KB HOMEKBH
KB HOME Segments Disclosure
Segment Information
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. Our CODM, identified as our chief executive officer and chief operating officer for purposes of our reportable
segment disclosures, regularly reviews operating results for the individual operating segments that comprise our reporting
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 November 30, 2025, our homebuilding reporting segments conducted ongoing operations in the following states:
West Coast: | California, Idaho and Washington |
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.
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 earns revenues primarily from insurance commissions and from the provision of
title services. We offer mortgage banking services, including mortgage loan originations, to our homebuyers indirectly through
KBHS, our unconsolidated joint venture with GR Alliance, a subsidiary of Guaranteed Rate, Inc. 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. 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 as described in
Note 1 – Summary of Significant Accounting Policies. 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 certain statements of operations information relating to our homebuilding reporting segments
(in thousands):
Year Ended November 30, 2025 | ||||||||||||
West Coast | Southwest | Central | Southeast | Corporate and Other | Total | |||||||
Revenues: | ||||||||||||
Housing | $2,690,807 | $1,245,446 | $1,176,854 | $1,097,453 | $— | $6,210,560 | ||||||
Land | 858 | — | — | 487 | — | 1,345 | ||||||
Total | 2,691,665 | 1,245,446 | 1,176,854 | 1,097,940 | — | 6,211,905 | ||||||
Construction and land costs: | ||||||||||||
Housing | (2,205,357) | (940,796) | (960,962) | (910,342) | (7,804) | (5,025,261) | ||||||
Land | (812) | — | — | (536) | — | (1,348) | ||||||
Inventory-related charges | (4,324) | (1,642) | (20,407) | (5,678) | — | (32,051) | ||||||
Total | (2,210,493) | (942,438) | (981,369) | (916,556) | (7,804) | (5,058,660) | ||||||
Gross profits: | ||||||||||||
Housing (a) | 481,126 | 303,008 | 195,485 | 181,433 | (7,804) | 1,153,248 | ||||||
Land | 46 | — | — | (49) | — | (3) | ||||||
Total | 481,172 | 303,008 | 195,485 | 181,384 | (7,804) | 1,153,245 | ||||||
Marketing expenses | (60,972) | (23,615) | (39,179) | (30,427) | (9,276) | (163,469) | ||||||
Commission expenses | (77,451) | (39,906) | (50,874) | (43,412) | — | (211,643) | ||||||
General and administrative expenses | (43,213) | (25,677) | (31,941) | (29,542) | (140,697) | (271,070) | ||||||
Operating income (loss) | 299,536 | 213,810 | 73,491 | 78,003 | (157,777) | 507,063 | ||||||
Other (b) | 5,953 | (215) | 13 | (3) | 6,399 | 12,147 | ||||||
Homebuilding pretax income (loss) | $305,489 | $213,595 | $73,504 | $78,000 | $(151,378) | $519,210 | ||||||
Housing gross profit margin as a percentage of housing revenues | 17.9% | 24.3% | 16.6% | 16.5% | —% | 18.6% | ||||||
Year Ended November 30, 2024 | ||||||||||||
West Coast | Southwest | Central | Southeast | Corporate and Other | Total | |||||||
Revenues: | ||||||||||||
Housing | $2,931,648 | $1,309,950 | $1,449,632 | $1,207,437 | $— | $6,898,667 | ||||||
Land | 410 | — | 3,162 | — | — | 3,572 | ||||||
Total | 2,932,058 | 1,309,950 | 1,452,794 | 1,207,437 | — | 6,902,239 | ||||||
Construction and land costs: | ||||||||||||
Housing | (2,364,046) | (984,463) | (1,133,497) | (956,136) | (6,643) | (5,444,785) | ||||||
Land | (21) | — | (2,080) | — | — | (2,101) | ||||||
Inventory-related charges | (2,941) | (267) | (843) | (546) | — | (4,597) | ||||||
Total | (2,367,008) | (984,730) | (1,136,420) | (956,682) | (6,643) | (5,451,483) | ||||||
Gross profits: | ||||||||||||
Housing (a) | 564,661 | 325,220 | 315,292 | 250,755 | (6,643) | 1,449,285 | ||||||
Land | 389 | — | 1,082 | — | — | 1,471 | ||||||
Total | 565,050 | 325,220 | 316,374 | 250,755 | (6,643) | 1,450,756 | ||||||
Marketing expenses | (55,057) | (24,489) | (43,341) | (27,668) | (7,553) | (158,108) | ||||||
Commission expenses | (83,492) | (42,682) | (63,532) | (48,621) | — | (238,327) | ||||||
General and administrative expenses | (56,887) | (29,267) | (38,069) | (31,353) | (134,837) | (290,413) | ||||||
Operating income (loss) | 369,614 | 228,782 | 171,432 | 143,113 | (149,033) | 763,908 | ||||||
Other (b) | 6,252 | (242) | 31 | 22 | 32,057 | 38,120 | ||||||
Homebuilding pretax income (loss) | $375,866 | $228,540 | $171,463 | $143,135 | $(116,976) | $802,028 | ||||||
Housing gross profit margin as a percentage of housing revenues | 19.3% | 24.8% | 21.7% | 20.8% | —% | 21.0% | ||||||
Year Ended November 30, 2023 | ||||||||||||
West Coast | Southwest | Central | Southeast | Corporate and Other | Total | |||||||
Revenues: | ||||||||||||
Housing | $2,321,093 | $1,163,913 | $1,827,264 | $1,058,151 | $— | $6,370,421 | ||||||
Land | — | 6,035 | 4,650 | — | — | 10,685 | ||||||
Total | 2,321,093 | 1,169,948 | 1,831,914 | 1,058,151 | — | 6,381,106 | ||||||
Construction and land costs: | ||||||||||||
Housing | (1,883,520) | (891,121) | (1,413,021) | (811,756) | (9,941) | (5,009,359) | ||||||
Land | — | (4,911) | (4,581) | — | — | (9,492) | ||||||
Inventory-related charges | (4,902) | (57) | (2,461) | (4,004) | — | (11,424) | ||||||
Total | (1,888,422) | (896,089) | (1,420,063) | (815,760) | (9,941) | (5,030,275) | ||||||
Gross profits: | ||||||||||||
Housing (a) | 432,671 | 272,735 | 411,782 | 242,391 | (9,941) | 1,349,638 | ||||||
Land | — | 1,124 | 69 | — | — | 1,193 | ||||||
Total | 432,671 | 273,859 | 411,851 | 242,391 | (9,941) | 1,350,831 | ||||||
Marketing expenses | (50,318) | (23,917) | (41,020) | (22,677) | (5,645) | (143,577) | ||||||
Commission expenses | (70,060) | (37,472) | (74,048) | (41,163) | — | (222,743) | ||||||
General and administrative expenses | (45,334) | (23,846) | (38,180) | (31,422) | (126,992) | (265,774) | ||||||
Operating income (loss) | 266,959 | 188,624 | 258,603 | 147,129 | (142,578) | 718,737 | ||||||
Other (b) | (730) | (127) | 20 | 145 | 13,738 | 13,046 | ||||||
Homebuilding pretax income (loss) | $266,229 | $188,497 | $258,623 | $147,274 | $(128,840) | $731,783 | ||||||
Housing gross profit margin as a percentage of housing revenues | 18.6% | 23.4% | 22.5% | 22.9% | —% | 21.2% | ||||||
(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. For the year ended
November 30, 2024, Corporate and Other also includes a gain associated with the sale of our ownership interest in a privately held technology company,
as described in Note 11 – Other Assets. The following table summarizes the equity in income (loss) of unconsolidated joint ventures by homebuilding
reporting segment (in thousands):
Years Ended November 30, | |||||
2025 | 2024 | 2023 | |||
Equity in income (loss) of unconsolidated joint ventures: | |||||
West Coast | $5,937 | $6,241 | $(731) | ||
Southwest | (219) | (244) | (127) | ||
Central | — | — | — | ||
Southeast | (3) | 22 | 145 | ||
Total | $5,715 | $6,019 | $(713) | ||
The following tables present certain balance sheet information relating to our homebuilding reporting segments (in
thousands):
November 30, | |||
2025 | 2024 | ||
Inventories: | |||
West Coast | $3,048,056 | $2,915,543 | |
Southwest | 969,260 | 845,910 | |
Central | 758,962 | 839,920 | |
Southeast | 894,524 | 926,647 | |
Total | $5,670,802 | $5,528,020 | |
November 30, | |||
2025 | 2024 | ||
Investments in unconsolidated joint ventures: | |||
West Coast | $68,708 | $59,286 | |
Southwest | 1,180 | 5,209 | |
Central | — | — | |
Southeast | 2,548 | 2,525 | |
Total | $72,436 | $67,020 | |
Assets: | |||
West Coast | $3,300,212 | $3,178,188 | |
Southwest | 1,019,475 | 915,072 | |
Central | 910,307 | 1,001,393 | |
Southeast | 943,846 | 972,993 | |
Corporate and other | 446,603 | 801,600 | |
Total | $6,620,443 | $6,869,246 | |
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About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.