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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the transition period from to .

Commission File No. 001-09195

KB HOME

(Exact name of registrant as specified in its charter)


Delaware	95-3666267
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

10990 Wilshire Boulevard, Los Angeles, California 90024

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (310) 231-4000

Securities Registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value $1.00 per share)	KBH	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities

Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to

submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller

reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness

of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered

public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based

compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting common stock held by non-affiliates of the registrant on May 31, 2025 was $3,510,028,491,

excluding 6,387,293 shares held in treasury.

There were 63,173,611 shares of the registrant’s common stock, par value $1.00 per share, outstanding on December 31, 2025.

Documents Incorporated by Reference

Portions of the registrant’s definitive Proxy Statement for the 2026 Annual Meeting of Stockholders (incorporated into Part III).

KB HOME

FORM 10-K

FOR THE YEAR ENDED NOVEMBER 30, 2025

TABLE OF CONTENTS


		Page Number
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	25
Item 1C.	Cybersecurity	25
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26
Information about our Executive Officers		27

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	[Reserved]	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 8.	Financial Statements and Supplementary Data	57
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	97
Item 9A.	Controls and Procedures	97
Item 9B.	Other Information	98
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	98

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	98
Item 11.	Executive Compensation	99
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	99
Item 13.	Certain Relationships and Related Transactions, and Director Independence	100
Item 14.	Principal Accountant Fees and Services	100

PART IV
Item 15.	Exhibits and Financial Statement Schedules	100
Item 16.	Form 10-K Summary	103
Signatures		104

PART I

Item 1.BUSINESS

General

KB Home is one of the largest and most trusted homebuilders in the U.S. We have been building homes for nearly 70

years, with over 700,000 homes built since our founding in 1957. We build a variety of new homes, including attached and

detached single-family residential homes, townhomes and condominiums, designed primarily for first-time and first move-up,

as well as second move-up and active adult, homebuyers. We offer homes in development communities, at urban in-fill

locations and as part of mixed-use projects. Our homebuilding operations represent the majority of our business, accounting for

99.6% of our total revenues in 2025. Our financial services operations, which accounted for the remaining .4% of our total

revenues in 2025, offer various insurance products to our homebuyers in the markets where we build homes and provide title

services in certain of those markets. Our financial services operations also provide mortgage banking services, including

residential consumer mortgage loan (“mortgage loan”) originations, to our homebuyers indirectly through KBHS Home Loans,

LLC (“KBHS”), an unconsolidated joint venture between us and a third party.

Unless the context indicates otherwise, the terms “we,” “our” and “us” used in this report refer to KB Home, a Delaware

corporation, and its predecessors and subsidiaries. We also use the following terms in our business with the corresponding

meanings: “home” is a single-family residence, whether it is a single-family home or other type of residential property; “homes

delivered” are homes for which the sale has closed and title has passed to a customer; “community” is a single development in

which new homes are constructed as part of an integrated plan; “community count” is the number of communities we have open

for sales with at least five homes/lots left to sell; and “product” encompasses a home’s floor plan design and interior/exterior

style, amenities, functions and features.

The following charts present homebuilding revenues, net income and diluted earnings per share for the years ended

November 30, 2021, 2023 and 2025, and book value per share as of November 30, 2021, 2023 and 2025:

Markets

Reflecting the geographic scale of our homebuilding business, we have operations in the nine states and 49 major markets

presented below. We also operate in various submarkets within these major markets. We may refer to these markets and

submarkets collectively as our “served markets.” For reporting purposes, we organize our homebuilding operations into four

segments — West Coast, Southwest, Central and Southeast.


Segment	States	Major Market(s)

West Coast	California	Contra Costa County, Fresno, Hollister, Los Angeles, Madera, Modesto, Oakland, Orange County, Riverside, Roseville, Sacramento, Salinas, San Bernardino, San Diego, San Francisco, San Jose, Santa Rosa-Petaluma, Stockton, Vallejo, Ventura and Yuba City
	Idaho	Boise
	Washington	Bremerton, Olympia and Seattle
Southwest	Arizona	Phoenix and Tucson
	Nevada	Las Vegas
Central	Colorado	Denver, Erie, Firestone and Loveland
	Texas	Austin, Dallas, Fort Worth, Houston and San Antonio
Southeast	Florida	Fort Myers, Jacksonville, Lakeland, Melbourne, Orlando, Palm Coast, Sarasota and Tampa
	North Carolina	Charlotte, Durham-Chapel Hill, Fayetteville and Raleigh

In 2025, we announced our reentry into the Atlanta, Georgia market. However, as of November 30, 2025, we had not

acquired land or commenced selling homes in that market.

Business Strategy

Overview. Our core business strategy, which we refer to as KB Edge, is to expand our operations primarily within our

current geographic footprint to achieve a top-five position in each of our served markets (based on homes delivered). KB Edge

is a systematic, fact-based and process-driven approach to homebuilding that is grounded in gaining a detailed understanding of

consumers’ location and product preferences and product price-to-value perceptions.

KB Edge consists of the following key principles with respect to customers, land, products and production:

•Customers. With our Built to Order® homebuying process, we provide each of our homebuyers with a highly

personalized experience where they can make a wide range of structural and design choices for their future new home,

as discussed further below under “Customer Obsession.” We believe this highly interactive, “customer-first”

experience that puts our homebuyers firmly in control of designing the home they want based on what they value and

how they want to live, at a price they can afford, gives us a meaningful and distinct competitive advantage over other

homebuilders and resale and rental homes. In addition, we find our homebuyers build a strong emotional attachment

to our products when they create a personalized home with the features and finishes they select.

•Land. We seek to manage our working capital and reduce our operating risks by primarily acquiring entitled land

parcels within attractive submarkets identified by our market research. We typically focus on metropolitan areas with

favorable long-term economic and population growth prospects, and target land parcels that meet our investment

return standards. We focus on investments that provide a one- to three-year supply of land or lots per product line, per

community, and individual assets that are generally between 50 to 250 lots in size. Our land investment is sensitive to

and will shift with local or national housing market environments or broader economic conditions, generally increasing

when we are experiencing or expecting strong growth and decreasing when we are experiencing or expecting slower

growth. We leverage the relationships we have with landowners, developers and brokers to find and acquire land

parcels, and use our experience in working with municipalities to efficiently obtain development approvals.

•Products. We offer our customers a variety of homes with a standardized set of functions and features generally priced

to be affordable for those with household incomes within a range of the local area’s median level, with the goal of

being attainable for the largest demand segments. Additionally, since mid-February 2025, we have implemented a

simplified sales strategy focused on providing a straightforward, transparent base price, with limited, if any,

concessions or incentives, that is intended to offer to our customers a compelling value competitive with area resale

home prices. Moreover, unlike the constraints inherent with resale homes, and new homes offered by certain other

builders, our Built to Order approach provides our customers with the opportunity to select their lot location within a

community, floor plan, elevation and structural options, each of which may be at a premium added to a home’s selling

price, and to personalize their homes beyond our base offerings by adding numerous design options available in our

KB Home Design Studios. Our design studios, generally centrally located within our served markets, are a key

component of our Built to Order process, with the mix of included features and design options we offer at each studio

primarily based on the preferences identified by our market survey and purchase frequency data, as discussed further

below under “Customer Obsession.”

We utilize a centralized internal architectural group that designs homes to meet or exceed customers’ price-to-value

expectations while being as cost-effective as possible to construct. To enhance the simplicity and efficiency of our

products and processes, our architectural group has developed a core series of high-frequency, flexible floor plans and

elevations that we can offer across many of our served markets, which it periodically updates to incorporate value-

engineering enhancements, regulatory requirements and/or evolving consumer tastes. Our library of standardized

plans, which we have streamlined to focus on those most frequently selected by our customers, facilitates our ability to

shift with local demand, which may include adding smaller square footage homes at communities to offer more

affordable choices to buyers, and/or project site attributes, such as the size and location of developable lots. This

library also enables us to better understand in advance the cost to build our products and to compare and implement

best land development and home construction practices across divisions and communities. We also incorporate

energy-efficient and water-saving features into our product designs to help lower our homebuyers’ total cost of

homeownership and reduce our homes’ impact on the environment.

•Production. In addition to differentiating us from other high-production homebuilders, our Built to Order process

helps drive low-cost production. We generally commence construction of a home only after we have a signed

purchase contract with a homebuyer and have obtained preliminary credit approval or other evidence of the

homebuyer’s financial ability to purchase the home, and seek to build a backlog of sold homes. To help moderate

construction-related cost inflation, we, to the extent practicable, enter into fixed-price contracts with our larger trade

partners and building material suppliers for specified periods of time. By maintaining a substantial backlog, along

with centralized scheduling and standardized reporting processes, we have established a disciplined and scalable

operational platform that helps us sustain an even-flow production of pre-sold homes. This reduces our inventory risk,

promotes construction efficiencies, enhances our relationships with independent contractors and other business

partners, and provides us with greater visibility and predictability on future deliveries.

There have been and may in future periods be circumstances where we deviate from certain of the above principles, such as

starting construction on a certain number of homes in a community before corresponding sales contracts are signed with

homebuyers to more quickly meet customer delivery expectations and generate revenues. Historically, 60% to 70% of our

homes delivered are Built to Order, with the remainder consisting of homes started without a corresponding buyer and partially

constructed homes where the initial buyer cancelled their home sales contract with us. In 2025, around 55% of our homes

delivered were Built to Order, largely reflecting strategies we adopted during the 2020-2024 period to navigate supply chain

disruptions that substantially lengthened our average build time and hindered our even-flow home production process, and

market dynamics in areas with then-low resale home inventory. In 2026, with a more normalized supply chain and meaningful

improvement in our average build times since the 2023 second quarter, we intend to bring our mix of homes delivered closer to

our historical average. We may also acquire land parcels in peripheral neighborhoods of a core metropolitan area that otherwise

fit our growth strategy and meet our investment return standards.

Asset Efficiency. In implementing our KB Edge business strategy, a key focus is on enhancing asset efficiency. We do this

by calibrating home sales rates and selling prices at each of our communities to improve profitability; focusing on controlling

direct construction costs; increasing inventory turns to the extent practical; balancing pace, price and construction starts at each

community to optimize even-flow production and our return on each inventory asset within its market context; structuring land

acquisitions to minimize upfront costs where possible, as discussed below under “Community Development and Land

Inventory Management”; and deploying excess cash flow from operations to help fuel revenue growth or reduce debt, among

other steps.

Customer Obsession. We believe the best new homes start with the people who will live in them. Our customer-centric

approach comes from a deep-rooted operational philosophy and company culture motivated by a paramount objective: to be the

most customer-obsessed homebuilder in the world. Driven by this ambition, our team seeks to provide a compelling, simple

and personalized homebuying process distinguished by phenomenal customer service. We want our customers to know they

have a real partner when buying a home with us and feel that once their home is built, they can see themselves in their new

home. Our team members, supported through our training and development programs, are encouraged to make decisions

intended to produce the best results for our customers and our organization. Our customer obsession mindset is built around the

following key principles:

•Find out what customers actually want. We ascertain homebuyer product design and location preferences partly

through surveys we conduct of recent buyers of both new and resale homes across our served markets. We also obtain

data from our own homebuyers’ selections and post-sale feedback. We use this information on what matters most to

homebuyers when making purchase and trade-off decisions to develop and refine our product offerings, as well as our

land acquisition targets.

We also cultivate and leverage close supplier and business partner relationships to integrate into, or offer with, our

products architectural elements, building materials, construction techniques, structural and non-structural systems, and

components and devices that are aligned with the preferences identified in our surveys and other data sources.

•Offer customers choice and control. From our synthesis of the foregoing consumer research and related activities, we

give our homebuyers a wide array of choices to craft the new home that fits their particular lifestyle and priorities,

including their homesite, floor plan, elevation and structural options. Our homebuyers can visit our KB Home Design

Studios, where they get both advice and the opportunity to select from a broad range of included features and design

options that will help personalize their home. When customers build a new home with us, they also enjoy choosing

exactly what they want and paying only for what matters most to them. This helps to meet homebuyers’ priorities at

price points attainable to them.

•Create collaborative customer relationships. In our view, we are not just selling a house. We are in the business of

delivering an exceptional, personalized experience that enables our customers to achieve perhaps the most meaningful

purchase they will ever make and an important landmark in their life’s journey — their own home. From this

perspective, we strive to form close relationships with our homebuyers. We endeavor to learn key details about what

they want, their top priorities today and where they see themselves in the future, so we can co-create a home for their

day-to-day lives. We support each person or family, whether it is their first time or they have already been

homeowners, with a dedicated community team of sales counselors, design consultants, construction superintendents,

customer service representatives, KBHS loan officers (for buyers who elect to use KBHS to finance their home

purchase) and other personnel. This team is available to guide each homebuyer through each major step of the design,

construction and closing of their KB home and aims to make the process as easy and straightforward as possible.

•Continue to listen to customers after the sale is done. To help learn and improve our customer experience, we

schedule follow-up visits with our customers 10 days and 30 days after they move in, as well as six, 10 and 18 months

later, to hear about their experience in their new home and to address any concerns they may have, including warranty

claims. Information about our KB Home 10-year Limited Warranty program is provided in Note 17 – Commitments

and Contingencies in the Notes to Consolidated Financial Statements in this report.

We believe our approach differentiates us in the homebuilding industry and, along with our company culture that sustains

it, enhances customer satisfaction. We are proud of the high levels of satisfaction our homebuyers have reported to us and

outside survey firms. In 2025, we continued to be one of the top-ranked national homebuilders for customer satisfaction on a

leading independent homebuilding review site, which we believe reflects the effective dedication we have to our homebuyers.

Promotional Marketing Strategy. To emphasize the distinct combination of partnership, personalization, innovative

design, sustainability and affordability we offer to our homebuyers, as well as the importance we place on customer

satisfaction, we have centered our external brand identity and messaging around Built on Relationships®. Built on

Relationships also encapsulates the importance of customer, as discussed above, and other key relationships – with suppliers,

trade contractors, land sellers and municipalities – to the success of our business. The key components we highlight as part of

our brand identity include:

•Partnership. Our dedicated team of sales counselors, design consultants, construction superintendents and customer

service representatives, as well as KBHS loan officers, work closely with our customers throughout the homebuying

process.

•Personalization. We give our homebuyers the ability to personalize their new home from floor plans to exterior styles,

and from design choices to where they live in the community. Additionally, at our KB Home Design Studios, our

homebuyers have the opportunity to select from a broad range of included features and design options.

•Innovative Design. We believe we offer homebuyers product designs that distinctively blend contemporary consumer-

preferred elements, such as open floor plans, flexible living spaces, indoor/outdoor flow and extra storage; quality

construction standards; and advanced technological features and devices, as compared to some other new and resale

homes.

•Sustainability. Our homes are engineered to be highly energy and water efficient, as discussed further below.

•Affordability. We offer our customers a variety of homes with a standardized set of functions and features generally

priced to be affordable for those with household incomes within a range of the local area’s median level. In addition,

in many of our communities, we can readily introduce smaller square footage floor plans to enable more customers to

select and design a personalized home within their budget. Our energy- and water-efficient homes can provide long-

term significant savings on utility bills, compared to typical resale homes and new homes without such features.

We typically sell our homes through salaried and/or commissioned sales associate employees from sales offices located in

or adjacent to furnished model homes in each community, or through outside brokers. We also use electronic sales capabilities

and technology to give our customers a variety of convenient ways to shop for and purchase a new KB home, including, among

other things:

•Offering virtual 360° home tours and online photo galleries for prospective homebuyers;

•Providing access to interactive floor plans and homesite maps for their desired community, as well as the ability to

reserve a favorite homesite and floorplan;

•Conducting virtual appointments and tours of the model homes and design studios;

•Offering online tools, such as the MyKB digital portal and KB Home app, to guide buyers through the homebuying

journey from shopping to construction and ownership; and

•Presenting homebuyers with the ability to virtually see and walk through their home at various points during its

construction and prior to closing.

We market our homes to prospective homebuyers and real estate brokers through a variety of media, and use data analytics

to target our advertising and measure its effectiveness and efficiency in terms of generating leads and orders. In recent years

and in response to the large number of millennial and Generation Z homebuyers, we have increased our emphasis on digital

marketing, through search engine marketing, online real estate listing platforms, display ads, email, social media, our website

and other evolving communication technologies. We also use print media and advertising, and billboards in our served

markets.

Homebuyer Profile. Our product portfolio for customers ranges from smaller, higher density homes, with average selling

prices typically suited for first-time homebuyers, to larger homes in premium locations with additional amenities and higher

average selling prices that generally attract a first or second move-up homebuyer. We also offer a variety of single-story

floorplans that typically appeal to an active adult homebuyer age 55 and over. For more than a decade, first-time and first

move-up homebuyers have accounted for an average of over 75% of our annual deliveries. The following charts present our

overall buyer profile and the percentage of homes delivered to first-time homebuyers within each homebuilding reporting

segment for the year ended November 30, 2025:

Operational Structure. We operate our homebuilding business through divisions with experienced management teams who

have in-depth local knowledge of their particular served markets, which helps us acquire land in preferred locations; develop

communities with products that meet local demand; and understand local regulatory environments. Our division management

teams exercise considerable autonomy in identifying land acquisition opportunities; developing land and communities;

implementing product, marketing and sales strategies; and controlling costs. To help maintain consistent execution within the

organization, our division management teams and other employees are continuously trained on KB Edge principles and are

evaluated, in part, based on their achievement of relevant operational objectives.

Our corporate management and support personnel develop and oversee the implementation of company-wide strategic

initiatives, our overall operational policies and internal control standards, and perform various centralized functions, including

architecture; purchasing and national contracts; treasury and cash management; land acquisition approval; risk and litigation

management; accounting and financial reporting; internal audit and compliance activities; information technology (“IT”)

systems; human resources strategy; marketing; and investor and media relations.

Community Development and Land Inventory Management

Developable land for the production of homes is a core resource for our business. Based on our current strategic plans, we

seek to own or control land sufficient to meet our forecasted production goals for the next three to five years. In 2026, we

intend to continue to invest in and develop land positions within attractive submarkets and selectively acquire or control

additional land that meets our investment return standards. We may periodically sell certain land interests or monetize land

previously held for future development to strategically balance our land portfolio in line with local or national market

environments or for other reasons. We may also decide not to exercise certain land option contracts and other similar contracts

due to market conditions and/or changes in our marketing strategy.

Our community development process generally consists of four phases: land acquisition, land development into finished

lots for a community (if necessary), home construction, and delivery of completed homes to homebuyers. Historically, our

community development process has typically ranged from 10 to 24 months in our West Coast homebuilding reporting

segment, with a somewhat shorter duration in our other homebuilding reporting segments. The development process in our

West Coast homebuilding reporting segment is typically longer than in our other segments due to the municipal and regulatory

requirements that are generally more stringent in California. Our community development process varies based on, among

other things, the extent and speed of required government approvals and utility service activations, the overall size of a

particular community, the scope of necessary site preparation activities, the type of product(s) that will be offered, weather

conditions, time of year, promotional marketing results, the availability of construction resources, consumer demand, local and

general economic and housing market conditions, and other factors.

Although they vary significantly in size and complexity, our single-family residential home communities typically consist

of 50 to 125 lots per product line, with lots ranging in size from 1,800 to 10,000 square feet. In our communities, we typically

offer four to 10 home design choices. We generally build one to three model homes at each community so that prospective

homebuyers can preview the various products available. Depending on the community, we may offer premium lots containing

more square footage, better views and/or location benefits. Some of our communities consist of multiple-story structures that

encompass several attached condominium-style units.

Land Acquisition and Land Development. We continuously evaluate land acquisition opportunities against our investment

return standards, while balancing competing needs for financial strength, liquidity and land inventory for future growth. For

example, in 2025, after opportunistically purchasing two sizable land parcels in the first quarter, we scaled back our investments

over the balance of the year in alignment with our growth projections amid softer market conditions. When we acquire land,

we generally focus on parcels with lots that are entitled for residential construction and are either physically developed to start

home construction (referred to as “finished lots”) or partially finished. However, depending on market conditions and available

opportunities, we may acquire undeveloped and/or unentitled land. We may also invest in land that requires us to repurpose

and re-entitle the property for residential use, such as urban in-fill developments. We expect that the overall balance of

undeveloped, unentitled, entitled, partially finished and finished lots in our inventory will vary over time, and in implementing

our strategic growth initiatives, we may acquire a greater proportion of undeveloped or unentitled land in the future if and as the

availability of reasonably priced land with finished or partially finished lots diminishes.

As part of the decision-making process for approving a land purchase, we review extensive information about a proposed

project, including past use; assessment of environmentally sensitive areas and areas that may be suitable for parks, trails, and

open space preservation; assessment of site development required, including any work needed to comply with storm water

regulations; proximity to major employment and retail centers; and site design and product (home designs and specifications)

plans that are, among other things, consistent with our focus on building highly energy- and water-efficient homes.

We generally seek to structure our land acquisition and land development activities to minimize, or defer the timing of,

expenditures in order to reduce both the market risks associated with holding land and our working capital and financial

commitments, including interest and other carrying costs. This may entail developing land in smaller phases wherever possible,

and balancing development with our starts pace to manage our inventory of finished lots. We typically use contracts that, in

exchange for a small initial option payment or earnest money deposit, give us an option or similar right to acquire land at a

future date, usually at a pre-determined price and pending our satisfaction with the feasibility of developing and selling homes

on the land and/or an underlying land seller’s completion of certain obligations, such as securing entitlements, developing

infrastructure or finishing lots. We refer to land subject to such option or similar contractual rights as being “controlled.” Our

decision to exercise a particular land option or similar right is based on the results of our due diligence and continued market

viability analysis after entering into such a contract.

The following table presents the number of inventory lots we owned, in various stages of development, or controlled under

land option contracts or other similar contracts by homebuilding reporting segment as of November 30, 2025 and 2024:


	Homes Under Construction		Land Under Development		Land Under Option (a)		Total Land Owned or Under Option
	2025	2024	2025	2024	2025	2024	2025	2024
West Coast	1,713	2,286	10,400	10,794	8,637	10,876	20,750	23,956
Southwest	630	1,303	6,255	4,078	4,257	7,736	11,142	13,117
Central	1,254	1,575	9,501	9,866	9,859	9,615	20,614	21,056
Southeast	1,158	1,360	6,226	7,600	4,722	9,614	12,106	18,574
Total	4,755	6,524	32,382	32,338	27,475	37,841	64,612	76,703

(a)Land under option as of November 30, 2025 and 2024 includes 7,715 and 18,923 lots, respectively, under land option

contracts or other similar contracts where the associated deposits were refundable at our discretion.

The number of lots we owned or controlled under land option contracts or other similar contracts as of November 30, 2025

decreased 16% from November 30, 2024, largely reflecting homes delivered and our abandonment of 24,596 previously

controlled lots that no longer met our underwriting criteria, partly offset by newly optioned lots during 2025.

The following charts present the percentage of inventory lots we owned or controlled under land option contracts or other

similar contracts by homebuilding reporting segment and the percentage of total lots we owned and had under option as of

November 30, 2025:

Home Construction and Deliveries. Following the acquisition of land and, if necessary, the development of the land into

finished lots, we typically begin constructing model homes and marketing homes for sale. As discussed above under “Business

Strategy,” we generally commence construction of a home after we have a signed sales contract with a homebuyer and have

obtained preliminary credit approval or other evidence of the homebuyer’s financial ability to purchase the home. Other than

model homes, our inventories typically do not consist of a significant number of completed unsold homes. However, at the end

of 2025, we carried a higher number of completed unsold homes largely reflecting strategies we had adopted in 2020-2024 to

navigate supply chain disruptions and market dynamics. In 2026, with a more normalized supply chain and meaningful

improvement in our average build times, and our emphasis on increasing the proportion of Built to Order sales and homes

delivered, our completed unsold inventory is expected to decrease compared to 2025 levels. In addition, cancellations of home

sales contracts prior to the delivery of the underlying homes, the construction of attached products with some unsold units, or

specific marketing or other strategic considerations will result in our having some unsold completed or partially completed

homes in our inventory.

Our typical timeframe from home sale to delivery has historically ranged from six to seven months, with an average build

time of four to five months from construction start to home completion. We may encounter circumstances beyond our control,

such as supply chain disruptions, as further described below under Item 1A – Risk Factors, which could substantially lengthen

our average build time and hinder our even-flow production process. We made meaningful sequential improvements since the

2023 second quarter, and by the end of the 2025 fourth quarter our build time had returned to our historical average.

We, or outside general contractors we may engage, contract with a variety of independent contractors, who are typically

locally based, to perform all land development and home construction work through these independent contractors’ own

employees or subcontractors. We do not self-perform any land development or home construction work. These independent

contractors also supply some of the building materials required for such production activities. Our contracts with these

independent contractors require that they comply with all laws applicable to their work, including wage and safety laws, meet

performance standards, follow local building codes and permits, and abide by our Ethics Policy referenced under Item 10 –

Directors, Executive Officers and Corporate Governance in this report.

Raw Materials. Outside of land, the principal raw materials used in our production process are concrete and forest

products. Other primary materials used in home construction include drywall, and plumbing and electrical items. We source

our building materials, many of which are domestically produced, from third parties and, to the extent feasible, select products

with sustainability certifications or attributes. In addition, our lumber suppliers generally certify that their wood was not

sourced from endangered forests or is certified by recognized programs. We attempt to enhance the efficiency of our operations

by using, where practical, standardized materials that are commercially available on competitive terms from a variety of outside

sources. In addition, we have national and regional purchasing programs for certain building materials, appliances, fixtures and

other items that allow us to benefit from large-quantity purchase discounts and, where available, participate in outside

manufacturer or supplier rebate programs. When possible, we arrange for bulk purchases of these products at favorable prices

from such manufacturers and suppliers.

Backlog

Our “backlog” consists of homes that are under a sales contract but have not yet been delivered to a homebuyer. Ending

backlog represents the number of homes in backlog from the previous period plus the number of net orders (new orders for

homes less home sales contract cancellations) generated during the current period minus the number of homes delivered during

the current period. Our backlog at any given time will be affected by cancellations, homes delivered, build times, and our

community count. Backlog value represents potential future housing revenues from homes in backlog. Our cancellation rates

and the factors affecting such rates are further discussed below under both Item 1A – Risk Factors and Item 7 – Management’s

Discussion and Analysis of Financial Condition and Results of Operations in this report.

The following charts present our ending backlog (number of homes and value) by homebuilding reporting segment as of

November 30, 2024 and 2025:

Competition, Seasonality, Delivery Mix and Other Factors

Competition. The homebuilding industry and housing market are highly competitive with respect to selling homes;

contracting for construction services, such as carpentry, roofing, electrical and plumbing; and acquiring attractive developable

land, though the intensity of competition can vary and fluctuate between and within individual markets and submarkets. We

compete for homebuyers, construction resources and desirable land against numerous homebuilders, ranging from regional and

national firms, some of which are larger and have greater financial resources than us, to small local enterprises. As to

homebuyers, we primarily compete with other homebuilders on the basis of selling price, community location and amenities,

availability of financing options, home designs, reputation, build time, and the design choices and options that can be included

in a home. In some cases, this competition occurs within larger residential development projects containing separate sections

other homebuilders design, plan and develop. We also compete for homebuyers against housing alternatives to new homes,

including resale homes, apartments, single-family rentals and other rental housing.

In markets experiencing extensive construction activity, including areas recovering from earthquakes, wildfires, hurricanes,

flooding or other natural disasters, there can be craft and skilled trade shortages that limit independent contractors’ ability to

supply construction services, which in turn tends to drive up our costs and/or extend our production schedules. Elevated

construction activity, and reallocations of staff for public safety priorities after natural disasters or otherwise, can increase the

time needed to obtain governmental approvals or utility service activations and, combined with tariffs imposed or increased by

the U.S. and other governments, the cost of certain raw building materials, such as steel, lumber, drywall and concrete, or

finished products. We expect these upward cost trends may continue in 2026, particularly if and as there is greater competition

for these resources across a disrupted global supply chain.

Seasonality. Our performance is affected by seasonal demand trends for housing. Traditionally, there has been more

consumer demand for home purchases and we tend to generate more net orders in the spring and early summer months

(corresponding to most of our second quarter and part of our third quarter) than at other times of the year. This “selling season”

demand results in our typically delivering more homes and generating higher revenues from late summer through the fall

months (corresponding to part of our third quarter and all of our fourth quarter). The seasonal nature of our business may also

cause significant variations in our working capital requirements and liquidity. Accordingly, our quarterly results of operations

and financial position at the end of any given quarter are not necessarily indicative of results for the corresponding full year.

We can provide no assurance whether or to what extent typical seasonal performance trends will occur in 2026, or at all.


	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Net Orders
2025	24%	30%	25%	21%
2024	25%	30%	24%	21%
2023	19%	36%	28%	17%

Homes Delivered
2025	22%	24%	26%	28%
2024	21%	25%	26%	28%
2023	21%	28%	25%	26%

Housing Revenues
2025	22%	25%	26%	27%
2024	21%	25%	25%	29%
2023	22%	27%	25%	26%

Delivery Mix and Other Factors. In addition to the overall volume of homes we sell and deliver, our results in a given

period are significantly affected by the geographic mix of markets and submarkets in which we operate; the number and

characteristics of the communities we have open for sales in those markets and submarkets; and the products we sell from those

communities during the period. While there are some similarities, there are differences within and between our served markets

in terms of the number, size and nature of the communities we operate and the products we offer to consumers. These

differences reflect, among other things, local homebuyer preferences; household demographics (e.g., large families or working

professionals; income levels); geographic context (e.g., urban or suburban; availability of reasonably priced finished lots;

development constraints; residential density); and the shifts that can occur in these factors over time. These factors in each of

our served markets will affect the costs we incur and the time it takes to locate, acquire rights to and develop land, open

communities for sales, and market and build homes; the size of our homes; our selling prices (including the contribution from

homebuyers’ purchases of design choices and options); the pace at which we sell and deliver homes; the rate at which

communities are sold out; and our housing gross profits and housing gross profit margins. Therefore, our results in any given

period will fluctuate compared to other periods based on the proportion of homes delivered from areas with higher or lower

selling prices and on the corresponding land and overhead costs incurred to generate those deliveries, as well as from our

overall community count.

Human Capital

Our Culture. We focus on attracting, developing, and retaining the highest quality employees, with particular emphasis on

the leaders of our local divisions who oversee operations in various markets and collaborate with a wide array of stakeholders.

We strive to cultivate a workplace that offers fulfilling individual roles and opportunities for career advancement and

professional growth.

At November 30, 2025 and 2024, we had approximately 2,118 and 2,384 full-time employees, respectively. None of our

employees are represented by a collective bargaining agreement. At the close of our 2025 fiscal year, our division and regional

presidents had served an average of over 11 years, while local land leaders managing land acquisition, entitlement, and

development had an average tenure of more than eight years. Our senior corporate executives, responsible for setting company-

wide strategy, maintained an average tenure of approximately 19 years. Additional information about the tenure of our

leadership team is provided in the chart below. The considerable experience within our leadership team has contributed to a

strong organizational culture at all levels.

In 2025, our employee turnover was 18%, comprising 16% voluntary departures and 2% involuntary separations. For

fiscal year 2024, turnover reached 18%, with 15% attributed to voluntary exits and 3% to involuntary separations. We consider

these turnover rates, which exclude reductions in force, to be appropriate given prevailing industry standards and market trends.

Compensation and Benefits. We provide competitive compensation and benefits packages that are designed to reward and

retain our team members as well as support our short-term and long-term business goals. Components of the packages include:

•Medical, dental, vision care, life and disability insurance;

•401(k) Savings Plan with a company match;

•Tuition reimbursement;

•Employee home purchase discounts; and

•A selection of voluntary benefits designed to meet individual preferences and needs.

The benefits packages we offer are shaped by recommendations from nationally recognized compensation and benefits

consultants we retain to provide objective assessments and benchmark our programs against those of peer companies and

organizations of similar scale.

Promoting High Ethical Standards. We aim to reach our business objectives by operating with integrity and following

high ethical standards. All employees must complete a training course on our Ethics Policy upon hire and annually thereafter,

and confirm they will adhere to its guidelines. An internal ethics committee composed of senior corporate and operational

leaders oversees the Ethics Policy and reviews related matters. We provide an independently managed hotline and reporting

website that allow employees and third parties to anonymously report any ethics-related issues.

Talent Acquisition and Development. We are committed both to developing the potential of our team members and to

fostering their professional growth. We support this objective through targeted talent development programs, such as the

training investments described below, that have enabled us to promote from within for a variety of leadership roles across our

organization. At the same time, our recruitment approach aims to attract exceptional candidates who can contribute to our

business growth. Beyond seeking experienced individuals from the homebuilding field, we have implemented multiple

initiatives that enhance our talent pipeline. These include forging partnerships with academic institutions, which assist us in

sourcing and hiring outstanding interns and entry-level professionals. We have also prioritized recruiting veterans and we are a

founding supporter of the Building Talent Foundation, established by the Leading Builders of America, to help address the

significant and ongoing shortage of skilled workers in the homebuilding sector.

Training and Career Development. In order to promote the professional growth of our employees and to help ensure the

consistent execution of our business strategy — particularly our commitment to customer-centricity — we provide training

opportunities specifically tailored to the roles and career stages of our employees. We maintain KBU, a specialized online

learning platform that delivers a wide array of written, audio-visual, and interactive training resources, covering both company-

wide policies and discipline-specific topics. This resource offers a collection of around 2,900 self-paced courses and live

virtual sessions led by instructors, catering to employees at every level, and includes coverage of approximately 360 subjects

related to leadership and management. Throughout 2025, our workforce collectively completed 31,451 courses, averaging

about 11 courses per employee. Additionally, those in supervisory and managerial roles participate in training designed to help

them support the growth of the individuals on their teams. To identify and advance top talent, we conduct an annual review of

our workforce and succession plans. This evaluation focuses on identifying high-achieving and high-potential team members

from a variety of backgrounds and experiences for progression into field and corporate leadership positions. The management

development and compensation committee, which is part of our board of directors and consists of members with expertise in

human capital management, talent development and executive compensation across different business models, oversees this

process.

Inclusion. Our employment practices are designed to create a welcoming environment and encourage the advancement of

all individuals who join our team. We strictly prohibit discrimination on grounds such as race, color, religion, national origin,

ancestry, family status, age, veteran status, physical or mental disabilities, medical conditions, gender, gender identity, sexual

orientation, marital status, or any other status protected by law. As detailed in our Human Rights Standards, our organization is

dedicated to cultivating a workplace where every employee is treated with dignity and fairness. We also provide career

development and progression opportunities determined by merit, giving each person the ability to succeed and flourish based on

their unique skills and achievements. As of November 30, 2025, females accounted for 44% of our workforce and 35% of

managerial employees. Furthermore, individuals from ethnic or racial minority groups represented 36% of our workforce and

22% of our managerial population.

Employee Safety and Wellness. We strive to foster a secure and encouraging workplace for our employees and trade

partners, as outlined in the “Safety and Community Investment Initiatives” section of this report. In prioritizing the well-being

of our team, we have implemented a variety of initiatives beyond the benefits packages previously mentioned, including a

comprehensive wellness program focused on promoting the physical and mental health of our workforce, available to all staff

members regardless of their location or working hours. The program includes monthly interactive webinars that address diverse

topics related to overall health, such as balanced nutrition, mental resilience, fitness, and preventive healthcare. Through these

offerings, we aim to empower employees to maintain healthier lifestyles, fostering greater job satisfaction and productivity.

Our ongoing efforts to improve and broaden these initiatives are designed to cultivate a positive and supportive workplace for

the benefit of both our people and the organization.

Sustainability Principles and Practices

Since beginning our sustainability focus over two decades ago, we have made a dedicated effort to be an industry leader in

this area. We seek to integrate sustainable features, products and design elements into our homes in ways that maintain their

affordability to our core customer segments and, as noted above under “Business Strategy,” help to lower long-term

homeownership costs. We believe our initiatives provide tangible benefits for our customers, our operations and the

environment, and distinctly differentiate us from other builders of new homes and from resale homes.

Sustainability Practices. We have established an Environmental Management System (“EMS”), through which we focus

on continually improving the energy efficiency of our homes so, among other things, there are less greenhouse gas (“GHG”)

emissions associated with their use over their multi-decade life cycle. Our EMS, and its related manuals and other

documentation, provides a framework for planning, implementing, measuring, evaluating and refining these efforts over time.

In addition to our internal executive team who implements and operates within the EMS, we monitor evolving trends and gather

input and guidance for our initiatives through our National Advisory Board, which is a panel of external advisors we established

in 2009 solely for these purposes. These advisors, who have a broad and diverse set of personal and professional perspectives,

experiences and expertise, help us shape our sustainability priorities and reporting, as well as our approach to stakeholder

engagement.

Energy Efficiency and Water Conservation Leadership. Our sustainability program has primarily focused on progressively

enhancing the energy efficiency and water-saving capability of our homes to help minimize their impact on the environment

from day-to-day use. These priorities reflect that most of the energy consumption during a home’s life occurs after it is

delivered to a customer, and that we operate in some of the most water-challenged regions of the country.

To guide our efforts in these key areas, we have set increasingly higher energy efficiency and water conservation goals

based on the rigorous, well-respected and widely recognized standards established under the U.S. Environmental Protection

Agency’s (“EPA”) voluntary ENERGY STAR® and WaterSense® programs, which seek to help businesses and consumers

save money and conserve natural resources by using labeled products and certain practices that are energy- or water-efficient,

respectively. Milestones we have achieved under these programs include the following:

•In 2008, we became the first national homebuilder to make a broad commitment to building ENERGY STAR certified

homes, which, according to the EPA, achieve on average up to a 20% energy-efficiency improvement compared to

new homes built to local code, and even more compared to resale homes without certification.

◦The EPA estimated as of 2024 that each certified home produces approximately 3,287 pounds (1.5 metric tons)

per year less GHG emissions than a typical new home.

◦Based on our energy use analysis, our homes currently save our homeowners an estimated average of over $1,400

annually on utility bills compared to typical resale homes.

•In 2025, the cumulative number of ENERGY STAR certified new homes we have built totaled over 217,000, more

than any other builder in the nation.

◦In 2005, we built our first solar home, and in 2011, we introduced our first all-solar community.

◦In 2025, all our homes built in California were solar homes. As of November 30, 2025, most of our model homes

and sales offices in California were powered by solar energy. We are also building all-electric homes in many

areas across the country per local requirements and conditions.

•In 2008, we were the first national homebuilder to join the WaterSense program, and in 2009, we made a commitment

to using WaterSense labeled products in our homes.

•In 2021, we were the first national homebuilder to implement the WaterSense Labeled Homes Program, Version 2,

under which homes are to be at least 30% more water efficient than a typical new home. In July 2022, we committed

to building WaterSense labeled homes in all our future Arizona, California and Nevada communities.

•To date, we have built approximately 30,000 WaterSense labeled and Southern Nevada Water Authority Water Smart

homes, which we believe is more than any other homebuilder, and installed over 1.3 million WaterSense labeled

fixtures, collectively helping to save an estimated 2.2 billion gallons of water per year based on calculations derived

from WaterSense program and supplier data.

In 2025, the EPA outlined plans to phase out the ENERGY STAR program as a federally supported initiative, with the

fiscal year 2026 federal budget allocating no funding for its continuation, and to revise the WaterSense labeling criteria for

fixtures. These decisions, along with a broader agency restructuring, have made the long-term future of these programs

uncertain. While the programs remain operational at this time, we are monitoring developments, including evolving federal,

state and local regulations and consumer expectations, and evaluating alternative energy and water efficiency programs and

standards. Presently, we have no plans to materially change the high efficiency performance of our new homes built in 2026.

Indoor Environments. Our sustainability program portfolio includes incorporating features that are aimed at enhancing our

homes’ indoor environment with air-sealing designs and high-performance ventilation systems and low- or zero-VOC products.

Our homes also feature door hardware with antimicrobial protection that helps reduce the spread of bacteria and germs.

Awards and Recognition. We have been recognized with major national awards for our consistent leadership and

commitment, including:

•Newsweek’s 2026 list of America’s Most Responsible Companies – We were once again named by Newsweek as one

of America’s most responsible companies, the highest-ranked national builder and the only one to make this

distinguished list six years in a row. This recognition is based on our industry-leading environmental and social

practices;

•Time Magazine’s 2025 list of World’s Best Companies – We were the only national homebuilder to make this list.

The recognition is based on a comprehensive analysis conducted to identify the top-performing companies around the

globe and is based on evaluation criteria of employee satisfaction, revenue growth and sustainability;

•Time Magazine’s 2025 list of America’s Best Midsize Companies – We have been the only national homebuilder to

receive this distinction every year since its inception, which is based on more than 15 different criteria, including

employee satisfaction, revenue growth and sustainability transparency;

•USA Today’s 2025 list of America’s Climate Leaders – We were the highest-ranked homebuilder in consideration of,

among other things, our annualized reductions in emission intensity and carbon disclosure rating; and

•In 2025, we were recognized by AvidCXTM, a trusted platform of homebuyer experience insights, with an

unprecedented 18 division-level AvidCX awards, including the prestigious 2025 AvidCX Cup, based on customer

surveys taken during the first year of homeownership. We also received an impressive 108 AvidCX Service awards

honoring our team members in sales, design, construction, mortgage and customer care as being in the top 5%

nationally in customer satisfaction.

Our annual sustainability reports, which we have published on our website since 2008, contain more information about our

programs, goals, and achievements.

Safety and Community Investment Initiatives. Safety is a priority for our employees, our homebuyers and our independent

contractors. To monitor our independent contractors’ compliance with their safety obligations, we track nearly 50 checkpoints

across key aspects of jobsite safety, including safety documentation, personal protective equipment, scaffolding and ladders, fall

protection, trenching and excavation, hazard assessment protocol, first aid and emergency plan, electrical safety and material

safety. In addition to our on-site construction managers conducting safety inspections weekly, each operating division has a

designated representative who has successfully completed the Occupational Safety and Health Administration’s 30-hour

training course which provides supervisors with a greater depth and variety of training on an expanded list of topics associated

with the recognition, avoidance, abatement, and prevention of workplace hazards. Since 2014, we have partnered with

IBACOS®, a nationally recognized expert in home construction quality and performance, to conduct annual jobsite safety

reviews.

In March 2025, we introduced the nation’s first new-home community that meets the home- and neighborhood-level

wildfire resilience standards developed by the Insurance Institute for Business and Home Safety (“IBHS”), an independent

nonprofit research organization. Utilizing fire-resistant building materials, methods and features based on IBHS research, this

community is designed to IBHS’ highest level of protection against direct flame contact, radiant heat and embers, which helps

to meaningfully reduce the likelihood of wildfire spread. Each home in the community is built to the Wildfire Prepared Home

Plus standard and receives a designation certifying that it has met IBHS’ most stringent requirements for homesite-level fire

mitigation. We intend to selectively expand our application of IBHS’ standards to other new-home communities in 2026 and

beyond.

Our commitment to the communities we serve is not solely about the homes we build, as we strive to also make wider

community contributions that intersect with the nature of our business. Our KB Cares philanthropic program helps to build

strong social ties by, among other things, providing our employees with an opportunity to give back to the areas in which we

operate through efforts ranging from assisting people in challenging circumstances to educating the next generation. KB Cares

has four key focus areas: shelter, community, sustainability/environment and construction skills/employment. We have

partnered with local nonprofits and community organizations to contribute to the long-term social fabric of the areas in which

we build, including Jared Allen’s Homes for Wounded Warriors, which raises money to build or modify homes for injured

military veterans; Sackcloth & Ashes, which donates a blanket to a local homeless shelter for every blanket we purchase as a

housewarming gift for our new homeowners; and Sleep in Heavenly Peace, for which our employees and various trade partners

help build and deliver handmade, fully furnished beds to children in need. Since 2023, we have partnered with the National

Forest Foundation to support its mission to replenish and preserve national forests by replanting thousands of acres of habitat

nationwide and protect the future of national forests. In addition, as noted above under “Human Capital,” we are also one of the

founding partners of the Building Talent Foundation, whose mission is to advance the education, training and career

progression of young people and people from underrepresented groups as skilled technical workers and business owners in

residential construction.

We have a Supplier Code of Conduct that builds upon the principles, guidelines and standards within our Ethics Policy,

including operating in accordance with applicable laws; treating all workers fairly and with dignity and respect; and providing a

clean, safe and healthy work environment without the use of any involuntary or forced labor. Our Supplier Code of Conduct

also encourages our suppliers to operate in an efficient and environmentally responsible manner, conserve natural resources and

minimize waste and the use of environmentally harmful materials.

Corporate Governance. Our board of directors maintains a robust governance framework and leading practices to oversee

the management of our business and, among other things, oversees our sustainability initiatives as part of our overall business

strategy. Our approach to corporate governance aligns with the principles of the Investor Stewardship Group, a coalition of

some of the world’s largest investors and asset managers, as follows:


Stewardship Principle		What We Do

•Boards are accountable to stockholders.		•Our board is unclassified and directors stand for election annually under a majority voting standard in an uncontested election.

•Stockholders should be entitled to voting rights in proportion to their economic interest.		•We have one class of outstanding voting securities that allow each holder one vote for each share held.

•Boards should be responsive to stockholders and be proactive in order to understand their perspectives.		•Stockholders may communicate with us and our board. •We proactively engage with stockholders year-round. Since 2021, many stockholder dialogues included discussions on our sustainability-focused programs. Two directors are liaisons to management on sustainability-related matters.

•Boards should have a strong, independent leadership structure.		•Our board has a strong independent lead director with significant responsibilities and authority. •Only independent directors serve on board committees.

•Boards should adopt structures and practices that enhance their effectiveness.		•Directors have extensive and relevant experience and skills. •90% of directors are independent; 50% are women or racial or ethnic minorities. •The average tenure of our board members is approximately eight years, with five of the directors on the Board having joined since 2020, promoting its refreshment.

•Boards should develop management incentive structures that are aligned with the long-term strategy of the company.		•We take stockholder feedback into account in our executive compensation program, as discussed in our 2026 Proxy Statement. •Management compensation is designed to encourage the achievement of our long-term strategic goals. •All unvested employee equity awards made since 2017 require double-trigger vesting in a change in control.

More information concerning our corporate governance can be found in our Proxy Statement for the 2026 Annual Meeting

of Stockholders (“2026 Proxy Statement”).

Government Regulations and Environmental Matters

Our operations are subject to myriad legal and regulatory requirements concerning land development (including

governmental permits, taxes, assessments and fees), the homebuilding process, employment conditions and worksite health and

safety. These requirements often provide broad discretion to government authorities, and they could be interpreted or revised in

ways that delay or prohibit project development or home sales, and/or make these activities more costly. The costs to comply,

or associated with any noncompliance, are, or can be, significant and variable from period to period. A liability for

environmental remediation and other environmental costs is accrued when we consider it probable that a liability has been

incurred and the amount of loss can be reasonably estimated. However, environmental costs and accruals were not material to

our operations, cash flows or financial position in 2025, 2024 or 2023.

Under applicable environmental laws (including those aimed at protecting against climate change impacts), we may be

responsible for, among other things, removing or remediating hazardous or toxic substances even where we were not aware of

their presence or on land we previously owned. In addition to incurring clean-up costs, the presence of harmful substances on

or near our properties may prevent us from performing land development or selling homes. Also, we are subject to federal,

state and local rules that can require us to undertake extensive measures to prevent or minimize discharges of stormwater and

other materials from our communities, and to protect wetlands and other designated areas.

As part of our due diligence process for land acquisitions, we often use third-party environmental consultants to investigate

potential environmental risks, and we require disclosures, representations and warranties from land sellers regarding

environmental risks. We also take steps prior to our acquisition of the land to gain reasonable assurance as to the precise scope

of any remediation work required and the costs associated with removal, site restoration and/or monitoring. To the extent

contamination or other environmental issues have occurred in the past, we will attempt to recover restoration costs from third

parties, such as the generators of hazardous waste, land sellers or others in the prior chain of title and/or their insurers.

However, despite these efforts, there can be no assurance that we will avoid material liabilities relating to the existence or

removal of toxic wastes, site restoration, monitoring or other environmental matters affecting properties currently or previously

owned or controlled by us, and no estimate of any potential liabilities can be made.

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, beneficial ownership

reports on Forms 3, 4 and 5 and proxy statements, as well as all amendments to those reports are available free of charge

through our investor relations website at investor.kbhome.com, as soon as reasonably practicable after such reports are

electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). They can also be found at the SEC

website at www.sec.gov. We will also provide these reports in electronic or paper format free of charge upon request made to

our investor relations department at investorrelations@kbhome.com or at our principal executive offices. We intend for our

investor relations website to be the primary location where investors and the general public can obtain announcements

regarding, and can learn more about, our financial and operational performance, business plans and prospects, our board of

directors, our senior executive management team, and our corporate governance policies, including our articles of

incorporation, By-Laws, corporate governance principles, board committee charters, and ethics policy. We may from time to

time choose to disclose or post important information about our business on or through our investor relations website, and/or

through other electronic channels, including social media outlets, such as Facebook® (Facebook.com/KBHome) and X®

(Twitter.com/KBHome), and other evolving communication technologies. The content available on or through our primary

website at www.kbhome.com, our investor relations website, including our sustainability reports, Human Rights Statement,

Supplier Code of Conduct and other governance policies, or social media outlets and other evolving communication

technologies is not incorporated by reference in this report or in any other filing we make with the SEC, and our references to

such content are intended to be inactive textual or oral references only.

Item 1A.RISK FACTORS

Although we have operated through a number of varying economic cycles, there are several risks that could affect our

ability to conduct our business, which we discuss below. If any of these risks materialize, they could, among other things, (a)

materially and adversely impact our results of operations and consolidated financial statements; and (b) cause our results to

differ materially from the forward-looking and other statements we make in our SEC filings; in our news releases and other

public reports and communications, including those we post on or make available through our websites or other electronic

channels; or orally through our personnel and representatives. These risks, and other factors outside of our control, could also

create or increase volatility in our common stock’s market price. The order in which we discuss the risks below should not be

taken as any indication of their relative importance, likelihood or impact.

Consumer Demand Risks. The following could negatively affect consumer demand for our products, thereby unfavorably

impacting our net orders, homes delivered, average selling prices, revenues and/or profitability:

•Soft or negative economic or housing market conditions. Adverse conditions in our served markets or nationally could

be caused or worsened by factors outside of our control, including slow or negative economic growth, or growth

concentrated in a few business sectors outside of housing; sustained elevated mortgage interest rates and inflation; high

consumer debt levels; and other macroeconomic and geopolitical concerns, such as the military conflict in Ukraine,

lingering economic and financial market impacts from the prolonged shutdown of the federal government’s operations

in October and November 2025, which may be compounded if Congress cannot agree on, or the President does not

approve, a budget to fully fund the government beyond January 30, 2026, as well as the delay or cancellation of

federal funding to certain states, particularly California. Among other impacts, a severe or sustained economic

contraction may negatively impact housing demand, exacerbate ongoing housing affordability challenges, decrease

traffic at our communities and/or trigger a rise in home sales contract cancellations, resulting in fewer net orders as

compared to corresponding year-earlier periods. In addition, these conditions, along with heightened competition from

other homebuilders and sellers and landlords of existing homes, as discussed below, may lead us to reduce our home

selling prices or offer other concessions (such as mortgage interest rate buydowns) to attract or retain buyers. Since

mid-February 2025, we have focused on delivering the most compelling value to our buyers through pricing

transparency and a simplified sales approach to help stimulate demand. We both reduced selling prices relative to

applicable market conditions and lowered or eliminated other homebuyer concessions. While we believe this approach

drove higher traffic to our communities and stabilized demand after its implementation relative to the start of our 2025

fiscal year, an extended downturn in the U.S. housing market could result in an oversupply of new home and resale

inventory and greater foreclosure activity, which would further impair our ability to sell homes at the same volume,

prices and margins as in prior periods. Additionally, we can offer no assurance that our current pricing strategy, and

any changes we may implement thereto, including whether we offer or increase any concessions to homebuyers, will

improve or sustain demand relative to 2025 levels or our expectations for 2026 and beyond.

•Reduced employment levels and job and wage growth. While unemployment rates remained steady in 2024 and

through the 2025 first half, the 2025 second half was marked by slower job and wage growth, as well as a gradual rise

in the unemployment rate, which may be indicative of a cooling labor market. An increase in unemployment levels, as

well as buyers hesitating on making purchase decisions due to, among other things, tepid consumer confidence, may

lead to an increase in loan delinquencies and foreclosures, more resale homes on the market and diminished demand

for new homes, including our homes. If it does, our core first-time and first move-up homebuyer segments could be

particularly affected, impacting us more severely than homebuilders targeting a different buyer demographic.

•Lower population growth, household formations or other unfavorable demographic changes. We continue to view the

long-term outlook for the housing market favorably, based largely on demographic trends and the continued

undersupply of homes. However, if there is less population growth or demographic trends are not as positive as we

expect, potentially driven by, among other things, birth rate changes, economic factors or U.S. immigration policies,

demand for new homes, including our homes, could be below the long-term forecasts in our business plans and/or

result in our not achieving the same or better growth and financial performance in 2026 and beyond as we did in prior

periods.

•Lack of available affordable housing. Elevated mortgage loan interest rates in 2024 and 2025, and the extended

undersupply of homes, among other factors, have strained housing affordability and raised demand for lower-priced

homes. In response, we introduced smaller floor plans and offer attached homes, townhomes, and condominiums,

especially in our in-fill communities, to provide more affordable options. However, continued affordability

challenges, particularly among entry-level homebuyers who are our primary customers, may require us to lower selling

prices or offer other concessions to generate net orders, potentially reducing our revenues and profit margins.

•Diminished consumer confidence, whether generally or as to purchasing a home. Consumers may be reluctant to

purchase a home compared to housing alternatives (such as renting apartments or homes, or remaining in their existing

home) due to location or lifestyle preferences, affordability and home selling price perceptions (particularly in markets

that experienced rapid home price appreciation), employment instability or otherwise. Consumers may also decide not

to search for a new home, or cancel their home sales contracts with us, due to economic or personal financial

uncertainty. The combination of elevated mortgage interest rates, several years of rising housing prices, volatility

across financial markets, persistent inflation, including for essential consumer expenses (e.g., food, gasoline,

electricity, trash, water), and various other macroeconomic and geopolitical concerns have weighed on consumer

budgets and confidence throughout 2024 and 2025 and may continue to do so in 2026. In addition, homeowners who

purchased their home with a relatively low mortgage interest rate may be reluctant to move given the current higher

interest rate levels. With strained housing affordability, these conditions are expected to remain, and may worsen, in

2026, negatively impacting demand and potentially requiring us to lower selling prices or offer other concessions to

stimulate net orders, adversely affecting our revenues and margins.

•Tightened availability or affordability of mortgage loans and homeowner insurance coverage. Most of our buyers need

a mortgage loan to purchase their home. Their ability to obtain a mortgage loan is largely subject to prevailing interest

rates, lenders’ credit standards and appraisals, and the availability of government-supported programs, such as those

from the Federal Housing Administration, the Veterans Administration, Federal National Mortgage Association (also

known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (also known as Freddie Mac). While

mortgage interest rates began to moderate in the 2025 second half, if mortgage interest rates increase and/or become

more volatile, credit standards are tightened, appraisals for our homes are lowered or mortgage loan programs are

curtailed, potential buyers of our homes may not be able to obtain necessary mortgage financing to be able to purchase

a home from us. Further, we cannot provide any assurance that any interest rate reduction(s) or other monetary policy

changes will positively affect demand for homes or our results of operations.

Since 2022, insurance companies have discontinued, or significantly reduced, underwriting new homeowner insurance

policies in areas that have experienced, or are thought to be at risk of experiencing, significant wildfires, hurricanes,

flooding or other natural disasters, such as in California, Florida and certain Texas markets. If potential homebuyers

are unable to obtain affordable homeowner insurance coverage, a challenge which became more widespread in

California and Florida during 2024 and was exacerbated by wildfires and various significant weather events in 2025,

they may not be able to or decide not to pursue purchasing a home or may cancel a home sales contract with us.

•Poor lender performance. We depend on third-party lenders, including GR Alliance Ventures, LLC (“GR Alliance”), a

subsidiary of Guaranteed Rate, Inc. and our third-party partner in KBHS, to provide mortgage loans to our

homebuyers, unlike homebuilders with a wholly-owned mortgage lender. These lenders may be unable or unwilling to

complete, timely or at all, the loan originations they start for our homebuyers, including if adequate homeowner

insurance is not available. Poorly or non-performing lenders can significantly delay home closings, disrupting our

production schedules and delivery forecasts, or cause home sales contract cancellations. In addition, if GR Alliance or

KBHS perform poorly and our customers use another lender, the income from and value of our KBHS equity interest

would decline.

•Adverse tax law changes. If federal or state laws are changed to eliminate or reduce the income tax benefits associated

with homeownership, such as personal tax deductions for mortgage interest costs and real estate taxes, the after-tax

cost of homeownership could measurably increase and diminish consumer interest in buying a home, as could

increases in personal income tax rates. At the same time, favorable tax law changes will not necessarily increase

demand or allow for higher selling prices for homes generally or for the homes we sell.

•Competition. We face significant competition for customers from other homebuilders, sellers of resale homes and

other housing industry participants, including single-family and other rental-housing operators. Relative to the

2021-2023 period, since mid-2024, the supply of resale properties available for sale has generally risen in our served

markets, and there has been a higher supply of rental units in some of our served markets. This competitive

environment may, among other things, cause us to reduce our home selling prices or offer other concessions to attract

or retain buyers. Additionally, unpredictable buyer demand since 2022 has amplified competitive pressures and is

likely to remain a factor in 2026.

•Seasonality. As discussed above under Item 1 – Business in this report, we historically have experienced fluctuations

in our quarterly operating results with measurably more homes delivered and revenues generated in our third and

fourth fiscal quarters. However, as was the case in recent years, this pattern may not continue in the future at all or to

the same degree as in the past.

•Inflation. Since 2021, product and labor costs and general inflation in the economy have increased and remained

elevated compared to the prior decade. In turn, we experienced rising land and construction costs, particularly for

building materials and construction service providers’ rates, warranty repair costs, and compensation and benefit

expenses to attract and retain talent. These trends are expected to continue to an extent in 2026, though they may

worsen compared to prior years. Inflation has also tempered consumer demand for homes, disrupted credit and

lending markets and may increase our financing costs, as borrowings, if any, under our new, larger unsecured

revolving credit facility with various banks (“Credit Facility”) and our recently amended senior unsecured term loan

with the lenders party thereto (“Term Loan”) typically accrue interest at a variable rate based on short-term Secured

Overnight Financing Rate (“SOFR”). While we attempt to pass on increases in our costs through increased selling

prices, including for design choices and options, market forces and buyer affordability constraints can limit our ability

to do so. If we are unable to raise selling prices enough to compensate for higher costs, or our borrowing costs

increase significantly, our revenues, housing gross profit margin and net income could be adversely affected.

Supply Risks. The following could negatively affect our ability to increase our owned and controlled lot inventory,

community count, operational scale and market share, optimize returns on each of our assets, and grow our business, if at all:

•Lack of available land; delayed community openings and home starts. Securing sufficient developable land in our

served markets, and, in some cases, in targeted submarkets that have relatively more favorable long-term economic

and population growth prospects, that meets our investment return standards is critical for us to meet our strategic

goals and profitably expand our business’ scale. Land availability depends on several factors, including geographical/

topographical/governmental constraints, sellers’ business relationships and reputation within the residential real estate

community, and competition from other parties, some of which can bid more for land. Reflecting housing market

conditions, we and other homebuilders appreciably increased land investments in 2024 compared to 2023, which

pressured both the availability and pricing of land. In 2025, however, we measurably reduced our land acquisition

spending from 2024 levels to align with prevailing market conditions. While we began to see a more constructive land

market as to terms and pricing at the beginning of the 2025 fourth quarter, we expect to continue to face competition

for desirable land in our served markets in 2026 and beyond irrespective of whether we increase, decrease or maintain

our current pace of land spend, which may limit our ability to profitably develop communities and sell homes on such

land. Even if we are successful in acquiring attractive land parcels, we cannot assure that we will be able to generate

the returns from developing and selling homes on such parcels expected at the time of acquisition, or positive returns.

Timely development of the land we acquire is critical to achieving our net order, homes delivered and revenue

objectives for a given period. Our land development activities have been delayed by supply chain issues, as described

below, slow governmental approval and/or utility activation processes, and other factors, including those outside of our

control and similar delays will likely occur in future periods. Beyond negatively affecting our community count, our

failure to meet our anticipated community grand opening dates has caused, and may in the future cause us, to generate

fewer net orders, including lost orders, and incur higher costs, including carrying costs, adversely impacting our

margins and inventory turns. Similarly, our failure to timely start and complete new homes in an open new home

community has caused, and may in the future cause us, to incur higher costs and experience home sales contract

cancellations, as well as impair our ability to realize the benefits of faster build times, as discussed below.

•Supply chain challenges. Our business relies on a network of suppliers and trade partners to source materials and

services to build homes. In 2025, our supply chain faced cost pressures and constrained availability of several home

construction items due to varying tariffs, duties, sanctions and/or trade restrictions the federal government and other

countries (sometimes in retaliation) imposed on materials, parts and goods imported into the U.S., including steel,

aluminum and lumber, and we experienced continued significant delays with respect to state and municipal

construction permitting, inspections and utility processes. In addition, shortages or rising prices of building materials

have, and may in the future, ensue from manufacturing defects that result in building material recalls or the need to

undertake prolonged on-site repairs or other remediation measures.

Such cost pressures, supply constraints, processing delays and, to a lesser degree, manufacturing defects have

increased our input costs and reduced our revenues in certain reporting periods, and in some instances, led to home

sales contract cancellations or lower customer satisfaction. While we were able to keep our overall costs steady for

2025 through value engineering and other cost-saving measures, as well as negotiations with our suppliers, we expect

these economic and trade-related trends will continue to create headwinds into 2026 that, along with general

inflationary pressures, we may not be able to mitigate, negatively impacting our margins. Additionally, while we have

taken steps to engage with state and local officials and utilities, both public and private, to reduce processing delays,

we can provide no assurance that the delays we experienced in 2025 will improve to any degree, if at all, in 2026 or

beyond.

In an effort to accelerate our build times and the delivery of homes to our homebuyers, which improves customer

satisfaction, inventory turns and revenue generation, and the competitiveness of our value proposition to customers

relative to other new homebuilders, since 2020 we, among other things, have expanded our supplier base and added

new construction service providers; worked with our national suppliers to get products and materials; ordered items in

advance of starting homes; implemented construction process workarounds; simplified our design options; paced lot

releases to align with our production capacity; and balanced pace, price and construction starts to enhance margins.

Beginning in the 2023 second quarter, we achieved meaningful sequential improvements in our build times and by the

end of the 2025 fourth quarter, even with disrupted trade flows and state/municipal/utility processing delays, our

company-wide build times returned to approximately their historical average. However, we believe the challenging

environment described above, particularly trade restrictions on imported materials, may persist to a certain degree into

and potentially throughout 2026, which may slow or prevent additional progress in reducing our build times, and could

cause them to increase. We may also face increased home warranty and construction defect claims associated with

replacing or servicing substitute products or materials used in some instances to address supply shortages due to trade

restrictions or other factors in certain served markets or communities.

•Insufficient financial resources. Our business needs considerable cash to, among other things, acquire and develop

land, build homes and provide customer service. We expect to meet our needs with existing cash, future operational

cash flow, our Credit Facility and unsecured letter of credit facility with certain financial institutions (“LOC Facility”),

or outside sources, including loans that are specifically obtained for, or secured by, particular communities or other

inventory assets, which we refer to as “project financing.” However, outside financing may be unavailable, costly and/

or considerably dilute stockholders. For instance:

◦Tight or volatile capital or financial market conditions may hinder our ability to obtain external financing or

performance bonds, or use or expand our Credit Facility and LOC Facility, on favorable terms or at all. Also, if a

rating agency downgrades our credit rating or outlook, external financing may be difficult and costly for us to

obtain.

◦Noncompliance with our Credit Facility, Term Loan and senior notes covenants may restrict our ability to borrow;

accelerate repayment of our debt, which may not be feasible for us; or cause our lenders to impose significant fees

or cease lending to us.

◦As described in Note 15 – Notes Payable in the Notes to Consolidated Financial Statements in this report, if a

change of control or fundamental change occurs before our senior notes mature, we may need to offer to purchase

certain of them. This may require us to refinance or restructure our debt, which we may be unable to do on

favorable terms or at all.

◦Our debt and ratio of debt to capital levels could require us to dedicate substantial cash flow to debt service;

inhibit our ability to respond to business changes or adjust our debt maturity schedule; curb execution on our

current strategies; and/or make us more vulnerable in a downturn than our less-leveraged competitors. Our next

senior note maturity is our $300.0 million in aggregate principal amount of 6.875% senior notes due June 15, 2027

(“6.875% Senior Notes due 2027”).

•Decreased land inventory value. Our land inventory’s value depends on market conditions, including our estimates of

applicable future demand and revenue generation. If conditions deteriorate during the typically significant amount of

time between our acquiring ownership/control of land and delivering homes on that land; if we cannot sell land held

for sale at its estimated fair value; or if we make strategic changes, we may need to record inventory-related charges.

We may also record charges if we decide to sell land at a loss or activate or sell land held for future development.

In addition, our business could be negatively affected if our net orders, homes delivered or backlog-to-homes delivered

conversion rate fall; if often-volatile building materials prices or construction services costs increase, which has been

the trend over the past few years; or if our community openings are delayed due to, among other things, prolonged

development from supply chain disruptions, construction services shortages or otherwise, our strategic adjustments, or

protracted government approvals or utility service activations from staff or resource cuts or reallocations for public

safety priorities (e.g., earthquakes, wildfires, flooding, hurricanes or other natural disasters).

•Poor contractor availability and performance. Independent contractors perform essentially all of our land development

and home construction work. Though we schedule and oversee such activities at our community sites, we have no

control over our independent contractors’ availability or work methods. If qualified contractors are not available (due

to general shortages in a tight labor market, competition from other builders or otherwise), or do not timely perform,

we may incur production delays and other inefficiencies, or higher costs for substitute services. Also, if our trade

partners’ work or materials quality does not meet our standards, we could face more home warranty and construction

defect claims, and they or their insurers may not be able to cover the associated repair costs.

•Potential expansion of employment-related obligations. Governmental agencies or others might assert that we should

be subjected to California law and associated regulations that, in certain circumstances, impose responsibility upon

direct contractors for certain wages and benefits that subcontractors of the direct contractor have failed to pay to their

employees. It might also be alleged that California law and regulations impose other liabilities upon us with respect to

the employees of our trade partners. Further efforts in California or elsewhere to impose such external labor-related

obligations on us could create substantial exposure for us in situations beyond our control.

Strategy Risks. Our strategies, and any related initiatives or actions, and any changes thereto, including as to the land we

acquire and develop and the markets we decide to serve, may not be successful in achieving our goals or generate any growth,

earnings or returns, particularly in the highly volatile business environment of the past few years and as may occur in 2026, due

to inflation, interest rate and financial market volatility, or political or social distress. In 2025, around 55% of our homes

delivered were Built to Order, largely reflecting strategies to navigate supply chain disruptions that substantially lengthened our

average build time and hindered our even-flow home production process, and market dynamics in areas with then-low resale

home inventory. Our intent for 2026 is to bring our mix of homes delivered closer to our historical average. However, we may

not achieve positive operational or financial results from implementing this or other business strategies, or results equal to or

better than we did in any prior period or in comparison to other homebuilders. We may also incur higher costs, or experience

sourcing or supply chain disruptions that result in extended times to build our homes, as compared to other homebuilders due to

our commitment to sustainability. At the same time, we expect there could be an unfavorable reputational impact if we do not

maintain our sustainability programs; or if we fail to meet our sustainability objectives. Among other strategic risks, our

business is presently concentrated in California, Florida, Nevada and Texas. Poor conditions in any of those markets could

have a measurable negative impact on our results, and the impact could be larger for us than for other less-concentrated

homebuilders.

Adverse conditions in California would have particular significance to our business. We generate the highest proportion of

our revenues from and make significant inventory investments in our California operations. However, we may be constrained

or delayed in entitling land and selling and delivering homes in California, and incur higher development or construction costs,

from water conservation or wildfire protection measures (including precautionary and event-induced electricity blackouts,

temporary or extended local or regional evacuations, development moratoriums in high-risk areas, and community resiliency

design requirements) that are intended to address severe drought and climate conditions that have arisen in recent years. In

addition, to the extent large-scale wildfires and flooding, as well as hurricanes, heavy rains and other climate change-driven

natural disasters in our served markets become more frequent and intense, as discussed below under “Climate Risk,” we may

experience greater disruption to our land development and homebuilding activities, delaying orders and homes delivered,

among other impacts.

Also, California’s highly regulated and litigious business environment has made the state an increasingly difficult place for

us to operate. This includes implementing regulations under the state’s Global Warming Solutions Act of 2006 intended to

lower GHG emissions. For instance, we have and will continue to incur higher construction costs because of a state law

requirement that effectively requires that all newly-built homes have solar power systems, and we may be unable to offset

(through customer leases) or cover such costs through selling price increases due to competition and consumer affordability

concerns. We also faced an uncertain solar power system provider environment in 2025 and 2024 largely due to the federal

government’s repealing and/or accelerating the expiration of related tax credits, as described below, and changes in California

net metering regulations that created significant instability in the solar power industry, with several providers going out of

business or entering bankruptcy. This has disrupted the supply and installation of solar power systems, causing delays in

system completions and permissions to operate and, in turn, home deliveries. The federal government’s repeal and/or

accelerated expiration of tax credits for solar power systems has also caused lease financing providers to exit the market,

pressuring the availability of leases for customers in California.

Effective in 2026, California’s new energy efficiency standards will require all new residences to be electric-ready for

heating, cooling, cooking, clothes drying and water heating systems. In addition, California and certain of its local

governments have implemented restrictions on or disincentives for new suburban and exurban residential communities,

generally in favor of higher-density, urban developments that can be attractive to some buyers, but in many cases are on smaller

parcels with higher building costs and more complicated entitlement requirements and may be subject to affordable housing

mandates, prevailing wage requirements, greater local opposition and/or additional site remediation work. These efforts have

and could further significantly increase our land acquisition and development costs and, along with competition from other

homebuilders and investors for available developable land, limit our California operations’ growth, while making new homes

less affordable to potential buyers in the state, including as a result of its public utilities commission’s decision to significantly

reduce net metering payments to homeowners for the rooftop solar power they export to the grid from systems installed.

Climate Risk. While there is considerable debate over its drivers and magnitude, and about the physical, regulatory and/or

technical/scientific mitigation or adaptation measures, if any, that should be implemented, global climate change and responses

to it present potential risks to our operations, ranging from extreme weather events to extensive governmental policy

developments and shifts in consumer preferences, which could individually or collectively significantly disrupt our business as

well as negatively affect our suppliers, independent contractors and customers. Experiencing or addressing these various risks

may significantly reduce our revenues and profitability, or cause us to generate losses. For instance, incorporating greater

resource efficiency into our home designs to comply with upgraded building codes often raises our costs to construct homes. In

evaluating whether to implement voluntary improvements, we consider that choosing not to enhance our homes’ resource

efficiency can make them less attractive to municipalities, and increase the vulnerability of residents in our communities to

rising energy and water expenses and use restrictions. We balance these costs against our goals of profitability and affordability

for first-time and first move-up buyers, while considering potential homeowner insurance challenges in certain areas due to

local environmental conditions, historical events and/or the regulatory environment for insurance providers. We may determine

we need to absorb most or all the additional operating costs that come with making our homes more efficient and/or from

operating in areas with more extensive regulatory requirements, such as California, or certain climates. While our years of

experience in sustainable homebuilding, as discussed above under “Sustainability Principles and Practices,” may give us an

advantage over other homebuilders in managing these absorbed costs, they may be substantial for us.

Our operations in any of our served markets may face potential adverse physical effects, especially in California, our

largest market, that has historically experienced, and is projected to continue to experience, climate-related events at an

increasing frequency including drought, water scarcity, heat waves, wildfires, and resultant air quality impacts and power

shutoffs associated with wildfire prevention. In addition, as we develop land and open more communities in less populated

areas, new housing subdivisions may be subject to potential development moratoriums and not be permitted unless developers

secure alternative water supplies, among other conditions. While we have health and safety protocols in place for our

construction sites and take steps to safeguard our administrative functions, including our IT resources, as described below under

“Information Technology and Information Security Risks,” we can provide no assurance that we or our suppliers or trade

partners can successfully operate in areas experiencing frequent or persistent adverse climate-related conditions, and we or they

may be more impacted and take longer, and with higher costs, to resume operations in an affected location than other

homebuilders or businesses, depending on the nature of the conditions or other circumstances.

As discussed above under “Strategy Risks,” and below under “Legal and Compliance Risks,” various government and

legislative bodies have aimed to restrict, moderate or promote activities consistent with resource conservation, GHG emission

reduction, environmental protection or other climate-related objectives. These initiatives could increase our costs, such as with

California’s requirement that all new homes have solar power systems, agency requirements for all-electric readiness and higher

efficiency standards, including the use of zero-emission alternatives, beginning in 2026; delay or complicate home construction,

for example, due to a need to reformulate or redesign building materials or components, or source updated or upgraded items or

equipment, or specially trained or certified independent contractors, in limited or restricted supply, which has been a challenge

for us in certain cases in the past few years; or diminish consumer interest in homes mandated to include or omit certain

features, amenities or appliances, particularly if home prices increase as a result.

Adapting to or transitioning from the use of certain items or methods in home construction, or adjusting the products we

offer to our buyers, whether due to climate-related governmental rules affecting home construction or our supply chain, market

dynamics or consumer preferences, can negatively affect our costs and profitability, production operations in affected markets

and customer satisfaction during the transition period, which could be prolonged. For instance, in certain local markets in

California where natural gas use is banned in new homes, we have faced some disruptions in reorienting our purchase order,

independent contractor engagement, design studio and home construction processes and have implemented certain architectural

design changes for all-electric homes. To the extent other jurisdictions or the state adopt such bans and as we implement the

state’s all-electric readiness requirements, as discussed above, we will face similar issues.

Though practically available technology and resources allow us only to make certain estimates, and not definitive

measurements, of the effectiveness and overall impact of our longstanding and broad-based environmental sustainability

initiatives described above under “Sustainability Principles and Practices,” we feel these initiatives and their evolution over

time represent how we can best address climate change risks in the context of our business, industry and the wider, and rapidly

changing, economic, social and political environment. However, climate change is an intrinsically complex global phenomenon

with inherent residual risks across its physical, regulatory and adaptation/transition dimensions that cannot be mitigated given

their wide-ranging, (sometimes unexpectedly) interdependent and largely unpredictable potential scope, nature, timing or

duration. Therefore, though we have not as of the date of this report identified or experienced any particular material impact,

whether singular or in combination, to our consolidated financial statements from climate change or the associated regulatory,

physical, transition and other risks discussed above, we cannot provide any assurance that we have or can successfully prepare

for, or are or will be able to reduce or manage any of them to the extent they may arise.

Further, we expect that as concerns about climate change and other environmental issues continue to increase,

homebuilders will be required to comply with new and extensive laws and regulations, including recently enacted climate

disclosure laws in California as well as any climate-related disclosure rules that may be adopted by the SEC, each of which we

anticipate will result in additional significant compliance costs. In October 2023, California enacted the Climate Corporate

Data Accountability Act (“SB-253”), which mandates the disclosure of GHG emissions, including Scope 1, Scope 2 and Scope

3 emissions; and the Climate-Related Financial Risk Act (“SB-261”), which mandates the disclosure of climate-related

financial risks, and measures adopted to reduce and adapt to such risks. California has delayed formal rulemaking for SB-253

to at least late February 2026. We expect to file an initial Scope 1 and Scope 2 GHG emissions report later in the year under

SB-253, pending finalization of the regulations. As of the date of this report, SB-261 is subject to a court injunction on its

implementation. Whether we file a climate-related financial risk report under SB-261 in 2026 depends on the outcome of the

legal process affecting that statute and any regulations California adopts.

We may also experience substantial negative impacts to our business if an unexpectedly severe weather event or natural

disaster damages our operations or those of our suppliers or independent contractors in our primary markets, such as in

California, Florida, Nevada and Texas, or from the unintended consequences of regulatory changes that directly or indirectly

impose substantial restrictions on our activities or adaptation requirements. Such severe weather events could delay home

construction, increase construction costs, reduce the availability of building materials, and damage roads and/or cause

transportation delays that stress our supply chain and negatively impact the demand for new homes in affected areas, as well as

slow down or otherwise impair the ability of utilities and local government agencies to provide approvals and service to new

communities. Further, if our insurance does not fully cover our costs and other losses from such events, our earnings, liquidity,

or capital resources could be adversely impacted.

Warranty and Insurance Risks. Our homebuilding business is subject to warranty and construction defect claims. Though

we have insurance coverage to partially reduce our exposure, it is limited and costly, in part due to a shrinking provider market,

and we have high self-insured retentions that are expected to increase. We self-insure some of our risk through a wholly-owned

insurance subsidiary. Because we do not maintain insurance coverage to cover all claims or liabilities that may arise in our

business, and have high self-insured retentions with the insurance coverages we do maintain, we may need to use a significant

amount of our then-existing liquidity, or obtain external financing, to satisfy any such claims and liabilities.

Due to our dependence on the performance of independent suppliers and contractors to provide products and materials and

carry out our homebuilding activities, and the associated risks described above under “Inflation,” “Supply chain challenges”

and “Poor contractor availability and performance,” as well as inherent uncertainties, including obtaining recoveries from

responsible parties and/or their or our insurers, our recorded warranty and other liabilities may be inadequate to address future

claims, which, among other things, could require us to record charges to increase such liabilities. We may also record charges

to reflect our then-current claims experience, including the actual costs incurred. Home warranty and other construction defect

issues may also generate negative publicity, including on social media and the internet, that detracts from our reputation and

efforts to sell homes.

Tax-Related Risks. Our future income tax rates and expense can fluctuate or be adversely affected due to legislative and

regulatory changes; government or court interpretations of new or existing tax laws and regulations; changes in available tax

credits; adjustments to estimated taxes in finalizing our tax returns and/or due to new regulatory guidance; changes in non-

deductible expenses, particularly those associated with compensation; tax benefits related to stock-based compensation; the

realization of our deferred tax assets; and the resolution of tax audits with federal or state tax authorities based on, among other

things, tax positions we have taken.

In 2025 and prior years, we have recognized federal tax credits under Internal Revenue Code Section 45L (“Section 45L”)

from our building energy-efficient new homes, when such credits were available to us. In July 2025, H.R.1, the One Big

Beautiful Bill Act (“OBBBA”) repealed the Section 45L credit for homes delivered after June 30, 2026. As a result, beginning

in our 2026 third quarter, our income tax expense and effective tax rate will no longer reflect a benefit from such tax credits as

to homes delivered after that date.

Our realization of our deferred tax assets depends on our generating sufficient future taxable income, which may not occur.

Also, our deferred tax assets’ value can increase or decrease with: (a) changes in the federal corporate income tax rate; (b) our

undergoing a “change of ownership” under federal tax rules, which would significantly reduce and possibly eliminate their

value; and (c) adjustments in statutory or taxing authority treatment of such assets.

We have filed our tax returns based on certain positions we believe are appropriate, and we may owe additional taxes if

taxing authorities disagree with those positions.

Human Capital Risks. Our directors, officers and employees are important resources. If we cannot attract, retain and

develop talent at reasonable pay and benefits levels, or, alternatively, if we need to implement personnel or compensation

reductions, our performance, profitability and ability to achieve our strategic goals could be significantly impaired. While we

have developed extensive leadership development programs and succession plans, as discussed above, we cannot assure that

our programs and plans, and their future iterations, will ensure that employees in key leadership positions who depart will be

replaced by equally or more effective successors. In addition, in many of our served markets, we need to have personnel with

certain professional licenses, including building contractor and real estate brokerage licenses. Our home selling and

construction activities may be severely disrupted or delayed if we do not have sufficient licensed individuals in our workforce.

Information Technology and Information Security Risks. We use IT resources to carry out important operational activities

and maintain our business records. Third parties provide and maintain many of our IT resources, including disaster recovery

and business continuity services intended to safeguard access to and use of our IT resources during a general or local network

outage, under agreements with evolving security and service level standards. Our senior IT executives also periodically update

the audit and compliance committee of our board of directors on our cybersecurity practices and risks, most recently in January

2026. A reporting process has been established, and periodically tested and refined with the assistance of outside experts, to

escalate notice within our organization of and coordinate our response to IT security events. Depending on the severity of an

event, our incident reporting process includes informing as early as practicable our senior corporate management and members

of our board of directors. If a cybersecurity incident is determined to be material, we are subject to additional SEC reporting

requirements. Our cybersecurity policies and procedures are further described below under Item 1C – Cybersecurity in this

report.

Our systems have faced a variety of phishing, denial-of-service and other attacks and occasional theft of encrypted

employee laptops. To help counter the growing volume and sophistication of cyberattacks and other attempts to gain

unauthorized access to sensitive business or individuals’ personal information, including the potential of fraudulent schemes

inducing our employees, customers, trade partners, or other third parties to disclose information or unknowingly provide access

to systems or data, whether in our sales offices or elsewhere, and considering the use of artificial intelligence and other

technology to compromise our user access protocols, we have implemented administrative, physical and multi-layered technical

controls and processes. These measures are designed to help address and mitigate cybersecurity risks and protect our IT

resources and sensitive information, and include employee education and awareness training, as well as assessments conducted

by external third parties. Our technical defense layers are designed to provide multiple, overlapping measures to establish

appropriate system security configurations and protect against exploitation of a vulnerability that may arise or if a security

control fails. For these defenses, we rely on third parties that we believe, but cannot guarantee, are capable of performing the

protective service for which we have engaged them. We conduct periodic incident response tabletop exercises, with third-party

support and reviews, and we perform an annual cybersecurity risk assessment to identify potential areas of focus. Our IT

security costs, including cybersecurity insurance, are significant and will likely rise in tandem with the sophistication and

frequency of system attacks.

We also depend on our service providers, GR Alliance and other mortgage lenders, with whom we share some personal

identifying and confidential information, to secure our data and the homebuyer information they collect from us. However, our,

GR Alliance’s and our service providers’ measures may be inadequate and possibly have operational or security vulnerabilities

that could go undetected for some period of time. If our IT resources are compromised, we may be severely limited in

conducting our business and achieving our strategic goals for an extended period, experience internal control failures or lose

access to operational assets or funds. A substantial disruption, or security breach suffered by us, GR Alliance/KBHS or a

service provider, particularly our cloud service provider which hosts many of our IT resources, could damage our reputation

and result in the loss of customers or revenues, in sensitive personal information being publicly disclosed or misused and/or

regulatory or legal proceedings against us. We may incur significant expenses to resolve such issues. While, to date, we have

not had a significant cybersecurity breach or attack that had a material impact on our business or consolidated financial

statements, there can be no assurance our efforts to maintain the security and integrity of these systems will be effective or that

attempted security breaches, cyber-attack, data theft or disruptions would not occur in the future, be successful or damaging.

Beyond our service providers, we depend on independent third parties to handle certain processes required to complete land

purchases and home closings, including title insurers and escrow/settlement companies. Should these third parties, as well as

independent mortgage lenders and other firms involved in real property transactions, experience their own cybersecurity

incidents or IT resource failures that disrupt or prevent their performance of necessary real estate transaction services, our

ability to close on land transactions or our customers’ ability to close on their homes, as well as our production schedules and

delivery forecasts, may be significantly disrupted and have a material impact on our operations or consolidated financial

statements, including by causing home sales contract cancellations.

Legal and Compliance Risks. As discussed above under Item 1 – Business in this report, our operations are subject to

myriad legal and regulatory requirements, which can delay our operational activities, raise our costs and/or prohibit or restrict

homebuilding in some areas. These requirements often provide broad discretion to government authorities, and they could be

interpreted or revised in ways unfavorable to us. The costs to comply, or associated with any noncompliance, are, or can be,

significant and variable from period to period. With respect to environmental laws, in addition to the risks and potential

operational costs discussed above, we have been, and we may in the future be, involved in federal, state and local air and water

quality agency investigations or proceedings for potential noncompliance with their rules, including rules governing discharges

of materials into the air and waterways; stormwater discharges from community sites; wetlands and listed species habitat

protection; and governmental health and safety rules and requirements, such as those enforced by the federal Occupational

Safety and Health Administration and similar state agencies. We could incur penalties and/or be restricted from developing or

building at certain community locations during or as a result of such agencies’ investigations or findings.

Additionally, we are involved in legal, arbitral or regulatory proceedings or investigations incidental to our business, the

outcome or settlement of which could result in material claims, losses, monetary damage awards, penalties, or other direct or

indirect payments recorded against our earnings, or injunctions, consent decrees or other voluntary or involuntary restrictions or

adjustments to our business operations or practices. Any adverse results could be beyond our expectations, insurance coverages

and/or accruals at particular points in time. Unfavorable outcomes, as well as unfavorable investor, analyst or news reports

related to our industry, company, personnel, governance or operations, may also generate negative publicity, including on social

media and the internet, damaging our reputation and resulting in the loss of customers or revenues. We may also face similar

reputational impacts if our sustainability initiatives or objectives and/or our social or governance practices do not meet the

standards set by investors or third-party rating services. Additionally, low third-party ratings could result in our common stock

being excluded from certain indexes or not being recommended for or selected by investors with certain mandates or priorities.

To reduce the risks and expected significant costs of defending intra-corporate proceedings in multiple venues and to help

ensure that such matters are considered within a well-established body of law, our By-Laws provide that, subject to certain

exceptions, Delaware state courts are the exclusive forum for specified internal corporate affairs actions and federal courts are

the exclusive forum for any action asserting a claim arising under the Securities Act of 1933, as amended. These provisions

may limit a stockholder’s ability to bring a claim in their favored forum. At the same time, if a court were to allow for an

alternative forum, or we waive the provision’s application, for a particular matter, we may incur additional costs associated with

resolving an otherwise relevant action in another jurisdiction(s).

The European Union and state governments, notably California, Colorado, Delaware and Nevada, have enacted or

enhanced data privacy regulations, and other governments are considering establishing similar or stronger protections. These

regulations impose certain obligations for securing, and potentially removing, specified personal information in our systems,

and for apprising individuals of the information we have collected about them. We have incurred costs in an effort to address

these data privacy risks and requirements, and our costs may increase significantly as risks become increasingly complex or if

new or changing requirements are enacted, and based on how individuals exercise their rights. Despite our efforts, any

noncompliance could result in our incurring substantial penalties and reputational damage.

KBHS’ operations are heavily regulated. If GR Alliance, which oversees KBHS’ operations, or KBHS is found to have

violated regulations, or mortgage investors demand KBHS repurchase mortgage loans it has sold to them, or cover their losses,

for claimed contract breaches, KBHS could face significant liabilities, which, if they exceed its reserves, could result in our

recognizing losses on our KBHS equity interest.

Our financial results may be materially affected by our use of critical accounting estimates and the adoption of new or

amended financial accounting standards, as well as regulatory or outside auditor guidance or interpretations. In addition, to the

extent we expand our disclosures on our sustainability initiatives in line with certain private reporting frameworks and investor

requests, our failure to report accurately or achieve progress on our metrics on a timely basis, or at all, could adversely affect

our reputation, business, financial performance and growth.

Other Risks. The risk factors described above are not our only salient risks. Political events, war, terrorism, weather or

other natural/environmental disasters, and other risks that are currently unknown or are currently or may initially be seen as

immaterial, could also have a material adverse impact on our business, consolidated financial statements and/or common

stock’s market price.

Item 1B.UNRESOLVED STAFF COMMENTS

None.

Item 1C.CYBERSECURITY

Risk Management and Strategy. We have policies and procedures for identifying, assessing and managing material risks

associated with cybersecurity threats. To help protect our IT resources, we have instituted administrative, physical and

technical controls and processes and commissioned third-party assessments. The technical defense measures we have

implemented are designed to address vulnerabilities that may arise, including from a security control failure. These measures

currently involve a combination of artificial intelligence; machine learning computer network monitoring; malware and

antivirus resources; firewall systems; and endpoint detection and response. We also utilize cloud service defenses; Internet

address and content filtering monitoring software intended to secure against known malicious websites and potential data

exfiltration; and enterprise gateway security for workforce mobile devices and applications. Additionally, a variety of cyber

intelligence and threat monitoring sources provide us with ongoing updates on potential or emerging risks. For all these

measures we rely on third-party providers that we believe are capable of performing the service for which they have been

engaged or on certain governmental agencies. Before we engage a third-party provider for these types of services and

resources, we typically conduct a security review involving, as relevant to the service or resource, discussions with the

provider’s security personnel, evaluation of auditor reports, and other requested information and documentation.

We evaluate, and adjust as determined appropriate, our cybersecurity strategies and measures based on the above-noted

threat monitoring sources, learnings from periodic incident response tabletop exercises in which members of senior

management participate; penetration tests and scanning exercises; and an annual cybersecurity and/or cloud security risk

assessment conducted with help from outside experts informed by the National Institute of Standards and Technology

Cybersecurity framework. Our IT function also undertakes a specific risk review, assisted in part by independent consultants

and other third parties, that is integrated into the overall annual enterprise risk management assessment the board of directors’

audit and compliance committee oversees. Our internal audit department incorporates the results from this risk review, and

cybersecurity-related enhancements identified through the review, in designing and conducting its IT function audits, in some

cases with a third-party firm’s assistance.

To support the ongoing identification and management of cybersecurity issues, all employees are required to complete

cybersecurity awareness training, including social engineering, password best practices, data classification and phishing

awareness, with additional training for handling of customer personal information. We also publish a monthly security

awareness newsletter along with performing ongoing internal phishing assessments.

We also consider and evaluate cybersecurity risks associated with KBHS and third-party service providers that we have

identified as having the greatest potential to expose us to cybersecurity threats. We have established due diligence procedures

with KBHS and such third-party service providers, as well as communication channels as part of their breach and incident

response processes. We also review annually the System and Organization Controls reports of third-party vendors hosting our

data to ensure they maintain adequate access management controls including physical safeguards, disaster recovery capabilities,

data privacy and notification processes, onboarding processes, incident response procedures and periodic independent testing of

the vendor capabilities. We depend on our third-party service providers, KBHS and outside service providers to our customers

with whom we share some personal identifying and confidential information to secure the information they receive from us.

Our business strategy, results of operations, or financial condition may be materially affected if our IT resources are

compromised, whether by an intentional attack, natural or man-made disaster, electricity blackout, IT/cybersecurity failure,

systems misconfiguration, denial-of-service attacks, service provider error, mismanaged user access protocols, personnel action,

or otherwise. Depending on source or severity, among other factors, should any such compromise(s) occur, we may be severely

limited in conducting operations for an extended period, experience internal control failures, be cut off from assets or funds,

face reputational damage, lose customers and related revenues and/or have private party or governmental legal proceedings

instituted against us, and incur significant expenses to resolve any such issues. Similar impacts may result from a substantial

disruption, or security incident or breach, suffered by KBHS or an outside service provider to our customers, which could also

result in sensitive personal information being publicly disclosed or misused.

Governance. Our management is responsible for the ongoing assessment of, and for developing and implementing our

strategies and measures to address, material cybersecurity risks. Our board of directors through its audit and compliance

committee oversees management’s cybersecurity assessment activities and protective strategies and measures. This includes

engaging in periodic reviews with management covering, among other things, our cybersecurity practices and risks. Several of

our directors have experience with overseeing cybersecurity practices and incident management. Our chief information officer

(“CIO”) periodically provides this review to the audit and compliance committee, with the most recent review conducted in

January 2026. The CIO, who has more than 35 years of experience in IT and cybersecurity, is supported by a chief information

security officer, who has more than 30 years of experience in IT and cybersecurity, and various employees and dedicated

contract personnel experienced with IT and cybersecurity matters who are responsible for procuring, using, maintaining,

updating and evaluating the cybersecurity measures detailed above. These individuals also hold numerous cloud, security and

privacy certifications.

We have a cybersecurity incident response plan (“CIRP”) that, among other things. defines roles and responsibilities,

outlines steps for managing a cybersecurity event that is assessed to be a cybersecurity incident, including determining whether

such an incident is material and required to be publicly disclosed per SEC rules, and specifies internal and external

communication channels with respect to a cybersecurity incident. Our IT function, which is led by the CIO, maintains and is

initially responsible for executing on our CIRP and specific runbooks, which describe processes for evaluating and escalating,

depending on severity, within the enterprise and up to our senior executive management and board of directors the

cybersecurity threats and incidents, or potential threats or incidents, identified through our cybersecurity measures. This team

also maintains other policies and procedures concerning cybersecurity matters, such as encryption standards, antivirus

protection, remote access, multifactor authentication, data classification, confidential information and the use of the internet,

social media, email and wireless devices. We also maintain insurance coverage for cybersecurity insurance as part of our

overall insurance portfolio.

Our IT systems have faced a variety of phishing, denial-of-service and other attacks. Although we have not identified any

cybersecurity incidents during the fiscal years covered by this report that have materially affected or are reasonably likely to

materially affect our business strategy, consolidated results of operations or consolidated financial condition, we can provide no

assurance that our security measures will be successful and therefore we may experience a cybersecurity incident that materially

affects our business strategy, consolidated results of operations, consolidated financial condition or reputation, including, but

not limited to those described above. For more information about the cybersecurity risks we face, see Item 1A – Risk Factors.

Item 2.PROPERTIES

None.

Item 3.LEGAL PROCEEDINGS

Our legal proceedings are discussed in Note 18 – Legal Matters in the Notes to Consolidated Financial Statements in this

report.

Item 4.MINE SAFETY DISCLOSURES

Not applicable.

Information about our Executive Officers

The following table presents certain information regarding our executive officers as of December 31, 2025:


Name	Age	Present Position	Year Assumed Present Position	Years at KB Home	Other Positions and Other Business Experience within the Last Five Years	From – To

Jeffrey T. Mezger	70	Chairman and Chief Executive Officer (a)	2024	32	Chairman, President and Chief Executive Officer	2016- 2024
Robert R. Dillard	51	Executive Vice President and Chief Financial Officer	2025	1	Chief Financial Officer, Sonoco Products Company (a global provider of packaging solutions)	2022- 2025
					Chief Strategy Officer, Sonoco Products Company	2022- 2022
					Vice President, Corporate Development, Sonoco Products Company	2018- 2022
Robert V. McGibney	51	President and Chief Operating Officer	2024	25	Executive Vice President and Chief Operating Officer	2022- 2024
					Executive Vice President and Co-Chief Operating Officer	2021- 2022
					Regional President	2018- 2021
Albert Z. Praw	77	Executive Vice President, Real Estate and Business Development	2011	29
Brian J. Woram	65	Executive Vice President and General Counsel	2010	15

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

There is no family relationship between any of our executive officers or between any of our executive officers and any of

our directors.

PART II

Item 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the New York Stock Exchange under the ticker symbol “KBH.” As of December 31, 2025,

there were 473 holders of record of our common stock.

Information regarding the shares of our common stock that may be issued under our equity compensation plans is provided

below under Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters in

this report.

The following table summarizes our purchases of our own equity securities during the three months ended November 30,

2025 (dollars in thousands, except per share amounts):


Period	Total Number of Shares Purchased	Average Price Paid per Share	Dollar Value of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs
September 1-30	—	$—	$—	$261,540
October 1-31	1,647,423	59.01	97,212	902,788
November 1-30	45,646	61.08	2,788	900,000
Total	1,693,069	$59.06	$100,000

As of November 30, 2024, we were authorized to repurchase up to $700.0 million of our outstanding common stock under

a share repurchase program approved by our board of directors in April 2024. On October 9, 2025, our board of directors

authorized us to repurchase up to $1.00 billion of our outstanding common stock. This authorization replaced the 2024

authorization, which had $261.5 million remaining, as further discussed in Note 19 – Stockholders’ Equity in the Notes to

Consolidated Financial Statements in this report. In the 2025 fourth quarter, we purchased 1,597,196 shares of our common

stock pursuant to this authorization at a total cost of $100.0 million, bringing our total repurchases in 2025 to 9,385,309 shares

at a total cost of $538.5 million. As of November 30, 2025, we were authorized to repurchase up to $900.0 million of our

outstanding common stock.

During the three months ended November 30, 2025, we also purchased certain previously issued shares delivered to us by

employees to satisfy withholding taxes on the vesting of restricted stock awards. These transactions are not considered

repurchases under the board of directors authorization.

The 2022 Inflation Reduction Act (“IRA”) imposed a nondeductible 1% excise tax on the net value of certain stock

repurchases made after December 31, 2022. All dollar amounts presented in the table above and in this report related to our

share repurchases and our share repurchase authorizations exclude such excise taxes, to the extent applicable, unless otherwise

indicated.

Stock Performance Graph

The following graph compares the five-year cumulative total return of KB Home common stock, the S&P 500 Index and

the Dow Jones US Home Construction Index for the periods ended November 30:

Comparison of Five-Year Cumulative Total Return

Among KB Home, S&P 500 Index and

Dow Jones US Home Construction Index


	2020	2021	2022	2023	2024	2025
KB Home	$100	$115	$92	$155	$249	$197
S&P 500 Index	100	128	116	132	177	204
Dow Jones US Home Construction Index	100	133	113	177	255	232

The above graph is based on the KB Home common stock and index prices calculated as of the last trading day before

December 1 of the year-end periods presented. The closing price of KB Home common stock on the New York Stock

Exchange was $64.33 per share on November 30, 2025 and $82.74 per share on November 30, 2024. The performance of our

common stock as presented above reflects past performance only and is not indicative of future performance. Total return

assumes $100 invested at market close on November 30, 2020 in KB Home common stock, the S&P 500 Index and the Dow

Jones US Home Construction Index, including reinvestment of dividends.

Item 6.[RESERVED]

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

RESULTS OF OPERATIONS

Our discussion and analysis below is primarily focused on our 2025 and 2024 financial results, including comparisons of

our year-over-year performance between these years. Discussion and analysis of our 2023 fiscal year specifically, as well as the

year-over-year comparison of our 2024 financial performance to 2023, are located under Part II, Item 7 – Management’s

Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal

year ended November 30, 2024, filed with the SEC on January 24, 2025, which is available on our investor relations website at

investor.kbhome.com and the SEC website at www.sec.gov.

RESULTS OF OPERATIONS

Overview. Revenues are generated from our homebuilding and financial services operations. The following table presents

a summary of our consolidated results of operations (dollars in thousands, except per share amounts):


	Years Ended November 30,			Variance
	2025	2024	2023	2025 vs 2024	2024 vs 2023
Revenues:
Homebuilding	$6,211,905	$6,902,239	$6,381,106	(10)%	8%
Financial services	24,309	27,847	29,523	(13)	(6)
Total	$6,236,214	$6,930,086	$6,410,629	(10)%	8%
Pretax income:
Homebuilding	$519,210	$802,028	$731,783	(35)%	10%
Financial services	34,979	48,890	39,494	(28)	24
Total	554,189	850,918	771,277	(35)	10
Income tax expense	(125,400)	(195,900)	(181,100)	36	(8)
Net income	$428,789	$655,018	$590,177	(35)%	11%
Earnings per share:
Basic	$6.28	$8.70	$7.25	(28)%	20%
Diluted	$6.15	$8.45	$7.03	(27)%	20%

Housing market conditions in 2025 were challenging despite solid underlying drivers, mainly favorable demographic

KB HOME 10-K