#1kb HOME Investor Presentation First Quarter 2022 ]]#2kb Forward-Looking Statements HOME 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 (at the time made) expectations and projections about future events and are subject to risks, uncertainties, and assumptions about our operations, economic and market factors, and the homebuilding industry, among other things. These statements 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; population growth, household formations and demographic trends; conditions in the capital, credit and financial markets; our ability to access external financing sources and raise capital through the issuance of common stock, debt or other securities, and/or project financing, on favorable terms; the execution of any securities repurchases pursuant to our board of directors' authorization; material and trade costs and availability, including building materials, especially lumber, and appliances; consumer and producer price inflation; changes in interest rates; our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule; our compliance with the terms of our revolving credit facility; volatility in the market price of our common stock; home selling prices, including our homes' selling prices, increasing at a faster rate than consumer incomes; weak or declining consumer confidence, either generally or specifically with respect to purchasing homes; competition from other sellers of new and resale homes; weather events, significant natural disasters and other climate and environmental factors; any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal government's operations, and financial markets' and businesses' reactions to any such failure; government actions, policies, programs and regulations directed at or affecting the housing market (including the tax benefits associated with purchasing and owning a home, and the standards, fees and size limits applicable to the purchase or insuring of mortgage loans by government- sponsored enterprises and government agencies), the homebuilding industry, or construction activities; changes in existing tax laws or enacted corporate income tax rates, including those resulting from regulatory guidance and interpretations issued with respect thereto; changes in U.S. trade policies, including the imposition of tariffs and duties on homebuilding materials and products, and related trade disputes with and retaliatory measures other countries; disruptions in world and regional trade flows, economic activity and supply chains due to the military conflict in Ukraine, including those stemming from wide-ranging sanctions the U.S. and other countries have imposed or may further impose on Russian business sectors, financial organizations, individuals and raw materials, the impact of which may, among other things, increase our operational costs, exacerbate building materials and appliance shortages and/or reduce our revenues and earnings; the adoption of new or amended financial accounting standards and the guidance and/or interpretations with respect thereto; the availability and cost of land in desirable areas and our ability to timely develop acquired land parcels and open new home communities; our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred; costs and/or charges arising from regulatory compliance requirements or from legal, arbitral or regulatory proceedings, investigations, claims or settlements, including unfavorable outcomes in any such matters resulting in actual or potential monetary damage awards, penalties, fines or other direct or indirect payments, or injunctions, consent decrees or other voluntary or involuntary restrictions or adjustments to our business operations or practices that are beyond our current expectations and/or accruals; our ability to use/realize the net deferred tax assets we have generated; our ability to successfully implement our current and planned strategies and initiatives related to our product, geographic and market positioning, gaining share and scale in our served markets and in entering into new markets; our operational and investment concentration in markets in California; consumer interest in our new home communities and products, particularly from first-time homebuyers and higher-income consumers; our ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key markets in California; our ability to successfully implement our business strategies and achieve any associated financial and operational targets and objectives, including those discussed in this release or in other public filings, presentations or disclosures; income tax expense volatility associated with stock-based compensation; the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services; the performance of mortgage lenders to our homebuyers; the performance of KBHS, our mortgage banking joint venture; information technology failures and data security breaches; an epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19), and the control response measures that international (including China), federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period; 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. 2 | © 2022 KB Home#33 | kb Built-to-Order Model Is a Key Differentiator Advantages of Built-to-Order ("BTO") Mitigates Risk Aligns business to demand, as we build to our sales pace, not to a targeted delivery goal, which minimizes speculative inventory and margin variability associated with carrying a large number of finished, but unsold, homes in inventory Operationally Efficient Monthly Absorption Rate per Community 6.3 4.6 4.3 4.0 3.0 Working from a large backlog of sold homes, we can manage starts to achieve even-flow production at the community level, generating efficiencies in overhead and cost to build 2019 2020 2021 KBH ■Peer Group Average* Higher Visibility Even-flow production reinforces our preferred position with subcontractors and provides greater predictability on deliveries Margin Enhancer Opportunities for incremental revenue as well as margin enhancement through lot premiums, structural options and design studio upgrades Drives Absorption Selling and building the home the customer values helps drive absorption and customer satisfaction * Includes DHI, LEN, MDC, MTH, NVR, PHM, TMHC, TOL, TPH. Source: Wolfe Research. 4.1 © 2022 KB Home#44 | kb Built-to-Order Model Attracts Largest Demand Segments of Market HOME A Leader in the 1st Time Buyer Segment While Drawing a Mix of Buyers to Our Communities 12% 21% 1st Time Q1 2022 Buyer Profile (Based on Homes Delivered) 12% 55% Invest in land positions within prime growth submarkets 2nd Move-Up 1st Move-Up Active Adult Position our product to target the median household income in each submarket BTO enhances value through choice of lot, square footage, floor plan and elevation, and then the ability to personalize in our Design Studios While we primarily target the 1st time buyer, our model also appeals to move-up buyers and empty nesters who can make a different set of choices in the same community O2022 KB Home#5kb Dedicated to Providing World Class Customer Service HOME • • 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 - mortgage - studio construction - closing - post closing Customers recognize the value of our partnership. Recent customer surveys conducted by independent, third-party sources such as TrustBuilderⓇ and ConsumerAffairs have given KB Home exceptional customer satisfaction ratings. REAL HOMEOWNERS TRUST BUILDER HONEST REVIEWS powered by NEW HOMESOURCE Ratings by Category KB Home Ⓡ has 4.6 out of 5 stars overall 5689 Reviews in All Areas Star Rating Breakdown 5 ⭑ 4185 Overall 4.6 4⭑ 830 Quality 4.4 3 ★ 360 Trustworthiness 4.6 Value 4.6 2⭑ 176 Responsiveness 4.5 1⭑ 138 5 | TrustBuilderⓇ data as of March 15, 2022. O2020 KB Home#66 | First Quarter 2022 2022 KB Home#77 | kb Growth-Oriented Geographic Footprint HOME Principal Markets • West Coast: California, Idaho, Washington Q1 2022 Mix West Coast Southwest Central Southeast • Southwest: Arizona, Nevada Homebuilding Revenues 47% 15% 26% 12% Deliveries 32% 18% 33% 17% • Central: Colorado, Texas Avg. Selling Price $721K $407K $373K $351K • Southeast: Florida, Net Order Value 39% 15% 29% 17% North Carolina Backlog Value 34% 18% 32% 16% © 2022 KB Home#8• • kb First Quarter 2022 Highlights HOME (all comparisons on a year-over-year basis) ($ in millions except Average Selling Price) . Revenues grew 23% to $1.40 billion Homebuilding operating income grew 49% to $169.6 million. Homebuilding operating income margin improved 220 basis points to 12.2%. - - Housing gross profit margin increased 160 basis points to 22.4%. Excluding inventory-related charges, housing gross profit margin improved 130 basis points from 21.1%. Selling, general and administrative expenses as a percentage of housing revenues improved 50 basis points to 10.2% Q1 2022 Q1 2021 % Change Housing Revenues $1,394.2 $1,137.4 23% Deliveries 2,868 2,864 Average Selling Price $486,100 $397,100 22% Net Orders Net income and diluted earnings per share increased 38% to $134.3 million and 44% to $1.47, respectively • • • • Backlog value grew 55% to $5.71 billion, our highest first-quarter level since 2007, with the number of homes in backlog up 29% to 11,886 Net order value increased by $284.7 million, or 15%, to $2.15 billion Total liquidity was $1.07 billion, which included $831.4 million of available capacity under our revolver The ratio of debt to capital improved 70 basis points to 38.2% In January 2022, Standard and Poor's Financial Services reaffirmed the Company's BB credit rating and changed its rating outlook to positive from stable Stockholders' equity increased 4% to $3.13 billion, and book value per share increased by $5.51, or 18%, to $35.37 8 | 4,210 4,292 -2% Net Order Value $2,153.7 $1,869.1 15% Backlog Homes 11,886 9,238 29% Backlog Value $5,711.3 $3,694.1 55% Ending Community Count 208 209 Average Community Count 213 223 -4% Absorption (net orders per community, per month) 6.6 6.4 3% 2022 KB Home#9kb Housing Revenues HOME ($ in millions) 9 | $1,072 $1,137 '20 '21 First Quarter $1,436 $1,394 $910 $979 $1,462 $1,190 $1,660 '22 '20 '21 '20 '21 '20 '21 Second Quarter Third Quarter Fourth Quarter 2022 KB Home#10HOME ($ in thousands) 10 | Average Selling Price $390 $397 '20 '21 First Quarter $486 $364 '22 '20 $410 $385 21 '21 '20 Second Quarter $427 $414 '21 '20 Third Quarter $451 '21 Fourth Quarter 2022 KB Home#11kb Homebuilding Operating Income Margin* HOME 11 | 6.1% '20 10.4% '21 12.2% '22 6.9% 11.4% '20 '21 Second Quarter 9.6% 12.1% 10.7% '20 '21 '20 20 Third Quarter First Quarter *Excludes inventory-related charges and Q2 2020 severance charges. See Appendix: Reconciliation of Non-GAAP Financial Measures. 12.9% '21 Fourth Quarter © 2022 KB Home#1212 | kb Housing Gross Profit Margin - Reported HOME 20 '20 17.4% '21 First Quarter 22.4% 20.8% 18.2% 21.4% 21.5% 19.9% 20.0% '22 '20 '21 '20 '21 '20 Second Quarter Third Quarter '21 Fourth Quarter 22.3% © 2022 KB Home#1313 | kb Housing Gross Profit Margin - As Adjusted* HOME '20 17.9% '21 22.4% 21.1% First Quarter 18.7% 22.4% 22.0% 21.5% 21.0% 20.6% '22 '20 '21 '20 '21 '20 Second Quarter Third Quarter *Excludes inventory-related charges. See Appendix: Reconciliation of Non-GAAP Financial Measures. '21 Fourth Quarter O2020 KB Home#14kb SG&A Expense Ratio HOME 11.8% 20 '20 10.7% 10.2% '21 First Quarter 11.8%* 10.1% 11.0% '22 '20 '21 '20 Second Quarter 14 | *Excludes $6.7 million of severance charges. 10.3% 9.9% 9.8% '21 '20 '21 Fourth Quarter Third Quarter O2022 KB Home#1515 | kb Balanced Land Portfolio HOME Q1 2022 Highlights . Total inventory was $5.20 billion Lots by Region (in 000's) • · Total lots owned or controlled were 88,212 • • Owned lots represented a supply of approx. 3.8 years based on homes delivered in the trailing 12 months Owned optioned split was 58% / 42% We own or control all of the lots that we need for our anticipated volume growth in 2022 and 2023, and are currently investing for deliveries in 2024 and beyond 21.9 22.4 19.4 16.7 14.1 14.0 12.3 11.7 11.9 29.0 29.4 26.9 26.3 23.7 25.3 24.5 23.7 22.5 12.7 12.9 12.3 12.3 12.3 12.6 11.4 11.1 10.5 15.0 14.0 15.4 17.0 17.7 21.2 22.4 23.6 24.1 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 West Coast ■Southwest Central Southeast © 2022 KB Home#1616 | kb Average Community Count 251 247 238 234 223 214 205 205 Q1 72 Q2 2020 Q3 3 +4 Q4 Q1 22 Q2 2021 Q3 213 84 Q4 Q1 2022 © 2022 KB Home#1717│ kb Net Orders per Community per Month HOME 4.6 6.4 7.0 6.6 2.4 '20 '21 '22 '20 First Quarter 5.9 6.6 21 '21 '20 '21 '20 20 Second Quarter 5.6 5.5 '21 Third Quarter Fourth Quarter © 2022 KB Home#18kb Net Order Value HOME ($ in millions) 18 | $1,383 $1,869 $2,154 $2,037 $688 $1,644 $2,009 $1,585 $1,769 '20 '21 '22 '20 '21 '20 '21 '20 '21 First Quarter Second Quarter Third Quarter Fourth Quarter O2022 KB Home#19kb Backlog Value HOME ($ in millions) 19 | $2,125 '20 $3,694 '21 First Quarter $5,711 $1,903 $4,295 $4,842 $2,568 $2,962 $4,952 '22 '20 '21 '20 '21 '20 '21 Second Quarter Third Quarter Fourth Quarter 2022 KB Home#20kb Generating Significant Gross Operating Cash Flow HOME ($ in millions) Highlights From 2019 through 2021: • We generated nearly $6.4 billion in gross operating cash flow . Approximately 92% of this cash flow was reinvested in our future growth through land acquisition and 20 | development spend that met our underwriting criteria $2,496 $2,472 $2,005 $1,875 $251 $311 ($1,624) We returned approximately $301 million ($1,694) in cash to stockholders through dividends and share repurchases 2019 2020 ($2,533) 2021 ($37) ($209) ($2,681) LTM Q1 2022 ■Gross Cash provided by Operating Activities ■Land Acquisition and Development Investment Net Cash provided by (used in) Operating Activities (As Reported) O2022 KB Home#21kb Healthy Capital Structure HOME Highlights Leverage • We improved our debt-to-capital ratio by 70 basis points year over year From 2019 through 2021, we have repaid approximately $340 million in senior notes Liquidity . Total liquidity, including cash and revolver availability, was $1.07 billion at Feb. 28, 2022 Credit Rating Debt-to-Capital Ratio 42.3% 39.6% 38.2% 35.8% 2019 2020 2021 Q1 2022 Liquidity and Debt Maturity Summary at 2/28/22 ($ in millions) ■Revolver Availability Unrestricted Cash ■Senior Notes $241 . In January 2022, S&P Global amended our outlook to Positive from Stable Recent Transactions • In February 2022, we increased the borrowing capacity of our unsecured revolving line of credit to $1.09 billion and extended the maturity date to 2027 21 | $831 $350 $350 $390 $300 $300 Liquidity 2022* Coupon: 7.5% 2023 2024 2025 2026 2027 2028 2029 2030 2031 7.625% 6.875% 4.8% 4.0% * Matures 9/15/22 O2022 KB Home#2222 1 The ESG Difference 2022 KB Home#23kb Leadership in Sustainable Homebuilding HOME 160,000+ Total U.S. EPA ENERGY STARTM Certified New Homes 14,000+ Total Solar Homes 18,000+ Total U.S. EPA WaterSense TM & Water Smart Homes Approx. $800 Million* Cumulative Utility Bill Savings Approx. 1.6 Billion Gallons* Water Conserved Annually Approx. 5.6 Billion Pounds* Fewer CO2 Emissions ENERGY STAR energyAWARD 2021 PARTNER OF THE YEAR Sustained Excellence MARKET LEADER energyAWARD 2021 CERTIFIED HOMES Received a record 25 ENERGY STAR® Market Leader Awards in 2021 EPA Water Sense 2021 PARTNER AMERICA'S MOST OF THE YEAR RESPONSIBLE COMPANIES 2022 Newsweek statista Energy Savings Comparison The Crossings at Glen St. Johns At KB Home, every home we build is designed to be ENERGY STAR® certified thanks to the quality construction techniques and materials we use. In fact, we go beyond EPA requirements by ensuring that every ENERGY STAR certified KB home has been tested and verified by a third-party inspector to meet EPA's strict certification standards. Our ENERGY STAR certified homes offer fewer air leaks and drafts, reduced noise and energy-efficient appliances and lighting to ultimately deliver significant savings on utility bills compared to used homes. Typical Used Homes Estimated Monthly Energy Costs of a Used Home: $343 Figure represente actimated monthly coste of a typical cimilarly sized home. Actual energy consumption and costs will vary, The Crossings at Glen St. Johns - Plan XXXX Estimated Monthly Energy Costs of This KB Home: $130 Figure represents estimated monthly costs of an ENERGY STAR-cenified KB home.. Actual energy consumption and costs will vary. Estimated Annual Savings: $2,556* kb HOME HERS Index Home Energy Rating System 140 Spend More 130 Typical Used Home 120 110 100 HERS Reference Home 90 80 70 60 50 4KB Home Score: 52 40 30 20 10 0 Save More €2020 KB Home. The energy efficiency level and the estimated energy cost and savings shown for the KB home plan are determined per the California Energy Commission (CEC) Home Energy Rating Systems Program (Program using CEC-certified computer software and CEC-mandated incurs and certain resumed conditions as to specific standard features of the home as das gned. Each is based on the heating and cooling systems, appliances and lighting that are included as standard items with this KB home plan and average local energy elity rates available at the time of determination. The estimated energy cost shown for a typical used home is calculated based on corresponding features of a vintage home built in 1984-1991) of similar overal square footage (without accounting for layout or household size), at published by the CBC, or, for appliances and lighting setumed for that period and evenage local energy utility rates available at the time of determination. The estimated energy coats and savings shown do not include or take into account any applicable local, state or federal taxes and/or regulatory or energy utility provider-imposed fees. tariffs or charges. The typical new home energy efficiency level shown represents a home as built to the 2008 California Building Energy Efficiency Standards (Standarda) The used home anergy efficiency range is a comparison to the energy efficiency level of a home as built to the Standards KB Home does not warrant or guarantee that the energy efficiency level for an as-built home will be equal to or lower than the home's as-designed level as shown for this KCB home plan or that any level of energy costs or savings (if any) will be achieved or maintained, even if a home is built at designed per this KB home plan "Actual anergy costs and savings (if any) tor any bulk home will vary over time, and may vary substancially based on a number of factors and variables. Importare information about the energy efficiency level and the estimated energy costs and savings figures shown for this KB home plan is available online at http://www.kbhome.com/energy-efficiens-home and at KB Home community sales offices. KB Home is not afflicted with any home energy efficiency evaluation organization arayabam, software program or rater. (CA rev. 10/17) 00100730-241.3481 Energy Savings Comparison Our proprietary tool demonstrating the lower total cost of homeownership possible. with a KB home** KB Home provides this comparison for every floor plan at each of our communities * Estimated 23 | ** Lower cost of homeownership is relative to a typical new or resale home. O2022 KB Home#2424 | kb Giving Back to Our Communities HOME DONATIONS kbcares kbes DONATIONS DONATIONS kba DONATIONE EMOND LINNAR bcares D DONATIONS kbares DONATIONS kb HOME HUGGIES kbcam DONATIONS kbores kbens DONATIONS DOMATIONS Вокален kbaek kbares DONATIONS UHAUL ROHT EQUIVENT/LOWEST COST Kocares HUGG kbrates DORATIONS DONATIONS ProMar om. Met. Rei Cont. 120P 20.5.6KL) kbcare kb HOME SHERWIN WILLIAMS NATIONAL PAINT WEEK #KBCARES ProMar 400 820 FL OZ 4% US. MAL kbcares kbcares Abcares kbcares kbcares O2022 KB Home#25kb Robust Corporate Governance Governance Practices: A Snapshot Independent · Eleven of our twelve directors are independent Independent directors lead all Board committees Accountable . Directors are elected annually under a majority voting standard 18% • In 2021, our directors received an average of 96% support • · Directors and senior executives are subject to strong stock ownership requirements Executive officers are subject to a robust incentive compensation claw-back policy Aligned Five-Year Annualized Total Stockholder Return (2017-2021) 25% 22% S&P 500 KB Home • We have one class of outstanding voting securities that allows each holder one vote for each share held Dow Jones U.S. Home Construction Index · No supermajority voting requirements • 25 | In 2021, our Say-on-Pay proposal received 85% support O2022 KB Home#2626 | Summary 2022 KB Home#27kb KB Home - A Compelling Story HOME Key Takeaways Well positioned Existing geographic footprint offers potential for substantially larger scale in markets selected for their long-term economic and demographic growth potential Compelling Focused on 1st time buyers while appealing to move-up buyers and empty nesters, thereby targeting the largest homebuyer demand segments Advantages of BTO Sell and build the home the customer values, which helps drive absorption. With a large backlog of sold homes, we can manage starts to achieve even-flow production at the community level, generating efficiencies in overhead and cost to build, and we have greater predictability on deliveries. Demonstrated leadership in sustainability With an industry-leading over 150,000 ENERGY STAR homes delivered, we are committed to helping our buyers lower the cost of homeownership. Our ENERGY STAR homes are up to 20% more efficient than standard new homes built to code. 27 | Return on Equity 12.2% 11.8% 19.9% >27% 2019 2020 2021 2022E* *Reflects the guidance we provided on our Q1 2022 earnings conference call on March 23, 2022. See Appendix: ROE Calculation Detail. O2022 KB Home#2828 | Appendix T 2022 KB Home#29kb ROE Calculation Detail HOME ($ in thousands) 0000 29│ 2019 2020 2021 Pretax income $ 348,175 $ 364,043 $ 695,346 Income tax expense (79,400) (67,800) (130,600) Net income $ 268,775 $ 296,243 $ 564,746 Average stockholders' equity (a) $ 2,211,312 $ 2,509,531 $ 2,832,405 Return on equity (a) Average stockholders' equity for the trailing five quarters. 12.2% 11.8% 19.9% © 2022 KB Home#3030 | kb Reconciliation of Non-GAAP Financial Measures HOME 0000 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Housing Gross Profit Margin Housing Gross Profit Margin - As Reported Housing inventory-related charges 17.4% 0.5 18.2% 19.9% 0.5 0.7 20.0% 20.8% 1.0 0.3 21.4% 21.5% 22.3% 0.1 0.5 0.1 22.4% Housing Gross Profit Margin - As Adjusted 17.9% 18.7% 20.6% 21.0% 21.1% 21.5% 22.0% 22.4% 22.4% Homebuilding Operating Income Margin Homebuilding Operating Income Margin - As Reported Homebuilding inventory-related charges 5.6% 0.5 5.7% 1.2* 8.9% 0.7 9.7% 10.0% 1.0 0.4 11.3% 0.1 11.6% 12.8% 0.5 0.1 12.2% Homebuilding operating income margin excluding inventory-related charges 6.1% 6.9% 9.6% 10.7% 10.4% 11.4% 12.1% 12.9% 12.2% *In addition to inventory-related charges, percentage includes impact from $6.7 million of severance charges. The Company believes these non-GAAP financial measures, which assist management in making certain decisions, are relevant and useful to investors in understanding its operations and in providing meaningful period-to-period comparisons, and may be helpful in comparing the Company with other homebuilding companies to the extent they provide similar information. © 2022 KB Home#31• • kb Deferred Tax Asset Value and Protection HOME At Feb. 28, 2022, KB Home had net deferred tax assets (DTA) of approximately $173 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 protection is a Rights Agreement approved by stockholders in 2009, 2018 and 2021 (which extended the latest expiration to Apr. 30, 2024). The Rights Agreement provides authority for the distribution of dilutive stock purchase rights in connection with an acquisition of 4.9% or more of KB Home's outstanding common stock. At Feb. 28, 2022, there were 88.6 million shares of common stock outstanding 31 | ©2022 KB Home#3232 | Thank you for your interest in KB Home. For further information, please contact us: Investor Relations (310) 231-4000 [email protected] 2022 KB Home