Revenues Total $1.02 Billion Net
Income of $47.5 Million, or $.51 Per Diluted Share Average
Community Count Increases 17% to 252; Net Orders Up 15%
KB Home (NYSE: KBH) today reported results for its second
quarter ended May 31, 2019.
“We are pleased with our second quarter performance, as we made
significant progress on our Returns-Focused Growth Plan. Two of the
key objectives of this Plan are to grow our business and strengthen
our balance sheet. This quarter’s results demonstrate further
achievement in both areas, with average community count growth of
17% year over year — our most substantial increase in four years —
and a 930-basis point reduction in our debt to capital ratio, to
45.8% over the same period,” said Jeffrey Mezger, chairman,
president and chief executive officer.
“Demand for our products was strong at 5.4 net orders per
community, per month, keeping pace with the exceptional absorption
rate we generated in last year’s second quarter. We were well
positioned throughout this Spring selling season, with the ongoing
expansion of our community count driving a 15% year-over-year
increase in net orders. With net order value up 13% year over year
to $1.5 billion, driven by double digit order growth in each of our
four regions, and continued year-over-year community count growth
anticipated for our third and fourth quarters, we are confident we
can produce further improvement in our results in the second half
of this year.”
Three Months Ended May 31, 2019
(comparisons on a year-over-year basis)
- Total revenues were $1.02 billion, compared to $1.10
billion.
- Homes delivered increased 2% to 2,768.
- Average selling price decreased 8% to $367,700, mainly due to a
shift in the geographic mix of homes delivered and a changing mix
of communities within the Company’s West Coast region.
- Homebuilding operating income was $52.1 million, compared to
$74.2 million. Homebuilding operating income margin was 5.1%, down
170 basis points. Excluding inventory-related charges of $4.3
million in the quarter and $6.5 million in the year-earlier
quarter, this metric was 5.5%, compared to 7.3%.
- Housing gross profit margin increased slightly to 17.2% from
17.1%.
- The housing gross profit margin primarily reflected the
favorable impacts of lower amortization of previously capitalized
interest and the Company’s adoption of a new accounting standard
(ASC 606) in fiscal year 2019, which were offset by pricing
pressure on orders in the 2018 fourth quarter and 2019 first
quarter due to weaker market conditions during those periods,
certain West Coast region communities with relatively high average
selling prices and margins having closed out in previous quarters,
and reduced operating leverage due to lower housing revenues and
higher expenses supporting community count growth.
- Housing gross profit margin excluding inventory-related charges
was 17.6%, compared to 17.7%. Adjusted housing gross profit margin,
a metric that excludes inventory-related charges and the
amortization of previously capitalized interest, was 21.3%,
compared to 22.2%.
- Selling, general and administrative expenses as a percentage of
housing revenues were 12.1%, compared to last year’s second quarter
record-low ratio of 10.4%, mainly reflecting increased marketing
expenses to support new community openings, the Company’s adoption
of ASC 606 and reduced operating leverage due to lower housing
revenues.
- As a result of its adoption of ASC 606, the Company changed the
classification and timing of recognition of certain model complex
costs. In the current quarter, these changes favorably impacted the
Company’s housing gross profit margin and negatively impacted its
selling, general and administrative expense ratio by approximately
80 basis points in each case.
- Total pretax income was $56.8 million, compared to $78.3
million.
- The Company’s income tax expense and effective tax rate were
$9.3 million and approximately 16%, respectively, which primarily
reflected the favorable impacts of $4.3 million of federal energy
tax credits the Company earned from building energy-efficient homes
and $.9 million of excess tax benefits related to stock-based
compensation. Without these items, the Company’s effective tax rate
would have approximated 26%.
- For the three months ended May 31, 2018, the Company’s income
tax expense and effective tax rate were $21.0 million and
approximately 27%, respectively.
- Net income totaled $47.5 million, or $.51 per diluted share,
compared to $57.3 million, or $.57 per diluted share.
Six Months Ended May 31, 2019
(comparisons on a year-over-year basis)
- Total revenues were $1.83 billion, compared to $1.97
billion.
- Homes delivered were essentially flat with the year-earlier
period at 4,920.
- Average selling price declined 7% to $369,100.
- Homebuilding operating income was $83.4 million, compared to
$118.2 million.
- Inventory-related charges totaled $7.9 million, down from $11.5
million.
- Pretax income totaled $91.3 million, compared to $124.4
million.
- The Company’s income tax expense and effective tax rate were
$13.8 million and approximately 15%, respectively. For the six
months ended May 31, 2018, the Company’s income tax expense of
$138.3 million and effective tax rate of approximately 111%
primarily reflected a non-cash charge of $111.2 million for the
impact of the Tax Cuts and Jobs Act of 2017 (“TCJA”). Excluding
this charge, the Company’s adjusted income tax expense and adjusted
effective tax rate for the 2018 period were $27.1 million and
approximately 22%, respectively.
- The year-over-year decrease in the Company’s effective tax
rate, excluding the TCJA-related charge in 2018, primarily
reflected the favorable impacts in the 2019 period of an increase
in federal energy tax credits, a reversal of a deferred tax asset
valuation allowance and an increase in excess tax benefits related
to stock-based compensation.
- Net income was $77.5 million, or $.82 per diluted share,
compared to a net loss of $13.9 million, or $.16 per diluted share
in the year-earlier period, which reflected the TCJA-related
charge.
Backlog and Net Orders (comparisons on
a year-over-year basis)
- Net orders grew by 532, or 15%, to 4,064, with net order value
increasing by $170.7 million, or 13%, to $1.53 billion.
- Both net orders and net order value rose in each of the
Company’s four regions.
- Company-wide, net orders per community averaged 5.4 per month,
compared to 5.5 per month.
- The cancellation rate as a percentage of gross orders improved
to 15% from 18%.
- The number of homes in ending backlog increased 2% to
5,927.
- Ending backlog value decreased to $2.17 billion from $2.24
billion, mainly due to the lower average selling price of the homes
in backlog within the Company’s West Coast region.
- Average community count increased 17% to 252. Ending community
count grew 21% to 255. The improvement in the Company’s average and
ending community counts reflected increases in each of its four
regions.
Balance Sheet as of May 31, 2019
(comparisons to November 30, 2018)
- The Company had total liquidity of $597.4 million, including
cash and cash equivalents of $178.9 million and available capacity
under its unsecured revolving credit facility of $418.5 million,
with $50.0 million of cash borrowings outstanding under the
facility.
- Cash and cash equivalents decreased by $395.5 million, mainly
due to the Company’s repayment of all $230.0 million in aggregate
principal amount of its 1.375% convertible senior notes at their
February 1, 2019 maturity and cash used by operating activities.
- Operating activities used net cash of $180.3 million, primarily
for investments in inventories.
- Inventories increased by $198.0 million, or 6%, to $3.78
billion.
- Investments in land acquisition and development totaled $782.8
million for the six months ended May 31, 2019, and lots owned or
controlled increased to 54,752.
- Notes payable decreased by $205.7 million to $1.85 billion,
primarily reflecting the above-mentioned repayment of convertible
senior notes.
- In the first half of 2019, the Company extended its debt
maturities through the repayment of all $400.0 million in aggregate
principal amount of its 4.75% senior notes that were scheduled to
mature on May 15, 2019 using $400.0 million of net proceeds from
concurrent public senior notes offerings completed in the 2019
first quarter.
- The Company’s ratio of debt to capital of 45.8% improved 390
basis points from November 30, 2018 and 930 basis points from May
31, 2018. The ratio of net debt to capital increased 170 basis
points to 43.3%.
Earnings Conference Call
The conference call to discuss the Company’s 2019 second quarter
earnings will be broadcast live TODAY at 2:00 p.m. Pacific Time,
5:00 p.m. Eastern Time. To listen, please go to the Investor
Relations section of the Company’s website at www.kbhome.com.
About KB Home
KB Home (NYSE: KBH) is one of the largest homebuilders in the
United States, with more than 600,000 homes delivered since our
founding in 1957. We operate in 38 markets in eight states,
primarily serving first-time and first move-up homebuyers, as well
as second move-up and active adults. We are differentiated in
offering customers the ability to personalize what they value most
in their home, from choosing their lot, floor plan, and exterior,
to selecting design and décor choices in our KB Home Studios. In
addition, our industry leadership in sustainability helps to lower
the cost of homeownership for our buyers compared to a typical
resale home. We take a broad approach to sustainability,
encompassing energy efficiency, water conservation, healthier
indoor environments, smart home capabilities and waste reduction.
KB Home is the first national builder to have earned awards under
all of the U.S. EPA’s homebuilder programs — ENERGY STAR®,
WaterSense® and Indoor airPLUS®. We invite you to learn more about
KB Home by visiting www.kbhome.com,
calling 888-KB-HOMES, or connecting with us on Facebook.com/KBHome
or Twitter.com/KBHome.
Forward-Looking and Cautionary
Statements
Certain matters discussed in this press release, including any
statements that are predictive in nature or concern future market
and economic conditions, business and prospects, our future
financial and operational performance, or our future actions and
their expected results are “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on current expectations and
projections about future events and are not guarantees of future
performance. We do not have a specific policy or intent of updating
or revising forward-looking statements. Actual events and results
may differ materially from those expressed or forecasted in
forward-looking statements due to a number of factors. The most
important risk factors that could cause our actual performance and
future events and actions to differ materially from such
forward-looking statements include, but are not limited to the
following: general economic, employment and business conditions;
population growth, household formations and demographic trends;
conditions in the capital, credit and financial markets; our
ability to access external financing sources and raise capital
through the issuance of common stock, debt or other securities,
and/or project financing, on favorable terms; the execution of any
share repurchases pursuant to our board of directors’
authorization; material and trade costs and availability; changes
in interest rates; our debt level, including our ratio of debt to
capital, and our ability to adjust our debt level and maturity
schedule; our compliance with the terms of our revolving credit
facility; volatility in the market price of our common stock; weak
or declining consumer confidence, either generally or specifically
with respect to purchasing homes; competition from other sellers of
new and resale homes; weather events, significant natural disasters
and other climate and environmental factors; any failure of
lawmakers to agree on a budget or appropriation legislation to fund
the federal government’s operations, and financial markets’ and
businesses’ reactions to that failure; government actions,
policies, programs and regulations directed at or affecting the
housing market (including the TCJA, the Dodd-Frank Act, tax
benefits associated with purchasing and owning a home, and the
standards, fees and size limits applicable to the purchase or
insuring of mortgage loans by government-sponsored enterprises and
government agencies), the homebuilding industry, or construction
activities; changes in existing tax laws or enacted corporate
income tax rates, including those resulting from regulatory
guidance and interpretations issued with respect to the TCJA;
changes in U.S. trade policies, including the imposition of tariffs
and duties on homebuilding materials and products, and related
trade disputes with and retaliatory measures taken by other
countries; the adoption of new or amended financial accounting
standards, including revenue recognition (ASC 606) and lease
accounting standards, and the guidance and/or interpretations with
respect thereto; the availability and cost of land in desirable
areas; our warranty claims experience with respect to homes
previously delivered and actual warranty costs incurred; costs
and/or charges arising from regulatory compliance requirements or
from legal, arbitral or regulatory proceedings, investigations,
claims or settlements, including unfavorable outcomes in any such
matters resulting in actual or potential monetary damage awards,
penalties, fines or other direct or indirect payments, or
injunctions, consent decrees or other voluntary or involuntary
restrictions or adjustments to our business operations or practices
that are beyond our current expectations and/or accruals; our
ability to use/realize the net deferred tax assets we have
generated; our ability to successfully implement our current and
planned strategies and initiatives related to our product,
geographic and market positioning, gaining share and scale in our
served markets and in entering into new markets; our operational
and investment concentration in markets in California; consumer
interest in our new home communities and products, particularly
from first-time homebuyers and higher-income consumers; our ability
to generate orders and convert our backlog of orders to home
deliveries and revenues, particularly in key markets in California;
our ability to successfully implement our Returns-Focused Growth
Plan and achieve the associated revenue, margin, profitability,
cash flow, community reactivation, land sales, business growth,
asset efficiency, return on invested capital, return on equity,
debt to capital ratio and other financial and operational targets
and objectives; income tax expense volatility related to
stock-based compensation; the ability of our homebuyers to obtain
residential mortgage loans and mortgage banking services; the
performance of mortgage lenders to our homebuyers; the performance
of KBHS Home Loans, LLC, our mortgage banking joint venture with
Stearns Lending, LLC; information technology failures and data
security breaches; and other events outside of our control. Please
see our periodic reports and other filings with the Securities and
Exchange Commission for a further discussion of these and other
risks and uncertainties applicable to our business.
KB HOME
CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Three Months and Six
Months Ended May 31, 2019 and 2018
(In Thousands, Except Per Share
Amounts - Unaudited)
Three Months Ended May 31,
Six Months Ended May 31,
2019
2018
2019
2018
Total revenues
$
1,021,803
$
1,101,423
$
1,833,286
$
1,973,046
Homebuilding:
Revenues
$
1,018,671
$
1,098,673
$
1,827,459
$
1,967,878
Costs and expenses
(966,572
)
(1,024,475
)
(1,744,021
)
(1,849,677
)
Operating income
52,099
74,198
83,438
118,201
Interest income
439
1,278
1,544
2,281
Equity in loss of unconsolidated joint
ventures
(369
)
(322
)
(775
)
(1,167
)
Homebuilding pretax income
52,169
75,154
84,207
119,315
Financial services:
Revenues
3,132
2,750
5,827
5,168
Expenses
(1,040
)
(957
)
(2,064
)
(1,910
)
Equity in income of unconsolidated joint
ventures
2,500
1,361
3,302
1,780
Financial services pretax income
4,592
3,154
7,065
5,038
Total pretax income
56,761
78,308
91,272
124,353
Income tax expense
(9,300
)
(21,000
)
(13,800
)
(138,300
)
Net income (loss)
$
47,461
$
57,308
$
77,472
$
(13,947
)
Earnings (loss) per share:
Basic
$
.54
$
.65
$
.88
$
(.16
)
Diluted
$
.51
$
.57
$
.82
$
(.16
)
Weighted average shares
outstanding:
Basic
87,641
87,581
87,310
87,370
Diluted
92,366
101,159
94,635
87,370
KB HOME
CONSOLIDATED BALANCE
SHEETS
(In Thousands - Unaudited)
May 31, 2019
November 30, 2018
Assets
Homebuilding:
Cash and cash equivalents
$
178,876
$
574,359
Receivables
299,708
292,830
Inventories
3,780,853
3,582,839
Investments in unconsolidated joint
ventures
56,446
61,960
Property and equipment, net
61,221
24,283
Deferred tax assets, net
424,395
441,820
Other assets
87,734
83,100
4,889,233
5,061,191
Financial services
30,720
12,380
Total assets
$
4,919,953
$
5,073,571
Liabilities and stockholders’
equity
Homebuilding:
Accounts payable
$
262,920
$
258,045
Accrued expenses and other liabilities
605,816
666,268
Notes payable
1,854,556
2,060,263
2,723,292
2,984,576
Financial services
1,451
1,495
Stockholders’ equity
2,195,210
2,087,500
Total liabilities and stockholders’
equity
$
4,919,953
$
5,073,571
KB HOME
SUPPLEMENTAL
INFORMATION
For the Three Months and Six
Months Ended May 31, 2019 and 2018
(In Thousands, Except Average
Selling Price - Unaudited)
Three Months Ended May 31,
Six Months Ended May 31,
2019
2018
2019
2018
Homebuilding revenues:
Housing
$
1,017,799
$
1,091,768
$
1,815,970
$
1,958,308
Land
872
6,905
11,489
9,570
Total
$
1,018,671
$
1,098,673
$
1,827,459
$
1,967,878
Homebuilding costs and
expenses:
Construction and land costs
Housing
$
843,071
$
905,055
$
1,504,399
$
1,632,135
Land
673
6,189
10,200
8,587
Subtotal
843,744
911,244
1,514,599
1,640,722
Selling, general and administrative
expenses
122,828
113,231
229,422
208,955
Total
$
966,572
$
1,024,475
$
1,744,021
$
1,849,677
Interest expense:
Interest incurred
$
36,544
$
39,924
$
71,332
$
79,868
Interest capitalized
(36,544
)
(39,924
)
(71,332
)
(79,868
)
Total
$
—
$
—
$
—
$
—
Other information:
Amortization of previously capitalized
interest
$
37,754
$
52,433
$
68,301
$
94,783
Depreciation and amortization
7,463
2,196
15,377
4,376
Average selling price:
West Coast
$
574,800
$
673,100
$
588,600
$
664,100
Southwest
326,500
307,700
326,500
305,900
Central
287,400
304,500
286,300
300,100
Southeast
297,800
279,900
297,900
279,200
Total
$
367,700
$
401,800
$
369,100
$
396,400
KB HOME
SUPPLEMENTAL
INFORMATION
For the Three Months and Six
Months Ended May 31, 2019 and 2018
(Dollars in Thousands -
Unaudited)
Three Months Ended May 31,
Six Months Ended May 31,
2019
2018
2019
2018
Homes delivered:
West Coast
680
738
1,177
1,330
Southwest
566
588
1,049
1,088
Central
1,067
1,008
1,891
1,829
Southeast
455
383
803
693
Total
2,768
2,717
4,920
4,940
Net orders:
West Coast
1,141
969
1,840
1,776
Southwest
768
642
1,301
1,210
Central
1,498
1,347
2,424
2,343
Southeast
657
574
1,174
987
Total
4,064
3,532
6,739
6,316
Net order value:
West Coast
$
664,431
$
614,863
$
1,084,892
$
1,195,285
Southwest
241,729
200,259
412,568
377,201
Central
438,302
380,672
722,568
680,600
Southeast
188,226
166,176
334,747
281,976
Total
$
1,532,688
$
1,361,970
$
2,554,775
$
2,535,062
May 31, 2019
May 31, 2018
Homes
Value
Homes
Value
Backlog data:
West Coast
1,378
$
806,651
1,328
$
918,188
Southwest
1,178
372,699
1,210
371,902
Central
2,247
669,037
2,296
673,461
Southeast
1,124
324,786
953
273,334
Total
5,927
$
2,173,173
5,787
$
2,236,885
KB HOME RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (In Thousands, Except Percentages and Per
Share Amounts - Unaudited)
This press release contains, and Company management’s discussion
of the results presented in this press release may include,
information about the Company’s adjusted housing gross profit
margin, adjusted income tax expense, adjusted net income, adjusted
diluted earnings per share, adjusted effective tax rate and ratio
of net debt to capital, none of which are calculated in accordance
with generally accepted accounting principles (“GAAP”). The Company
believes these non-GAAP financial measures are relevant and useful
to investors in understanding its operations and the leverage
employed in its operations, and may be helpful in comparing the
Company with other companies in the homebuilding industry to the
extent they provide similar information. However, because they are
not calculated in accordance with GAAP, these non-GAAP financial
measures may not be completely comparable to other companies in the
homebuilding industry and, thus, should not be considered in
isolation or as an alternative to operating performance and/or
financial measures prescribed by GAAP. Rather, these non-GAAP
financial measures should be used to supplement their respective
most directly comparable GAAP financial measures in order to
provide a greater understanding of the factors and trends affecting
the Company’s operations.
Adjusted Housing Gross Profit
Margin
The following table reconciles the Company’s housing gross
profit margin calculated in accordance with GAAP to the non-GAAP
financial measure of the Company’s adjusted housing gross profit
margin:
Three Months Ended May 31,
Six Months Ended May 31,
2019
2018
2019
2018
Housing revenues
$
1,017,799
$
1,091,768
$
1,815,970
$
1,958,308
Housing construction and land costs
(843,071
)
(905,055
)
(1,504,399
)
(1,632,135
)
Housing gross profits
174,728
186,713
311,571
326,173
Add: Inventory-related charges (a)
4,337
6,526
7,892
11,511
Housing gross profits excluding
inventory-related charges
179,065
193,239
319,463
337,684
Add: Amortization of previously
capitalized interest (b)
37,716
49,348
67,702
90,717
Adjusted housing gross profits
$
216,781
$
242,587
$
387,165
$
428,401
Housing gross profit margin
17.2
%
17.1
%
17.2
%
16.7
%
Housing gross profit margin excluding
inventory-related charges
17.6
%
17.7
%
17.6
%
17.2
%
Adjusted housing gross profit margin
21.3
%
22.2
%
21.3
%
21.9
%
(a)
Represents inventory impairment and land
option contract abandonment charges associated with housing
operations.
(b)
Represents the amortization of previously
capitalized interest associated with housing operations.
Adjusted housing gross profit margin is a non-GAAP financial
measure, which the Company calculates by dividing housing revenues
less housing construction and land costs excluding (1) housing
inventory impairment and land option contract abandonment charges
(as applicable) recorded during a given period and (2) amortization
of previously capitalized interest associated with housing
operations, by housing revenues. The most directly comparable GAAP
financial measure is housing gross profit margin. The Company
believes adjusted housing gross profit margin is a relevant and
useful financial measure to investors in evaluating the Company’s
performance as it measures the gross profits the Company generated
specifically on the homes delivered during a given period. This
non-GAAP financial measure isolates the impact that housing
inventory impairment and land option contract abandonment charges,
and the amortization of previously capitalized interest associated
with housing operations, have on housing gross profit margins, and
allows investors to make comparisons with the Company’s competitors
that adjust housing gross profit margins in a similar manner. The
Company also believes investors will find adjusted housing gross
profit margin relevant and useful because it represents a
profitability measure that may be compared to a prior period
without regard to variability of housing inventory impairment and
land option contract abandonment charges, and amortization of
previously capitalized interest associated with housing operations.
This financial measure assists management in making strategic
decisions regarding community location and product mix, product
pricing and construction pace.
Adjusted Income Tax Expense, Adjusted
Net Income, Adjusted Diluted Earnings Per Share and Adjusted
Effective Tax Rate
The following table reconciles the Company’s income tax expense,
net income (loss), diluted earnings (loss) per share and effective
tax rate calculated in accordance with GAAP to the non-GAAP
financial measures of adjusted income tax expense, adjusted net
income, adjusted diluted earnings per share and adjusted effective
tax rate, respectively:
Six Months Ended May 31,
2019
2018
As Reported
As Reported
TCJA Adjustment
As Adjusted
Total pretax income
$
91,272
$
124,353
$
—
$
124,353
Income tax expense (a)
(13,800
)
(138,300
)
111,200
(27,100
)
Net income (loss)
$
77,472
$
(13,947
)
$
111,200
$
97,253
Diluted earnings (loss) per share
$
.82
$
(.16
)
$
.97
Weighted average shares outstanding —
diluted
94,635
87,370
101,283
Effective tax rate (a)
15
%
111
%
22
%
(a)
For the six months ended May 31, 2019,
income tax expense and the related effective tax rate primarily
reflected the favorable impacts of $4.3 million of federal energy
tax credits the Company earned from building energy-efficient
homes, a $3.3 million reversal of a deferred tax asset valuation
allowance and $2.9 million of excess tax benefits related to
stock-based compensation. For the six months ended May 31,
2018, income tax expense and adjusted income tax expense, as well
as the related effective tax rate and adjusted effective tax rate,
included the favorable impacts of $4.2 million of federal energy
tax credits the Company earned from building energy-efficient homes
and $2.4 million of excess tax benefits related to stock-based
compensation.
The Company’s adjusted income tax expense, adjusted net income,
adjusted diluted earnings per share and adjusted effective tax rate
are non-GAAP financial measures, which the Company calculates by
excluding a non-cash charge of $111.2 million recorded in the 2018
first quarter from its reported income tax expense, net loss,
diluted loss per share and effective tax rate, respectively. This
charge was primarily due to the Company’s accounting re-measurement
of its deferred tax assets based on the reduction in the federal
corporate income tax rate from 35% to 21%, effective January 1,
2018, under the TCJA. The most directly comparable GAAP financial
measures are the Company’s income tax expense, net income (loss),
diluted earnings (loss) per share and effective tax rate. The
Company believes these non-GAAP measures are meaningful to
investors as they allow for an evaluation of the Company’s
operating results without the impact of the TCJA-related
charge.
Ratio of Net Debt to
Capital
The following table reconciles the Company’s ratio of debt to
capital calculated in accordance with GAAP to the non-GAAP
financial measure of the Company’s ratio of net debt to
capital:
May 31, 2019
November 30, 2018
Notes payable
$
1,854,556
$
2,060,263
Stockholders’ equity
2,195,210
2,087,500
Total capital
$
4,049,766
$
4,147,763
Ratio of debt to capital
45.8
%
49.7
%
Notes payable
$
1,854,556
$
2,060,263
Less: Cash and cash equivalents
(178,876
)
(574,359
)
Net debt
1,675,680
1,485,904
Stockholders’ equity
2,195,210
2,087,500
Total capital
$
3,870,890
$
3,573,404
Ratio of net debt to capital
43.3
%
41.6
%
The ratio of net debt to capital is a non-GAAP financial
measure, which the Company calculates by dividing notes payable,
net of homebuilding cash and cash equivalents, by capital (notes
payable, net of homebuilding cash and cash equivalents, plus
stockholders’ equity). The most directly comparable GAAP financial
measure is the ratio of debt to capital. The Company believes the
ratio of net debt to capital is a relevant and useful financial
measure to investors in understanding the leverage employed in the
Company’s operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190626005243/en/
Jill Peters, Investor Relations Contact (310) 893-7456 or
jpeters@kbhome.com Cara Kane, Media Contact (321) 299-6844 or
ckane@kbhome.com
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