<SEC-DOCUMENT>0000950123-11-037372.txt : 20111227
<SEC-HEADER>0000950123-11-037372.hdr.sgml : 20111226
<ACCEPTANCE-DATETIME>20110420182033
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-11-037372
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20110420

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">KB HOME<BR>
10990 Wilshire Boulevard<BR>
Los Angeles, California 90024
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">April&nbsp;20, 2011</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">John Cash<BR>
Accounting Branch Chief<BR>
Division of Corporation Finance<BR>
United States Securities and Exchange Commission<BR>
100 F Street NE<BR>
Washington, D.C. 20549-7010

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">Re:&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>KB Home<BR>
Form&nbsp;10-K for the fiscal year ended November&nbsp;30, 2010<BR>
Filed January&nbsp;31, 2011<BR>
File #1-9195</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Cash:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This letter responds to the comments of the staff (&#147;Staff&#148;) of the Division of Corporation Finance
of the Securities and Exchange Commission (the &#147;Commission&#148;) contained in your letter dated April
11, 2011 regarding the Form 10-K for the fiscal year ended November&nbsp;30, 2010 that we filed with the
Commission on January&nbsp;31, 2011 (the &#147;Form 10-K&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Below we have reprinted the comments from the April&nbsp;11, 2011 letter in bold, followed by our
responses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Form&nbsp;10-K for the fiscal year ended November&nbsp;30, 2010</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Consolidated Financial Statements</B></U><BR>
<U><B>Note 14. Commitments and Contingencies, page 80</B></U>

</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%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to our prior comment two. Please explain to us how the line items:
homes identified in 2009; homes identified in 2010; and revision to estimated repair costs, in
the roll-forward provided in your letter dated March&nbsp;8, 2011 reconcile to related captions in
the overall warranty roll-forward provided in your </B><B>Form 10-K</B><B>. Also, please explain to us, and
clarify in future filings, how you determined your overall warranty liability at each
reporting date since August&nbsp;31, 2009 was sufficient, particularly in light of the increases in
the estimated repair costs related to homes you identified with defective drywall before and
after that date. Please help us better understand how and why you essentially concluded that
your general warranty liability was over-accrued.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Response</U>:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In our Form 10-K (as in each of our periodic reports since our Quarterly Report on Form 10-Q for
the quarterly period ending August&nbsp;31, 2009), we supplemented the roll-forward table of our overall
warranty liability with narrative disclosure of our warranty liability related to allegedly
defective drywall material manufactured in China, an issue that has impacted several companies in
the homebuilding industry. In assessing the sufficiency and reasonableness of our overall warranty
liability, however, we do not evaluate in isolation the individual items that are covered within
our overall warranty liability, such as estimated repair costs related to identified homes affected
by the allegedly defective drywall material. Rather, in assessing our overall warranty liability,
we evaluate the costs related to identified homes affected by the allegedly defective drywall
material and other home warranty-related items on a combined basis. The separate roll-forward with
respect to the allegedly
</DIV>



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



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">defective drywall material that we included in our March&nbsp;8, 2011 letter was prepared to illustrate
our identification and estimation of repair costs related to affected homes, but it is not
typically prepared or used in our assessment of our overall warranty liability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table reconciles our estimated repair costs related to identified affected homes as
set forth in our March&nbsp;8, 2011 letter to the roll-forward table of our overall warranty liability
included in our Form 10-K (in thousands):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Estimated</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">repair costs</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">related to</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Other estimated</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">allegedly</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">warranty</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Overall warranty</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">defective drywall</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">obligations</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">liability (A)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at November
30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">145,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">145,369</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Warranties issued</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,846</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,319</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23,371</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24,690</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments (B)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,726</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,502</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,224</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at November
30, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,407</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">121,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">135,749</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Warranties issued</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,173</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,173</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(25,455</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;&nbsp;&nbsp;(C)&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19,518</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44,973</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments (B)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">22,396</TD>
    <TD nowrap>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24,357</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,961</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at November
30, 2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">82,640</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">93,988</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
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</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(A)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents the overall warranty liability roll-forward included in our Form 10-K.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(B)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on our assessment of our overall warranty liability for sufficiency and reasonableness,
we make adjustments to the overall warranty liability as necessary.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(C)</TD>
    <TD>&nbsp;</TD>
    <TD>Comprised of $13,085 for homes under repair or repaired, but with costs remaining to be paid
(unresolved), and $12,370 for homes with repairs completed and with all costs paid (resolved),
as reflected in our March&nbsp;8, 2011 letter.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(D)</TD>
    <TD>&nbsp;</TD>
    <TD>Comprised of $14,284 for identified affected homes and an $8,112 revision to estimated repair
costs, as reflected in our March&nbsp;8, 2011 letter.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We estimate the costs that may be incurred under the warranties we provide on our homes and
record a liability in the amount of such estimated costs at the time the revenue associated with
the sale of each home is recognized. Our overall warranty liability is reduced as payments for
actual warranty costs are made.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our overall warranty liability is affected by various factors, including the number of homes sold,
historical and anticipated rates of warranty claims, and costs per claim. Due to the judgments and
projections used in estimating the warranty costs we may incur at the time homes are sold, our
actual warranty costs may differ from those estimated. Among other events that could cause such
differences are unanticipated changes in the legal environment, local weather, land or
environmental conditions, quality of materials (such as drywall) or methods used in the
construction of our homes, or our customer service practices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On a quarterly basis, we assess our overall warranty liability for sufficiency and reasonableness
and we make adjustments, as necessary, in a timely manner. Our assessment includes the review of
our actual warranty costs incurred to identify trends and changes in our warranty claims
experience, and considers our construction quality and customer service initiatives and outside
events, such as the discovery of allegedly defective drywall material. Our primary assumption in
assessing our overall warranty liability
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<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">is that our historical warranty claims experience is a strong indicator of future claims
experience. Through our quarterly sufficiency/reasonableness assessment process, we determine
whether our overall warranty liability is an appropriate estimate or needs to be adjusted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We do not believe our overall warranty liability was over-accrued in the reporting periods covered
by our Form 10-K. Based on our assessments of our overall warranty liability for sufficiency and
reasonableness at each covered reporting date, we concluded that our overall warranty liability was
an appropriate estimate. While we have considered the repair costs related to identified homes
affected by the allegedly defective drywall material in conjunction with our quarterly assessments
of our overall warranty liability since the third quarter of 2009, we have throughout the same
period also experienced favorable trends in our actual warranty costs incurred with respect to
other home warranty-related items. We believe these favorable trends reflect our ongoing focus on
construction quality and customer service, among other things. Thus, although our overall warranty
liability has decreased &#151; in part because of the payments we have made to resolve repairs on
identified affected homes and in part due to a decrease in the number of homes we have sold in the
past several years &#151; it represented an appropriate estimate at the end of each reporting period.
Therefore, we determined that our overall warranty liability at each reporting date since August
31, 2009 was sufficient and reasonable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In future filings (as applicable), we will clarify how we have determined that our overall warranty
liability has been sufficient in light of the estimated repair costs related to identified affected
homes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Note 15. Legal Matters, page 81</B></U>
</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%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to our prior comment three and have the following additional comments:</B></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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>(A)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note you provided your estimate of the fair value of the South Edge land you may
acquire on a per acre basis. Please also provide us the total fair value amounts at
November&nbsp;30, 2009 and 2010 and at February&nbsp;28, 2011 based on the number of acres you may
acquire.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>(B)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please provide us a more specific and comprehensive discussion regarding how you
determined that the fair value of the South Edge land decreased from $138,000 per acre at
November&nbsp;30, 2010 to $127,000 per acre at February&nbsp;28, 2011. In this regard, it is
unclear if the decrease is reflective of the costs you would incur to develop the land and
build and sell houses on the land.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>(C)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please clarify how and why you determined that selling the land without further
development was no longer an alternative strategy.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>(D)</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please provide us a more specific and comprehensive discussion regarding how you
considered local market conditions in determining whether residential development at South
Edge was a feasible strategy. In this regard, please address the significant assumptions
you used including the timeframe for development and anticipated selling prices and
compare those assumptions with current market conditions.</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Response</U>:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For clearer presentation, we have formatted our response with lettered paragraphs and have
substituted in the above comment corresponding letters for the bullet points in the April&nbsp;11, 2011
letter.
</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%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Total Fair Value of South Edge Land</U>. At November&nbsp;30, 2009 and 2010, the total fair
value of the 458 acres expected to be acquired from South Edge was $60.5&nbsp;million ($132,000 per
acre) and $63.2&nbsp;million ($138,000 per acre), respectively. At February&nbsp;28, 2011, the total
fair value of the 592 acres expected to be acquired from South Edge was $75.2&nbsp;million
($127,000 per acre). The total fair value at February&nbsp;28, 2011 was based on a larger number
of acres than at November&nbsp;30, 2009 and 2010. The increased acreage primarily reflected our
determination at February&nbsp;28, 2011</TD>
</TR>

</TABLE>
</DIV>

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</DIV>

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

<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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>that it was probable that we would, due to the February&nbsp;3, 2011 court decision to enter an order
for relief on the Chapter&nbsp;11 involuntary bankruptcy petition filed against South Edge and as a
proponent of a bankruptcy court-approved plan of reorganization for South Edge (a &#147;Supported
Plan&#148;), (i)&nbsp;acquire, pursuant to such a Supported Plan, a portion of South Edge land that had
initially been allocated to two original South Edge members that declared bankruptcy in 2008,
and (ii)&nbsp;be able to increase the amount of South Edge land that would be developable for
residential construction pursuant to a revised development plan for the South Edge project that
would be implemented under such a Supported Plan. Please note that while we believe it is
probable that we will become a proponent of a Supported Plan, we continue to support South
Edge&#146;s appeal of the entry of the orders for relief and appointing a trustee. In addition, we
are appealing those orders and are seeking to have them reversed. By engaging in discussions
that may result in our being a proponent of a Supported Plan, we are not waiving the right to
challenge the orders that are the subject of the appeal.</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%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Fair Value Estimates of the South Edge Land at November&nbsp;30, 2010 and February&nbsp;28,
2011</U>. Our fair value estimates of the South Edge land at both November&nbsp;30, 2010 and
February&nbsp;28, 2011 considered the facts and circumstances surrounding the South Edge project
that were known to us at each respective date. As discussed in our March&nbsp;29, 2011 letter to
you, we estimated the per acre fair value of the South Edge land at November&nbsp;30, 2010 assuming
that our share of the land would be sold to third parties without further development (the
&#147;Land Sale Strategy&#148;). Consistent with this view, we estimated the fair value of the South
Edge land at November&nbsp;30, 2010 based on comparable land sales in the local market. This
approach yielded an estimated fair value of $138,000 per acre.</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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At February&nbsp;28, 2011, as discussed below in paragraph (C), we assumed that our share of the
South Edge land would be developed, homes would be built and sold on most of the land and the
remainder of the developed land would be sold to third parties (the &#147;Development Strategy&#148;).
Based on this view and using a present value methodology, we estimated the fair value of the
South Edge land to be $127,000 per acre. The decrease in the estimated per acre fair value at
February&nbsp;28, 2011 compared to the estimated per acre fair value at November&nbsp;30, 2010 resulted
from several factors. One important factor behind the decrease was the February&nbsp;3, 2011 court
decision to enter an order for relief on the Chapter&nbsp;11 involuntary bankruptcy petition filed
against South Edge and to appoint a trustee for South Edge and the consequences that flow from
that event (assuming that appeal of the court decision is not successful).
Resolving and concluding the bankruptcy process is expected to delay the development of the
South Edge land and to add costs that would not otherwise have been incurred in the development
process. Given the size, complexity and long-term nature of the South Edge project, the
anticipated delay and additional cost negatively impacted our cash flow projections and fair
value estimate at February&nbsp;28, 2011. Our per acre fair value estimate of the South Edge land at
February&nbsp;28, 2011 also reflected our consideration of the probable implementation of a Supported
Plan, which is anticipated to include a revised development plan for the South Edge project that
is more appropriate for current market conditions and consumer preferences. On balance, the net
impact of these items yielded a decrease in our per acre fair value estimate for the land at
February&nbsp;28, 2011 as compared to our per acre fair value estimate at November&nbsp;30, 2010.</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%" nowrap align="left">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>South Edge Land Development Strategy</U>. The probable outcomes of the February&nbsp;3, 2011
court decision, in conjunction with our assessments of its feasibility (as discussed below in
paragraph (D)), form the basis for our view that the Development Strategy is the most probable
strategy for our share of the South Edge land. The previously considered Land Sale Strategy
was based on two key assumptions: (a)&nbsp;that South Edge would be able to pay off the Loans at a
discount in a privately-negotiated settlement with the administrative agent for the lenders
(as discussed in our</TD>
</TR>

</TABLE>
</DIV>

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</DIV>

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

<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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>March&nbsp;29, 2011 letter), and could do so relatively quickly once key terms were agreed upon, and
(b)&nbsp;that differing objectives, capabilities and financial strength among the members of South
Edge would make reaching an agreement to pursue the Land Sale Strategy more practical than
agreeing on a revised multi-year development plan for the South Edge project. The court
decision increased the cost and complexity of these matters and forced a re-evaluation of our
assumptions, which led us to consider the Development Strategy as the most probable strategy for
the South Edge land. Because of the court decision, any resolution of the Loans with the
administrative agent for the lenders must be made in the bankruptcy process, and it will be
slower and more costly than the privately-negotiated settlement that was considered possible
prior to the court decision. Likewise, any disposition of South Edge assets must be made under
bankruptcy court supervision, will involve multiple constituencies, and will require more time
and cost than was previously considered. In this changed environment, in which there must be
multiple party collaboration and bankruptcy court involvement, there are more incentives and
fewer disincentives to reaching agreement on improvements in the development plan for the South
Edge project, and to enhance the project&#146;s governance, in order to maximize its value. Thus the
Land Sale Strategy, which was relatively simpler and more feasible than the Development Strategy
before the court decision, has in our view become less attractive than the Development Strategy
after the court decision.</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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As we reported in our Quarterly Report on Form 10-Q for the quarter ended February&nbsp;28, 2011,
with the court decision, we believe it is probable that we will either (i)&nbsp;pay an amount to the
administrative agent for the South Edge lenders under the Springing Guaranty (although we
believe there are potential offsets or defenses to minimize its enforcement), and assume the
lenders&#146; lien position with respect to our share of the South Edge land, or (ii)&nbsp;acquire our
share of the South Edge land as a part owner of a newly created entity that will acquire all of
the South Edge land through a Supported Plan. If we are one of the proponents of a Supported
Plan, which we consider the most likely outcome, we believe, based on our discussions with
certain other South Edge members, that such a Supported Plan will provide an opportunity (a)&nbsp;to
revise the current development plan for the South Edge project in ways that better reflect
current market conditions and consumer preferences, (b)&nbsp;to enhance project governance with a
smaller group of members that share a common interest in the way the South Edge land is
developed, and (c)&nbsp;to address the ownership and development of South Edge land that was
initially allocated to the two original members of South Edge that declared bankruptcy in 2008
(as noted in our March&nbsp;29, 2011 letter). Under a Supported Plan outcome, we anticipate that we
will acquire a portion of this South Edge land initially allocated to the bankrupt original
South Edge members.</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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Therefore, for the above reasons, as of February&nbsp;28, 2011 and up through the date of this
letter, we no longer view the Land Sale Strategy as a probable alternative strategy for the
South Edge land.</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%" nowrap align="left">(D)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Consideration of South Edge Local Market Conditions</U>. Under our operational business
model, we consider geographic areas for potential land acquisitions and assess the viability
of developing residential communities based on ongoing periodic surveys of both new and resale
homebuyers, analyses of demographic, employment and other relevant statistical studies, and
other research and forward planning activities. Based on the results of such activities and
our nearly 20&nbsp;years of homebuilding experience in the southern Nevada market where the South
Edge project is located, we considered at February&nbsp;28, 2011 and believe as of the date of this
letter that there will be sufficient demand for new residential construction in this
land-constrained area to support our pursuing the Development Strategy over the expected
development timeframe for the South Edge land. Among other factors, this view is based on the
generally favorable home sales activity we have experienced at the South Edge project and at
our other new home communities located nearby. There are also new home communities within and
near the South Edge project operated by other homebuilders that we believe are performing
relatively well. Taking the foregoing into account, we</TD>
</TR>

</TABLE>
</DIV>

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</DIV>

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

<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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>therefore considered at February&nbsp;28, 2011 and believe as of the date of this letter that the
Development Strategy represents a feasible strategy.</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%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The assumptions and judgments we used in estimating the per acre fair value of our share of the
South Edge land at February&nbsp;28, 2011 related to a number of items, including anticipated product
design offerings, estimates of average selling prices, estimates of potential future home sales
and cancellation rates, and anticipated land development, construction and overhead costs.
These assumptions and judgments were largely grounded in our assessment of current market
conditions gained from our recent and continuing development and home sales activity experience
at the South Edge project and at our other nearby new home communities. That is, we assumed
that we would offer multiple home design options that are similar to our current offerings in
the market, and therefore used the average selling prices and construction costs for our current
products as a baseline. To reflect the expected 15-year development timeframe for the South
Edge land (which includes the additional land anticipated to be acquired under a Supported Plan
and the anticipated delay in development stemming from the South Edge bankruptcy proceedings),
we applied an assumed appreciation factor to both revenues and construction costs to reflect our
projections of future market conditions until the final home is sold. Our projections consider
that future market conditions will improve relative to current market conditions as we expect
the southern Nevada market to recover from the historically severe deterioration it has
experienced in the past few years. In summary, our assumptions and judgments used in our
estimate of the per acre fair value of our share of the South Edge land at February&nbsp;28, 2011
were consistent with our expectations for our communities within and near the South Edge project
and reflected known facts and circumstances regarding current market conditions, our experience
in building homes in the southern Nevada market, and future projections that we considered to be
reasonable.</TD>
</TR>

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We acknowledge that:
</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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We are responsible for the adequacy and accuracy of the disclosure in the filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Staff comments or changes to disclosure in response to Staff comments do not foreclose
the Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We may not assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe this letter appropriately responds to each of the Staff&#146;s comments and questions. If
you have any further questions or comments, please do not hesitate to contact me at 310-231-4014,
Brian J. Woram, our Executive Vice President, General Counsel and Corporate Secretary, at
310-231-4040, or William R. Hollinger, our Senior Vice President and Chief Accounting Officer, at
310-231-4028.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR>
    <TD colspan="3" align="left">Sincerely,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top" align="left">&nbsp;</TD>
</TR><TR>
    <TD colspan="3" style="border-bottom: 0px solid #000000" align="left">/S/ JEFF J. KAMINSKI<BR>&nbsp;
&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD colspan="3" align="left">Jeff J. Kaminski&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR><TR>
    <TD nowrap colspan="3" align="left">Executive Vice President and Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">cc:&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Tricia Armelin, Staff Accountant<BR>
Anne McConnell, Senior Staff Accountant<BR>
(U.S. Securities and Exchange Commission)<BR><BR>
Brian J. Woram, Executive Vice President, General Counsel and Corporate Secretary<BR>
William R. Hollinger, Senior Vice President and Chief Accounting Officer<BR>
(KB Home)</TD>
</TR>
</TABLE>
</DIV>


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