Homebuilding Industry Outlook

kb Reconciliation of Non-GAAP Financial Measures HOME 0000 2020 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Housing Gross Profit Margin Housing Gross Profit Margin - As Reported Housing inventory-related charges 17.4% 0.5 18.2% 0.5 19.9% 20.0% 0.7 1.0 20.8% 21.4% 21.5% 0.3 0.1 0.5 22.3% 22.4% 0.1 25.3% 26.7% 0.3 Housing Gross Profit Margin - As Adjusted 17.9% 18.7% 20.6% 21.0% 21.1% 21.5% 22.0% 22.4% 22.4% 25.3% 27.0% Homebuilding Operating Income Margin Homebuilding Operating Income Margin - As Reported 5.6% Homebuilding inventory-related charges 0.5 5.7% 1.2* 8.9% 0.7 9.7% 1.0 10.0% 0.4 11.3% 0.1 11.6% 0.5 12.8% 12.2% 0.1 15.4% 17.7% 0.1 0.4 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% 15.5% 18.1% *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 30 | 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

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