KB Home Announces Pricing of Concurrent Underwritten Public Offerings of 5.5 Million Shares of Common Stock and $200 Million of

  KB Home Announces Pricing of Concurrent Underwritten Public Offerings of 5.5
  Million Shares of Common Stock and $200 Million of Convertible Senior Notes

Business Wire

LOS ANGELES -- January 23, 2013

KB Home (NYSE: KBH), one of the nation’s largest and most recognized
homebuilders, today announced that it has agreed to sell an aggregate of 5.5
million shares of its common stock at a public offering price of $18.25 per
share (or up to 6.325 million shares if the underwriters exercise their option
to purchase additional shares) and $200 million in aggregate principal amount
of its 1.375% convertible senior notes due 2019 (or up to $230 million in
aggregate principal amount if the underwriters exercise their over-allotment
option) in its previously announced concurrent underwritten public offerings.

The convertible senior notes will bear interest at a rate of 1.375% per year,
payable semi-annually in arrears, and will mature in 2019, unless earlier
purchased, redeemed or converted. The senior notes are convertible into shares
of KB Home’s common stock at an initial conversion rate of 36.5297 shares per
$1,000 principal amount of senior notes, which is equal to a conversion price
of approximately $27.37 per share, subject to adjustment in certain
circumstances. The convertible senior notes will be guaranteed on an unsecured
senior basis by certain of KB Home’s subsidiaries that have guaranteed
KBHome’s outstanding senior notes.

KB Home estimates the aggregate net proceeds from the concurrent offerings to
be approximately $289 million (assuming no exercise of the underwriters’
options), after deducting the underwriting discount and estimated offering
expenses payable by KBHome. KB Home intends to use the net proceeds from both
offerings for general corporate purposes, including without limitation land
acquisition and development. The closing of both offerings is expected to
occur on January 29, 2013, subject to the satisfaction of customary closing
conditions.

The concurrent offerings are being made pursuant to an effective shelf
registration statement that KB Home has on file with the Securities and
Exchange Commission (“SEC”). The common stock offering and the convertible
senior notes offering are being conducted as separate public offerings by
means of separate prospectus supplements, and neither the common stock
offering nor the convertible senior notes offering will be conditioned upon
consummation of the other. For each offering, copies of the prospectus
supplement and accompanying prospectus describing the offering, when
available, may be obtained by visiting EDGAR on the SEC’s website at
www.sec.gov or by contacting Citigroup at the following address: c/o
Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York
11717 or by telephone at 1-800-831-9146 or by e-mail at
batprospectusdept@citi.com, or Credit Suisse at the following address:
Attention: Prospectus Department, One Madison Avenue, New York, New York
10010, e-mail: newyork.prospectus@credit-suisse.com or toll free at (800)
221-1037.

This press release shall not constitute an offer to sell or the solicitation
of an offer to buy these securities, nor shall there be any sale of such
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such jurisdiction. The concurrent offerings are being made only by
means of their respective prospectus supplements and accompanying prospectus.

About KB Home

KB Home is one of the largest and most recognized homebuilding companies in
the United States. Since its founding in 1957, the company has built more than
half a million quality homes. KB Home’s signature Built to Order™ approach
lets each buyer customize their new home from lot location to floor plan and
design features. In addition to meeting strict ENERGY STAR® guidelines, all KB
homes are highly energy efficient to help lower monthly utility costs for
homeowners, which the company demonstrates with its proprietary KB Home Energy
Performance Guide® (EPG®). A leader in utilizing state-of-the-art sustainable
building practices, KB Home was named the #1 Green Homebuilder in the most
recent study by Calvert Investments and the #1 Homebuilder on FORTUNE
magazine’s 2011 World’s Most Admired Companies list. Los Angeles-based KB Home
was the first homebuilder listed on the New York Stock Exchange, and trades
under the ticker symbol “KBH.”

Forward-Looking and Cautionary Statements

Certain matters discussed in this press release, including any statements that
are predictive in nature or concern future market and economic conditions,
business and prospects, our future financial and operational performance, or
our future actions and their expected results are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on current expectations and projections
about future events and are not guarantees of future performance. We do not
have a specific policy or intent of updating or revising forward-looking
statements. Actual events and results may differ materially from those
expressed or forecasted in forward-looking statements due to a number of
factors. The most important risk factors that could cause our actual
performance and future events and actions to differ materially from such
forward-looking statements include, but are not limited to the following:
general economic, employment and business conditions; adverse market
conditions, including an increased supply of unsold homes, declining home
prices and greater foreclosure and short sale activity, among other things,
that could result in, among other negative impacts on our consolidated
financial statements, additional impairment or land option contract
abandonment charges, lower revenues and operating and other losses; conditions
in the capital, credit and financial markets (including mortgage lending
standards, the availability of mortgage financing and mortgage foreclosure
rates); material prices and availability; labor costs and availability;
changes in interest rates; inflation; our debt level, including our ratio of
debt to total capital, and our ability to adjust our debt level, maturity
schedule and structure and to access the equity, credit, capital or other
financial markets or other external financing sources, including raising
capital through the public or private issuance of common stock, debt or other
securities, and/or obtaining a credit or similar facility or project
financing, on favorable terms; weak or declining consumer confidence, either
generally or specifically with respect to purchasing homes; competition for
home sales from other sellers of new and resale homes, including lenders and
other sellers of homes obtained through foreclosures or short sales; weather
conditions, significant natural disasters and other environmental factors;
government actions, policies, programs and regulations directed at or
affecting the housing market (including, but not limited to, the 2010
Dodd-Frank Wall Street Reform and Consumer Protection Act, tax credits, tax
incentives and/or subsidies for home purchases, tax deductions for mortgage
interest payments and property taxes, tax exemptions for profits on home
sales, and programs intended to modify existing mortgage loans and to prevent
mortgage foreclosures), the homebuilding industry, or construction activities;
decisions by lawmakers on federal fiscal policies, including those relating to
taxation and government spending; the availability and cost of land in
desirable areas; our warranty claims experience with respect to homes
previously delivered and actual warranty costs incurred; legal or regulatory
proceedings or claims; our ability to use/realize the net deferred tax assets
we have generated; our ability to successfully implement our current and
planned product, geographic and market positioning (including, but not limited
to, our efforts to expand our inventory base/pipeline with desirable land
positions or interests at reasonable cost and to expand our community count,
open additional new home communities for sales and sell higher-priced homes
and more design options, and our operational and investment concentration in
markets in California and Texas), revenue growth, asset optimization, asset
activation, local field management and talent investment, and overhead and
other cost management strategies and initiatives; consumer traffic to our new
home communities and consumer interest in our product designs and offerings,
particularly higher-income consumers; cancellations and our ability to realize
our backlog by converting net orders to home deliveries; our home sales and
delivery performance in key markets in California and Texas; the manner in
which our homebuyers are offered and whether they are able to obtain mortgage
loans and mortgage banking services, including from our preferred mortgage
lender, Nationstar Mortgage LLC; the performance of Nationstar as our
preferred mortgage lender; information technology failures and data security
breaches; the possibility that the offer and sale of our common stock will not
close timely, or at all; the possibility that the concurrent offer and sale of
convertible senior notes will not close timely, or at all; and other events
outside of our control. Please see our periodic reports and other filings with
the SEC for a further discussion of these and other risks and uncertainties
applicable to our business.

Contact:

KB Home
Susan Martin, Media Contact
310-231-4142
smartin@kbhome.com
or
Katoiya Marshall, Investor Relations Contact
310-893-7446
kmarshall@kbhome.com
 
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