Leases

We lease certain property and equipment for use in our operations. We recognize lease expense for these leases generally

on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Lease right-of-use assets

and lease liabilities are recorded in our consolidated balance sheets for leases with an expected term at the commencement date

of more than 12 months. Some of our leases include one or more renewal options, the exercise of which is generally at our

discretion. Such options are excluded from the expected term of the lease unless we determine it is reasonably certain the

option will be exercised. Lease liabilities are equal to the present value of the remaining lease payments while the amount of

lease right-of-use assets is based on the lease liabilities, subject to adjustment, such as for lease incentives. Our leases do not

provide a readily determinable implicit interest rate; therefore, we estimate our incremental borrowing rate to calculate the

present value of remaining lease payments. In determining our incremental borrowing rate, we considered the lease term,

market interest rates, current interest rates on our senior notes and the effects of collateralization. Our lease population at

November 30, 2025 was comprised of operating leases where we are the lessee, primarily real estate leases for our corporate

offices, division offices and design studios, as well as certain equipment leases. Our lease agreements do not contain any

residual value guarantees or material restrictive covenants.

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. For

the years ended November 30, 2025, 2024 and 2023, our total lease expense was $20.5 million, $20.2 million and

$22.1 million, respectively, and included short-term lease costs of $7.2 million, $7.0 million and $8.6 million, respectively.

Variable lease costs and external sublease income for the years ended November 30, 2025, 2024 and 2023 were immaterial.

The following table presents our lease right-of-use assets, lease liabilities and the weighted-average remaining lease term

and weighted-average discount rate (incremental borrowing rate) used in calculating the lease liabilities (dollars in thousands):


	November 30,
	2025	2024
Lease right-of-use assets (a)	$17,519	$18,734
Lease liabilities (a)	19,801	20,887
Weighted-average remaining lease term	2.9 years	2.8 years
Weighted-average discount rate (incremental borrowing rate)	4.5%	4.6%

(a)Lease right-of-use assets and lease liabilities are predominantly within our homebuilding operations, with only nominal

amounts in our financial services operations.

The following table presents additional information about our leases (in thousands):


	Years Ended November 30,
	2025	2024
Lease right-of-use assets obtained in exchange for new lease liabilities	$7,968	$4,780
Cash payments on lease liabilities	12,459	12,594

As of November 30, 2025, the future minimum lease payments required under our leases are as follows (in thousands):


Years Ending November 30,
2026		$7,935
2027		7,001
2028		4,077
2029		1,586
2030		592
Thereafter		—
Total lease payments		21,191
Less: Interest		(1,390)
Present value of lease liabilities		$19,801

Historical Timeline

Fiscal Year	Filed
2025	Jan 23, 2026	Showing above
2024	Jan 24, 2025

2023	Jan 19, 2024

2022	Jan 20, 2023

2021	Jan 21, 2022

2020	Jan 22, 2021

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

KB HOME Leases Disclosure

Historical Timeline

About Leases Disclosures

Other Available Disclosures