — ( 252,277 ) ( 252,277 )

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

Balance at February 28, 2025

Balance at May 31, 2025

74,437 ( 6,387 ) $ 74,437 $ 840,296 $ 3,450,350 $ ( 3,704 ) $ ( 370,841 ) $ 3,990,538

2 unchanged sentences

(In Thousands – Unaudited)

Three Months Ended February 28,

Six Months Ended May 31,

Cash flows from operating activities:

5 unchanged sentences

Depreciation and amortization

20,512 18,034

Stock-based compensation

11,513 16,711

Inventory impairments and land option contract abandonments

1 unchanged sentence

( 25,061 ) 20,677

( 73,554 ) ( 390,558 )

Accounts payable, accrued expenses and other liabilities

( 93,336 ) ( 68,338 )

( 5,897 ) 3,797

Net cash used in operating activities

13 unchanged sentences

Issuance of common stock under employee stock plans

Stock repurchases ( 50,000 ) ( 50,000 )

Stock repurchases and excise taxes paid ( 130,123 ) ( 250,000 )

Tax payments associated with stock-based compensation awards

2 unchanged sentences

( 32,575 ) ( 36,513 )

Net cash provided by financing activities

Net cash provided by (used in) financing activities

94,062 ( 101,952 )

13 unchanged sentences

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 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.

The results of our consolidated operations for the three months and six months ended May 31, 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.

4 unchanged sentences

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 $ 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.

Our cash equivalents totaled $ 63.3 million at May 31, 2026 and $ 152.6 million at November 30, 2025.

At May 31, 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 $ 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.

Our comprehensive income was $ 27.3 million for the three months ended May 31, 2026 and $ 107.9 million for the three months ended May 31, 2025.

For the six months ended May 31, 2026 and 2025, our comprehensive income was $ 60.8 million and $ 217.4 million, respectively.

Our comprehensive income for each of the three-month and six-month periods ended May 31, 2026 and 2025 was equal to our net income for the respective periods.

Recent Accounting Pronouncements Not Yet Adopted.

17 unchanged sentences

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.

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.

14 unchanged sentences

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:

As of May 31, 2026, our homebuilding reporting segments conducted ongoing operations in the following states:

California, Idaho and Washington

1 unchanged sentence

Colorado and Texas

Florida and North Carolina

Florida, Georgia and North Carolina

Our homebuilding reporting segments are engaged in the acquisition and development of land primarily for residential purposes and offer a wide variety of homes that are designed to appeal to first-time, first move-up and active adult homebuyers.

9 unchanged sentences

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;

Corporate 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;

6 unchanged sentences

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

Three Months Ended February 28, 2026

Three Months Ended May 31, 2026

West Coast Southwest Central Southeast Corporate and Other Total

13 unchanged sentences

Commission expenses ( 17,264 ) ( 5,607 ) ( 8,667 ) ( 8,623 ) — ( 40,161 )

General and administrative expenses (b) ( 10,413 ) ( 4,403 ) ( 6,713 ) ( 5,761 ) ( 34,034 ) ( 61,324 )

Operating income (loss)

26,673 18,393 7,973 11,869 ( 36,757 ) 28,151

Other (c) 1,398 ( 128 ) — — 1,163 2,433

Homebuilding pretax income (loss)

$ 28,071 $ 18,265 $ 7,973 $ 11,869 $ ( 35,594 ) $ 30,584

Housing gross profit margin as a percentage of housing revenues 14.0 % 20.2 % 15.6 % 15.0 % — % 15.2 %

Three Months Ended May 31, 2025

West Coast Southwest Central Southeast Corporate and Other Total

Housing $ 660,193 $ 314,102 $ 282,966 $ 267,455 $ — $ 1,524,716

Land — — — — — —

Total 660,193 314,102 282,966 267,455 — 1,524,716

Construction and land costs:

Housing ( 537,930 ) ( 235,585 ) ( 229,507 ) ( 219,335 ) ( 2,140 ) ( 1,224,497 )

Land — — — — — —

Inventory-related charges ( 1,194 ) ( 821 ) ( 1,814 ) ( 1,729 ) — ( 5,558 )

Total ( 539,124 ) ( 236,406 ) ( 231,321 ) ( 221,064 ) ( 2,140 ) ( 1,230,055 )

Gross profits:

Housing (a) 121,069 77,696 51,645 46,391 ( 2,140 ) 294,661

Land — — — — — —

Total 121,069 77,696 51,645 46,391 ( 2,140 ) 294,661

Marketing expenses ( 15,317 ) ( 6,014 ) ( 10,111 ) ( 7,775 ) ( 3,385 ) ( 42,602 )

Commission expenses ( 18,739 ) ( 9,977 ) ( 12,822 ) ( 10,976 ) — ( 52,514 )

General and administrative expenses ( 11,419 ) ( 6,324 ) ( 8,033 ) ( 7,410 ) ( 34,896 ) ( 68,082 )

1 unchanged sentence

75,594 55,381 20,679 20,230 ( 40,421 ) 131,463

Other (c) 1,160 ( 79 ) 4 — 1,674 2,759

Homebuilding pretax income (loss)

$ 76,754 $ 55,302 $ 20,683 $ 20,230 $ ( 38,747 ) $ 134,222

Housing gross profit margin as a percentage of housing revenues 18.3 % 24.7 % 18.3 % 17.3 % — % 19.3 %

Six Months Ended May 31, 2026

West Coast Southwest Central Southeast Corporate and Other Total

Housing $ 959,847 $ 346,857 $ 429,437 $ 441,585 $ — $ 2,177,726

Land 855 — — 585 — 1,440

Total 960,702 346,857 429,437 442,170 — 2,179,166

Construction and land costs:

Housing ( 818,747 ) ( 274,512 ) ( 363,064 ) ( 376,996 ) ( 4,089 ) ( 1,837,408 )

Land ( 780 ) — — ( 516 ) — ( 1,296 )

Inventory-related charges ( 4,980 ) ( 408 ) ( 1,016 ) ( 1,330 ) — ( 7,734 )

Total ( 824,507 ) ( 274,920 ) ( 364,080 ) ( 378,842 ) ( 4,089 ) ( 1,846,438 )

Gross profits:

Housing (a) 136,120 71,937 65,357 63,259 ( 4,089 ) 332,584

Land 75 — — 69 — 144

Total 136,195 71,937 65,357 63,328 ( 4,089 ) 332,728

Marketing expenses ( 32,503 ) ( 10,596 ) ( 17,517 ) ( 14,228 ) ( 2,933 ) ( 77,777 )

Commission expenses ( 32,466 ) ( 11,535 ) ( 18,419 ) ( 17,321 ) — ( 79,741 )

General and administrative expenses (b) ( 19,334 ) ( 8,806 ) ( 11,354 ) ( 11,073 ) ( 63,506 ) ( 114,073 )

Operating income (loss)

51,892 41,000 18,067 20,706 ( 70,528 ) 61,137

Other (c) 1,960 ( 165 ) 1 ( 3 ) 2,443 4,236

Homebuilding pretax income (loss)

1 unchanged sentence

Housing gross profit margin as a percentage of housing revenues 14.2 % 20.7 % 15.2 % 14.3 % — % 15.3 %

Three Months Ended February 28, 2025

Six Months Ended May 31, 2025

West Coast Southwest Central Southeast Corporate and Other Total

16 unchanged sentences

142,086 114,156 46,167 33,307 ( 76,914 ) 258,802

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

Other (c) 3,559 ( 62 ) 9 ( 3 ) 3,748 7,251

Homebuilding pretax income (loss)

2 unchanged sentences

(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.

(b ) General and administrative expenses within Corporate and other for the three months and six months ended May 31, 2026 included $ 1.5 million of costs associated with the planned relocation of our corporate headquarters office, as discussed in Note 21 – Relocation of Corporate Headquarters .

(c) 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,

Three Months Ended May 31,

Six Months Ended May 31,

2026 2025 2026 2025

Equity in income (loss) of unconsolidated joint ventures:

1 unchanged sentence

Southwest ( 128 ) ( 79 ) ( 165 ) ( 62 )

Central — — — —

Southeast — — ( 3 ) ( 3 )

21 unchanged sentences

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

Three Months Ended February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Insurance commissions $ 3,558 $ 2,376 $ 6,685 $ 4,937

4 unchanged sentences

Equity in income of unconsolidated joint venture

2,830 4,862 4,963 9,191

Pretax income $ 6,665 $ 8,161 $ 12,200 $ 15,687

8 unchanged sentences

Total liabilities $ 1,687 $ 3,210

(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.

(a) Other assets at May 31, 2026 and November 30, 2025 included $ 40.4 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 February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Net income $ 27,349 $ 107,883 $ 60,773 $ 217,440

6 unchanged sentences

Undistributed earnings allocated to participating securities

56 588 134 1,161

Undistributed earnings reallocated to participating securities

9 unchanged sentences

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 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.

We had no other participating securities at May 31, 2026 and 2025.

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

14 unchanged sentences

Total $ 5,732,557 $ 5,670,802

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.

Land under development at May 31, 2026 and November 30, 2025 included land held for future development of $ 10.0 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.

2 unchanged sentences

Our interest costs were as follows (in thousands):

Three Months Ended February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Capitalized interest at beginning of period $ 134,904 $ 125,356 $ 125,627 $ 122,387

9 unchanged sentences

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

We evaluated 25 active communities or land parcels for recoverability as of May 31, 2026 with a carrying value of $ 399.6 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.

In addition, we evaluated land held for future development for recoverability as of both May 31, 2026 and November 30, 2025.

Based on the results of our evaluations, we recognized inventory impairment charges of $ 3.1 million for the three-month and six-month periods ended May 31, 2026, related to one community.

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

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

Three Months Ended May 31, Six Months Ended May 31,

Unobservable Input 2026 2025

Average selling price $ 627,500

n/a $ 627,500

Deliveries per month 1

Discount rate 17 %

As of May 31, 2026, the aggregate carrying value of our inventory that had been impacted by inventory impairment charges was $ 22.1 million, representing seven 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.

1 unchanged sentence

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 $ 2.2 million and $ 1.5 million for the three-month periods ended February 28, 2026 and 2025, respectively.

Based on the results of our assessments, we recognized land option contract abandonment charges of $ 2.5 million and $ 4.6 million for the three-month and six-month periods ended May 31, 2026, respectively.

For the three-month and six-month periods ended May 31, 2025, we recognized land option contract abandonment charges of $ 5.6 million and $ 7.0 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, especially in periods of volatile housing market or broader economic conditions.

4 unchanged sentences

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 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.

Based on our analyses, we determined that one of our joint ventures at May 31, 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 May 31, 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.

3 unchanged sentences

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 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.

As a result of our analyses, we determined that as of May 31, 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):

February 28, 2026 November 30, 2025

May 31, 2026 November 30, 2025

Deposits Aggregate

6 unchanged sentences

$ 71,347 $ 1,664,089 $ 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 $ 64.0 million at February 28, 2026 and $ 62.8 million at November 30, 2025.

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 $ 82.3 million at May 31, 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.

2 unchanged sentences

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 $ 13.8 million at February 28, 2026 and $ 15.4 million at November 30, 2025.

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 $ 12.4 million at May 31, 2026 and $ 15.4 million at November 30, 2025.

Investments in Unconsolidated Joint Ventures

3 unchanged sentences

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 February 28, 2026 and November 30, 2025.

We had investments in six homebuilding unconsolidated joint ventures as of May 31, 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 February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Revenues $ 20,010 $ 14,371 $ 31,066 $ 39,740

2 unchanged sentences

$ 2,628 $ 2,213 $ 3,696 $ 7,028

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.

All the combined revenues and most of the construction and land costs for the three-month and six-month periods ended May 31, 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):

8 unchanged sentences

Total liabilities and equity $ 180,579 $ 175,499

(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 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.

(a) As of both May 31, 2026 and November 30, 2025, the unconsolidated joint venture in California that delivered homes in the three-month and six-month periods ended May 31, 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 for a reduction to $ 55.2 million on August 31, 2025 and to $ 40.0 million on February 28, 2026.

In April 2026, the loan agreement was further amended, reducing the aggregate commitment to $ 39.2 million, providing for an additional reduction to $ 28.0 million as of December 31, 2026, and extending the maturity date to November 30, 2027, with no option for further extension.

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 February 28, 2026 or November 30, 2025 .

None of our other unconsolidated joint ventures had outstanding debt at May 31, 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;

6 unchanged sentences

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

Three Months Ended February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Revenues $ 21,184 $ 27,349 $ 39,743 $ 52,964

15 unchanged sentences

Total liabilities and equity $ 238,893 $ 208,565

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

(a) Cash and cash equivalents included restricted cash of $ .9 million at both May 31, 2026 and November 30, 2025 .

Mortgage loans held for sale .

5 unchanged sentences

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 $ 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.

The fair value of IRLCs included in other assets in KBHS’ balance sheets was $ 5.7 million at May 31, 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 gains of $ .9 million and $ 1.0 million for the three-month and six-month periods ended May 31, 2026, and losses of $ 2.1 million and $ 3.6 million for the three-month and six-month periods ended May 31, 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.

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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 February 28, 2026.

KBHS was in compliance with these covenants as of May 31, 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 $ 124,755 $ 107,833

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

(a) Other includes investments in equity securities without readily determinable fair values of $ 15.2 million at May 31, 2026 and November 30, 2025 .

Accrued Expenses and Other Liabilities

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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 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.

Our total lease expense for the three months ended May 31, 2026 and 2025 was $ 5.3 million and $ 5.1 million, respectively , and included short-term lease costs of $ 1.9 million and $ 1.8 million, respectively.

For the six months ended May 31, 2026 and 2025, our total lease expense was $ 10.5 million and $ 9.9 million, respectively, and included short-term lease costs of $ 3.6 million and $ 3.3 million, respectively.

Variable lease costs and external sublease income for the three-month and six-month periods ended May 31, 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 February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Income tax expense $ 9,900 $ 34,500 $ 16,800 $ 64,300

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26.6 % 24.2 % 21.7 % 22.8 %

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.

Our income tax expense and effective tax rate for the three months ended May 31, 2026 reflected $ 1.6 million of non-deductible executive compensation expense, partly offset by the favorable impact of $ 1.1 million of Internal Revenue Code Section 45L (“Section 45L”) tax credits we recognized primarily from building energy-efficient homes.

Our income tax expense and effective tax rate for the three months ended May 31, 2025 included the favorable impact of $ 3.1 million of Section 45L tax credits, partly offset by $ 2.8 million of non-deductible executive compensation expense.

For the six months ended May 31, 2026, our income tax expense and effective tax rate included the favorable impact of $ 3.8 million of excess tax benefits related to stock-based compensation and $ 1.5 million of Section 45L tax credits, partly offset by $ 2.7 million of non-deductible executive compensation expense.

Our income tax expense and effective tax rate for the six months ended May 31, 2025 reflected the favorable impact of $ 5.4 million of excess tax benefits related to stock-based compensation and $ 4.8 million of Section 45L tax credits, partly offset by $ 5.2 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.

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

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.

As of both May 31, 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 May 31, 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 May 31, 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 six months ended May 31, 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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$ 1,968,714 $ 1,692,977

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.

The carrying amounts of our senior notes listed above are net of unamortized debt issuance costs, which totaled $ 8.9 million at May 31, 2026 and $ 10.1 million at November 30, 2025.

Unsecured Revolving Credit Facility.

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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 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 %.

As of May 31, 2026, we had $ 275.0 million of cash borrowings and $ 1.6 million of letters of credit outstanding under the Credit Facility.

Therefore, as of May 31, 2026, we had $ 923.4 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 May 31, 2026, the weighted average annual interest rate on our outstanding borrowings under the Credit Facility was 4.9 %.

Senior Unsecured Term Loan.

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

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

As of May 31, 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 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.

As of May 31, 2026 and November 30, 2025, we had letters of credit outstanding under the LOC Facility of $ 55.4 million and $ 68.2 million, respectively.

Senior Notes.

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 the senior notes outstanding at May 31, 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 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.

As of May 31, 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.

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

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:

As of May 31, 2026, inventories having a carrying value of $ 20.8 million were pledged to collateralize mortgages and land contracts due to land sellers and other loans.

As of May 31, 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 – $ .4 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 three months ended February 28, 2026 and the year ended November 30, 2025 (in thousands):

February 28, 2026 November 30, 2025

The following table presents the fair value hierarchy and our assets measured at fair value on a nonrecurring basis for the six months ended May 31, 2026 and the year ended November 30, 2025 (in thousands):

May 31, 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):

February 28, 2026 November 30, 2025

May 31, 2026 November 30, 2025

Description Fair Value

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

Three Months Ended February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Balance at beginning of period $ 102,539 $ 96,067 $ 101,245 $ 96,026

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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 $ 22.2 million and $ 22.3 million are included in receivables in our consolidated balance sheets at February 28, 2026 and November 30, 2025, respectively.

Estimated probable insurance and other recoveries of $ 21.2 million and $ 22.3 million are included in receivables in our consolidated balance sheets at May 31, 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 February 28,

Three Months Ended May 31, Six Months Ended May 31,

2026 2025 2026 2025

Balance at beginning of period $ 179,630 $ 180,253 $ 179,247 $ 185,428

15 unchanged sentences

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

At May 31, 2026, we had $ 1.38 billion of performance bonds and $ 57.0 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 February 28, 2026, we had total cash deposits of $ 71.5 million to purchase land having an aggregate purchase price of $ 1.90 billion.

At May 31, 2026, we had total cash deposits of $ 71.3 million to purchase land having an aggregate purchase price of $ 1.66 billion.

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

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Department of Justice Civil Division, dated September 27, 2023, to produce certain documents and testimony with respect to the inspection, rating, marketing and advertising of our ENERGY STAR ® certified homes, including our contracts and/or communications with U.S.

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

processes and procedures.

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

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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 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 believe the accruals we have recorded for probable and reasonably estimable losses with respect to these proceedings are adequate and that, as of May 31, 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;

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

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.

In the 2026 first half, we repurchased 2,216,336 shares of our common stock at a total cost of $ 125.0 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 February 28,

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

As of May 31, 2026, there was $ 775.0 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 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.

In the three months and six months ended May 31, 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 2026 and 2025 first quarters, our board of directors declared, and we paid, a quarterly cash dividend of $ .25 per share.

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

Quarterly dividends declared and paid during each of the six-month periods ended May 31, 2026 and 2025 totaled $ .50 per share.

In April 2026, we retired 10,858,494 shares of our treasury stock.

Upon the retirement of the treasury stock, we deducted the par value from common stock and reflected the excess of cost over par value as a reduction to retained earnings.

Stock-Based Compensation

Stock Options.

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 .

At May 31, 2026 and November 30, 2025, we had 316,378 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 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.

During the six months ended May 31, 2026, a total of 34,486 stock options with a weighted average exercise price of $ 16.21 were exercised.

As of May 31, 2026, stock options outstanding and stock options exercisable each had a weighted average remaining contractual life of .4 years.

As all outstanding stock options have been fully vested since 2019, there was no stock-based compensation expense associated with stock options for the three-month and six-month periods ended May 31, 2026 and 2025.

Stock options outstanding and stock options exercisable each had an aggregate intrinsic value of $ 10.3 million at May 31, 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.)

1 unchanged sentence

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

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.

We recognized total compensation expense of $ 5.5 million and $ 9.2 million for the three months ended May 31, 2026 and 2025, respectively, related to restricted stock and PSUs.

For the six months ended May 31, 2026 and 2025, we recognized total compensation expense of $ 11.5 million and $ 16.7 million, 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):

Three Months Ended February 28,

Six Months Ended May 31,

Summary of cash and cash equivalents at end of period:

7 unchanged sentences

Decrease in consolidated inventories not owned ( 2,968 ) ( 2,133 )

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

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.

Non-cash change in investment in unconsolidated joint venture, net ( 1,097 ) 3,916

Relocation of Corporate Headquarters

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

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

Relocation activities will primarily occur in two phases, with the larger phase anticipated to be substantially complete in 2027 and a smaller phase expected to continue into 2028.

Based on our current estimates and assumptions, and subject to our relocation efforts proceeding as currently planned, we expect to incur total costs associated with the relocation of approximately $ 8.0 million to $ 12.0 million.

The majority of these costs are expected to be incurred in 2027, with certain costs extending into 2028.

These estimates are subject to change as our relocation plan progresses and workforce transition decisions and other factors continue to evolve;

accordingly, actual costs and the timing of when such costs are incurred may differ from current expectations.

The relocation cost estimates mainly consist of employee separation, retention and relocation expenses, with a smaller portion

related to other exit costs such as travel;

legal, consulting and other professional services;

contract terminations;

and asset impairments.

As employees are required to provide service through applicable dates to receive separation or retention benefits, the expenses and related liabilities are recognized ratably over the required service period.

Relocation expenditures and other exit costs are generally recognized in the period incurred.

For both the three-month and six-month periods ended May 31, 2026, we recognized $ 1.5 million of expenses related to the relocation, including $ .5 million of asset impairments.

All such expenses for both periods were included in selling, general and administrative expenses, within our corporate and other non-operating segment, in our consolidated statements of operations.

As of May 31, 2026, the liability for relocation costs totaled $ 1.0 million and was included within accrued expenses and other liabilities in our consolidated balance sheet.

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