Supplemental Guarantor Information (Tables)

6 Months Ended

May 31, 2013

Schedule of Financial Services Income (Loss)

Condensed Consolidated Statement of Operations

Six Months Ended May 31, 2013 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	826,912		$	102,713		$	—	$	929,625
Homebuilding:
Revenues	$	—		$	826,912		$	97,692		$	—	$	924,604
Construction and land costs	—			(702,036		)	(84,227		)	—		(786,263		)
Selling, general and administrative expenses	(34,152		)	(79,126		)	(15,918		)	—		(129,196		)
Operating income (loss)	(34,152		)	45,750			(2,453		)	—		9,145
Interest income	429			2			5			—		436
Interest expense	29,607			(56,866		)	(2,488		)	—		(29,747		)
Equity in loss of unconsolidated joint ventures	—			(999		)	(3		)	—		(1,002		)
Homebuilding pretax loss	(4,116		)	(12,113		)	(4,939		)	—		(21,168		)
Financial services pretax income	—			—			4,637			—		4,637
Total pretax loss	(4,116		)	(12,113		)	(302		)	—		(16,531		)
Income tax benefit	300			800			—			—		1,100
Equity in net loss of subsidiaries	(11,615		)	—			—			11,615		—
Net loss	$	(15,431	)	$	(11,313	)	$	(302	)	$	11,615	$	(15,431	)

Revised Condensed Consolidated Statement of Operations

Six Months Ended May 31, 2012 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	489,192		$	68,218		$	—	$	557,410
Homebuilding:
Revenues	$	—		$	489,192		$	63,308		$	—	$	552,500
Construction and land costs	—			(435,800		)	(49,073		)	—		(484,873		)
Selling, general and administrative expenses	(28,934		)	(66,468		)	(18,910		)	—		(114,312		)
Operating loss	(28,934		)	(13,076		)	(4,675		)	—		(46,685		)
Interest income	225			4			17			—		246
Interest expense	30,930			(59,194		)	(2,491		)	—		(30,755		)
Equity in loss of unconsolidated joint ventures	—			(313		)	(2		)	—		(315		)
Homebuilding pretax income (loss)	2,221			(72,579		)	(7,151		)	—		(77,509		)
Financial services pretax income	—			—			3,471			—		3,471
Total pretax income (loss)	2,221			(72,579		)	(3,680		)	—		(74,038		)
Income tax benefit (expense)	(100		)	4,100			100			—		4,100
Equity in net loss of subsidiaries	(72,059		)	—			—			72,059		—
Net loss	$	(69,938	)	$	(68,479	)	$	(3,580	)	$	72,059	$	(69,938	)

Condensed Consolidated Statement of Operations

Three Months Ended May 31, 2013 (in thousands):



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	465,388		$	59,018		$	—	$	524,406
Homebuilding:
Revenues	$	—		$	465,388		$	56,400		$	—	$	521,788
Construction and land costs	—			(394,639		)	(48,359		)	—		(442,998		)
Selling, general and administrative expenses	(19,329		)	(42,462		)	(8,308		)	—		(70,099		)
Operating income (loss)	(19,329		)	28,287			(267		)	—		8,691
Interest income	228			2			2			—		232
Interest expense	16,098			(28,823		)	(1,782		)	—		(14,507		)
Equity in loss of unconsolidated joint ventures	—			(564		)	(3		)	—		(567		)
Homebuilding pretax loss	(3,003		)	(1,098		)	(2,050		)	—		(6,151		)
Financial services pretax income	—			—			1,978			—		1,978
Total pretax loss	(3,003		)	(1,098		)	(72		)	—		(4,173		)
Income tax benefit	1,000			200			—			—		1,200
Equity in net loss of subsidiaries	(970		)	—			—			970		—
Net loss	$	(2,973	)	$	(898	)	$	(72	)	$	970	$	(2,973	)

Revised Condensed Consolidated Statement of Operations

Three Months Ended May 31, 2012 (in thousands):



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	265,273		$	37,579		$	—	$	302,852
Homebuilding:
Revenues	$	—		$	265,273		$	35,332		$	—	$	300,605
Construction and land costs	—			(224,404		)	(28,637		)	—		(253,041		)
Selling, general and administrative expenses	(14,934		)	(41,384		)	(6,782		)	—		(63,100		)
Operating loss	(14,934		)	(515		)	(87		)	—		(15,536		)
Interest income	100			3			8			—		111
Interest expense	16,810			(29,408		)	(1,871		)	—		(14,469		)
Equity in loss of unconsolidated joint ventures	—			(241		)	(2		)	—		(243		)
Homebuilding pretax income (loss)	1,976			(30,161		)	(1,952		)	—		(30,137		)
Financial services pretax income	—			—			1,501			—		1,501
Total pretax income (loss)	1,976			(30,161		)	(451		)	—		(28,636		)
Income tax benefit (expense)	(200		)	4,600			100			—		4,500
Equity in net loss of subsidiaries	(25,912		)	—			—			25,912		—
Net loss	$	(24,136	)	$	(25,561	)	$	(351	)	$	25,912	$	(24,136	)

Condensed Consolidated Balance Sheets

Condensed Consolidated Balance Sheet

May 31, 2013 (in thousands)



	KB Home Corporate		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	480,655	$	49,436	$	8,480	$	—		$	538,571
Restricted cash	42,322		—		—		—			42,322
Receivables	69		64,577		1,475		—			66,121
Inventories	—		1,849,657		179,733		—			2,029,390
Investments in unconsolidated joint ventures	—		120,300		2,500		—			122,800
Other assets	94,314		8,464		1,019		—			103,797
	617,360		2,092,434		193,207		—			2,903,001
Financial services	—		—		9,120		—			9,120
Intercompany receivables	1,853,125		—		—		(1,853,125		)	—
Investments in subsidiaries	17,545		—		—		(17,545		)	—
Total assets	$	2,488,030	$	2,092,434	$	202,327	$	(1,870,670	)	$	2,912,121
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	141,130	$	230,218	$	124,605	$	—		$	495,953
Mortgages and notes payable	1,876,084		67,191		—		—			1,943,275
	2,017,214		297,409		124,605		—			2,439,228
Financial services	—		—		2,077		—			2,077
Intercompany payables	—		1,795,025		58,100		(1,853,125		)	—
Stockholders’ equity	470,816		—		17,545		(17,545		)	470,816
Total liabilities and stockholders’ equity	$	2,488,030	$	2,092,434	$	202,327	$	(1,870,670	)	$	2,912,121

Revised Condensed Consolidated Balance Sheet

November 30, 2012 (in thousands)



	KB Home Corporate		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	457,007	$	52,933	$	14,825		$	—		$	524,765
Restricted cash	42,362		—		—			—			42,362
Receivables	121		63,600		1,100			—			64,821
Inventories	—		1,572,999		133,572			—			1,706,571
Investments in unconsolidated joint ventures	—		114,292		9,382			—			123,674
Other assets	85,901		15,638		(6,489		)	—			95,050
	585,391		1,819,462		152,390			—			2,557,243
Financial services	—		—		4,455			—			4,455
Intercompany receivables	1,559,712		—		—			(1,559,712		)	—
Investments in subsidiaries	11,411		—		—			(11,411		)	—
Total assets	$	2,156,514	$	1,819,462	$	156,845		$	(1,571,123	)	$	2,561,698
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	134,314	$	207,641	$	116,934		$	—		$	458,889
Mortgages and notes payable	1,645,394		77,421		—			—			1,722,815
	1,779,708		285,062		116,934			—			2,181,704
Financial services	—		—		3,188			—			3,188
Intercompany payables	—		1,534,400		25,312			(1,559,712		)	—
Stockholders’ equity	376,806		—		11,411			(11,411		)	376,806
Total liabilities and stockholders’ equity	$	2,156,514	$	1,819,462	$	156,845		$	(1,571,123	)	$	2,561,698

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statement of Cash Flows

Six Months Ended May 31, 2013 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net loss	$	(15,431	)	$	(11,313	)	$	(302	)	$	11,615		$	(15,431	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in (income) loss of unconsolidated joint ventures	—			999			(1,084		)	—			(85		)
Land option contract abandonments	—			284			—			—			284
Changes in assets and liabilities:
Receivables	52			(977		)	520			—			(405		)
Inventories	—			(249,342		)	(41,319		)	—			(290,661		)
Accounts payable, accrued expenses and other liabilities	6,816			22,577			2,817			—			32,210
Other, net	4,473			1,341			674			—			6,488
Net cash used in operating activities	(4,090		)	(236,431		)	(38,694		)	11,615			(267,600		)

Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(659		)	(4,992		)	—			(5,651		)
Purchases of property and equipment, net	(166		)	(517		)	(69		)	—			(752		)
Net cash used in investing activities	(166		)	(1,176		)	(5,061		)	—			(6,403		)

Cash flows from financing activities:
Change in restricted cash	40			—			—			—			40
Proceeds from issuance of debt	230,000			—			—			—			230,000
Payment of debt issuance costs	(10,086		)	—			—			—			(10,086		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(37,830		)	—			—			(37,830		)
Proceeds from issuance of common stock, net	109,503			—			—			—			109,503
Issuance of common stock under employee stock plans	2,106			—			—			—			2,106
Payments of cash dividends	(4,179		)	—			—			—			(4,179		)
Stock repurchases	(33		)	—			—			—			(33		)
Intercompany	(299,447		)	271,940			39,122			(11,615		)	—
Net cash provided by financing activities	27,904			234,110			39,122			(11,615		)	289,521
Net increase (decrease) in cash and cash equivalents	23,648			(3,497		)	(4,633		)	—			15,518
Cash and cash equivalents at beginning of period	457,007			52,933			15,748			—			525,688
Cash and cash equivalents at end of period	$	480,655		$	49,436		$	11,115		$	—		$	541,206

Revised Condensed Consolidated Statement of Cash Flows

Six Months Ended May 31, 2012 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net loss	$	(69,938	)	$	(68,479	)	$	(3,580	)	$	72,059		$	(69,938	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in (income) loss of unconsolidated joint ventures	—			313			(87		)	—			226
Inventory impairments	—			11,764			4,745			—			16,509
Changes in assets and liabilities:
Receivables	(98		)	(2,605		)	19,498			—			16,795
Inventories	—			1,287			(17,418		)	—			(16,131		)
Accounts payable, accrued expenses and other liabilities	(4,198		)	(23,587		)	(12,429		)	—			(40,214		)
Other, net	(499		)	372			2,999			—			2,872
Net cash used in operating activities	(74,733		)	(80,935		)	(6,272		)	72,059			(89,881		)

Cash flows from investing activities:
Return of investments in (contributions to) unconsolidated joint ventures	—			4,552			(2		)	—			4,550
Sales (purchases) of property and equipment, net	(53		)	(550		)	11			—			(592		)
Net cash provided by (used in) investing activities	(53		)	4,002			9			—			3,958

Cash flows from financing activities:
Change in restricted cash	1,293			6			—			—			1,299
Proceeds from issuance of debt	344,831			—			—			—			344,831
Payment of debt issuance costs	(6,751		)	—			—			—			(6,751		)
Repayment of senior notes	(340,481		)	—			—			—			(340,481		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(6,695		)	—			—			(6,695		)
Issuance of common stock under employee stock plans	353			—			—			—			353
Payments of cash dividends	(6,746		)	—			—			—			(6,746		)
Intercompany	14,642			62,739			(5,322		)	(72,059		)	—
Net cash provided by (used in) financing activities	7,141			56,050			(5,322		)	(72,059		)	(14,190		)
Net decrease in cash and cash equivalents	(67,645		)	(20,883		)	(11,585		)	—			(100,113		)
Cash and cash equivalents at beginning of period	340,957			46,375			30,742			—			418,074
Cash and cash equivalents at end of period	$	273,312		$	25,492		$	19,157		$	—		$	317,961