Slide 1: Investor Presentation Fourth Quarter 2023
kb HOME . A. ~ ly Ny ~ uilt on = “A ah | Fastehipa ae 4 2 nf ll I ! Investor Presentation Fourth Quarter 2023 |
Slide 2: Forward-Looking Statements
Forward-Looking Statements Items in this presentation, and statements by KB Home management in relation to this presentation or otherwise, may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on current
Slide 3: Built to Order Model Provides Competitive Advantages
Built to Order Model Provides Competitive Advantages Buyers Want Choice Buyers Value Choice; Buyers select their floor plan, lot, square footage and As a Result, Our BTO Model Drives personalized finishes in our Design Studios based on what they High Monthly Absorption per Community value and can af
Slide 4: Built to Order Model Attracts Largest Demand Segments of Market
Built to Order Model Attracts Largest Demand Segments of Market A Leader in the 1st Time Buyer Segment While Drawing a Mix of Buyers to Our Communities Q4 2023 Buyer Profile (Based on Homes Delivered) BTO enhances value and affordability through 15% Invest in land Position our product choice of lot,
Slide 5: Dedicated to Providing World Class Customer Service
Dedicated to Providing World Class Customer Service • KB Home’s personalized, customer-centric Built to Order business model enables us to develop long-term relationships with our customers • Our community teams partner with customers through each major step of their purchase of a KB home: sale – mo
Slide 6: Fourth Quarter 2023
Fourth Quarter 2023 © 2024 KB Home 6
Slide 7: Growth-Oriented Geographic Footprint
Growth-Oriented Geographic Footprint Principal Markets Q4 2023 Mix • West Coast: California, West Coast Southwest Central Southeast Idaho, Washington Homebuilding 43% 17% 23% 17% • Southwest: Arizona, Revenues Nevada Deliveries 30% 20% 30% 20% • Central: Colorado, Texas Average $679K $432K $381K $40
Slide 8: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights (all comparisons on a year-over-year basis) Q4 2023 Q4 2022 % Change • Revenues totaled $1.67 billion Housing Revenues $1.66 billion $1.93 billion -14% • Homebuilding operating income was $180.9 million, compared to $278.2 million Deliveries 3,407 3,786 -10% – Homebuil
Slide 9: Housing Revenues
Housing Revenues ($ in millions) $1,933 $1,839 $1,758 $1,715 $1,660 $1,660 $1,574 $1,436 $1,462 $1,394 $1,379 $1,137 '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 9
Slide 10: Average Selling Price
Average Selling Price ($ in thousands) $509 $510 $495 $494 $486 $487 $480 $466 $451 $427 $410 $397 '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 10
Slide 11: Homebuilding Operating Income Margin
Homebuilding Operating Income Margin* 18.1% 15.5% 15.8% 12.9% 12.2% 12.1% 11.7% 11.4% 11.7% 11.4% 10.9% 10.4% '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 11 *Excludes inventory-related charges. See Appendix: Reconciliation
Slide 12: Housing Gross Profit Margin – Reported
Housing Gross Profit Margin – Reported 26.7% 25.3% 22.4% 22.3% 22.4% 21.5% 21.4% 21.1% 21.5% 21.5% 20.8% 20.7% '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 12
Slide 13: Housing Gross Profit Margin – As Adjusted
Housing Gross Profit Margin – As Adjusted* 27.0% 25.3% 23.9% 22.4% 22.0% 22.4% 21.8% 21.5% 21.4% 21.5% 21.1% 20.8% '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 13 *Excludes inventory-related charges. See Appendix: Reconcilia
Slide 14: SG&A Expense Ratio
SG&A Expense Ratio 10.7% 10.2% 10.1% 10.1% 10.2% 9.8% 9.9% 9.8% 9.9% 9.6% 8.9% 8.0% '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 14
Slide 15: Balanced Land Portfolio
Balanced Land Portfolio Q4 2023 Highlights Lots by Region (in 000’s) • Total inventory was $5.13 billion • Total lots owned or controlled were 55,976 22.5 21.9 22.4 • Owned lots represented a supply of 16.7 19.4 19.7 approximately 3.1 years based on 12.3 14.0 14.1 16.7 11.7 14.7 homes delivered in t
Slide 16: Average Community Count
Average Community Count 251 253 237 240 236 223 221 214 213 211 205 205 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2022 2023 © 2024 KB Home 16
Slide 17: Net Orders per Community per Month
Net Orders per Community per Month 7.0 6.6 6.6 6.4 6.2 5.5 5.2 4.3 3.1 2.8 2.7 1.0 '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 17
Slide 18: Net Order Value
Net Order Value ($ in millions) $2,154 $2,125 $2,037 $2,009 $1,869 $1,900 $1,769 $1,512 $1,002 $979 $933 $363 '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 18
Slide 19: Backlog Value
Backlog Value ($ in millions) $6,121 $5,711 $5,261 $4,952 $4,842 $4,295 $3,694 $3,692 $3,457 $3,395 $3,315 $2,668 '21 '22 '23 '21 '22 '23 '21 '22 '23 '21 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter © 2024 KB Home 19
Slide 20: Generating Significant Gross Operating Cash Flow
Generating Significant Gross Operating Cash Flow ($ in millions) Highlights $2,884 $2,496 $2,586 From 2019 through 2023: $1,875 $2,005 • We generated nearly $12 billion in gross operating cash flow $1,083 • Approximately 85% of this cash flow $251 $311 $183 was reinvested in our future growth ($37)
Slide 21: Healthy Capital Structure
Healthy Capital Structure Highlights Debt-to-Capital Ratio 42.3% Leverage 39.6% • From fiscal year-end 2019 through fiscal year-end 2023, we reduced 35.8% 33.4% our debt-to-capital ratio by nearly 12 percentage points 30.7% Liquidity 2019 2020 2021 2022 Q4 2023 • Total liquidity, including cash and
Slide 22: The ESG Difference
The ESG Difference © 2024 KB Home 22
Slide 23: Leadership in Sustainable Homebuilding
Leadership in Sustainable Homebuilding 188,000+ Total U.S. EPA ENERGY STAR™ Certified New Homes 20,000+ Received a record 29 Total Solar Homes ENERGY STAR® Market Leader Awards in 2023 21,800+ Total U.S. EPA WaterSense™ & Water Smart Homes Approx. $1.1 Billion* Cumulative Utility Bill Savings Approx
Slide 24: Giving Back to Our Communities
Giving Back to Our Communities © 2024 KB Home 24
Slide 25: Robust Corporate Governance
Robust Corporate Governance Governance Practices: A Snapshot Independent • Ten of our eleven directors are independent • Independent directors lead all Board committees Accountable • Directors are elected annually under a majority voting standard • In 2023, our directors received an average of 96% s
Slide 26: Summary
26 Summary © 2024 KB Home
Slide 27: KB Home – A Compelling Story
KB Home – A Compelling Story Key Takeaways Well positioned Existing geographic footprint offers potential for substantially Return on Equity larger scale in markets selected for their long-term economic and demographic growth potential 24.6% Compelling Focused on 1st time and affordable 1st move-up
Slide 28: Appendix
28 Appendix © 2024 KB Home
Slide 29: ROE Calculation Detail
ROE Calculation Detail ($ in thousands) 2020 2021 2022 2023 Pretax income $ 364,043 $ 695,346 $ 1,072,066 $ 771,277 Income tax expense (67,800) (130,600) (255,400) (181,100) Net income $ 296,243 $ 564,746 $ 816,666 $ 590,177 Average stockholders’ equity (a) $ 2,509,531 $ 2,832,405 $ 3,319,238 $ 3,75
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 2021 2022 2023 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Housing Gross Profit Margin ` Housing Gross Profit Margin - As Reported 20.8% 21.4% 21.5% 22.3% 22.4% 25.3% 26.7% 22.4% 21.5% 21.1% 21.5% 20.7% Housing inventory-related charges 0.3 0.1 0.5 0.1 - - 0.3 1
Slide 31: Deferred Tax Asset Value and Protection
Deferred Tax Asset Value and Protection • At November 30, 2023, KB Home had net deferred tax assets (DTA) of approximately $119 million • To support the realization of the DTA, KB Home has undertaken a number of steps to avoid experiencing an “ownership change” under federal tax laws • The primary p
Slide 32: Thank you for your interest in KB Home
Thank you for your interest in KB Home. For further information, please contact us: Investor Relations (310) 231-4000 investorrelations@kbhome.com © 2024 KB Home 32