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, 2018, our homebuilding reporting segments conducted ongoing operations in the following states:

West Coast: California and Washington

Southwest: Arizona and Nevada

Central: Colorado and Texas

Southeast: Florida and North Carolina

In the 2018 third quarter, we expanded into Washington with our entrance into the Seattle market.

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 August 31,						Nine Months Ended August 31,
	2018			2017			2018			2017
Revenues:
West Coast	$	571,880		$	609,598		$	1,455,272		$	1,426,030
Southwest	196,056			132,307			528,872			376,132
Central	327,888			291,006			885,875			826,008
Southeast	126,051			107,876			319,734			328,935
Total	$	1,221,875		$	1,140,787		$	3,189,753		$	2,957,105

Pretax income (loss):
West Coast	$	72,996		$	58,922		$	156,472		$	118,271
Southwest	31,065			11,648			66,619			30,269
Central	32,294			28,921			80,464			75,584
Southeast	(702		)	1,129			1,405			(605		)
Corporate and other	(26,089		)	(24,396		)	(76,081		)	(78,231		)
Total	$	109,564		$	76,224		$	228,879		$	145,288



Inventory impairment charges:
West Coast	$	4,190	$	4,992	$	14,882	$	8,136
Southwest	—		2,102		—		3,445
Central	654		—		654		—
Southeast	2,291		—		2,291		3,032
Total	$	7,135	$	7,094	$	17,827	$	14,613



	Three Months Ended August 31,				Nine Months Ended August 31,
	2018		2017		2018		2017
Land option contract abandonments:
West Coast	$	219	$	903	$	815	$	2,738
Southwest	432		—		432		—
Central	477		—		700		518
Southeast	151		116		151		253
Total	$	1,279	$	1,019	$	2,098	$	3,509



	August 31, 2018		November 30, 2017
Inventories:
Homes under construction
West Coast	$	700,305	$	638,639
Southwest	183,226		179,240
Central	356,722		320,205
Southeast	154,642		98,764
Subtotal	1,394,895		1,236,848

Land under development
West Coast	967,099		723,761
Southwest	376,413		309,672
Central	502,415		435,373
Southeast	207,995		182,533
Subtotal	2,053,922		1,651,339

Land held for future development or sale
West Coast	146,947		233,188
Southwest	21,141		62,475
Central	11,951		12,654
Southeast	59,999		66,882
Subtotal	240,038		375,199
Total	$	3,688,855	$	3,263,386



Assets:
West Coast	$	1,984,393	$	1,747,786
Southwest	614,214		586,666
Central	1,004,464		901,516
Southeast	462,427		359,307
Corporate and other	897,650		1,433,883
Total	$	4,963,148	$	5,029,158