<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended May 31, 2000.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from [ ] to [ ].
Commission File No. 1-9195
KAUFMAN AND BROAD HOME CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-3666267
(State of incorporation) (IRS employer identification number)
10990 Wilshire Boulevard
Los Angeles, California 90024
(310) 231-4000
(Address and telephone number of principal and executive offices)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
Yes [X] No [ ]
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK AS OF THE CLOSE OF THE PERIOD COVERED BY THIS REPORT.
Common stock, par value $1.00 per share, 39,356,846 shares outstanding. Excluded
from the calculation of shares outstanding are 8,802,292 shares held by the
Registrant's Grantor Stock Ownership Trust.
<PAGE> 2
KAUFMAN AND BROAD HOME CORPORATION
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER(S)
---------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Income -
Six Months and Three Months ended May 31, 2000 and 1999 3
Consolidated Balance Sheets -
May 31, 2000 and November 30, 1999 4
Consolidated Statements of Cash Flows -
Six Months ended May 31, 2000 and 1999 5
Notes to Consolidated Financial Statements 6-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10-16
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17
ITEM 5. OTHER INFORMATION 17-18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 18
SIGNATURES 19
INDEX OF EXHIBITS 20
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KAUFMAN AND BROAD HOME CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts - Unaudited)
<TABLE>
<CAPTION>
Six Months Ended May 31, Three Months Ended May 31,
--------------------------- ----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
TOTAL REVENUES $ 1,705,767 $ 1,556,413 $ 906,182 $ 862,270
=========== =========== =========== ===========
CONSTRUCTION:
Revenues $ 1,679,962 $ 1,529,732 $ 893,737 $ 847,523
Construction and land costs (1,374,236) (1,248,519) (733,605) (688,574)
Selling, general and administrative expenses (214,483) (203,923) (110,555) (110,561)
----------- ----------- ----------- -----------
Operating income 91,243 77,290 49,577 48,388
Interest income 3,747 3,782 1,826 1,872
Interest expense, net of amounts capitalized (13,182) (13,026) (7,118) (6,944)
Minority interests (12,524) (12,470) (6,722) (7,288)
Equity in pretax income (loss) of
unconsolidated joint ventures 1,490 (53) 1,036 (159)
Gain on issuance of French subsidiary stock 39,630 -- -- --
----------- ----------- ----------- -----------
Construction pretax income 110,404 55,523 38,599 35,869
----------- ----------- ----------- -----------
MORTGAGE BANKING:
Revenues:
Interest income 10,839 8,290 5,574 4,293
Other 14,966 18,391 6,871 10,454
----------- ----------- ----------- -----------
25,805 26,681 12,445 14,747
Expenses:
Interest (9,611) (7,566) (4,735) (3,810)
General and administrative (6,484) (5,777) (3,609) (2,831)
----------- ----------- ----------- -----------
Mortgage banking pretax income 9,710 13,338 4,101 8,106
----------- ----------- ----------- -----------
TOTAL PRETAX INCOME 120,114 68,861 42,700 43,975
Income taxes (28,200) (24,100) (15,000) (15,400)
----------- ----------- ----------- -----------
NET INCOME $ 91,914 $ 44,761 $ 27,700 $ 28,575
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE $ 2.23 $ .97 $ .70 $ .60
=========== =========== =========== ===========
DILUTED EARNINGS PER SHARE $ 2.18 $ .94 $ .68 $ .58
=========== =========== =========== ===========
BASIC AVERAGE SHARES OUTSTANDING 41,232 46,295 39,817 47,907
=========== =========== =========== ===========
DILUTED AVERAGE SHARES OUTSTANDING 42,214 47,606 40,712 49,052
=========== =========== =========== ===========
CASH DIVIDENDS PER COMMON SHARE $ .150 $ .150 $ .075 $ .075
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
KAUFMAN AND BROAD HOME CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands - Unaudited)
<TABLE>
<CAPTION>
May 31, November 30,
2000 1999
----------- ------------
<S> <C> <C>
ASSETS
CONSTRUCTION:
Cash and cash equivalents $ 16,732 $ 15,576
Trade and other receivables 250,738 205,847
Mortgages and notes receivable 68,134 58,702
Inventories 1,694,418 1,521,265
Investments in unconsolidated joint ventures 22,967 21,290
Deferred income taxes 96,023 99,519
Goodwill 194,578 205,618
Other assets 93,032 86,259
----------- -----------
2,436,622 2,214,076
----------- -----------
MORTGAGE BANKING:
Cash and cash equivalents 13,074 12,791
Receivables:
First mortgages and mortgage-backed securities 44,085 47,080
First mortgages held under commitments of sale and other receivables 290,554 386,076
Other assets 10,350 4,212
----------- -----------
358,063 450,159
----------- -----------
TOTAL ASSETS $ 2,794,685 $ 2,664,235
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CONSTRUCTION:
Accounts payable $ 328,319 $ 328,528
Accrued expenses and other liabilities 191,770 222,855
Mortgages and notes payable 1,036,503 813,424
----------- -----------
1,556,592 1,364,807
----------- -----------
MORTGAGE BANKING:
Accounts payable and accrued expenses 6,162 9,711
Notes payable 287,263 377,666
Collateralized mortgage obligations secured by mortgage-backed securities 33,173 36,219
----------- -----------
326,598 423,596
----------- -----------
Minority interests:
Consolidated subsidiaries and joint ventures 46,794 9,499
Company obligated mandatorily redeemable preferred securities
of subsidiary trust holding solely debentures of the Company 189,750 189,750
----------- -----------
236,544 199,249
----------- -----------
Common stock 48,159 48,091
Paid-in capital 336,248 335,324
Retained earnings 485,729 376,626
Accumulated other comprehensive income (4,378) (1,584)
Grantor stock ownership trust (190,807) (81,874)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 674,951 676,583
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,794,685 $ 2,664,235
=========== ===========
</TABLE>
See accompanying notes
4
<PAGE> 5
KAUFMAN AND BROAD HOME CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands - Unaudited)
<TABLE>
<CAPTION>
Six Months Ended May 31,
--------------------------
2000 1999
---------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 91,914 $ 44,761
Adjustments to reconcile net income to net cash used by operating
activities:
Equity in pretax (income) loss of unconsolidated joint ventures (1,490) 53
Minority interests 12,524 12,470
Gain on issuance of French subsidiary stock (39,630) --
Amortization of discounts and issuance costs 501 852
Depreciation and amortization 20,113 17,368
Provision for deferred income taxes 3,496 510
Change in:
Receivables 41,199 (26,567)
Inventories (161,532) (160,220)
Accounts payable, accrued expenses and other liabilities (36,695) (3,410)
Other, net (16,967) (5,483)
--------- ---------
Net cash used by operating activities (86,567) (119,666)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired -- (8,568)
Investments in unconsolidated joint ventures (187) 1,697
Net originations of mortgages held for long-term investment (220) (3,273)
Payments received on first mortgages and mortgage-backed securities 3,244 8,900
Purchases of property and equipment, net (7,221) (10,388)
--------- ---------
Net cash used by investing activities (4,384) (11,632)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from credit agreements and other short-term borrowings 120,070 139,267
Issuance of French subsidiary stock 113,118 --
Payments on collateralized mortgage obligations (3,071) (8,476)
Payments on mortgages, land contracts and other loans (11,941) (36,237)
Payments to minority interests (10,789) (15,290)
Payments of cash dividends (6,064) (7,185)
Repurchases of common stock (108,933) --
--------- ---------
Net cash provided by financing activities 92,390 72,079
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,439 (59,219)
Cash and cash equivalents at beginning of period 28,367 63,353
--------- ---------
Cash and cash equivalents at end of period $ 29,806 $ 4,134
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid, net of amounts capitalized $ 23,206 $ 19,033
========= =========
Income taxes paid $ 30,281 $ 29,979
========= =========
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Cost of inventories acquired through seller financing $ 11,621 $ 14,559
========= =========
Issuance of common stock related to an acquisition $ -- $ 146,005
========= =========
Debt assumed related to an acquisition $ -- $ 303,239
========= =========
</TABLE>
See accompanying notes.
5
<PAGE> 6
KAUFMAN AND BROAD HOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in the annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted.
These unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements for the year ended
November 30, 1999 contained in the Company's 1999 Annual Report to
Stockholders.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the Company's financial
position as of May 31, 2000, the results of its consolidated operations for
the six months and three months ended May 31, 2000 and 1999, and its
consolidated cash flows for the six months ended May 31, 2000 and 1999. The
results of operations for the six months and three months ended May 31,
2000 are not necessarily indicative of the results to be expected for the
full year. The consolidated balance sheet at November 30, 1999 has been
taken from the audited financial statements as of that date.
2. Inventories
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
May 31, November 30,
2000 1999
---------- -----------
<S> <C> <C>
Homes, lots and improvements in production $1,251,486 $1,063,505
Land under development 442,932 457,760
---------- ----------
Total inventories $1,694,418 $1,521,265
========== ==========
</TABLE>
The impact of capitalizing interest costs on consolidated pretax income is
as follows (in thousands):
<TABLE>
<CAPTION>
Six Months Ended May 31, Three Months Ended May 31,
-------------------------- --------------------------
2000 1999 2000 1999
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Interest incurred $ 44,390 $ 34,719 $ 22,798 $ 18,948
Interest expensed (13,182) (13,026) (7,118) (6,944)
-------- -------- -------- --------
Interest capitalized 31,208 21,693 15,680 12,004
Interest amortized (17,397) (18,800) (9,366) (7,872)
-------- -------- -------- --------
Net impact on consolidated pretax income $ 13,811 $ 2,893 $ 6,314 $ 4,132
======== ======== ======== ========
</TABLE>
3. Earnings Per Share
Basic earnings per share is calculated by dividing net income by the
average number of common shares outstanding for the period. Diluted
earnings per share is calculated by dividing net income by the average
number of common shares outstanding including all dilutive potentially
issuable shares under various stock option plans and stock purchase
contracts.
6
<PAGE> 7
KAUFMAN AND BROAD HOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Earnings Per Share (continued)
The following table presents a reconciliation of average shares outstanding
(in thousands):
<TABLE>
<CAPTION>
Six Months Ended May 31, Three Months Ended May 31,
------------------------ --------------------------
2000 1999 2000 1999
------- ------ ------ -------
<S> <C> <C> <C> <C>
Basic average shares outstanding 41,232 46,295 39,817 47,907
Net effect of stock options assumed to
be exercised 982 1,311 895 1,145
------ ------ ------ ------
Diluted average shares outstanding 42,214 47,606 40,712 49,052
====== ====== ====== ======
</TABLE>
4. Comprehensive Income
Comprehensive income consists of net income and foreign currency
translation adjustments and totaled $25.2 million and $26.0 million for the
three months ended May 31, 2000 and 1999, respectively, and $89.1 million
and $40.1 million for the six months ended May 31, 2000 and 1999,
respectively.
5. Segment Information
The Company has identified two reportable segments: construction and
mortgage banking. Information for the Company's reportable segments is
presented in its consolidated statements of income and consolidated balance
sheets included herein. The Company's reporting segments follow the same
accounting policies used for the Company's consolidated financial
statements. Management evaluates a segment's performance based upon a
number of factors including pretax results.
6. Issuance of French Subsidiary Stock
On February 7, 2000, Kaufman & Broad S.A. (KBSA), the Company's wholly
owned French subsidiary issued 5,314,327 common shares (including the over
allotment option) in an initial public offering. The offering was made in
France and in Europe and was priced at 23 euros per share. KBSA is now
listed on the Premier Marche of the ParisBourse. The offering generated
total net proceeds of $113.1 million of which $82.9 million was used by the
Company to reduce its domestic debt and repurchase additional shares of its
common stock. The remainder of the proceeds is being used to fund internal
and external growth of KBSA. The Company recognized a gain of $39.6
million, or $.94 per diluted share as a result of the offering. The Company
continues to own a majority interest in KBSA and will continue to
consolidate these operations in its financial statements.
7. Stock Repurchase Plan
As of July 13, 2000, the Company had repurchased 10.5 million shares of the
Company's common stock previously authorized for repurchase by the Board of
Directors. On July 6, 2000, the Company's Board of Directors authorized the
repurchase of an additional 4.0 million shares of the Company's common
stock; none of these shares had been repurchased as of July 13, 2000.
7
<PAGE> 8
KAUFMAN AND BROAD HOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Mortgages and Notes Payable
On February 18, 2000, the Company's mortgage banking subsidiary renewed its
revolving mortgage warehouse agreement (the "Mortgage Warehouse Facility")
and increased the facility from $250 million to $300 million. The Mortgage
Warehouse Facility, which expires on February 18, 2003, provides for an
annual fee based on the committed balance of the facility and provides for
interest at either the London Interbank Offered Rate or the Federal Funds
Rate plus an applicable spread on amounts borrowed. The Master Loan and
Security Agreement was renewed on May 19, 2000 with an investment bank and
was increased from $150 million to $250 million. The agreement, which
expires on May 18, 2001, provides for a facility fee based on the $250
million maximum amount available and provides for interest to be paid
monthly at the Eurodollar Rate plus an applicable spread on amounts
borrowed. The amounts outstanding under the Mortgage Warehouse Facility and
the Master Loan and Security Agreement are secured by a borrowing base,
which includes certain mortgage loans held under commitments of sale and
are repayable from sales proceeds. There are no compensating balance
requirements under either facility. Both facilities include financial
covenants and restrictions which, among other things, require the
maintenance of certain financial statement ratios, a minimum tangible net
worth and a minimum net income.
On May 10, 2000, the Company entered into a $125 million Bridge Revolving
Credit Facility with various banks. The facility, which expires on April
30, 2001, provides for a quarterly fee based on the committed balance of
the facility and provides for interest to be paid monthly at the London
Interbank Offered Rate plus an applicable spread on amounts borrowed. As of
July 13, 2000, no amounts were outstanding under the Bridge Revolving
Credit Facility.
9. Acquisition
Effective January 7, 1999, the Company acquired substantially all of the
homebuilding assets of the Lewis Homes group of companies ("Lewis Homes").
The purchase price for Lewis Homes was approximately $449 million,
comprised of the assumption of approximately $303 million in debt and the
issuance of 7,886,686 shares of the Company's common stock valued at
approximately $146 million. The purchase price was based on the December
31, 1998 net book values of the entities purchased. The excess of the
purchase price over the estimated fair value of net assets acquired was
$177.6 million and was allocated to goodwill. The Company is amortizing the
goodwill on a straight-line basis over a period of ten years. The shares of
Company common stock issued in the acquisition are "restricted" shares and
may not be resold without a registration statement or compliance with
Securities and Exchange Commission regulations that limit the number of
shares that may be resold in a given period. The Company has agreed to file
a registration statement for six million of those shares in three
increments at the Lewis family's request from July 1, 2000 to July 1, 2002.
Under the terms of the purchase agreement, a Lewis family member has also
been appointed to the Company's Board of Directors.
The following unaudited pro forma information presents a summary of the
consolidated results of operations of the Company as if the acquisition of
Lewis Homes had occurred as of December 1, 1998 with pro forma adjustments
to give effect to amortization of goodwill, interest expense on acquisition
debt and certain other adjustments, together with related income tax
effects (in thousands, except per share amounts):
8
<PAGE> 9
KAUFMAN AND BROAD HOME CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
9. Acquisition (continued)
<TABLE>
<CAPTION>
Six Months Ended
----------------
May 31,
1999
--------------
<S> <C>
Total revenues $1,639,365
Total pretax income 73,376
Net income 47,676
Basic earnings per share 1.00
Diluted earnings per share .97
</TABLE>
10. Reclassifications
Certain amounts in the consolidated financial statements of prior years
have been reclassified to conform to the 2000 presentation.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
Total revenues for the three months ended May 31, 2000 increased $43.9
million, or 5.1%, to $906.2 million from $862.3 million for the three
months ended May 31, 1999. For the six months ended May 31, 2000, total
revenues increased $149.4 million, or 9.6%, to $1.71 billion from $1.56
billion in the year-earlier period. The increase in total revenues for the
three month period of 2000 compared to 1999 was due to higher land sale
revenues. The increase in total revenues for the six months ended May 31,
2000 was due to higher housing and land sale revenues. Net income for the
second quarter of 2000 totaled $27.7 million, or $.68 per diluted share
compared with second quarter 1999 net income of $28.6 million or $.58 per
diluted share. For the six months ended May 31, 2000, net income increased
to $91.9 million or $2.18 per diluted share from $44.8 million or $.94 per
diluted share for the six months ended May 31, 1999. Results for the first
six months of 2000 included a one-time gain of $39.6 million, or $.94 per
diluted share, on the issuance of stock by the Company's French subsidiary
(the French IPO gain) in an initial public offering in February 2000.
Excluding the French IPO gain, diluted earnings per share for the six
months ended May 31, 2000 totaled $1.24 per share, up 31.9% compared with
the six month period of 1999. The increase in earnings per share in the
three month period was principally driven by an improved housing gross
margin and a 17.0% reduction in the average number of diluted shares
outstanding due to the Company's ongoing share repurchase program. Earnings
per share rose in the first six months of 2000 due to higher unit
deliveries, an improved housing gross margin and a reduction in the
selling, general and administrative expense ratio. Earnings per share for
the first half of 2000 also benefited from an 11.3% reduction in the
average number of diluted shares outstanding. Mortgage banking pretax
income for the three months and six months ended May 31, 2000 decreased
49.4% and 27.2%, respectively, from the year ago periods primarily due to
the impact of recent market interest rate increases as well as transition
costs related to the consolidation of the Company's mortgage banking
operations.
CONSTRUCTION
Revenues increased by $46.2 million, or 5.5%, to $893.7 million in the
second quarter of 2000 from $847.5 million in the second quarter of 1999
due to an increase in land sale revenues. Housing revenues for the period
decreased by 1.2%, or $10.0 million, to $836.5 million from $846.5 million
in the year-earlier period as a result of a 1.9% decrease in unit
deliveries. Housing revenues in the United States decreased 3.9% to $735.2
million on 4,440 unit deliveries in the second quarter of 2000 from $765.3
million on 4,651 units in the corresponding quarter of 1999 as lower
housing revenues from California operations were only partially offset by
increases in Other U.S operations. Housing revenues from California
operations for the second quarter of 2000 totaled $302.0 million, down
12.9% from $346.6 million in the year-earlier period. California deliveries
in the second quarter of 2000 decreased 15.6% to 1,207 units from 1,430
units in the second quarter of 1999. This decrease was due, in large part,
to the fact that the 1999 second quarter reflected the Company's
sell-through of certain acquired Lewis communities which were located in
areas that did not fit its overall KB2000 operating strategy. Housing
revenues from Other U.S. operations totaled $433.2 million for the three
months ended May 31, 2000 compared to $418.7 million in the same period a
year ago, an increase of 3.5%. Other U.S. deliveries increased slightly to
3,233 units in the second quarter of 2000 from 3,221 units in the second
quarter of 1999 as the average number of active communities in the
Company's Other U.S. operations increased 1.7%, to 181 from 178. Revenues
from French housing operations during the three months ended May 31, 2000
rose to $101.3 million on 602 units from $79.1 million on 480 units in the
year-earlier period, reflecting improvement in the French housing market.
During the second quarter of 2000, the Company's overall average selling
price was $165,900, nearly flat with $164,700 in the same quarter a year
ago. Despite higher average selling prices in all domestic categories and
in France, the overall average selling price increased only slightly due to
a shift in the proportion of deliveries generated from Other U.S and French
operations. The Company's domestic average selling price rose to $165,600
in the second quarter of 2000 from $164,500 in the same period of 1999. For
the three months ended May 31, 2000, the average selling price in the
Company's California operations increased 3.2% to $250,200 from $242,400
for the same period a year ago and the average selling price in Other U.S.
operations rose 3.1% to $134,000 from $130,000. Increases in all domestic
categories occurred as a result of selected increases in sales prices in
certain markets. In France, the average selling price in the second quarter
of 2000 increased 2.0% to $168,200 from $164,900 in the year-earlier
quarter primarily due to a change in the mix of deliveries.
10
<PAGE> 11
Revenues from land sales totaled $57.3 million in the second quarter of
2000 compared to $1.0 million in the second quarter of 1999. The
significant increase in land sales for the three months ended May 31, 2000
occurred as the Company continued to execute its asset repositioning
strategy which includes the identification and sale of non-core assets.
For the first six months of 2000, construction revenues increased by $150.2
million, or 9.8%, to $1.68 billion, from $1.53 billion for the same period
a year ago as a result of higher housing and land sale revenues. Housing
revenues totaled $1.61 billion on 9,607 units in the first half of 2000
compared to $1.52 billion on 9,418 units for the same period a year ago.
Housing operations in the United States produced revenues of $1.42 billion
on 8,485 units in the first six months of 2000 and $1.39 billion on 8,607
units in the comparable period of 1999. During the first half of 2000,
California housing revenues decreased 5.7% to $592.2 million from $628.0
million in the first half of 1999, reflecting an 11.1% decrease in unit
deliveries during the period. Housing revenues from Other U.S. operations
increased 8.9% to $830.6 million in the first six months of 2000 from
$762.6 million in the prior year's period as unit deliveries in the region
rose 2.9%. Deliveries in California decreased to 2,335 units for the first
six months of 2000 from 2,629 for the first six months of 1999, while
deliveries from Other U.S. operations increased to 6,150 units from 5,978
units during the same period. French housing revenues totaled $183.5
million on 1,118 units in the first half of 2000 compared to $131.4 million
on 801 units in the corresponding period of 1999.
The Company-wide average new home price increased 3.3% to $167,300 in the
first half of 2000 from $161,900 in the year-earlier period. For the first
half of 2000, the average selling price in California increased 6.2% to
$253,600 from $238,900 for the first half of 1999 and the average selling
price in Other U.S. operations rose 5.9% to $135,100 from $127,600. These
increases occurred as a result of selected increases in sales prices in
certain markets. In France, the average selling price for the six month
period remained essentially flat at $164,100 in 2000 compared to $164,000
in 1999.
Company-wide revenues from land sales increased to $72.6 million in the
first half of 2000 from $5.0 million in the first half of 1999 as a result
of the Company's asset repositioning strategy.
Operating income increased by $1.2 million to $49.6 million in the second
quarter of 2000 from $48.4 million in the second quarter of 1999 due to
higher gross profits. Gross profits increased by $1.2 million, or .7%, to
$160.1 million in the second quarter of 2000 from $158.9 million in the
prior year's period. During this same period, housing gross profits
increased by $1.0 million to $160.0 million from $159.0 million. The
housing gross margin increased to 19.1% in the second quarter of 2000 from
18.8% in the year-earlier quarter mainly as a result of the favorable
pricing environment. Housing gross margin improved primarily in Other U.S.
operations and particularly in the Texas region. The housing operating
income margin in the second quarter of 2000 was 5.9%, up .2 percentage
points from 5.7% in the year-earlier quarter. Land sales generated
break-even results in the second quarters of both 2000 and 1999.
Selling, general and administrative expenses totaled $110.6 million in the
three month periods ended May 31, 2000 and 1999. As a percentage of housing
revenues, selling, general and administrative expenses were 13.2% in the
second quarter of 2000 compared to 13.1% in the same period a year ago. The
slightly higher ratio in 2000 resulted from temporary transitional impacts
associated with beginning the consolidation of the Company's homebuilding
accounting functions into two regional office locations which will be
completed in the fourth quarter of 2000.
For the first six months of 2000, operating income increased by $13.9
million to $91.2 million from $77.3 million in the corresponding period of
1999 as higher gross profits were partially offset by increased selling,
general and administrative expenses. Housing gross profits increased by
$24.5 million, or 8.7%, to $305.7 million in the first half of 2000 from
$281.2 million in the first half of 1999. Housing gross margin increased to
19.0% in the first half of 2000 from 18.4% in the year-earlier period. The
increase in the Company's housing gross margin for the six months ended May
31, 2000 resulted primarily from the improved pricing environment in the
latter part of 1999 as well as the reduced impact related to purchase
accounting associated with the 1999 acquisition of Lewis Homes.
Company-wide land sales generated essentially break-even result for the
first six months of both 2000 and 1999.
Selling, general and administrative expenses increased by $10.6 million to
$214.5 million for the first six months of 2000 from $203.9 million for the
same period of 1999. As a percentage of housing revenues,
11
<PAGE> 12
selling, general and administrative expenses improved by .1 percentage
point to 13.3% for the first six months of 2000 from 13.4% in the
corresponding period of 1999.
Interest income totaled $1.8 million in the second quarter of 2000 compared
to $1.9 million in the second quarter of 1999. For the first six months,
interest income totaled $3.7 million in 2000 and $3.8 million in 1999. The
slight decline in interest income in the second quarter and first half of
2000 reflected a decrease in the interest bearing average balances of
short-term investments and mortgages receivable compared to the same
periods a year ago.
Interest expense (net of amounts capitalized) increased by $.2 million to
$7.1 million in the second quarter of 2000 from $6.9 million in the second
quarter of 1999. For the six months ended May 31, 2000, interest expense
increased by $.2 million to $13.2 million from $13.0 million for the six
months ended May 31, 1999. Gross interest incurred in the three months and
six months ended May 31, 2000 was higher than that incurred in the
corresponding year-ago periods by $3.9 million and $9.7 million,
respectively, reflecting an increase in average indebtedness. The
percentage of interest capitalized during the three months ended May 31,
2000 and 1999 was 68.8% and 63.4%, respectively. For the six month periods
ended May 31, this percentage was 70.3% in 2000 and 62.5% in 1999. The
amount of interest capitalized as a percentage of gross interest incurred
and distributions associated with the Company's outstanding Feline Prides
was 60.0% for both the three months and six months ended May 31, 2000 and
52.8% and 51.3% for the three months and six months ended May 31, 1999,
respectively.
Minority interests totaled $6.7 million in the second quarter of 2000 and
$7.3 million in the second quarter of 1999. For the first half of 2000,
minority interests remained flat with the first half of 1999 at $12.5
million. Minority interests for three months and six months ended May 31,
2000 are comprised of two major components: pretax income of consolidated
subsidiaries and joint ventures related to residential and commercial
activities and distributions associated with the Company's Feline Prides.
Minority interests for the second quarter and first half of 2000 include
the impact of the French IPO.
Equity in pretax income (loss) of unconsolidated joint ventures in the
second quarter of 2000 totaled $1.0 million compared to the $.1 million
loss recorded in the second quarter of 1999. The Company's joint ventures
generated combined revenues of $35.1 million during the three months ended
May 31, 2000 compared with no revenues recorded in the corresponding period
of 1999. For the first half of 2000, the Company's equity in pretax income
of unconsolidated joint ventures totaled $1.5 million compared to a loss of
$.1 million for the same period of 1999. Combined revenues from these joint
ventures totaled $63.5 million in the first half of 2000 and $.7 million in
the first half of 1999. All of the joint venture revenues in the 2000 and
1999 periods were generated from residential properties.
Gain on issuance of French subsidiary stock totaled $39.6 million in the
first six months of 2000. This one-time gain resulted from the issuance of
5,314,327 common shares (including the over allotment option) by KBSA, the
Company's wholly owned French subsidiary, in an initial public offering in
the first quarter of 2000. The offering was made in France and in Europe
and was priced at 23 euros per share. KBSA is now listed on the Premiere
Marche of the ParisBourse. The offering generated total net proceeds of
$113.1 million of which $82.9 million was used by the Company to reduce its
domestic debt and repurchase additional shares of its common stock. The
remainder of the proceeds is being used to fund internal and external
growth of KBSA. The Company continues to own a majority interest in KBSA
and will continue to consolidate these operations in its financial
statements.
MORTGAGE BANKING
Interest income and interest expense increased by $1.3 million and $.9
million, respectively in the second quarter of 2000 compared to the same
quarter a year ago. For the first six months of 2000, interest income from
mortgage banking activities rose by $2.5 million and related interest
expense increased by $2.0 million from the same period of 1999. Interest
income for the three and six month periods increased due to the higher
balance of first mortgages held under commitments of sale and other
receivables outstanding during the 2000 periods. The increases in interest
expense resulted from the higher balance of notes payable outstanding
during the second quarter and first half of 2000 compared to the same
periods of 1999.
Other mortgage banking revenues decreased by $3.6 million to $6.9 million
in the second quarter of 2000 from $10.5 million in the prior year's second
quarter. For the first half of 2000, other mortgage banking revenues
totaled $15.0 million, a decrease of $3.4 million from $18.4 million in the
first half of 1999. These decreases
12
<PAGE> 13
were primarily the result of lower gains on the sale of mortgages and
servicing rights due to factors resulting from the impact of recent
interest rate increases, including a shift in product mix toward more
variable rate loans, as well as lower retention and the intensely
competitive mortgage banking environment.
General and administrative expenses associated with mortgage banking
activities increased by $.8 million to $3.6 million in the second quarter
of 2000 from $2.8 million for the same period a year ago. For the six month
period, these expenses totaled $6.5 million in 2000 and $5.8 million in
1999. The increase in general and administrative expenses in 2000 was
primarily due to transition costs associated with the recent consolidation
of the Company's mortgage branches into three processing centers.
INCOME TAXES
Income tax expense totaled $15.0 million and $15.4 million in the second
quarter of 2000 and 1999, respectively. For the first six months of 2000,
income tax expense totaled $28.2 million compared to $24.1 million in the
same period of 1999. The income tax amounts represented an effective income
tax rate of approximately 35% in both periods of 2000 (excluding the gain
on issuance of French subsidiary stock) and 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company assesses its liquidity in terms of its ability to generate cash
to fund its operating and investing activities. Historically, the Company
has funded its construction and mortgage banking concerns with internally
generated operating results and external sources of debt and equity
financing. For the six months ended May 31, 2000, net cash provided by
operating, investing and financing activities totaled $1.4 million compared
to $59.2 million used in the six months ended May 31, 1999.
Operating activities used $86.6 million of cash during the first six months
of 2000 compared to $119.7 million used during the same period of 1999. The
Company's uses of operating cash in the first half of 2000 included
investments in inventories of $161.5 million (excluding $11.6 million of
inventories acquired through seller financing), a gain on the issuance of
French subsidiary stock of $39.6 million, a decrease in accounts payable,
accrued expenses and other liabilities of $36.7 million and other operating
uses of $17.0 million. Partially offsetting these uses was cash provided
from six months' earnings of $91.9 million, a decrease in receivables of
$41.2 million and various noncash items deducted from net income.
Operating activities for the first six months of 1999 used cash to fund an
investment of $160.2 million in inventories (excluding the effect of
acquisitions and $14.6 million of inventories acquired through seller
financing), an increase of $26.6 million in receivables and a decrease of
$3.4 million in accounts payable, accrued expenses and other liabilities.
Sources of operating cash in the first six months of 1999 included six
months' earnings of $44.8 million and various noncash items deducted from
net income.
Investing activities used $4.4 million of cash in the first half of 2000
compared to $11.6 million used in the year-earlier period. In the first six
months of 2000, cash was used for net purchases of property and equipment
of $7.2 million, investments in unconsolidated joint ventures of $.2
million and originations of mortgages held for long-term investment of $.2
million. Partially offsetting these uses was $3.2 million of proceeds
received from mortgage-backed securities, which were principally used to
pay down the collateralized mortgage obligations for which the
mortgage-backed securities have served as collateral. In the first six
months of 1999, cash of $8.6 million, net of cash acquired, was used for
acquisitions, $10.4 million was used for net purchases of property and
equipment, and $3.3 million was used for originations of mortgages held for
long-term investment. Partially offsetting these uses were $8.9 million of
proceeds received from mortgage-backed securities and $1.7 million in
distributions related to investments in unconsolidated joint ventures.
Financing activities in the first six months of 2000 provided $92.4 million
of cash compared to $72.1 million provided in the first half of 1999. In
the first six months of 2000, cash was provided from proceeds from the
issuance of French subsidiary stock of $113.1 million and net proceeds from
borrowings of $108.1 million. Partially offsetting these sources were
payments for repurchases of common stock of $108.9 million, payments to
minority interests of $10.8 million, cash dividend payments of $6.1 million
and payments on collateralized mortgage obligations of $3.0 million.
Financing activities in the first six months of 1999 resulted in net cash
inflows due to net proceeds from borrowings of $103.1 million, partially
offset by payments to minority interests of $15.3 million, payments on
collateralized mortgage obligations of $8.5 million and cash dividend
payments of $7.2 million.
13
<PAGE> 14
On February 18, 2000, the Company's mortgage banking subsidiary renewed its
revolving mortgage warehouse agreement (the "Mortgage Warehouse Facility")
and increased the facility from $250 million to $300 million. The Mortgage
Warehouse Facility, which expires on February 18, 2003, provides for an
annual fee based on the committed balance of the facility and provides for
interest at either the London Interbank Offered Rate or the Federal Funds
Rate plus an applicable spread on amounts borrowed. The Master Loan and
Security Agreement was renewed on May 19, 2000 with an investment bank and
was increased from $150 million to $250 million. The agreement, which
expires on May 18, 2001, provides for a facility fee based on the $250
million maximum amount available and provides for interest to be paid
monthly at the Eurodollar Rate plus an applicable spread on amounts
borrowed. The amounts outstanding under the Mortgage Warehouse Facility and
the Master Loan and Security Agreement are secured by a borrowing base,
which includes certain mortgage loans held under commitments of sale and
are repayable from sales proceeds. There are no compensating balance
requirements under either facility. Both facilities include financial
covenants and restrictions which, among other things, require the
maintenance of certain financial statement ratios, a minimum tangible net
worth and a minimum net income.
On May 10, 2000, the Company entered into a $125 million Bridge Revolving
Credit Facility with various banks. The facility, which expires on April
30, 2001, provides for a quarterly fee based on the committed balance of
the facility and provides for interest to be paid monthly at the London
Interbank Offered Rate plus an applicable spread on amounts borrowed. As of
July 13, 2000, no amounts were outstanding under the Bridge Revolving
Credit Facility.
As of July 13, 2000, the Company had repurchased 10.5 million shares of the
Company's common stock previously authorized for repurchase by the Board of
Directors. On July 6, 2000, the Company's Board of Directors authorized the
repurchase of an additional 4.0 million shares of the Company's common
stock; none of these shares had been repurchased as of July 13, 2000.
As of May 31, 2000 the Company had a total of $277.3 million available
under its $500 million domestic unsecured revolving credit facility and
$125 million Bridge Revolving Credit Facility. The Company's French
unsecured financing agreements, totaling $ 191.6 million, had in the
aggregate $128.4 million available at May 31, 2000. In addition, the
Company's mortgage banking operations had $72.2 million available under its
$300 million Mortgage Warehouse Facility and $190.5 million available under
its $250 million Master Loan and Security Agreement at quarter-end. Despite
executing stock repurchases of nearly $200 million, the Company has kept
its leverage ratio within its target range of 45% to 55%. The Company's
financial leverage, as measured by the ratio of net debt to total capital,
was 54.5% at May 31, 2000 compared to 53.5% at May 31, 1999.
The Company believes it has adequate resources and sufficient credit line
facilities to satisfy its current and reasonably anticipated future
requirements for funds to acquire capital assets and land, to construct
homes, to fund its mortgage banking operations and to meet any other needs
of its business, both on a short and long-term basis.
OUTLOOK
The Company's residential backlog as of May 31, 2000 consisted of 12,268
units, representing aggregate future revenues of approximately $2.05
billion, up 8.6% and 14.3%, respectively, from 11,296 units, representing
aggregate future revenues of approximately $1.80 billion, a year earlier.
Company-wide net orders for the second quarter of 2000 totaled 7,837, up
8.6% compared to the 7,219 net orders in the second quarter of 1999.
The Company's domestic operations accounted for approximately $1.74 billion
of backlog value on 10,408 units at May 31, 2000, up from $1.53 billion on
9,671 units at May 31, 1999, reflecting higher backlogs from both
California and Other U.S. operations. Backlog in California increased to
approximately $755.2 million on 3,063 units at May 31, 2000 from $613.5
million on 2,599 units at May 31, 1999 as net orders increased 3.5% to
2,178 in the second quarter of 2000 from 2,104 for the same quarter a year
ago. Other U.S. operations also demonstrated significant year-over-year
growth in backlog levels with the backlog value at May 31, 2000 increasing
to approximately $983.7 million on 7,345 units from $913.5 million on 7,072
units at May 31, 1999, reflecting a 13.5% increase in Other U.S. net orders
to 4,763 in the second quarter of 2000 from 4,198 in the year-earlier
quarter. The average number of active communities in the Company's domestic
operations for the second quarter of 2000 was 263, essentially flat with
262 for the same quarter a year ago.
14
<PAGE> 15
In France, the value of residential backlog at May 31, 2000 was
approximately $315.2 million on 1,860 units, up from $265.3 million on
1,606 units a year earlier. The Company's net orders in France decreased by
2.0% to 896 units in the second quarter of 2000 from 914 units in the
second quarter of 1999. The value of backlog associated with the Company's
French commercial development activities rose to approximately $7.2 million
at May 31, 2000 from $1.6 million at May 31, 1999.
Substantially all of the homes included in residential backlog are expected
to be delivered in 2000; however, cancellations could occur, particularly
if market conditions deteriorate or mortgage interest rates increase,
thereby decreasing backlog and related future revenues.
Company-wide net orders for the month of June 2000, excluding net orders
from unconsolidated joint ventures, decreased 7.6% from the comparable
period of 1999. During this same period, domestic net orders were down
2.9%, reflecting a 30.4% decrease in California net orders, partially
offset by a 13.3% increase in net orders from Other U.S. operations. The
decrease in California net orders was due, in large part, to the inclusion
of certain acquired Lewis communities in 1999 which were located in areas
which the Company transitioned out of in 2000 as it continued to pursue its
KB2000 operational business model. In France, net orders for the first four
weeks of the Company's 2000 third quarter decreased 36.0% compared with the
same period a year ago.
During the balance of 2000, the Company plans to continue to operate under
its KB2000 operational business model and to strive for continued growth.
The Company has leveraged the business model with additional complementary
initiatives, including strategies to establish leading market positions and
identify acquisition opportunities. The Company hopes to continue to
increase overall unit delivery growth in future years. The Company's growth
strategies include expanding existing operations to optimal market volume
levels, as well as entering new markets at high volume levels, principally
through acquisitions. Growth in existing markets will be driven by the
Company's ability to increase the average number of active communities
through the continued successful implementation of its KB2000 operational
business model.
As part of its strategy, the Company has made a commitment to pursue
opportunities in the area of e-commerce under its recently formed
subsidiary, e.KB, Inc. These efforts include continually improving its web
site, kbhomes.com, to provide more information for consumers, utilizing its
houseCALL center to support web site efforts and making strategic
investments in e-commerce businesses. The Company intends to continue to
focus on e-commerce initiatives to reduce supply chain costs and build
longer-term relationships with its customers.
The Company continues to focus on the asset repositioning strategy that it
announced in late 1999. As part of this strategy, the Company continues to
review its assets and businesses for the purpose of monetizing
non-strategic or marginal positions, and has instituted even more stringent
criteria for land acquisitions. Included among these initiatives is the
Company's exploration of the sale of certain domestic operating divisions,
which do not individually or in the aggregate comprise a material portion
of the Company's business. Including the land sales completed in the second
quarter, more than 50% of the land assets originally identified through the
asset repositioning strategy as non-core have been sold. The sale of
Kaufman and Broad Multi-Housing Group, Inc. was finalized just after the
end of the second quarter of 2000 and generated net proceeds to the Company
of approximately $85 million. The sale of this operation will not have a
material impact on the Company's operating results. The asset repositioning
initiatives are intended to increase cash flows available to reduce debt
and/or repurchase additional stock, or possibly to fund future
acquisitions.
Based on its current projections, including the impact of the on-going
share repurchase program, the Company expects to establish record earnings
in fiscal 2000, although this goal could be materially affected by various
risk factors such as changes in general economic conditions either
nationally or in the regions in which the Company operates or may commence
operations, job growth and employment levels, a downturn in the economy's
pace, home mortgage interest rates or consumer confidence and the extent of
its internal asset review, among other things. Future increases in
short-term interest rates instituted by the Federal Reserve Board may give
rise to further increases in mortgage interest rates, which could affect
the Company's performance.
15
<PAGE> 16
SAFE HARBOR STATEMENT
Investors are cautioned that certain statements contained in this document,
as well as some statements by the Company in periodic press releases and
some oral statements by Company officials to securities analysts and
stockholders during presentations about the Company are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995 (the "Act"). Statements which are predictive in nature, which
depend upon or refer to future events or conditions, or which include words
such as "expects", "anticipates", "intends", "plans", "believes",
"estimates", "hopes", and similar expressions constitute forward-looking
statements. In addition, any statements concerning future financial
performance (including future revenues, earnings or growth rates), ongoing
business strategies or prospects, and possible future Company actions,
which may be provided by management are also forward-looking statements as
defined by the Act. Forward-looking statements are based on current
expectations and projections about future events and are subject to risks,
uncertainties, and assumptions about the Company, economic and market
factors and the homebuilding industry, among other things. These statements
are not guaranties of future performance, and the Company has no specific
intention to update these statements.
Actual events and results may differ materially from those expressed or
forecasted in the forward-looking statements made by the Company or Company
officials due to a number of factors. The principal important risk factors
that could cause the Company's actual performance and future events and
actions to differ materially from such forward-looking statements include,
but are not limited to, national or regional changes in general economic
conditions, employment levels, costs of homebuilding material and labor,
home mortgage and other interest rates, the secondary market for mortgage
loans, competition, currency exchange rates as they affect the Company's
operations in France, consumer confidence, government regulation or
restrictions on real estate development, capital or credit market
conditions affecting the Company's cost of capital; the availability and
cost of land in desirable areas; environmental factors, governmental
regulations, unanticipated violations of Company policy, property taxes and
unanticipated delays in the Company's operations. See the Company's Annual
Report on Form 10-K for the year ended November 30, 1999 and other Company
filings with the Securities and Exchange Commission for a further
discussion of risks and uncertainties applicable to the Company's business.
The Company undertakes no obligation to update any forward-looking
statements in this Report on Form 10-Q or elsewhere.
16
<PAGE> 17
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 2000 Annual Meeting of Stockholders of the Company was held on April 6,
2000, at which the two matters described below were submitted to a vote of
stockholders with the voting results as indicated.
(1) Election of directors for a three-year term expiring at the 2003 Annual
Meeting of Stockholders:
<TABLE>
<CAPTION>
Nominee For Authority Withheld
---------------- --------- ------------------
<S> <C> <C>
Bruce Karatz 45,043,841 661,972
Randall W. Lewis 45,044,187 661,626
</TABLE>
Messrs. Ronald W. Burkle, Ray R. Irani, Guy Nafilyan and Luis G. Nogales
continue as directors and, if nominated, will next stand for re-election at
the 2001 Annual Meeting of Stockholders; Ms. Jane Evans and Messrs. James
A. Johnson, Barry Munitz and Sanford C. Sigoloff also continue as directors
and, if nominated, will next stand for re-election at the 2002 Annual
Meeting of Stockholders.
(2) A stockholder resolution concerning the elimination of the
classification of the board of directors:
For Against Abstain
---------- ---------- ---------
19,482,797 20,737,962 1,895,579
Abstentions were counted as present for purposes of voting the proposal and
had the effect of a negative vote because passage of the proposal would
have required the affirmative vote of a majority of shares present in
person or by proxy and entitled to vote at the 2000 Annual Meeting of
Stockholders.
ITEM 5. OTHER INFORMATION
Geographical Information
The following table presents residential information in terms of unit
deliveries to home buyers and net orders taken by geographical market for
the three months and six months ended May 31, 2000 and 1999, together with
backlog data in terms of units and value by geographical market as of May
31, 2000 and 1999.
<TABLE>
<CAPTION>
Three Months Ended May 31,
-------------------------------------
Deliveries Net Orders
------------------ ------------------
Market 2000 1999 2000 1999
------ -------- -------- --------- --------
<S> <C> <C> <C> <C>
California 1,207 1,430 2,178 2,104
Other U.S. 3,233 3,221 4,763 4,198
Foreign 602 488 896 917
------- ------ ------- -------
Total 5,042 5,139 7,837 7,219
====== ====== ======= =======
Unconsolidated Joint
Ventures 137 - 121 -
====== ====== ======= =======
</TABLE>
17
<PAGE> 18
Geographical Information (continued)
<TABLE>
<CAPTION>
Six Months Ended May 31, May 31,
--------------------------------------------- --------------------------------------------------
Backlog - Value
Deliveries Net Orders Backlog - Units In Thousands
-------------------- --------------------- ---------------------- ------------------------
Market 2000 1999 2000 1999 2000 1999 2000 1999
------ ------- -------- --------- --------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
California 2,335 2,629 3,519 3,676 3,063 2,599* $ 755,243 $ 613,466*
Other U.S. 6,150 5,978 8,189 7,712 7,345 7,072* 983,704 913,523*
Foreign 1,122 811 1,454 1,452 1,860 1,625 315,151 270,229
-------- -------- -------- -------- -------- -------- ---------- ----------
Total 9,607 9,418 13,162 12,840 12,268 11,296* $2,054,098 $1,797,218*
======== ======== ======== ======== ======== ======== ========== ==========
Unconsolidated Joint
Ventures 260 -- 236 -- 195 -- $ 36,660 $ --
======== ======== ======== ======== ======== ======== ========== ==========
</TABLE>
* Backlog amounts for 1999 have been adjusted to reflect the acquisition
of Lewis Homes. Therefore, backlog amounts at November 30, 1998
combined with net order and delivery activity for the first six months
of 1999 will not equal ending backlog at May 31, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
10.1 $125,000,000 Bridge Revolving Credit Facility, dated May 10,
2000.
24 The consent of Ernst & Young LLP, independent auditors, filed
as an exhibit to the Company's 1999 Annual Report on Form
10-K, is incorporated by reference herein.
27 Financial Data Schedule.
Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended May 31,
2000.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KAUFMAN AND BROAD HOME CORPORATION
------------------------------------------
Registrant
Dated July 13, 2000 /s/ BRUCE KARATZ
-------------------- ------------------------------------------
Bruce Karatz
Chairman, President and Chief Executive
Officer (Principal Executive Officer)
Dated July 13, 2000 /s/ WILLIAM R. HOLLINGER
--------------------- ------------------------------------------
William R. Hollinger
Vice President and Controller
(Chief Accounting Officer)
19
<PAGE> 20
INDEX OF EXHIBITS
Page of
Sequentially
Numbered Pages
--------------
10.1 $125,000,000 Bridge Revolving Credit Facility,
dated May 10, 2000.
27 Financial Data Schedule.
20
