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Segment Information
6 Months Ended
May 31, 2018
Segment Reporting [Abstract]  
Segment Information
Segment Information
We have identified five operating reporting segments, comprised of four homebuilding reporting segments and one financial services reporting segment. As of May 31, 2018, our homebuilding reporting segments conducted ongoing operations in the following states:
West Coast: California
Southwest: Arizona and Nevada
Central: Colorado and Texas
Southeast: Florida and North Carolina
Our homebuilding reporting segments are engaged in the acquisition and development of land primarily for residential purposes and offer a wide variety of homes that are designed to appeal to first-time, first move-up and active adult homebuyers. Our homebuilding operations generate most of their revenues from the delivery of completed homes to homebuyers. They also earn revenues from the sale of land.
Our homebuilding reporting segments were identified based primarily on similarities in economic and geographic characteristics, product types, regulatory environments, methods used to sell and construct homes and land acquisition characteristics. Management evaluates segment performance primarily based on segment pretax results.
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 Central and Southeast homebuilding reporting segments. This segment earns revenues primarily from insurance commissions and from the provision of title services.
In 2016, a subsidiary of ours and a subsidiary of Stearns Lending, LLC (“Stearns”) formed KBHS Home Loans, LLC (“KBHS”), an unconsolidated mortgage banking joint venture to offer mortgage banking services, including mortgage loan originations, to our homebuyers. We and Stearns each have a 50.0% ownership interest in KBHS, with Stearns providing management oversight of KBHS’ operations. KBHS was operational in all of our served markets as of June 2017. The financial services reporting segment is separately reported in our consolidated financial statements.
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. 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; 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 May 31,
 
Six Months Ended May 31,
 
2018
 
2017
 
2018
 
2017
Revenues:
 
 
 
 
 
 
 
West Coast
$
496,740

 
$
460,600

 
$
883,392

 
$
816,432

Southwest
180,917

 
126,189

 
332,816

 
243,825

Central
313,806

 
292,746

 
557,987

 
535,002

Southeast
107,210

 
120,537

 
193,683

 
221,059

Total
$
1,098,673

 
$
1,000,072

 
$
1,967,878

 
$
1,816,318

 
 
 
 
 
 
 
 
Pretax income (loss):
 
 
 
 
 
 
 
West Coast
$
51,883

 
$
36,496

 
$
83,476

 
$
59,349

Southwest
20,577

 
9,949

 
35,554

 
18,621

Central
29,075

 
26,985

 
48,170

 
46,663

Southeast
787

 
479

 
2,107

 
(1,734
)
Corporate and other
(27,168
)
 
(24,744
)
 
(49,992
)
 
(53,835
)
Total
$
75,154

 
$
49,165

 
$
119,315

 
$
69,064


Inventory impairment charges:
 
 
 
 
 
 
 
West Coast
$
5,993

 
$
3,144

 
$
10,692

 
$
3,144

Southwest

 

 

 
1,343

Central

 

 

 

Southeast

 
1,158

 

 
3,032

Total
$
5,993

 
$
4,302

 
$
10,692

 
$
7,519

 
Land option contract abandonments:
 
 
 
 
 
 
 
West Coast
$
388

 
$
1,044

 
$
596

 
$
1,835

Southwest

 

 

 

Central
145

 
518

 
223

 
518

Southeast

 
137

 

 
137

Total
$
533

 
$
1,699

 
$
819

 
$
2,490


 
May 31,
2018
 
November 30,
2017
Inventories:
 
 
 
Homes under construction
 
 
 
West Coast
$
749,329

 
$
638,639

Southwest
191,888

 
179,240

Central
337,259

 
320,205

Southeast
119,314

 
98,764

Subtotal
1,397,790

 
1,236,848

 
 
 
 
 
May 31,
2018
 
November 30,
2017
Land under development
 
 
 
West Coast
828,911

 
723,761

Southwest
289,784

 
309,672

Central
446,232

 
435,373

Southeast
196,390

 
182,533

Subtotal
1,761,317

 
1,651,339

 
 
 
 
Land held for future development or sale
 
 
 
West Coast
166,910

 
233,188

Southwest
62,101

 
62,475

Central
12,229

 
12,654

Southeast
63,655

 
66,882

Subtotal
304,895

 
375,199

Total
$
3,464,002

 
$
3,263,386

Assets:
 
 
 
West Coast
$
1,926,823

 
$
1,747,786

Southwest
588,196

 
586,666

Central
925,966

 
901,516

Southeast
406,066

 
359,307

Corporate and other
1,238,377

 
1,433,883

Total
$
5,085,428

 
$
5,029,158