KB Home Completes Offerings of Common Stock and 1.375% Convertible Senior Notes due 2019

  KB Home Completes Offerings of Common Stock and 1.375% Convertible Senior
  Notes due 2019

Business Wire

LOS ANGELES -- February 4, 2013

KB Home (NYSE:KBH), one of the nation’s largest and most recognized
homebuilders, today reported that it has completed the previously announced
sale of 6.325 million shares of its common stock and of $230 million in
aggregate principal amount of its 1.375% convertible senior notes due 2019.
These amounts include the exercise in full by the underwriters of their
options in the applicable offerings to purchase shares of common stock, and to
purchase convertible senior notes to cover over-allotments. The Company
received total net proceeds of approximately $332.9 million from the
offerings, after underwriting discounts and estimated expenses payable by the
Company, which it intends to use for general corporate purposes, including
without limitation land acquisition and development.

The convertible senior notes 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 are guaranteed on an unsecured
senior basis by certain of KB Home’s subsidiaries that have guaranteed the
Company’s outstanding senior notes.

The concurrent offerings were made pursuant to an effective shelf registration
statement that KB Home has on file with the Securities and Exchange Commission
("SEC"), by means of separate prospectus supplements. For each offering,
copies of the final prospectus supplement and accompanying prospectus
describing the offering 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.

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." For more information about KB Home's new home
communities, call 888-KB-HOMES or visit www.kbhome.com.

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; and other events outside of our control. Please see our periodic
reports and other filings with the Securities and Exchange Commission 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 or smartin@kbhome.com
or
Katoiya Marshall, Investor Relations Contact
310-893-7446 or kmarshall@kbhome.com
 
Press spacebar to pause and continue. Press esc to stop.