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Item 1.	BUSINESS

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(a)	Total revenues include revenues from housing and land sales.

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•	gaining a detailed understanding of consumer location and home design and interior/exterior design option preferences through regular surveys and research. In this report and elsewhere, we refer to our home designs and design options as our “products;”

•	managing our working capital and reducing our operating risks by acquiring primarily developed and entitled land at reasonable prices in identified preferred markets and submarkets that meet our investment return standards and market positioning (or “marketing”) strategy;

•	using our knowledge of consumer preferences to design, offer, construct and deliver products that meet the needs and interests of the largest demographic of homebuyers in our served markets. Historically, this demographic has been comprised of first-time and move-up homebuyers;

•	in general, commencing construction of a home only after a purchase contract has been signed with a buyer and preliminary credit approval or other evidence of the buyer’s financial ability to purchase the home has been obtained;

•	building a backlog of orders and minimizing the cycle time from the start of construction to the delivery of homes to buyers;

•	establishing an even flow production of high-quality homes at the lowest possible cost; and

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offering customers a distinct homebuying experience designed to offer the best combination of value and choice through affordable sales prices plus the opportunity to customize their homes as they desire with choices of lot location within a community, various house elevations and floor plans (“product premiums”) and numerous interior and exterior design options and upgrades available at our design studios.

•	achieving and maintaining profitability at the scale of prevailing market conditions;

•	generating cash and strengthening our balance sheet; and

•	positioning our business to capitalize on future growth opportunities.

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Generating Returns on Targeted Land Investment: Maintaining ownership or control of a forecasted three-to-five year base supply of developed or developable land subject to our investment return and marketing standards while accelerating our land development activities, predominantly in attractive growth markets. We invested approximately $1.47 billion in land and land development in 2014 and approximately $1.14 billion in 2013. This substantial investment contributed to year-over-year increases in our community count, revenues, average selling prices and housing gross profits in 2014. While we intend to selectively acquire or control additional land parcels that meet our investment return and marketing standards in 2015, given our present land pipeline, we expect our investment in land and land development will moderate on an overall basis compared to the prior year, and that a higher proportion of our investment will be dedicated to land development in order to advance the conversion of our owned land into new home communities open for sales and, in turn, generate additional net orders, homes delivered, revenues and cash. With this investment orientation, we anticipate that our community count in 2015 will be higher than in 2014, depending on sales absorption rates and the timing of community close-outs.

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Net Order Value Growth: In tandem with our community count expansion and land investment and activation initiatives, optimizing our land assets by increasing revenues per community open for sales through an intense focus on balancing sales pace and selling prices. In addition, through KBnxt, we have opportunities to generate incremental earnings from the higher home selling prices that accompany sales of lot and product premiums and design studio options and upgrades. In 2014, our KBnxt-based sales strategies helped to grow the year-over-year value of our net orders by 20%, following a 24% year-over-year rise in 2013. Our net order value for a given period represents the potential future housing revenues associated with net orders, including various lot and product premiums, and homebuyer spending on design studio options and upgrades for homes in backlog during the same period.

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Organizational and Production Efficiency: Continuously working to expand our housing gross profit margins by aligning our management resources, personnel levels and overhead costs with our growth platform, community count and home delivery expectations and business needs, and by streamlining and constantly improving, to the extent possible, our home construction process and operational activities. In addition to even flow production scheduling, our home construction process includes developing and refining a standardized set of value-engineered home designs in ways that allow us to meet the needs of our primary customer base in a variety of different markets, shorten cycle times and lower direct construction costs. It also includes taking advantage of economies of scale in contracting for building materials and subcontracted trade labor, and leveraging our organizational infrastructure in our served markets.

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•	refine our products and construction process to limit the materials needed to build our homes, and continuously look at ways to reduce construction and office waste;

•	build all of our new homes to the U.S. Environmental Protection Agency’s (“EPA”) ENERGY STAR® Version 3 standards;

•	build an increasing percentage of our homes to meet the EPA’s Watersense® specifications for water use efficiency;

•	build our homes with Watersense labeled fixtures;

•	seek out and utilize innovative technologies and systems to further improve the energy and water efficiency of our homes;

•	engage in campaigns and other educational efforts, sometimes together with other companies, organizations and groups, to increase consumer awareness of the importance and impact of sustainability in selecting a home and the products within a home;

•	developed an Energy Performance Guide®, or EPG®, that informs our homebuyers of the relative energy efficiency and the related estimated monthly energy costs and potential energy cost savings of each of our homes as designed, compared to typical new and existing homes; and

•	created and are adding more net-zero energy and zero freshwater design options, under a program called Double ZeroHouse™ 3.0, that are available in select markets.

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Item 1A.	RISK FACTORS

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•	weak general economic, income and employment growth;

•	high consumer debt levels, including elevated student loan balances;

•	delinquencies, defaults and foreclosures on mortgage loans;

•	homeowners whose outstanding principal balance on their mortgage loan exceeds the market value of their home;

•	volatility and uncertainty in domestic and international financial, credit and consumer lending markets; and

•	tight lending standards and practices for mortgage loans that limit consumers’ ability to qualify for mortgage financing to purchase a home.

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•	short- and long-term interest rates;

•	employment levels and job and personal income growth;

•	consumer debt levels;

•	housing demand from population growth, household formation and other demographic changes;

•	availability and pricing of mortgage financing for homebuyers;

•	consumer confidence generally and the confidence of potential homebuyers in particular;

•	U.S. and global financial system and credit market stability;

•	mortgage loan programs (including changes in FHA, Fannie Mae- and Freddie Mac-conforming mortgage loan limits, credit risk/mortgage loan insurance premiums and/or other costs or fees, down payment requirements and underwriting standards), and federal and state regulation, oversight, guidance and legal action regarding lending, home value appraisal, foreclosure and short sale practices;

•	federal and state personal income tax rates and provisions, including provisions for the deduction of mortgage loan interest payments, real estate taxes and other expenses;

•	supply of and prices for available new or resale homes (including lender-owned homes) and other housing alternatives, such as apartments, single-family rentals and other rental housing;

•	homebuyer interest in our current or new product designs and new home community locations, and general consumer interest in purchasing a home compared to choosing other housing alternatives; and

•	real estate taxes.

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•	our delivering fewer homes;

•	our selling homes at lower prices;

•	our offering or increasing sales incentives, discounts or price concessions for our homes;

•	our experiencing lower housing gross profit margins, particularly if we cannot raise our selling prices to cover increased land acquisition and development, direct construction or overhead costs or inflation;

•	our selling fewer homes or experiencing a higher number of cancellations by homebuyers;

•	impairments in the value of our inventory and other assets;

•	difficulty in acquiring desirable land that meets our investment return or marketing standards, and in selling our interests in land that no longer meet such standards on favorable terms, or at all;

•	difficulty in our acquiring raw materials and skilled management and subcontracted trade labor at acceptable prices;

•	delays in the development of land and/or the construction of our homes; and/or

•	difficulty in securing external financing, performance bonds or letter of credit facilities on favorable terms.

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•	limit our ability to obtain future financing for working capital, capital expenditures, acquisitions, inventory-related investments, debt service requirements or other business needs, including, but not limited to, supporting our strategic growth initiatives and operational actions;

•	limit our ability to maintain compliance with the financial covenants of the Credit Facility or to renew or, if necessary or desirable, expand the capacity of the Credit Facility;

•	limit our ability to renew or, if necessary or desirable, expand the capacity of any letter of credit facilities (including the LOC Facilities), and to obtain performance bonds in the ordinary course of our business;

•	limit our ability to pay dividends on shares of our common stock;

•	require us to dedicate a substantial portion of our cash flow from operations to the collateralization or payment of our debt and reduce our ability to use our cash flow for other purposes, including investments in our business;

•	impact our flexibility in planning for, or reacting to, changes in our business;

•	limit our ability to implement our present strategies, particularly our land acquisition and development plans and asset activation initiatives, in part due to competition from other homebuilders, developers and investors with greater available liquidity or balance sheet strength;

•	place us at a competitive disadvantage because we have more debt or debt-related restrictions than some of our competitors; and

•	make us more vulnerable in the event of weakness or a downturn in our business or in general economic or housing market conditions.

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Item 1B.	UNRESOLVED STAFF COMMENTS

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Item 2.	PROPERTIES

Item 3.	LEGAL PROCEEDINGS

Item 4.	MINE SAFETY DISCLOSURES

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(a)	All positions described were with us, unless otherwise indicated.

(b)	Mr. Mezger has served as a director since 2006.

(c)	Mr. Praw was employed by us from 1989-1992 and from 1994-2006. He was elected to his present position in October 2011.

Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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Item 6.	SELECTED FINANCIAL DATA

(a)	Net income for the year ended November 30, 2014 included the impact of an $825.2 million deferred tax asset valuation allowance reversal in the 2014 fourth quarter.

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Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

•	Profitability. We generated pretax income of $94.9 million for 2014, up 148% over the prior year, and have produced pretax income for six consecutive quarters totaling $149.8 million.

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Deferred Tax Asset Valuation Allowance. We reversed a substantial portion of our deferred tax asset valuation allowance at November 30, 2014, largely due to our consistent profitability. Among other things, the reversal nearly tripled our stockholders’ equity, significantly reduced our debt leverage ratio, and, going forward, enables us to potentially shelter, on a cash basis, more than $2 billion of future earnings from income taxes. The reversal also helped drive our net income to $918.3 million for the year.

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Community Count Expansion. Our average community count of 214 for the 2014 fourth quarter increased 13% from the year-earlier quarter, and our average community count of 200 for the year ended November 30, 2014 rose 10% from 2013, reflecting our investments in land and land development in 2014 and 2013. Consistent with our strategic investment orientation, a higher proportion of our new home communities are located in submarkets that feature homebuyers with higher household incomes

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Backlog and Future Growth. Our higher net orders in 2014 helped drive a 14% year-over-year expansion in our backlog to 2,909 homes at November 30, 2014. Our year-end backlog represented potential future housing revenues of $914.0 million, an increase of 34% from the prior year, reflecting the higher number of homes in backlog and the higher average selling price of those homes. Our homes in backlog and backlog value at November 30, 2014 reached their highest year-end levels since 2007.

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Revenues. Total revenues of $2.40 billion for the year ended November 30, 2014 rose 14% from $2.10 billion for 2013, primarily due to an increase in housing revenues. Housing revenues grew 14% to $2.37 billion in 2014 from $2.08 billion in 2013, reflecting increases in both the number of homes delivered and the overall average selling price of those homes. In 2014, our total revenues included land sale revenues of $20.0 million compared to $.9 million in 2013. Also included in our total revenues were financial services revenues of $11.3 million in 2014 and $12.2 million in 2013.

◦	Homes Delivered. We delivered 7,215 homes in 2014, up 1% from 7,145 homes delivered in 2013.

◦	Average Selling Price. Our overall average selling price of homes delivered increased 13% to $328,400 in 2014 from $291,700 in 2013.

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Homebuilding Operating Income. Our homebuilding operating income grew $23.9 million, or 26%, to $116.0 million in 2014, compared to $92.1 million in 2013. In 2014, our homebuilding operating income included $37.6 million of inventory impairment charges, of which $26.6 million related to planned future land sales, and $1.8 million of land option contract abandonment charges. In 2013, our homebuilding operating income included a net warranty charge of $32.0 million associated with water intrusion-related repairs of homes at certain of our communities in central and southwest Florida, and $3.6 million of inventory impairment and land option contract abandonment charges. As a percentage of homebuilding revenues, our operating income improved to 4.9% in 2014 from 4.4% in 2013.

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Housing Gross Profits. Housing gross profits of $429.5 million in 2014 increased by $81.7 million, or 24%, from $347.8 million in 2013, reflecting the higher volume of homes delivered and a higher housing gross profit margin. Included in our housing gross profits were $12.8 million of inventory impairment and land option contract abandonment charges in 2014 and the above-mentioned inventory impairment and land option contract abandonment charges and net warranty charge in 2013. Our housing gross profit margin improved by 140 basis points to 18.1% in 2014 from 16.7% in 2013. Excluding the housing inventory- and warranty-related charges in 2014 and 2013, our adjusted housing gross profit margin improved by 30 basis points to 18.7% in 2014 from 18.4% in 2013. The calculation of adjusted housing gross profit margin, which we believe provides a clearer measure of the performance of our business, is described below under “Non-GAAP Financial Measures.”

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Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased to $288.0 million in 2014 from $255.8 million in 2013. Selling, general and administrative expenses for 2013 included the reversal of a previously established accrual of $8.2 million due to a favorable court decision. As a percentage of housing revenues, to which these expenses are most closely correlated, selling, general and administrative expenses improved slightly to 12.2% in 2014 compared to 12.3% in 2013.

•	Interest Expense. Interest expense of $30.8 million for 2014 decreased from $62.7 million for 2013, reflecting an increase in the amount of our inventory qualifying for interest capitalization in 2014. In addition, interest expense in 2013 included a $10.4 million loss on the early extinguishment of debt associated with the retirement of certain of our senior notes.

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•	Income Taxes. We recognized an income tax benefit of $823.4 million in 2014 and $1.6 million in 2013. The income tax benefit increased in 2014 primarily due to the reversal of $825.2 million of our deferred tax asset valuation allowance in the fourth quarter of 2014.

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Net Income. We generated net income of $918.3 million, or $9.25 per diluted share, in 2014, compared to $40.0 million, or $.46 per diluted share, in 2013. Our net income for 2014 included the above-mentioned income tax benefit and a $3.2 million gain on the sale of our interest in an unconsolidated joint venture in Maryland, which were partly offset by the $39.4 million of inventory impairment and land option contract abandonment charges noted above. Our net income for 2013 included the above-described net warranty charge, a loss on the early extinguishment of debt, inventory impairment and land option contract abandonment charges, and the reversal of a previously established accrual. Our 2013 net income also included the above-mentioned income tax benefit.

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Cash, Cash Equivalents and Restricted Cash. Our cash, cash equivalents and restricted cash totaled $383.6 million at November 30, 2014, compared to $572.0 million at November 30, 2013. Of our total cash, cash equivalents and restricted cash at November 30, 2014 and 2013, $356.4 million and $530.1 million, respectively, was unrestricted. The decrease in total cash, cash equivalents and restricted cash was primarily due to our investments in land and land development during 2014, partly offset by total net proceeds of $531.6 million from the concurrent underwritten public issuances of the 4.75% senior notes due 2019 (the “4.75% Senior Notes due 2019”) and 7,986,111 shares of our common stock, par value $1.00 per share, at an offering price of $18.00 per share (the “2014 Common Stock Offering”).

•	Inventories. Reflecting our investment in land and land development of $1.47 billion and the distributions of $90.1 million of land and land development we received in 2014 from our unconsolidated joint venture Inspirada Builders, LLC (“Inspirada”), our inventory balance of $3.22 billion at November 30, 2014 increased 40% from $2.30 billion at November 30, 2013.

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Investments in Unconsolidated Joint Ventures. Our investments in unconsolidated joint ventures decreased to $79.4 million at November 30, 2014 from $130.2 million at November 30, 2013, primarily due to the distributions of land and land development we received from Inspirada and the above-noted sale of our interest in an unconsolidated joint venture in Maryland during 2014. These transactions were partly offset by capital contributions we made to several of our unconsolidated joint ventures during 2014.

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Notes Payable. Our debt balance increased to $2.58 billion at November 30, 2014 from $2.15 billion at November 30, 2013, reflecting the underwritten public issuance of the 4.75% Senior Notes due 2019. Our ratio of debt to capital improved to 61.8% at November 30, 2014, compared to 80.0% at November 30, 2013. Our ratio of net debt to capital (a calculation that is described below under “Non-GAAP Financial Measures”) also improved to 57.9% at November 30, 2014 from 74.6% at November 30, 2013. These improvements were primarily due to the year-over-year increase in our stockholders’ equity at November 30, 2014.

•	Stockholders’ Equity. Our stockholders’ equity expanded to $1.60 billion at November 30, 2014 from $536.1 million at November 30, 2013, primarily due to the net income we generated in 2014, which included the income tax benefit from the reversal of a substantial portion of our deferred tax asset valuation allowance, and the 2014 Common Stock Offering.

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•	Net Orders. Net orders from our homebuilding operations increased 6% to 7,567 in 2014 from 7,125 in 2013, reflecting our higher average community count and our continued emphasis on balancing home selling prices and the pace of net orders to optimize the performance of our communities.

◦	The year-over-year growth in our overall net orders reflected increases of 9%, 15% and 7% in our West Coast, Southwest and Central homebuilding reporting segments, respectively, partly offset by a 4% decrease in our Southeast homebuilding reporting segment.

◦	The overall value of the net orders we generated in 2014 increased 20% to $2.58 billion from $2.16 billion in 2013.

◦	Each of our homebuilding reporting segments generated year-over-year growth in net order value in 2014, with our West Coast homebuilding reporting segment up 25% to $1.22 billion, our Southwest homebuilding reporting segment up 21% to $230.6 million, our Central homebuilding reporting segment up 19% to $755.7 million, and our Southeast homebuilding reporting segment up 7% to $376.0 million.

◦	Our cancellation rate was 31% in 2014, compared to 32% in 2013.

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Backlog. Our backlog at November 30, 2014 was comprised of 2,909 homes, representing potential future housing revenues of $914.0 million, and at November 30, 2013 was comprised of 2,557 homes, representing potential future housing revenues of $682.5 million. The number of homes in our ending backlog rose 14% year over year, reflecting the 6% year-over-year increase in our net orders in 2014. The potential future housing revenues in our backlog at November 30, 2014 grew 34% from the prior year due to the increased number of homes in our backlog and the higher average selling price of those homes. Substantially all of the homes in our backlog at November 30, 2014 are expected to be delivered during the year ending November 30, 2015.

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Community Count. Overall, our average community count for the year ended November 30, 2014 increased 10% to 200 from 182 as of November 30, 2013, while our ending community count increased 19% from the year-earlier period. The year-over-year growth reflected our strategic community positioning efforts and increased land and land development activities, which resulted in our opening more new communities for sales in 2014 than in the prior year. In addition, our average community count increased on a year-over-year basis in each of our homebuilding reporting segments. With the substantial inventory-related investments we made in 2014 and the investments we are planning to make in 2015, we expect that our overall community count will continue to increase in 2015, depending on sales absorption rates and the timing of community close-outs.

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(a)	Percentage not meaningful.

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(a)	Percentage not meaningful.

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(a)	Percentage not meaningful.

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(a)	Percentage not meaningful.

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Recent Operating Results. We generated significant pretax income in 2014 and 2013, including six consecutive quarters of pretax income totaling $149.8 million as of November 30, 2014. As a result of this profitability, we emerged from a three-year cumulative pretax loss position as of August 31, 2014. This three-year cumulative pretax loss position had been a significant piece of negative evidence prior to 2014. In addition, as discussed above under “Results of Operations—Overview” in this report, we generated year-over-year improvement in most of our key financial metrics in 2014 and 2013, including improvement in our revenues; housing gross profits; selling, general and administrative expenses as a percentage of housing revenues; net orders; and backlog levels.

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Future Operating Results. We believe we have a strong backlog of orders that, combined with other factors, supports our ability to continue to be profitable. In addition, we expect to generate pretax earnings for 2015 and beyond based on detailed internal projections for each of our operating divisions. These projections considered current and expected supply and demand conditions in our served markets, land and land development investments, community count, net orders, backlog levels and average selling prices. Further, we estimate that even if our annual pretax income in future years remains flat with our 2015 projected pretax income, we will realize all of our federal deferred tax assets, except for approximately $14.5 million related to foreign tax credits that expire in 2015 and 2016 (due to our expectation that utilization of federal NOL will offset taxable income in those years). Our primary assumption regarding our future operating results is that sufficient taxable income will be generated before the federal NOL and tax credits (other than the foreign tax credits) expire. As of November 30, 2014, we estimate that we will need to generate more than $2 billion of pretax income in future periods before 2034 to realize our deferred tax assets. Historically, the significant difference between pretax income and taxable income has been asset impairment charges and land option contract abandonment charges.

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Financial Position. We believe our balance sheet and liquidity position at November 30, 2014, including $356.4 million of unrestricted cash and cash equivalents and $200 million available for future borrowings under the Credit Facility, and expected access to capital markets and external financing sources, supports our ability to invest in our business to generate profitable growth in future years. We invested $1.14 billion in land and land development in 2013 and an additional $1.47 billion in 2014. As a result of our substantial investments in land and land development, our inventory balance of $3.22 billion at November 30, 2014 increased 40% from November 30, 2013 and our community count at November 30, 2014 grew 19% from the previous year. Further, with the continued recovery in many housing markets, we have activated certain land previously held for future development, expanding the balance of our performing inventory assets. As of November 30, 2014, we owned or controlled 52,198 lots, representing a four to five year supply that we believe positions us to sustain future growth and profitability.

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Recovery Period for Deferred Tax Assets. For federal income tax purposes, the NOL can be carried back two years and then carried forward 20 years. As we have no taxable income in the allowable two-year carryback period, we plan to carry forward our NOL and apply such losses to future taxable income to realize our federal deferred tax assets. We believe that we will realize all of our federal NOL and will be able to absorb all federal deductible temporary differences as they reverse in future years, except for the portion related to foreign tax credits that may not be used due to the utilization of federal NOL to offset taxable income in the years through the tax credit expirations. The state NOL carryforwards will begin to expire between 2015 and 2033 if not utilized. We estimated the amount of the valuation allowance needed for our state NOL carryforwards based on an analysis of the amount of our NOL carryforwards associated with each state as compared to our expected level of taxable income under existing apportionment rules in each state and the carryforward periods allowed in each state’s tax code.

•	Risk of Future Asset Impairments. The frequency and magnitude of asset impairments has decreased significantly in recent years as assets have been written down or sold and as industry conditions have improved. While we remain at risk of future

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Net Order and Backlog Trends. We had a backlog of 2,909 homes, representing potential future housing revenues of $914.0 million as of November 30, 2014. Our homes in backlog and backlog value at November 30, 2014 increased 14% and 34%, respectively, from November 30, 2013, and reached their highest year-end levels since 2007. These year-over-year improvements in our backlog levels were driven primarily by the 6% rise in our net orders and a 20% increase in our net order value in 2014. As of November 30, 2014, we had experienced 11 consecutive quarters of year-over-year improvement in our net order value. The trends in our net orders and backlog reflect the upward momentum of our business that has been generated in large part through the ongoing execution of our core strategic initiatives that have contributed significantly to our sustained profitability for the past six quarters and that we believe will continue to drive profitable growth.

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Strategic Actions. We have taken strategic actions over the past few years to improve the financial performance of our business. Our principal strategic initiative since 2012 has been to reposition our homebuilding activities toward higher-performing, desirable locations in land-constrained growth markets, which we have implemented largely through substantial investments in land and land development. Alongside our repositioning and inventory-related investment initiatives, we have refined our products to better meet consumer preferences, and we have undertaken continuous efforts to contain costs and improve our operational efficiency to reach our profitability and growth goals. To advance the profitable growth of our business, we have evolved our priorities to focus on expanding our community count, increasing our revenues and enhancing profitability per home delivered, and by using features of our operational business model to generate incremental earnings from a variety of lot and product premiums, and design options and upgrades. We believe the favorable trends in our financial performance, including the pretax income we generated in 2014 and 2013, have been largely due to our successful execution on our strategic initiatives. As discussed under “Outlook” in this report, we plan to continue to focus on strategies to generate growth in 2015 and beyond.

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Housing Industry Outlook. In 2013 and 2012, U.S. new home sales increased 16% and 20%, respectively, over the prior year periods. In October 2014, U.S. new home sales were at a seasonally adjusted annual rate of 458,000, representing a decrease of 1.8% from the previous year. While tight mortgage lending standards combined with weak consumer income gains amid rising home prices moderated the pace of home sales in 2014 as compared to the rebound in sales in 2012 and 2013 that followed a 49-year low in 2011, robust economic growth in the second half of 2014 along with federal regulatory efforts to expand mortgage loan availability, particularly among first-time homebuyers, relatively low mortgage loan interest rates and inventories of new and existing homes available for sale, and continued favorable underlying trends in fundamental housing factors, including growing population and employment levels, demographic shifts and greater household formations, provide significant evidence that the overall housing market will remain healthy and continue to progress in 2015 and beyond even if the Federal Reserve takes steps to increase interest rates. However, individual housing markets may vary, based on their current supply and demand dynamics and fundamental trends in population, demographic and household formation growth, and there will be fluctuations, at times significant, in the performance of the overall housing market and our served markets, and in our results between periods over time.

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•	internally generated cash flows;

•	public issuances of our common stock;

•	public issuances of debt securities;

•	land option contracts and other similar contracts and seller notes; and

•	letters of credit and surety bonds.

•	land acquisition and land development;

•	home construction;

•	operating expenses;

•	principal and interest payments on notes payable; and

•	cash collateral.

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Consolidated Tangible Net Worth. We must maintain a minimum consolidated tangible net worth equal to the sum of (a) $282.6 million; (b) 50% of cumulative positive consolidated net income after November 30, 2012, excluding consolidated net income realized from a reversal of our deferred tax asset valuation allowance after November 30, 2012; (c) 75% of any consolidated net income realized as a result of a reversal of our deferred tax asset valuation allowance after November 30, 2012; and (d) 50% of the cumulative net proceeds received from our issuance of capital stock after November 30, 2012. As of November 30, 2014, our applicable minimum consolidated tangible net worth requirement was $1.10 billion.

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Leverage Ratio. We must maintain a Leverage Ratio of .850 or less, which adjusts to .825 or less for the first and second quarters of 2015; and to .800 or less for the third quarter of 2015 and each quarter thereafter during the term of the Credit Facility. As defined under the Credit Facility, the Leverage Ratio is calculated as the ratio of our consolidated total indebtedness to the sum of consolidated total indebtedness and consolidated tangible net worth. As of November 30, 2014, our Leverage Ratio was .618.

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Interest Coverage Ratio or Liquidity. We must maintain either (a) a minimum Interest Coverage Ratio of 1.40 for the fourth quarter of 2014 and each quarter thereafter during the term of the Credit Facility, pursuant to an amendment to the Credit Facility we entered into on November 19, 2014; or (b) a minimum level of liquidity, but not both. As defined under the Credit Facility, the Interest Coverage Ratio is the ratio of our consolidated adjusted EBITDA to consolidated interest incurred, in each case for the previous 12 months. Our minimum liquidity level is required to be the greater of (a) $50.0 million or (b) the sum of (i) consolidated interest incurred for the four most recently ended quarters and (ii) the aggregate principal amount of indebtedness coming due in the next 12 months, provided that the highest minimum liquidity applicable under (b) is $200.0 million. As of November 30, 2014, our minimum liquidity requirement was $200.0 million.

(a)	Under the terms of the Credit Facility, we are required to meet either the Interest Coverage Ratio or a minimum level of liquidity, but not both. As of November 30, 2014, we met both the Interest Coverage Ratio and the minimum liquidity requirements.

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(a)

Represents liabilities for fixed or determinable amounts associated with tax increment financing activities (“TIFE”) assessments and liabilities related to inventory not owned. As homes are delivered, the obligation to pay the remaining TIFE assessments associated with each underlying lot is transferred to the homebuyer. As such, these assessment obligations will be paid by us only to the extent we do not deliver homes on applicable lots before the related TIFE obligations mature.

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(b)	Total contractual obligations exclude our accrual for uncertain tax positions recorded for financial reporting purposes as of November 30, 2014 because we are unable to make a reasonable estimate of cash settlements with the respective taxing authorities for all periods presented. We anticipate these potential cash settlement requirements for 2015 to range from zero to $.1 million.

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(a)	As impairment indicators are assessed on a quarterly basis, some of the communities or land parcels evaluated during the years ended November 30, 2014, 2013 and 2012 were evaluated in more than one quarterly period. Communities or land parcels evaluated for recoverability in more than one quarterly period, if any, are counted only once for each period shown.

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•	general economic, employment and business conditions;

•	population growth, household formations and demographic trends;

•	adverse market conditions, including an increased supply of unsold homes, declining home prices and greater foreclosure and short sale activity, among other things, that could negatively affect our consolidated financial statements, including due to additional impairment or land option contract abandonment charges, lower revenues and operating and other losses;

•	conditions in the capital, credit and financial markets (including mortgage lending standards, the availability of mortgage financing and mortgage foreclosure rates);

•	material prices and availability;

•	subcontracted trade labor costs and availability;

•	changes in interest rates;

•	inflation;

•	our debt level, including our ratio of debt to capital, and our ability to adjust our debt level, maturity schedule and structure and to access the equity, credit, capital or other financial markets or other external financing sources, including raising

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•	our compliance with the terms and covenants of the Credit Facility;

•	weak or declining consumer confidence, either generally or specifically with respect to purchasing homes;

•	competition for home sales from other sellers of new and resale homes, including lenders and other sellers of homes obtained through foreclosures or short sales;

•	weather conditions, significant natural disasters and other environmental factors;

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government actions, policies, programs and regulations directed at or affecting the housing market (including the Dodd-Frank Act, tax credits, tax incentives and/or subsidies for home purchases, tax deductions for mortgage interest payments and property taxes, tax exemptions for profits on home sales, programs intended to modify existing mortgage loans and to prevent mortgage foreclosures 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;

•	decisions regarding federal fiscal and monetary policies, including those relating to taxation, government spending, interest rates and economic stimulus measures;

•	the availability and cost of land in desirable areas;

•	our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred, including our warranty claims and costs experience at certain of our communities in Florida;

•	legal or regulatory proceedings or claims;

•	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 with respect to product, geographic and market positioning (including our efforts to expand our inventory base/pipeline with desirable land positions or interests at reasonable cost and to expand our community count, open additional new home communities for sales, sell higher-priced homes and more design options, increase the size and value of our backlog, and our operational and investment concentration in markets in California), revenue growth, asset optimization (including by effectively balancing home sales prices and sales pace in our new home communities), asset activation and/or monetization, local field management and talent investment, containing and leveraging overhead costs, gaining share in our served markets and increasing our gross profit margins;

•	consumer traffic to our new home communities and consumer interest in our product designs and offerings, particularly higher-income consumers;

•	cancellations and our ability to realize our backlog by converting net orders to home deliveries;

•	our home sales and delivery performance, particularly in key markets in California;

•	our ability to generate cash from our operations, enhance our asset efficiency, increase our operating income margin and/or improve our return on invested capital;

•	the manner in which our homebuyers are offered and whether they are able to obtain mortgage loans and mortgage banking services, including from HCM;

•	the performance of HCM;

•	information technology failures and data security breaches; and

•	other events outside of our control.

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Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Note 1.	Summary of Significant Accounting Policies

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Note 2.	Segment Information

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Note 3.	Financial Services

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Note 4.	Earnings (Loss) Per Share

Note 5.	Receivables

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Note 6.	Inventories

(a)	Amounts for the years ended November 30, 2013 and 2012 included losses on the early extinguishment of debt of $10.4 million and $10.3 million, respectively, associated with the purchase and retirement of certain senior notes ahead of their maturity.

(b)	Capitalized interest amounts presented in the table reflect the gross amount of capitalized interest, as inventory impairment charges recognized are not generally allocated to specific components of inventory.

Note 7.	Inventory Impairments and Land Option Contract Abandonments

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(a)	The ranges of inputs used in each period primarily reflect differences between the housing markets where each of the impacted communities or land parcels are located, rather than fluctuations in prevailing market conditions.

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Note 8.	Variable Interest Entities

Note 9.	Investments in Unconsolidated Joint Ventures

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Note 10.	Other Assets

Note 11.	Accrued Expenses and Other Liabilities

(a)	The inventory-related obligations at November 30, 2014 included a $33.2 million liability we recorded for fixed or determinable amounts associated with TIFE assessments in connection with the distribution of land we received from Inspirada during 2014. As homes are delivered, the obligation to pay the remaining TIFE assessments associated with each underlying lot is

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Note 12.	Income Taxes

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Note 13.	Notes Payable

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(a)

At our option, these notes may be redeemed, in whole at any time or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, discounted to the redemption date at a defined rate, plus, in each case, accrued and unpaid interest on the notes being redeemed to the applicable redemption date.

(b)

At our option, these notes may be redeemed, in whole at any time or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, discounted to the redemption date at a defined rate, plus, in each case, accrued and unpaid interest on the notes being redeemed to, but excluding, the applicable redemption date, except that three months prior to these notes’ respective stated maturity dates and until their respective maturity, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus, in each case, accrued and unpaid interest on the notes being redeemed to, but excluding, the applicable redemption date.

(c)	We may not redeem the notes prior to November 6, 2018. On or after November 6, 2018, and prior to the stated maturity date, we may, at our option, redeem all or part of the notes at a redemption price equal to 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest to, but excluding the redemption date.

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Note 14.	Fair Value Disclosures

Level 1	Fair value determined based on quoted prices in active markets for identical assets or liabilities.

Level 2

Fair value determined using significant observable inputs, such as quoted prices for similar assets or liabilities or quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data, by correlation or other means.

Level 3	Fair value determined using significant unobservable inputs, such as pricing models, discounted cash flows, or similar techniques.

(a)	Amounts represent the aggregate fair value for real estate assets impacted by inventory impairment charges during the period, as of the date that the fair value measurements were made. The carrying value for these real estate assets may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.

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Note 15.	Commitments and Contingencies

(a)	The year-over-year increase in the expense associated with warranties issued in 2014 and 2013 reflected higher housing revenues in each of those years. Additionally, in 2013, we increased the warranty accrual rate per home based on our historical claims experience.

(b)

Adjustments in 2014 were primarily comprised of reclassifications of estimated minimum probable recoveries to receivables and a reclassification to establish a separate accrual for a water intrusion-related inquiry from the Office of the Attorney General of the State of Florida (the “Attorney General’s Office”). These items had no impact on our consolidated statements of operations. Adjustments in 2013 were comprised of charges associated with water intrusion-related issues in central and southwest Florida. In 2012, favorable warranty adjustments were partly offset by similar water intrusion-related charges.

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(a)	These expenses are included in selling, general and administrative expenses and are largely offset by contributions from subcontractors participating in the wrap-up policy.

(b)	Recoveries are reflected in the period we receive funds from subcontractors and/or their insurers.

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Note 16.	Legal Matters

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Note 17.	Stockholders’ Equity

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Note 18.	Accumulated Other Comprehensive Loss

(a)	The accumulated other comprehensive loss components are included in the computation of net periodic benefit costs as further discussed in Note 20. Postretirement Benefits.

Note 19.	Employee Benefit and Stock Plans

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Note 20.	Postretirement Benefits

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Note 21.	Supplemental Disclosure to Consolidated Statements of Cash Flows

Note 22.	Supplemental Guarantor Information

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Note 23.	Quarterly Results (unaudited)

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Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Item 9A.	CONTROLS AND PROCEDURES

(a)	Management’s Annual Report on Internal Control Over Financial Reporting

(b)	Report of Independent Registered Public Accounting Firm

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(c)	Changes in Internal Control Over Financial Reporting

Item 9B.	OTHER INFORMATION

Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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Item 11.	EXECUTIVE COMPENSATION

Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

(1)

Represents a prior non-employee directors compensation plan under which our non-employee directors received grants of stock units and Director Plan SARs, which were initially granted as cash-settled instruments. As discussed in Note 17. Stockholders’ Equity in the Notes to Consolidated Financial Statements in this report, all non-employee directors serving on our board of directors as of the date of this report have elected to receive shares of our common stock in settlement of their outstanding units and Director Plan SARs under the terms of the plan. In August 2013, pursuant to a board of directors authorization, we repurchased through open market transactions shares of our common stock solely as necessary for such non-employee director elections in respect of outstanding stock units. In August 2014, our board of directors authorized the repurchase of shares of our common stock, and also authorized potential future grants of stock payment awards under the 2014 Plan, in each case solely as necessary for such non-employee director elections in respect of outstanding Director Plan SARs; however, as of the date of this report, no shares of our common stock have been repurchased and no stock payment awards have been made pursuant to these authorizations. We consider this non-employee director compensation plan as having no available capacity to issue shares of our common stock.

Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES

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Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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