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 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 qualified as Guarantor Subsidiaries as of November 30, 2018.

Condensed Consolidating Statements of Operations (in thousands)



	Year Ended November 30, 2018
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	4,198,969		$	348,033		$	—		$	4,547,002
Homebuilding:
Revenues	$	—		$	4,198,969		$	334,826		$	—		$	4,533,795
Construction and land costs	—			(3,435,058		)	(308,862		)	—			(3,743,920		)
Selling, general and administrative expenses	(101,152		)	(311,815		)	(31,187		)	—			(444,154		)
Operating income (loss)	(101,152		)	452,096			(5,223		)	—			345,721
Interest income	3,273			11			230			—			3,514
Interest expense	(141,812		)	(2,624		)	(5,262		)	149,698			—
Intercompany interest	302,253			(142,882		)	(9,673		)	(149,698		)	—
Equity in income of unconsolidated joint ventures	—			2,066			—			—			2,066
Homebuilding pretax income (loss)	62,562			308,667			(19,928		)	—			351,301
Financial services pretax income	—			—			16,664			—			16,664
Total pretax income (loss)	62,562			308,667			(3,264		)	—			367,965
Income tax expense	(62,100		)	(101,200		)	(34,300		)	—			(197,600		)
Equity in net income of subsidiaries	169,903			—			—			(169,903		)	—
Net income (loss)	$	170,365		$	207,467		$	(37,564	)	$	(169,903	)	$	170,365



	Year Ended November 30, 2017
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	4,034,057		$	334,472		$	—		$	4,368,529
Homebuilding:
Revenues	$	—		$	4,034,057		$	322,208		$	—		$	4,356,265
Construction and land costs	—			(3,342,617		)	(303,851		)	—			(3,646,468		)
Selling, general and administrative expenses	(91,120		)	(298,498		)	(36,776		)	—			(426,394		)
Operating income (loss)	(91,120		)	392,942			(18,419		)	—			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			(118,138		)	22,218			(170,864		)	—
Equity in loss of unconsolidated joint ventures	—			(1,407		)	(2		)	—			(1,409		)
Homebuilding pretax income	4,794			271,770			363			—			276,927
Financial services pretax income	—			—			13,068			—			13,068
Total pretax income	4,794			271,770			13,431			—			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		$	171,770		$	12,831		$	(184,601	)	$	180,595



	Year Ended November 30, 2016
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Revenues	$	—		$	3,243,928		$	350,718		$	—		$	3,594,646
Homebuilding:
Revenues	$	—		$	3,243,928		$	339,015		$	—		$	3,582,943
Construction and land costs	—			(2,706,402		)	(334,699		)	—			(3,041,101		)
Selling, general and administrative expenses	(91,859		)	(254,210		)	(43,372		)	—			(389,441		)
Operating income (loss)	(91,859		)	283,316			(39,056		)	—			152,401
Interest income	470			55			4			—			529
Interest expense	(177,329		)	(3,958		)	(3,946		)	179,333			(5,900		)
Intercompany interest	301,432			(105,865		)	(16,234		)	(179,333		)	—
Equity in loss of unconsolidated joint ventures	—			(2,181		)	—			—			(2,181		)
Homebuilding pretax income (loss)	32,714			171,367			(59,232		)	—			144,849
Financial services pretax income	—			—			4,466			—			4,466
Total pretax income (loss)	32,714			171,367			(54,766		)	—			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		$	118,667		$	(62,966	)	$	(55,701	)	$	105,615

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



	Year Ended November 30, 2018
	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net income (loss)	$	170,365		$	207,467	$	(37,564	)	$	(169,903	)	$	170,365
Other comprehensive income:
Postretirement benefit plan adjustments	10,108			—		—			—			10,108
Other comprehensive income before tax	10,108			—		—			—			10,108
Income tax expense related to items of other comprehensive income	(2,749		)	—		—			—			(2,749		)
Other comprehensive income, net of tax	7,359			—		—			—			7,359
Comprehensive income (loss)	$	177,724		$	207,467	$	(37,564	)	$	(169,903	)	$	177,724

	Year Ended November 30, 2017
	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net income	$	180,595		$	171,770	$	12,831		$	(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		$	171,770	$	12,831		$	(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		$	118,667	$	(62,966	)	$	(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		$	118,667	$	(62,966	)	$	(55,701	)	$	106,877

Condensed Consolidating Balance Sheets (in thousands)



	November 30, 2018
	KB Home Corporate		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	429,977	$	114,269	$	30,113	$	—		$	574,359
Receivables	5,135		198,465		89,230		—			292,830
Inventories	—		3,314,386		268,453		—			3,582,839
Investments in unconsolidated joint ventures	—		61,960		—		—			61,960
Deferred tax assets, net	84,564		303,669		53,587		—			441,820
Other assets	95,738		9,530		2,115		—			107,383
	615,414		4,002,279		443,498		—			5,061,191
Financial services	—		—		12,380		—			12,380
Intercompany receivables	3,569,422		—		158,760		(3,728,182		)	—
Investments in subsidiaries	67,657		—		—		(67,657		)	—
Total assets	$	4,252,493	$	4,002,279	$	614,638	$	(3,795,839	)	$	5,073,571
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	126,176	$	584,321	$	213,816	$	—		$	924,313
Notes payable	1,995,115		40,038		25,110		—			2,060,263
	2,121,291		624,359		238,926		—			2,984,576
Financial services	—		—		1,495		—			1,495
Intercompany payables	43,702		3,377,920		306,560		(3,728,182		)	—
Stockholders’ equity	2,087,500		—		67,657		(67,657		)	2,087,500
Total liabilities and stockholders’ equity	$	4,252,493	$	4,002,279	$	614,638	$	(3,795,839	)	$	5,073,571



	November 30, 2017
	KB Home Corporate		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	575,193	$	104,120	$	41,317	$	—		$	720,630
Receivables	24,815		145,067		74,331		—			244,213
Inventories	—		2,959,606		303,780		—			3,263,386
Investments in unconsolidated joint ventures	—		64,794		—		—			64,794
Deferred tax assets, net	250,747		243,523		139,367		—			633,637
Other assets	91,592		8,954		1,952		—			102,498
	942,347		3,526,064		560,747		—			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	$	3,526,064	$	681,096	$	(3,572,005	)	$	5,041,515
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	163,984	$	374,051	$	251,358	$	—		$	789,393
Notes payable	2,289,532		9,283		26,030		—			2,324,845
	2,453,516		383,334		277,388		—			3,114,238
Financial services	—		—		966		—			966
Intercompany payables	26,533		3,142,730		352,966		(3,522,229		)	—
Stockholders’ equity	1,926,311		—		49,776		(49,776		)	1,926,311
Total liabilities and stockholders’ equity	$	4,406,360	$	3,526,064	$	681,096	$	(3,572,005	)	$	5,041,515

Condensed Consolidating Statements of Cash Flows (in thousands)



	Year Ended November 30, 2018
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net cash provided by (used in) operating activities	$	236,892		$	9,668		$	(25,048	)	$	—		$	221,512
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(22,672		)	1			—			(22,671		)
Return of investments in unconsolidated joint ventures	—			9,934			—			—			9,934
Purchases of property and equipment, net	(6,584		)	(674		)	(112		)	—			(7,370		)
Intercompany	(43,128		)	—			—			43,128			—
Net cash used in investing activities	(49,712		)	(13,412		)	(111		)	43,128			(20,107		)
Cash flows from financing activities:
Repayment of senior notes	(300,000		)	—			—			—			(300,000		)
Borrowings under revolving credit facility	70,000			—			—			—			70,000
Repayments under revolving credit facility	(70,000		)	—			—			—			(70,000		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(13,831		)	(920		)	—			(14,751		)
Issuance of common stock under employee stock plans	20,011			—			—			—			20,011
Stock repurchases	(35,039		)	—			—			—			(35,039		)
Tax payments associated with stock-based compensation awards	(8,476		)	—			—			—			(8,476		)
Payments of cash dividends	(8,892		)	—			—			—			(8,892		)
Intercompany	—			27,724			15,404			(43,128		)	—
Net cash provided by (used in) financing activities	(332,396		)	13,893			14,484			(43,128		)	(347,147		)
Net increase (decrease) in cash and cash equivalents	(145,216		)	10,149			(10,675		)	—			(145,742		)
Cash and cash equivalents at beginning of year	575,193			104,120			41,548			—			720,861
Cash and cash equivalents at end of year	$	429,977		$	114,269		$	30,873		$	—		$	575,119



	Year Ended November 30, 2017
	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Net cash provided by operating activities	$	70,683		$	366,005		$	76,531		$	—		$	513,219
Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(13,569		)	(5,125		)	—			(18,694		)
Return of investments in unconsolidated joint ventures	—			4,119			6,916			—			11,035
Purchases of property and equipment, net	(7,215		)	(809		)	(61		)	—			(8,085		)
Intercompany	311,857			—			—			(311,857		)	—
Net cash provided by (used in) investing activities	304,642			(10,259		)	1,730			(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
Tax payments associated with stock-based compensation awards	(6,673		)	—			—			—			(6,673		)
Payments of cash dividends	(8,642		)	—			—			—			(8,642		)
Intercompany	—			(251,147		)	(60,710		)	311,857			—
Net cash used in financing activities	(263,232		)	(357,529		)	(60,710		)	311,857			(369,614		)
Net increase (decrease) in cash and cash equivalents	112,093			(1,783		)	17,551			—			127,861
Cash and cash equivalents at beginning of year	463,100			105,903			23,997			—			593,000
Cash and cash equivalents at end of year	$	575,193		$	104,120		$	41,548		$	—		$	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	)	$	183,466		$	45,466		$	—		$	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		)	(579		)	(153		)	—			(4,784		)
Intercompany	144,651			—			—			(144,651		)	—
Net cash provided by (used in) investing activities	140,599			(1,124		)	(903		)	(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
Stock repurchases	(85,938		)	—			—			—			(85,938		)
Tax payments associated with stock-based compensation awards	(2,421		)	—			—			—			(2,421		)
Payments of cash dividends	(8,586		)	—			—			—			(8,586		)
Intercompany	—			(108,039		)	(36,612		)	144,651			—
Net cash used in financing activities	(82,072		)	(175,884		)	(36,612		)	144,651			(149,917		)
Net increase in cash and cash equivalents	18,250			6,458			7,951			—			32,659
Cash and cash equivalents at beginning of year	444,850			99,445			16,046			—			560,341
Cash and cash equivalents at end of year	$	463,100		$	105,903		$	23,997		$	—		$	593,000