Supplemental Guarantor Information (Tables)

9 Months Ended

Aug. 31, 2012

Condensed Consolidated Statements of Operations

Nine Months Ended August 31, 2012 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	585,913		$	396,001		$	—	$	981,914
Homebuilding:
Revenues	$	—		$	585,913		$	388,142		$	—	$	974,055
Construction and land costs	—			(492,384		)	(332,551		)	—		(824,935		)
Selling, general and administrative expenses	(45,480		)	(75,652		)	(63,806		)	—		(184,938		)
Operating income (loss)	(45,480		)	17,877			(8,215		)	—		(35,818		)
Interest income	332			5			26			—		363
Interest expense	37,026			(69,599		)	(21,242		)	—		(53,815		)
Equity in income (loss) of unconsolidated joint ventures	—			(585		)	548			—		(37		)
Homebuilding pretax loss	(8,122		)	(52,302		)	(28,883		)	—		(89,307		)
Financial services pretax income	—			—			7,830			—		7,830
Total pretax loss	(8,122		)	(52,302		)	(21,053		)	—		(81,477		)
Income tax benefit	1,600			9,500			3,700			—		14,800
Equity in net loss of subsidiaries	(60,155		)	—			—			60,155		—
Net loss	$	(66,677	)	$	(42,802	)	$	(17,353	)	$	60,155	$	(66,677	)

Nine Months Ended August 31, 2011 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	241,702		$	594,292		$	—	$	835,994
Homebuilding:
Revenues	$	—		$	241,702		$	588,114		$	—	$	829,816
Construction and land costs	—			(206,373		)	(517,712		)	—		(724,085		)
Selling, general and administrative expenses	(39,361		)	(23,735		)	(109,214		)	—		(172,310		)
Loss on loan guaranty	—			—			(37,330		)	—		(37,330		)
Operating income (loss)	(39,361		)	11,594			(76,142		)	—		(103,909		)
Interest income	631			4			141			—		776
Interest expense	37,025			(35,582		)	(38,345		)	—		(36,902		)
Equity in loss of unconsolidated joint ventures	—			(5		)	(55,860		)	—		(55,865		)
Homebuilding pretax loss	(1,705		)	(23,989		)	(170,206		)	—		(195,900		)
Financial services pretax income	—			—			3,321			—		3,321
Total pretax loss	(1,705		)	(23,989		)	(166,885		)	—		(192,579		)
Income tax expense	—			—			(100		)	—		(100		)
Equity in net loss of subsidiaries	(190,974		)	—			—			190,974		—
Net loss	$	(192,679	)	$	(23,989	)	$	(166,985	)	$	190,974	$	(192,679	)

Condensed Consolidated Statements of Operations

Three Months Ended August 31, 2012 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	263,481		$	161,023		$	—	$	424,504
Homebuilding:
Revenues	$	—		$	263,481		$	158,074		$	—	$	421,555
Construction and land costs	—			(213,913		)	(133,995		)	—		(347,908		)
Selling, general and administrative expenses	(16,546		)	(24,226		)	(22,008		)	—		(62,780		)
Operating income (loss)	(16,546		)	25,342			2,071			—		10,867
Interest income	107			1			9			—		117
Interest expense	6,096			(22,082		)	(7,074		)	—		(23,060		)
Equity in income (loss) of unconsolidated joint ventures	—			(293		)	571			—		278
Homebuilding pretax income (loss)	(10,343		)	2,968			(4,423		)	—		(11,798		)
Financial services pretax income	—			—			4,359			—		4,359
Total pretax income (loss)	(10,343		)	2,968			(64		)	—		(7,439		)
Income tax benefit (expense)	14,900			(4,300		)	100			—		10,700
Equity in net loss of subsidiaries	(1,296		)	—			—			1,296		—
Net income (loss)	$	3,261		$	(1,332	)	$	36		$	1,296	$	3,261

Three Months Ended August 31, 2011 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Total
Revenues	$	—		$	109,808		$	257,508		$	—	$	367,316
Homebuilding:
Revenues	$	—		$	109,808		$	254,724		$	—	$	364,532
Construction and land costs	—			(92,245		)	(210,663		)	—		(302,908		)
Selling, general and administrative expenses	(5,522		)	(13,800		)	(40,863		)	—		(60,185		)
Operating income (loss)	(5,522		)	3,763			3,198			—		1,439
Interest income	97			—			26			—		123
Interest expense	13,246			(14,190		)	(11,398		)	—		(12,342		)
Equity in income (loss) of unconsolidated joint ventures	—			67			(3		)	—		64
Homebuilding pretax income (loss)	7,821			(10,360		)	(8,177		)	—		(10,716		)
Financial services pretax income	—			—			1,067			—		1,067
Total pretax income (loss)	7,821			(10,360		)	(7,110		)	—		(9,649		)
Income tax expense	—			—			—			—		—
Equity in net loss of subsidiaries	(17,470		)	—			—			17,470		—
Net loss	$	(9,649	)	$	(10,360	)	$	(7,110	)	$	17,470	$	(9,649	)

Condensed Consolidated Balance Sheets

August 31, 2012 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	360,827		$	32,562	$	27,003	$	—		$	420,392
Restricted cash	46,113			—		—		—			46,113
Receivables	27,461			25,458		41,913		—			94,832
Inventories	—			1,257,133		511,910		—			1,769,043
Investments in unconsolidated joint ventures	—			108,199		13,956		—			122,155
Other assets	82,143			1,226		7,780		—			91,149
	516,544			1,424,578		602,562		—			2,543,684
Financial services	—			—		5,780		—			5,780
Investments in subsidiaries	11,571			—		—		(11,571		)	—
Total assets	$	528,115		$	1,424,578	$	608,342	$	(11,571	)	$	2,549,464
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	123,134		$	153,640	$	169,301	$	—		$	446,075
Mortgages and notes payable	1,645,059			78,735		3,885		—			1,727,679
	1,768,193			232,375		173,186		—			2,173,754
Financial services	—			—		3,269		—			3,269
Intercompany	(1,612,519		)	1,189,234		423,285		—			—
Stockholders’ equity	372,441			2,969		8,602		(11,571		)	372,441
Total liabilities and stockholders’ equity	$	528,115		$	1,424,578	$	608,342	$	(11,571	)	$	2,549,464

November 30, 2011 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Total
Assets
Homebuilding:
Cash and cash equivalents	$	340,957		$	32,876	$	41,217	$	—		$	415,050
Restricted cash	64,475			6		—		—			64,481
Receivables	801			29,250		36,128		—			66,179
Inventories	—			1,256,468		475,161		—			1,731,629
Investments in unconsolidated joint ventures	—			113,921		14,005		—			127,926
Other assets	67,059			730		7,315		—			75,104
	473,292			1,433,251		573,826		—			2,480,369
Financial services	—			—		32,173		—			32,173
Investments in subsidiaries	34,235			—		—		(34,235		)	—
Total assets	$	507,527		$	1,433,251	$	605,999	$	(34,235	)	$	2,512,542
Liabilities and stockholders’ equity
Homebuilding:
Accounts payable, accrued expenses and other liabilities	$	121,572		$	181,835	$	175,413	$	—		$	478,820
Mortgages and notes payable	1,533,477			45,925		4,169		—			1,583,571
	1,655,049			227,760		179,582		—			2,062,391
Financial services	—			—		7,494		—			7,494
Intercompany	(1,590,179		)	1,205,491		384,688		—			—
Stockholders’ equity	442,657			—		34,235		(34,235		)	442,657
Total liabilities and stockholders’ equity	$	507,527		$	1,433,251	$	605,999	$	(34,235	)	$	2,512,542

Condensed Consolidated Statements of Cash Flows

Nine Months Ended August 31, 2012 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net loss	$	(66,677	)	$	(42,802	)	$	(17,353	)	$	60,155		$	(66,677	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in (income) loss of unconsolidated joint ventures	—			585			(2,756		)	—			(2,171		)
Inventory impairments and land option contract abandonments	—			19,510			3,402			—			22,912
Changes in assets and liabilities:
Receivables	(26,660		)	3,792			18,366			—			(4,502		)
Inventories	—			29,590			(40,152		)	—			(10,562		)
Accounts payable, accrued expenses and other liabilities	(347		)	(22,682		)	(8,237		)	—			(31,266		)
Other, net	9,796			441			6,229			—			16,466
Net cash used in operating activities	(83,888		)	(11,566		)	(40,501		)	60,155			(75,800		)

Cash flows from investing activities:
Return of investment in (contributions to) unconsolidated joint ventures	—			3,201			(336		)	—			2,865
Purchases of property and equipment, net	(65		)	(652		)	(335		)	—			(1,052		)
Net cash provided by (used in) investing activities	(65		)	2,549			(671		)	—			1,813

Cash flows from financing activities:
Change in restricted cash	18,368			—			—			—			18,368
Proceeds from issuance of senior notes	694,831			—			—			—			694,831
Payment of senior notes issuance costs	(12,195		)	—			—			—			(12,195		)
Repayment of senior notes	(592,645		)	—			—			—			(592,645		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(20,815		)	(284		)	—			(21,099		)
Issuance of common stock under employee stock plans	451			—			—			—			451
Payments of cash dividends	(8,674		)	—			—			—			(8,674		)
Intercompany	3,687			29,518			26,950			(60,155		)	—
Net cash provided by financing activities	103,823			8,703			26,666			(60,155		)	79,037
Net increase (decrease) in cash and cash equivalents	19,870			(314		)	(14,506		)	—			5,050
Cash and cash equivalents at beginning of period	340,957			32,876			44,241			—			418,074
Cash and cash equivalents at end of period	$	360,827		$	32,562		$	29,735		$	—		$	423,124

Nine Months Ended August 31, 2011 (in thousands)



	KB Home Corporate			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Total
Cash flows from operating activities:
Net loss	$	(192,679	)	$	(23,989	)	$	(166,985	)	$	190,974		$	(192,679	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in loss of unconsolidated joint ventures	—			5			56,236			—			56,241
Loss on loan guaranty	—			—			37,330			—			37,330
Gain on sale of operating property	—			(8,825		)	—			—			(8,825		)
Inventory impairments and land option contract abandonments	—			991			22,516			—			23,507
Changes in assets and liabilities:
Receivables	77,094			(4,247		)	(83,787		)	—			(10,940		)
Inventories	—			(49,142		)	(128,628		)	—			(177,770		)
Accounts payable, accrued expenses and other liabilities	(3,127		)	(19,985		)	(23,841		)	—			(46,953		)
Other, net	6,566			(2,989		)	6,573			—			10,150
Net cash used in operating activities	(112,146		)	(108,181		)	(280,586		)	190,974			(309,939		)

Cash flows from investing activities:
Contributions to unconsolidated joint ventures	—			(1,334		)	(640		)	—			(1,974		)
Proceeds from sale of operating property	—			80,600			—			—			80,600
Sales (purchases) of property and equipment, net	(178		)	(81		)	185			—			(74		)
Net cash provided by (used in) investing activities	(178		)	79,185			(455		)	—			78,552

Cash flows from financing activities:
Change in restricted cash	23,692			—			(21,401		)	—			2,291
Repayments on senior notes	(100,000		)	—			—			—			(100,000		)
Payments on mortgages and land contracts due to land sellers and other loans	—			(84,638		)	(1,426		)	—			(86,064		)
Issuance of common stock under employee stock plans	1,426			—			—			—			1,426
Payments of cash dividends	(14,423		)	—			—			—			(14,423		)
Intercompany	(146,568		)	123,481			214,061			(190,974		)	—
Net cash provided by (used in) financing activities	(235,873		)	38,843			191,234			(190,974		)	(196,770		)
Net increase (decrease) in cash and cash equivalents	(348,197		)	9,847			(89,807		)	—			(428,157		)
Cash and cash equivalents at beginning of period	770,603			3,619			134,208			—			908,430
Cash and cash equivalents at end of period	$	422,406		$	13,466		$	44,401		$	—		$	480,273