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<SEC-DOCUMENT>0000950123-11-018877.txt : 20110225
<SEC-HEADER>0000950123-11-018877.hdr.sgml : 20110225
<ACCEPTANCE-DATETIME>20110225170741
ACCESSION NUMBER:		0000950123-11-018877
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20110225
DATE AS OF CHANGE:		20110225
EFFECTIVENESS DATE:		20110225

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KB HOME
		CENTRAL INDEX KEY:			0000795266
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATIVE BUILDERS [1531]
		IRS NUMBER:				953666267
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09195
		FILM NUMBER:		11642025

	BUSINESS ADDRESS:	
		STREET 1:		10990 WILSHIRE BLVD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90024
		BUSINESS PHONE:		3102314000

	MAIL ADDRESS:	
		STREET 1:		10990 WILSHIRE BLVD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90024

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	KAUFMAN & BROAD HOME CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFA14A
<SEQUENCE>1
<FILENAME>v58056bdefa14a.htm
<DESCRIPTION>DEFA14A
<TEXT>
<HTML>
<HEAD>
<TITLE>defa14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>SCHEDULE 14A</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>Proxy Statement Pursuant to Section&nbsp;14(a) of the<BR>
Securities Exchange Act of 1934 (Amendment No.&nbsp;1)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Filed by the Registrant </B><FONT style="font-family: Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Filed by a Party other than the Registrant </B><FONT style="font-family: Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Check the appropriate box:</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-family: Wingdings">&#111;</FONT> <B>Preliminary Proxy Statement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> <B>Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> <B>Definitive Proxy Statement</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#254;</FONT> <B>Definitive Additional Materials</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> <B>Soliciting Material under Rule&nbsp;14a-12</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>KB HOME</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><DIV style="margin-top: 1px"><FONT style="border-top: 1px solid #000000">(Name of Registrant as Specified In Its Charter)</FONT></DIV></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt">&nbsp;</DIV>

<DIV align="center" style="font-size: 10pt"><DIV style="margin-top: 1px"><FONT style="border-top: 1px solid #000000">(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</FONT></DIV></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Payment of Filing Fee (Check the appropriate box):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-family: Wingdings">&#254;</FONT> No fee required.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Title of each class of securities to which transaction applies:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Aggregate number of securities to which transaction applies:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Total fee paid:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Fee paid previously with preliminary materials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-family: Wingdings">&#111;</FONT> Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amount Previously Paid:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Form, Schedule or Registration Statement No.:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Filing Party:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Date Filed:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="width: 100%; border-bottom: 1px solid #000000; FONT-size: 1px">&nbsp;</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>









<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">














<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The definitive additional materials filed herewith include an e-mail message sent to KB Home
employees on February&nbsp;25, 2011, and a letter from KB Home President and Chief Executive Officer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Employee Email</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Subject Line: KB Home Annual Meeting &#151; Your Vote and Support are Important!
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear KB Home Team:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">KB Home&#146;s Annual Meeting of Stockholders is scheduled for Thursday, April&nbsp;7, 2011. The proxy
materials for the Annual Meeting are available at http://www.kbhome.com/investor/proxy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This year, we are making proxy materials available primarily through the Internet and are
encouraging our stockholders (which include many of you) to vote online or by telephone, rather
than by mail. This is primarily to reduce costs and the impact on the environment from printing and
mailing the proxy materials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If on February&nbsp;11, 2011, you held KB Home stock, had stock options and/or had investments in the KB
Home Common Stock Fund in our 401(k) Savings Plan, you will receive a voting instruction form or a
notice card with instructions on how to access the proxy materials and vote. Depending on your
holdings, including any in an outside brokerage or bank account, you may receive more than one
voting instruction form or notice card, and they may be sent to you electronically.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Please look for your voting instruction form(s) or notice card(s) in the mail or e-mail accounts.
Each voting instruction form or notice card will have the control numbers you need to vote. </B>If you
receive a notice card, you will not receive a paper or e-mail copy of the proxy materials unless
you request a copy by following the instructions provided on your notice card. If you receive a
paper or e-mail copy of the proxy materials, your control numbers will be on the voting instruction
form you receive or in the e-mail. Use the control numbers provided on <U>each</U> such voting
instruction form, notice card or e-mail you receive.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For the reasons discussed in the proxy materials, I urge you to vote as noted below:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FOR </B>the election of our directors (Proposal 1)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FOR </B>the ratification of our independent registered public accounting firm (Proposal
2)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FOR </B>the approval of an amendment to the KB Home 2010 Equity Incentive Plan (Proposal
3)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FOR </B>the advisory vote on named executive officer compensation (Proposal 4)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>FOR </B>the option of <B>ONE YEAR </B>for the frequency of an advisory vote to approve named
executive officer compensation (Proposal 5)</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To ensure your vote is counted, <U><B>please vote as soon as possible</B></U>. Remember, your vote is
important!
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you have any questions about voting or the Annual Meeting, please contact our Corporate
Secretary or our Assistant Corporate Secretary.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Thank you for your support.
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>A LETTER FROM KB HOME PRESIDENT AND CHIEF EXECUTIVE OFFICER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Fellow KB Home Stockholders:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2010 was a year of diligent work, continuous improvement and tremendous accomplishment for KB Home.
Based on the ongoing execution of our comprehensive strategy to transform and re-position our
business, we were very pleased to conclude our 2010 fiscal year with a profitable fourth quarter
and second half.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our results demonstrated that our strategy is working, and that we can operate a profitable
homebuilding company even at today&#146;s historically low levels of new home sales. Moreover, we
believe we are poised to capitalize on future growth opportunities for our business when the
housing markets eventually stabilize and recover.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I would like to share with you the primary tenets of our strategy as a company, both now and over
the past few years, all of which are grounded in the disciplined operating principles of our KB<I>nxt</I>
Built to Order&#153; business model that have guided our company for almost 15&nbsp;years.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Driving our Results</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The housing environment over the past year was perhaps the most challenging KB Home has experienced
since the company began building homes for families in 1957. In the face of persistent economic
uncertainty, low consumer confidence and high unemployment, we have concentrated on the areas that
are <I>within our control </I>in an effort to deliver results regardless of market conditions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With this in mind, our 2010 accomplishments included:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>dramatically lowering our cost to operate, including reducing our selling, general and
administrative expenses, while retaining our growth platform for future opportunities;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>opening new communities in &#147;A&#148; locations within what we consider to be the best performing
submarkets, offering homes designed specifically to meet the needs of local buyers;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expanding our year-over-year housing gross margins each and every quarter, despite pricing
pressures in most markets;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>maintaining a total cash balance at year-end in excess of $1&nbsp;billion; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enhancing our brand awareness and achieving record high customer satisfaction levels.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Even as headwinds in the housing market continue to adversely impact new home sales and deliveries,
we remain focused on our operational excellence to improve many areas of our business and drive our
financial results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Transforming our Business</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our positive earnings in the second half of 2010 signified the culmination of many years of hard
work since the housing downturn began in mid-2006. At that time, KB Home quickly moved to
transform our business and product offerings to compete in a new environment in which inventory
swelled, home prices declined, and foreclosure homes became our biggest competition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Throughout 2010 we continued to execute our comprehensive and consistent strategy to preserve cash,
reduce debt, exit underperforming markets, and generally re-size our operations to fit current
market realities. Along the way, we made some changes in our business that are not only benefiting
KB Home, but are also leaving a lasting impression on our entire industry.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Differentiating our Products</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">One of our innovations was the development and launch of our new line of homes that could be built
more efficiently and less expensively without compromising quality and design. The Open Series&#153;
captured the sensibilities and needs of a new kind of homebuyer in the marketplace, delivering
open, flexible designs that were affordably priced to compete directly with foreclosures and other
resale homes. We further improved and refined our successful Open Series product offerings in
2010, and they remain extremely relevant to today&#146;s value-conscious homebuyers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have also found ways to build more earth-friendly features into our homes through our My Home.
My Earth.&#153; environmental initiative without materially affecting prices, keeping our homes
affordable while helping our buyers to save money on their monthly utility bills and to conserve
natural resources.
</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">KB Home was recently named the #1 Green Homebuilder based on a study conducted by Calvert
Investments, a leading asset management firm in the area of sustainable and responsible investing.
Our overall score was almost double that of the next best performing homebuilder and over 10 times
the average score of the remaining eight builders in the study. This independent recognition of
our sustainability program is increasingly important among today&#146;s investors and consumers, and we
are continuing to raise the bar in our industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2011, we were pleased to announce a new initiative to provide a KB Home Energy
Performance Guide&#153; (EPG)&nbsp;with all of our new homes. Like an MPG sticker found on all new cars, the
KB Home EPG contains key information about the relative energy efficiency of the home, as well as
estimated monthly electric and gas costs for homeowners. We believe this will change the way
people shop for homes as they can now better quantify their total cost of homeownership, of which
utilities are a significant part. With the EPG, consumers can clearly recognize the tremendous
financial benefits of owning an energy-efficient KB home, especially when compared to resale homes.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Restoring our Profitability</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of these actions have been aimed at our primary goal of restoring profitability. Our
achievement in this regard, including reporting our first pretax profit in nearly four years in the
fourth quarter of 2010, is one in which all of us at KB Home take great pride, and our team is
eager to build on these results in the coming year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We know we have more to do and there will be additional challenges ahead as we anticipate difficult
economic conditions will continue to mitigate a housing recovery. Nevertheless, we believe we have
laid the foundation for a bright future at KB Home.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Investing in our Future</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indeed, even as we have repositioned our business and reduced our overhead, we have been careful to
preserve our company&#146;s growth platform. We currently operate in 30 of the best long-term growth
markets in the country. And in 2010, we invested $560&nbsp;million in land and land development in
desirable locations within those markets at very attractive lot prices. Even with our substantial
investments, we maintained a strong and liquid balance sheet with over $1&nbsp;billion in total cash at
year-end, which we feel allows us to continue to be nimble and opportunistic going forward.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have the right products, the right markets, and the right strategy. Most important, we have the
right team in place to execute on our proven strategy today, and to take KB Home to the next level
of performance as housing markets recover. In the process, we look forward to creating lasting
value for our stockholders, our employees and our customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Thank you for your continued investment in KB Home.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Sincerely,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="v58056bv5805629.gif" alt="(-s- Jeffrey T. Mezger)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Jeffrey T. Mezger<BR>
President and Chief Executive Officer<BR>
KB Home

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain matters discussed in the materials filed herewith, 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
&#147;forward-looking statements&#148; 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: general
economic, employment and business conditions; adverse market conditions that could result in
additional impairments or abandonment charges and operating losses, including an oversupply of
unsold homes, declining home prices and increased foreclosure and short sale activity, among other
things; conditions in the capital and credit markets (including residential consumer mortgage
lending standards, the availability of residential consumer mortgage financing and mortgage
foreclosure rates); material prices and availability; labor costs and availability; changes in
interest rates; inflation; our debt level and structure; weak or declining consumer confidence,
either generally or specifically with respect to purchasing homes; competition for home sales from
other sellers of new and existing homes, including 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 Dodd-Frank Act, tax credits, tax incentives and/or subsidies
for home purchases, tax deductions for consumer 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; the
availability and cost of land in desirable areas and our ability to identify and acquire such land;
legal or regulatory proceedings or claims, including the claims concerning South Edge described in
the Company&#146;s Annual Report on Form 10-K for the fiscal year ended November&nbsp;30, 2010; the ability
and/or willingness of participants in our unconsolidated joint ventures to fulfill their
obligations; our ability to access capital; our ability to use 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
active community count and open new communities), revenue growth and cost control strategies;
consumer interest in our new product designs, including The Open Series&#153;; 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.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
