Supplemental Guarantor Information

Our obligations to pay principal, premium, if any, and interest on the senior notes and borrowings, if any, under the Credit Facility are guaranteed on a joint and several basis by certain of our subsidiaries (“Guarantor Subsidiaries”). The guarantees are full and unconditional and the Guarantor Subsidiaries are 100% owned by us. Pursuant to the terms of the indenture governing the senior notes and the terms of the Credit Facility, if any of the Guarantor Subsidiaries ceases to be a “significant subsidiary” as defined by Rule 1-02 of Regulation S-X (as in effect on June 1, 1996) using a 5% rather than a 10% threshold (provided that the assets of our non-guarantor subsidiaries do not in the aggregate exceed 10% of an adjusted measure of our consolidated total assets), it will be automatically and unconditionally released and discharged from its guaranty of the senior notes and the Credit Facility so long as all guarantees by such Guarantor Subsidiary of any other of our or our subsidiaries’ indebtedness are terminated at or prior to the time of such release. We have determined that separate, full financial statements of the Guarantor Subsidiaries would not be material to investors and, accordingly, supplemental financial information for the Guarantor Subsidiaries is presented.

The supplemental financial information for all periods presented below reflects those subsidiaries that were Guarantor Subsidiaries as of November 30, 2017.

Condensed Consolidating Statements of Operations (in thousands)



	Year Ended November 30, 2017
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	3,957,267		$	411,262		$	—		$	4,368,529
Homebuilding:
Revenues	$	—		$	3,957,267		$	398,998		$	—		$	4,356,265
Construction and land costs	—			(3,286,891		)	(359,577		)	—			(3,646,468		)
Selling, general and administrative expenses	(91,120		)	(293,233		)	(42,041		)	—			(426,394		)
Operating income (loss)	(91,120		)	377,143			(2,620		)	—			283,403
Interest income	1,232			8			—			—			1,240
Interest expense	(172,102		)	(1,635		)	(3,434		)	170,864			(6,307		)
Intercompany interest	266,784			(117,926		)	22,006			(170,864		)	—
Equity in loss of unconsolidated joint ventures	—			(1,407		)	(2		)	—			(1,409		)
Homebuilding pretax income	4,794			256,183			15,950			—			276,927
Financial services pretax income	—			—			13,068			—			13,068
Total pretax income	4,794			256,183			29,018			—			289,995
Income tax expense	(8,800		)	(100,000		)	(600		)	—			(109,400		)
Equity in net income of subsidiaries	184,601			—			—			(184,601		)	—
Net income	$	180,595		$	156,183		$	28,418		$	(184,601	)	$	180,595



	Year Ended November 30, 2016
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	3,169,545		$	425,101		$	—		$	3,594,646
Homebuilding:
Revenues	$	—		$	3,169,545		$	413,398		$	—		$	3,582,943
Construction and land costs	—			(2,661,888		)	(379,213		)	—			(3,041,101		)
Selling, general and administrative expenses	(91,859		)	(251,384		)	(46,198		)	—			(389,441		)
Operating income (loss)	(91,859		)	256,273			(12,013		)	—			152,401
Interest income	470			55			4			—			529
Interest expense	(177,329		)	(3,958		)	(3,946		)	179,333			(5,900		)
Intercompany interest	301,432			(107,388		)	(14,711		)	(179,333		)	—
Equity in loss of unconsolidated joint ventures	—			(2,179		)	(2		)	—			(2,181		)
Homebuilding pretax income (loss)	32,714			142,803			(30,668		)	—			144,849
Financial services pretax income	—			—			4,466			—			4,466
Total pretax income (loss)	32,714			142,803			(26,202		)	—			149,315
Income tax benefit (expense)	17,200			(52,700		)	(8,200		)	—			(43,700		)
Equity in net income of subsidiaries	55,701			—			—			(55,701		)	—
Net income (loss)	$	105,615		$	90,103		$	(34,402	)	$	(55,701	)	$	105,615



	Year Ended November 30, 2015
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	2,640,678		$	391,352		$	—		$	3,032,030
Homebuilding:
Revenues	$	—		$	2,640,678		$	380,309		$	—		$	3,020,987
Construction and land costs	—			(2,196,228		)	(343,140		)	—			(2,539,368		)
Selling, general and administrative expenses	(86,053		)	(213,292		)	(43,653		)	—			(342,998		)
Operating income (loss)	(86,053		)	231,158			(6,484		)	—			138,621
Interest income	451			6			1			—			458
Interest expense	(180,701		)	(6,184		)	—			165,029			(21,856		)
Intercompany interest	289,727			(101,540		)	(23,158		)	(165,029		)	—
Equity in loss of unconsolidated joint ventures	—			(1,803		)	(1		)	—			(1,804		)
Homebuilding pretax income (loss)	23,424			121,637			(29,642		)	—			115,419
Financial services pretax income	—			—			11,624			—			11,624
Total pretax income (loss)	23,424			121,637			(18,018		)	—			127,043
Income tax benefit (expense)	2,000			(46,700		)	2,300			—			(42,400		)
Equity in net income of subsidiaries	59,219			—			—			(59,219		)	—
Net income (loss)	$	84,643		$	74,937		$	(15,718	)	$	(59,219	)	$	84,643

Condensed Consolidating Statements of Comprehensive Income (Loss) (in thousands)



	Year Ended November 30, 2017
	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net income	$	180,595		$	156,183	$	28,418		$	(184,601	)	$	180,595
Other comprehensive loss:
Postretirement benefit plan adjustments	(1,445		)	—		—			—			(1,445		)
Other comprehensive loss before tax	(1,445		)	—		—			—			(1,445		)
Income tax benefit related to items of other comprehensive loss	578			—		—			—			578
Other comprehensive loss, net of tax	(867		)	—		—			—			(867		)
Comprehensive income	$	179,728		$	156,183	$	28,418		$	(184,601	)	$	179,728

	Year Ended November 30, 2016
	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net income (loss)	$	105,615		$	90,103	$	(34,402	)	$	(55,701	)	$	105,615
Other comprehensive income:
Postretirement benefit plan adjustments	2,103			—		—			—			2,103
Other comprehensive income before tax	2,103			—		—			—			2,103
Income tax expense related to items of other comprehensive income	(841		)	—		—			—			(841		)
Other comprehensive income, net of tax	1,262			—		—			—			1,262
Comprehensive income (loss)	$	106,877		$	90,103	$	(34,402	)	$	(55,701	)	$	106,877



	Year Ended November 30, 2015
	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net income (loss)	$	84,643		$	74,937	$	(15,718	)	$	(59,219	)	$	84,643
Other comprehensive income:
Postretirement benefit plan adjustments	6,149			—		—			—			6,149
Other comprehensive income before tax	6,149			—		—			—			6,149
Income tax expense related to items of other comprehensive income	(2,460		)	—		—			—			(2,460		)
Other comprehensive income, net of tax	3,689			—		—			—			3,689
Comprehensive income (loss)	$	88,332		$	74,937	$	(15,718	)	$	(59,219	)	$	88,332

Condensed Consolidating Balance Sheets (in thousands)



	November 30, 2017
	KB Home Corporate		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	575,193	$	102,661	$	42,776	$	—		$	720,630
Receivables	24,815		144,076		75,322		—			244,213
Inventories	—		2,929,466		333,920		—			3,263,386
Investments in unconsolidated joint ventures	—		62,290		2,504		—			64,794
Deferred tax assets, net	250,747		243,523		139,367		—			633,637
Other assets	91,592		8,424		2,482		—			102,498
	942,347		3,490,440		596,371		—			5,029,158
Financial services	—		—		12,357		—			12,357
Intercompany receivables	3,414,237		—		107,992		(3,522,229		)	—
Investments in subsidiaries	49,776		—		—		(49,776		)	—
Total assets	$	4,406,360	$	3,490,440	$	716,720	$	(3,572,005	)	$	5,041,515
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	163,984	$	371,909	$	253,500	$	—		$	789,393
Notes payable	2,289,532		9,283		26,030		—			2,324,845
	2,453,516		381,192		279,530		—			3,114,238
Financial services	—		—		966		—			966
Intercompany payables	26,533		3,109,248		386,448		(3,522,229		)	—
Stockholders’ equity	1,926,311		—		49,776		(49,776		)	1,926,311
Total liabilities and stockholders’ equity	$	4,406,360	$	3,490,440	$	716,720	$	(3,572,005	)	$	5,041,515



	November 30, 2016
	KB Home Corporate		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	463,100	$	100,439	$	28,547	$	—		$	592,086
Receivables	4,807		135,915		90,943		—			231,665
Inventories	—		3,048,132		355,096		—			3,403,228
Investments in unconsolidated joint ventures	—		61,517		2,499		—			64,016
Deferred tax assets, net	276,737		318,077		144,171		—			738,985
Other assets	79,526		9,177		2,442		—			91,145
	824,170		3,673,257		623,698		—			5,121,125
Financial services	—		—		10,499		—			10,499
Intercompany receivables	3,559,012		—		97,062		(3,656,074		)	—
Investments in subsidiaries	35,965		—		—		(35,965		)	—
Total assets	$	4,419,147	$	3,673,257	$	731,259	$	(3,692,039	)	$	5,131,624
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	131,530	$	397,605	$	237,192	$	—		$	766,327
Notes payable	2,548,112		66,927		25,110		—			2,640,149
	2,679,642		464,532		262,302		—			3,406,476
Financial services	—		—		2,003		—			2,003
Intercompany payables	16,360		3,208,725		430,989		(3,656,074		)	—
Stockholders’ equity	1,723,145		—		35,965		(35,965		)	1,723,145
Total liabilities and stockholders’ equity	$	4,419,147	$	3,673,257	$	731,259	$	(3,692,039	)	$	5,131,624

Condensed Consolidating Statements of Cash Flows (in thousands)



	Year Ended November 30, 2017
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net cash provided by operating activities	$	70,683		$	374,524		$	68,012		$	—		$	513,219
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(13,563		)	(5,131		)	—			(18,694		)
Return of investments in unconsolidated joint ventures	—			4,119			6,916			—			11,035
Purchases of property and equipment, net	(7,215		)	(819		)	(51		)	—			(8,085		)
Intercompany	311,857			—			—			(311,857		)	—
Net cash provided by (used in) investing activities	304,642			(10,263		)	1,734			(311,857		)	(15,744		)
Cash flows from financing activities:
Repayment of senior notes	(270,326		)	—			—			—			(270,326		)
Issuance costs for unsecured revolving credit facility	(1,711		)	—			—			—			(1,711		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(106,382		)	—			—			(106,382		)
Issuance of common stock under employee stock plans	23,162			—			—			—			23,162
Excess tax benefits from stock-based compensation	958			—			—			—			958
Payments of cash dividends	(8,642		)	—			—			—			(8,642		)
Stock repurchases	(6,673		)	—			—			—			(6,673		)
Intercompany	—			(255,657		)	(56,200		)	311,857			—
Net cash used in financing activities	(263,232		)	(362,039		)	(56,200		)	311,857			(369,614		)
Net increase in cash and cash equivalents	112,093			2,222			13,546			—			127,861
Cash and cash equivalents at beginning of year	463,100			100,439			29,461			—			593,000
Cash and cash equivalents at end of year	$	575,193		$	102,661		$	43,007		$	—		$	720,861



	Year Ended November 30, 2016
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net cash provided by (used in) operating activities	$	(40,277	)	$	188,372		$	40,560		$	—		$	188,655
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(4,852		)	(750		)	—			(5,602		)
Return of investments in unconsolidated joint ventures	—			4,307			—			—			4,307
Purchases of property and equipment, net	(4,052		)	(555		)	(177		)	—			(4,784		)
Intercompany	144,651			—			—			(144,651		)	—
Net cash provided by (used in) investing activities	140,599			(1,100		)	(927		)	(144,651		)	(6,079		)
Cash flows from financing activities:
Change in restricted cash	9,344			—			—			—			9,344
Payments on mortgages and land contracts due to land sellers and other loans	—			(67,845		)	—			—			(67,845		)
Issuance of common stock under employee stock plans	5,343			—			—			—			5,343
Excess tax benefits from stock-based compensation	186			—			—			—			186
Payments of cash dividends	(8,586		)	—			—			—			(8,586		)
Stock repurchases	(88,359		)	—			—			—			(88,359		)
Intercompany	—			(115,729		)	(28,922		)	144,651			—
Net cash used in financing activities	(82,072		)	(183,574		)	(28,922		)	144,651			(149,917		)
Net increase in cash and cash equivalents	18,250			3,698			10,711			—			32,659
Cash and cash equivalents at beginning of year	444,850			96,741			18,750			—			560,341
Cash and cash equivalents at end of year	$	463,100		$	100,439		$	29,461		$	—		$	593,000



	Year Ended November 30, 2015
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net cash provided by operating activities	$	44,422		$	110,688		$	26,075		$	—		$	181,185
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(20,625		)	(1		)	—			(20,626		)
Return of investments in unconsolidated joint ventures	—			14,000			—			—			14,000
Purchases of property and equipment, net	(2,890		)	(1,271		)	(516		)	—			(4,677		)
Intercompany	45,470			—			—			(45,470		)	—
Net cash provided by (used in) investing activities	42,580			(7,896		)	(517		)	(45,470		)	(11,303		)
Cash flows from financing activities:
Change in restricted cash	17,891			—			—			—			17,891
Proceeds from issuance of debt	250,000			—			—			—			250,000
Payment of debt issuance costs	(4,561		)	—			—			—			(4,561		)
Repayment of senior notes	(199,906		)	—			—			—			(199,906		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(22,877		)	—			—			(22,877		)
Issuance of common stock under employee stock plans	740			—			—			—			740
Excess tax benefits from stock-based compensation	157			—			—			—			157
Payments of cash dividends	(9,186		)	—			—			—			(9,186		)
Stock repurchases	(567		)	—			—			—			(567		)
Intercompany	—			(19,586		)	(25,884		)	45,470			—
Net cash provided by (used in) financing activities	54,568			(42,463		)	(25,884		)	45,470			31,691
Net increase (decrease) in cash and cash equivalents	141,570			60,329			(326		)	—			201,573
Cash and cash equivalents at beginning of year	303,280			36,412			19,076			—			358,768
Cash and cash equivalents at end of year	$	444,850		$	96,741		$	18,750		$	—		$	560,341