What changed in this filing

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Item 1. Business

2026-01-23 compared with 2025-01-24 · 314 added, 303 removed, 543 unchanged (53% of the section changed)

KB Home is one of the largest and most trusted homebuilders in the U.S.

We have been building homes for more than 65

years, with nearly 700,000 homes built since our founding in 1957.

We have been building homes for nearly 70

years, with over 700,000 homes built since our founding in 1957.

We build a variety of new homes, including attached and

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The following charts present homebuilding revenues, net income and diluted earnings per share for the years ended

November 30, and book value per share as of November 30 :

November 30, 2021, 2023 and 2025, and book value per share as of November 30, 2021, 2023 and 2025:

Reflecting the geographic scale of our homebuilding business, we have operations in the nine states and 49 major markets

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Charlotte, Durham-Chapel Hill, Fayetteville and Raleigh

In 2025, we announced our reentry into the Atlanta, Georgia market.

However, as of November 30, 2025 , we had not

acquired land or commenced selling homes in that market.

Business Strategy

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being attainable for the largest demand segments.

With our Built to Order approach, our customers have the

opportunity to select their lot location within a community, floor plan, elevation and structural options, each of which

may be at a premium added to a home’s selling price, and to personalize their homes beyond our base offerings by

adding numerous design choices and options available in our KB Home Design Studios .

Our design studios, generally

centrally located within our served markets, are a key component of our Built to Order process, with the mix of design

choices and options we offer at each studio primarily based on the preferences identified by our market survey and

purchase frequency data, as discussed further below under “ Customer Obsession .”

Additionally, since mid-February 2025, we have implemented a

simplified sales strategy focused on providing a straightforward, transparent base price, with limited, if any,

concessions or incentives, that is intended to offer to our customers a compelling value competitive with area resale

Moreover, unlike the constraints inherent with resale homes, and new homes offered by certain other

builders, our Built to Order approach provides our customers with the opportunity to select their lot location within a

community, floor plan, elevation and structural options, each of which may be at a premium added to a home’s selling

price, and to personalize their homes beyond our base offerings by adding numerous design options available in our

KB Home Design Studios .

Our design studios, generally centrally located within our served markets, are a key

component of our Built to Order process, with the mix of included features and design options we offer at each studio

primarily based on the preferences identified by our market survey and purchase frequency data, as discussed further

below under “ Customer Obsession .”

We utilize a centralized internal architectural group that designs homes to meet or exceed customers’ price-to-value

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Our library of standardized

plans facilitates our ability to shift with local demand, which may include adding smaller square footage homes at

communities to offer more affordable choices to buyers, and/or project site attributes, such as the size and location of

developable lots.

This library also enables us to better understand in advance the cost to build our products and to

compare and implement best land development and home construction practices across divisions and communities.

We also incorporate energy-efficient and water-saving f eatures into our product designs to help lower our homebuyers’

total cost of homeownership and reduce our homes’ impact on the environment.

plans, which we have streamlined to focus on those most frequently selected by our customers, facilitates our ability to

shift with local demand, which may include adding smaller square footage homes at communities to offer more

affordable choices to buyers, and/or project site attributes, such as the size and location of developable lots.

library also enables us to better understand in advance the cost to build our products and to compare and implement

best land development and home construction practices across divisions and communities.

We also incorporate

energy-efficient and water-saving features into our product designs to help lower our homebuyers’ total cost of

homeownership and reduce our homes’ impact on the environment.

• Production .

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starting construction on a certain number of homes in a community before corresponding sales contracts are signed with

homebuyers to more quickly meet customer delivery expectations and generate revenues, particularly in markets with low

resale home inventory.

Generally, 60% to 70% of our homes delivered are Built to Order , with the remainder consisting of

homes started without a corresponding buyer and partially constructed homes where the initial buyer cancelled their home sales

contract with us.

We may also acquire land parcels in peripheral neighborhoods of a core metropolitan area that otherwise fit

our growth strategy and meet our investment return standards.

Additionally, significant supply chain disruptions from 2020

into 2023 substantially lengthened our average build time and hindered our even-flow home production process.

We achieved a

meaningful sequential improvement in our build times each quarter beginning with the 2023 second quarter.

Our average build

times in 2024 improved 28% from the prior year and as of the end of the 2024 fourth quarter , our build times had nearly

returned to their historical average of between four to five months from start to home completion .

homebuyers to more quickly meet customer delivery expectations and generate revenues.

Historically, 60% to 70% of our

homes delivered are Built to Order , with the remainder consisting of homes started without a corresponding buyer and partially

constructed homes where the initial buyer cancelled their home sales contract with us.

In 2025, around 55% of our homes

delivered were Built to Order , largely reflecting strategies we adopted during the 2020-2024 period to navigate supply chain

disruptions that substantially lengthened our average build time and hindered our even-flow home production process, and

market dynamics in areas with then-low resale home inventory.

In 2026, with a more normalized supply chain and meaningful

improvement in our average build times since the 2023 second quarter, we intend to bring our mix of homes delivered closer to

our historical average.

We may also acquire land parcels in peripheral neighborhoods of a core metropolitan area that otherwise

fit our growth strategy and meet our investment return standards.

Asset Efficiency.

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Inventory Management ”;

and deploying excess cash flow from operations to help fuel additional revenue growth or reduce

debt, among other steps.

and deploying excess cash flow from operations to help fuel revenue growth or reduce debt, among

Customer Obsession .

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Our homebuyers can visit our KB Home Design

Studios , where they get both advice and the opportunity to select from a broad range of inc luded features, design

choices and options that will help personalize their home.

When customers build a new home with us, they also enjoy

choosing exactly what they want and paying only for what matters most to them.

This helps to meet homebuyers’

priorities at price points attainable to them.

Studios , where they get both advice and the opportunity to select from a broad range of inc luded features and design

options that will help personalize their home.

When customers build a new home with us, they also enjoy choosing

exactly what they want and paying only for what matters most to them.

This helps to meet homebuyers’ priorities at

price points attainable to them.

• Create collaborative customer relationships .

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We support each person or family, whether it is their first time or they have already been

homeowners, with a dedicated community team of sales counselors, design consultants, customer service

representatives, construction superintendents and other personnel.

This team is available to guide each homebuyer

through each major step of the design, construction and closing of their KB home and aims to make the process as easy

and straightforward as possible.

homeowners, with a dedicated community team of sales counselors, design consultants, construction superintendents,

customer service representatives, KBHS loan officers (for buyers who elect to use KBHS to finance their home

purchase) and other personnel.

This team is available to guide each homebuyer through each major step of the design,

construction and closing of their KB home and aims to make the process as easy and straightforward as possible.

• Continue to listen to customers after the sale is done .

To help learn and improve our customer experience, we

schedule follow-up visits with our customers 1 0 days and 30 day s after they move in, as well as six, 10 and 18 months

schedule follow-up visits with our customers 10 days and 30 days after they move in, as well as six, 10 and 18 months

later , to hear about their experience in their new home and to address any concerns they may have, including warranty

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outside survey firms.

In 2024, we continued to be one of the highest-ranked national homebuilders for customer satisfaction in

third-party surveys and, based on long-running buyer surveys conducted by an outside organization we have engaged, achieved

the highest level of customer satisfaction in our histor y , which we believe reflects the effective dedication we have to our

In 2025, we continued to be one of the top-ranked national homebuilders for customer satisfaction on a

leading independent homebuilding review site, which we believe reflects the effective dedication we have to our homebuyers.

Promotional Marketing Strategy.

To emphasize the distinct combination of innovative design, sustainability,

personalization, affordability and partnership we offer to our homebuyers and the importance we place on customer satisfaction,

we have centered our external brand identity and messaging around Built on Relationships®.

Built on Relationships also

encapsulates the importance of customer, as discussed above, and other key relationships – with suppliers, trade contractors,

land sellers and municipalities – to the success of our business.

The key components we highlight as part of our brand identity

To emphasize the distinct combination of partnership, personalization, innovative

design, sustainability and affordability we offer to our homebuyers, as well as the importance we place on customer

satisfaction, we have centered our external brand identity and messaging around Built on Relationships®.

Relationships also encapsulates the importance of customer, as discussed above, and other key relationships – with suppliers,

trade contractors, land sellers and municipalities – to the success of our business.

The key components we highlight as part of

our brand identity include:

• Partnership .

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Additionally, at our KB Home Design Studios , our

homebuyers have the opportunity to select from a broad range of included features, design choices and options.

homebuyers have the opportunity to select from a broad range of included features and design options.

• Innovative Design .

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select and design a personalized home within their budget.

Our ENERGY STAR ® certified homes can provide long-

term significant savings on utility bills, compared to typical resale homes and new homes that are not ENERGY STAR

Our energy- and water-efficient homes can provide long-

term significant savings on utility bills, compared to typical resale homes and new homes without such features.

We typically sell our homes through salaried and/or commissioned sales associate employees from sales offices located in

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• Offering virtual 360 ° home tours and online photo galleries for prospective homebuyers;

• Providing access to interactive floor plans and homesite maps for their desired community;

• Providing access to interactive floor plans and homesite maps for their desired community, as well as the ability to

reserve a favorite homesite and floorplan;

• Conducting virtual appointments and tours of the model homes and design studios;

• Utilizing online tools to serve homebuyers where possible;

• Offering online tools, such as the MyKB digital portal and KB Home app, to guide buyers through the homebuying

journey from shopping to construction and ownership;

• Presenting homebuyers with the ability to virtually see and walk through their home at various points during its

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In recent years

and in response to the growing number of millennial and Generation Z homebuyers, we have increased our emphasis on digital

marketing, through search engine marketing, interactive internet-based applications, email, social media, our website and other

evolving communication technologies.

We also use print media and advertising, billboards and radio in our served markets.

and in response to the large number of millennial and Generation Z homebuyers, we have increased our emphasis on digital

marketing, through search engine marketing, online real estate listing platforms, display ads, email, social media, our website

and other evolving communication technologies.

We also use print media and advertising, and billboards in our served

Homebuyer Profile .

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return standards, while balancing competing needs for financial strength, liquidity and land inventory for future growth.

we acquire land, we generally focus on parcels with lots that are entitled for residential construction and are either physically

developed to start home construction (referred to as “finished lots”) or partially finished.

However, depending on market

conditions and available opportunities, we may acquire undeveloped and/or unentitled land.

We may also invest in land that

requires us to repurpose and re-entitle the property for residential use, such as urban in-fill developments.

We expect that the

overall balance of undeveloped, unentitled, entitled, partially finished and finished lots in our inventory will vary over time, and

in implementing our strategic growth initiatives, we may acquire a greater proportion of undeveloped or unentitled land in the

future if and as the availability of reasonably priced land with finished or partially finished lots diminishes.

example, in 2025, after opportunistically purchasing two sizable land parcels in the first quarter, we scaled back our investments

over the balance of the year in alignment with our growth projections amid softer market conditions.

When we acquire land,

we generally focus on parcels with lots that are entitled for residential construction and are either physically developed to start

home construction (referred to as “finished lots”) or partially finished.

However, depending on market conditions and available

opportunities, we may acquire undeveloped and/or unentitled land.

We may also invest in land that requires us to repurpose

and re-entitle the property for residential use, such as urban in-fill developments.

We expect that the overall balance of

undeveloped, unentitled, entitled, partially finished and finished lots in our inventory will vary over time, and in implementing

our strategic growth initiatives, we may acquire a greater proportion of undeveloped or unentitled land in the future if and as the

availability of reasonably priced land with finished or partially finished lots diminishes.

As part of the decision-making process for approving a land purchase, we review extensive information about a proposed

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contracts or other similar contracts where the associated deposits were refundable at our discretion.

The number of lots we owned or controlled under land option contracts or other similar contracts as of November 30, 2025

decreased 16% from November 30, 2024 , largely reflecting homes delivered and our abandonment of 24,596 previously

controlled lots that no longer met our underwriting criteria, partly offset by newly optioned lots during 2025.

The following charts present the percentage of inventory lots we owned or controlled under land option contracts or other

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model homes, our inventories typically do not consist of a significant number of completed unsold homes.

cancellations of home sales contracts prior to the delivery of the underlying homes, the construction of attached products with

some unsold units, or specific marketing or other strategic considerations will result in our having some unsold completed or

partially completed homes in our inventory.

Our typical cycle time from home sale to delivery has historically ranged from six

to seven months.

However, at the end

of 2025, we carried a higher number of completed unsold homes largely reflecting strategies we had adopted in 2020-2024 to

navigate supply chain disruptions and market dynamics.

In 2026, with a more normalized supply chain and meaningful

improvement in our average build times, and our emphasis on increasing the proportion of Built to Order sales and homes

delivered, our completed unsold inventory is expected to decrease compared to 2025 levels.

In addition, cancellations of home

sales contracts prior to the delivery of the underlying homes, the construction of attached products with some unsold units, or

specific marketing or other strategic considerations will result in our having some unsold completed or partially completed

homes in our inventory.

Our typical timeframe from home sale to delivery has historically ranged from s ix to seven months, with an average build

time of four to five months from construction start to home completion .

We may encounter circumstances beyond our control,

such as supply chain disruptions, as further described below under Item 1A – Risk Factors , which could substantially lengthen

our average build time and hinder our even-flow production process.

We made meaningful sequential improvements since the

2023 second quarter, and by the end of the 2025 fourth quarter our build time had returned to our historical average.

We, or outside general contractors we may engage, contract with a variety of independent contractors, who are typically

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the current period.

Our backlog at any given time will be affected by cancellations, homes delivered and our community count.

Our backlog at any given time will be affected by cancellations, homes delivered, build times, and our

community count.

Backlog value represents potential future housing revenues from homes in backlog.

Our cancellation rates and the factors

affecting such rates are further discussed below under both Item 1A – Risk Factors and Item 7 – Management’s Discussion and

Analysis of Financial Condition and Results of Operations in this report.

Our cancellation rates

and the factors affecting such rates are further discussed below under both Item 1A – Risk Factors and Item 7 – Management’s

Discussion and Analysis of Financial Condition and Results of Operations in this report.

The following charts present our ending backlog (number of homes and value) by homebuilding reporting segment as of

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including resale homes, apartments, single-family rentals and other rental housing.

In markets experiencing extensive construction activity, including areas recovering from earthquakes, wildfires (which is

expected to be the case in the Los Angeles County area due to the unprecedented wildfires it experienced in January 2025) ,

hurricanes (such as the hurricanes that made landfall in the Southeast United States in September and October 2024), flooding

or other natural disasters, there can be craft and skilled trade shortages that limit independent contractors’ ability to supply

construction services, which in turn tends to drive up our costs and/or extend our production schedules.

Elevated construction

activity, and reallocations of staff for public safety priorities after natural disasters or otherwise, can increase the time needed to

obtain governmental approvals or utility service activations and, combined with tariffs imposed or increased by the U.S.

other governments, the cost of certain raw building materials, such as steel, lumber, drywall and concrete, or finished products.

We expect these upward cost trends may continue in 2025 , particularly if and as there is greater competition for these resources

across a disrupted global supply chain.

In markets experiencing extensive construction activity, including areas recovering from earthquakes, wildfires, hurricanes,

flooding or other natural disasters, there can be craft and skilled trade shortages that limit independent contractors’ ability to

supply construction services, which in turn tends to drive up our costs and/or extend our production schedules.

construction activity, and reallocations of staff for public safety priorities after natural disasters or otherwise, can increase the

time needed to obtain governmental approvals or utility service activations and, combined with tariffs imposed or increased by

and other governments, the cost of certain raw building materials, such as steel, lumber, drywall and concrete, or

finished products.

We expect these upward cost trends may continue in 2026, particularly if and as there is greater competition

for these resources across a disrupted global supply chain.

Our performance is affected by seasonal demand trends for housing.

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months (corresponding to part of our third quarter and all of our fourth quarter).

However, as illustrated in the table below, the

combination of rapidly rising mortgage interest rates, elevated inflation and other macroeconomic and geopolitical concerns

disrupted our usual seasonal patterns in 2022.

Demand began to improve in the 2023 second quarter due to, among other

things, constrained resale home inventory, favorable demographic trends, buyer interest in homes at our price points and our

selective implementation of targeted sales strategies, including pricing adjustments and other homebuyer concessions

(particularly, mortgage-related concessions such as interest rate buydown or lock programs) to help drive order activity and

minimize cancellations.

We can provide no assurance whether or to what extent typical seasonal performance trends will occur

in 2025, or at all.

The seasonal nature of our business may also

cause significant variations in our working capital requirements and liquidity.

Accordingly, our quarterly results of operations

and financial position at the end of any given quarter are not necessarily indicative of results for the corresponding full year.

We can provide no assurance whether or to what extent typical seasonal performance trends will occur in 2026, or at all.

First Quarter

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overall community count.

Human Capital Resources

Human Capital

We focus on attracting, developing, and retaining the highest quality employees, with particular emphasis on

the leaders of our local divisions who oversee operations in various markets and collaborate with a wide array of stakeholders.

We strive to cultivate a workplace that offers fulfilling individual roles and opportunities for career advancement and

professional growth.

At November 30, 2025 and 2024 , we had approximately 2,118 and 2,384 full-time employees, respectively.

employees are represented by a collective bargaining agreement.

We seek to a ttract, promote, and retain qualified personnel, particularly the leaders of our local divisions who

manage our businesses in markets and partner with various stakeholders.

We strive to create an engaging environment that

offers fulfilling work, meaningful career growth and development opportunities, and rewarding short- and long-term

compensation programs aligned with our business objectives.

We also provide employee home purchase and product and

service referral programs, as well as awards for employment service milestones.

Additionally, our benefit programs include

medical, dental, and vision insurance, a savings/retirement plan, life and disability insurance, and tuition reimbursement, along

with a range of voluntary benefits designed to meet individual needs.

We engage nationally recognized external compensation

and benefits consulting firms to objectively evaluate our programs and benchmark them against those of peers and similarly

sized organizations.

Through our 2024 fiscal year end, our top division and regional leaders have an average tenure with us of

nearly 13 years , and the local leaders responsible for land acquisition, entitlement, and development average over eight years.

Our senior corporate officers, who set our overall strategy, have an average tenure of 22 years .

The ex tensive service history of

our leadership team has provided consistency in managing our business and in reinforcing and sustaining our company culture

at all levels of the organization.

For fiscal year 2024 , our turnover rate was 18% , made up of 15% voluntary turnover and 3%

involuntary turnover.

For fiscal year 2023 , our turnover rate was 27%, made up of 16% voluntary turnover and 11%

involuntary turnover.

We believe these rates are reasonable for our industry and market conditions at the time.

At the close of our 2025 fiscal year, our division and regional

presidents had served an average of over 11 years , while local land leaders managing land acquisition, entitlement, and

development had an average tenure of more than eight years .

Our senior corporate executives, responsible for setting company-

wide strategy, maintained an average tenure of approximately 19 years .

Additional information about the tenure of our

leadership team is provided in the chart below.

The considerable experience within our leadership team has contributed to a

strong organizational culture at all levels.

In 2025, our employee turnover was 18% , comprising 16% voluntary departures and 2% involuntary separations.

fiscal year 2024, turnover reached 18%, with 15% attributed to voluntary exits and 3% to involuntary separations.

these turnover rates, which exclude reductions in force, to be appropriate given prevailing industry standards and market trends.

Compensation an d Benefits.

We provide competitive compensation and benefits packages that are designed to reward and

retain our team members as well as support our short-term and long-term business goals.

Components of the packages include:

• Medical, dental, vision care, life and disability insurance;

• 401(k) Savings Plan with a company match;

• Tuition reimbursement;

• Employee home purchase discounts;

• A selection of voluntary benefits designed to meet individual preferences and needs.

The benefits packages we offer are shaped by recommendations from nationally recognized compensation and benefits

consultants we retain to provide objective assessments and benchmark our programs against those of peer companies and

organizations of similar scale.

Promoting High Ethical Standards.

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high ethical standards.

All employees must complete a training course on our Ethics Policy where they confirm they will

adhere to its guidelines.

An internal ethics committee composed of senior corporate and regional leaders oversees the Ethics

Policy and reviews related matters.

We provide an independently managed hotline and reporting website that allow employees

and third parties to anonymously report any ethics-related issues.

All employees must complete a training course on our Ethics Policy upon hire and annually thereafter,

and confirm they will adhere to its guidelines.

An internal ethics committee composed of senior corporate and operational

leaders oversees the Ethics Policy and reviews related matters.

We provide an independently managed hotline and reporting

website that allow employees and third parties to anonymously report any ethics-related issues.

Talent Acquisition and Development.

We place a significant emphasis on growing our team members’ skills through talent

development programs, including investing in training as discussed below.

We believe these initiatives have helped us achieve

a high level of internal promotions and retention.

At the same time, we seek to attract the best possible candidates to join our

company to, among other things, bring in innovative and diverse perspectives to help advance our business goals.

In addition to targeting experienced professionals within the homebuilding industry, we have implemented several

programs designed to deepen our talent pool.

These programs include partnerships with colleges and universities, which help

us to identify and recruit promising interns and early career professionals.

We have also made a concerted effort to recruit

military veterans, recognizing the unique qualities they bring to the workplace, and are a founding supporter of the Building

Talent Foundation, established by the Leading Builders of America to help address the severe and persistent labor shortage in

skilled trades affecting the homebuilding industry.

We are committed both to developing the potential of our team members and to

fostering their professional growth.

We support this objective through targeted talent development programs, such as the

training investments described below, that have enabled us to promote from within for a variet y of leadership roles across our

organization.

At the same time, our recruitment approach aims to attract exceptional candidates who can contribute to our

business growth.

Beyond seeking experienced individuals from the homebuilding field, we have implemented multiple

initiatives that enhance our talent pipeline.

These include forging partnerships with academic institutions , which assist us in

sourcing and hiring outstanding interns and entry-level professionals.

We have also prioritized recruiting veterans and we are a

founding supporter of the Building Talent Foundation, established by the Leading Builders of America, to help address the

significant and ongoing shortage of skilled workers in the homebuilding sector.

Training and Career Development.

To promote our employees ’ professional growth and help drive the consistent

execution of our business strategy, including our customer obsession philosophy, we offer training opportunities tailored to

team members ’ responsibilities throughout their careers with us.

We support a dedicated internet-based learning platform,

KBU, which includes a broad range of written, audio-visual, and interactive enterprise-wide and discipline-specific policy and

training materials.

The platform features a library of approximately 1,811 self-directed courses and virtual, instructor-led

programs for employees at all levels, as well as 389 leadership and managerial training topics .

During 2024, our team members

completed more than 30,230 courses in total, averaging approximately 11 courses per employee.

Managers and supervisors

also receive training to support the professional development of their direct reports.

To recognize and promote talented employees, we carry out a workforce and succession planning review process every

This process is aimed at identifying top-performing, high-potential team members, with a diverse range of experiences

and backgrounds, for advancement to crucial field and corporate leadership positions.

The management development and

compensation committee of our board of directors, composed of members with broad expertise and insight into human capital

management, talent development and executive compensation across various organizational structures, as well as solid

backgrounds in executive leadership, oversees this review process.

To promote an inclusive workforce and the professional growth of the diverse individuals who join us, our

employment policies prohibit discrimination based on race, color, religion, national origin, ancestry, familial status, age, veteran

status, physical disability, mental disability, medical condition, gender, gender identity, sexual orientation, marital status, or any

other legally protected status.

As outlined in our published Human Rights Statement, w e are committed to fostering a work

culture that treats all employees fairly and with respect.

This includes providing equal opportunities for professional growth

and advancement based solely on merit, ensuring that every individual has the chance to thrive and succeed based on their own

abilities and contributions .

As of November 30, 2024 , females comprised 42% of our workforce and 33% of managerial

In addition, ethnic/racial minorities comprised 38% of our workforce and 23% of managerial employees.

In order to promote the professional growth of our employees and to help ensure the

consistent execution of our business strategy — particularly our commitment to customer-centricity — we provide training

opportunities specifically tailored to the roles and career stages of our employees.

We maintain KBU, a specialized online

learning platform that delivers a wide array of written, audio-visual, and interactive training resources, covering both company-

wide policies and discipline-specific topics.

This resource offers a collection of around 2,900 self-paced courses and live

virtual sessions led by instructors, catering to employees at every level, and includes coverage of approximately 360 subjects

related to leadership and management.

Throughout 2025, our workforce collectively completed 31,451 courses, averaging

about 11 courses per employee.

Additionally, those in supervisory and managerial roles participate in training designed to help

them support the growth of the individuals on their teams.

To identify and advance top talent, we conduct an annual review of

our workforce and succession plans.

This evaluation focuses on identifying high-achieving and high-potential team members

from a variety of backgrounds and experiences for progression into field and corporate leadership positions.

The management

development and compensation committee, which is part of our board of directors and consists of members with expertise in

human capital management, talent development and executive compensation across different business models, oversees this

Our employment practices are designed to create a welcoming environment and encourage the advancement of

all individuals who join our team.

We strictly prohibit discrimination on grounds such as race, color, religion, national origin,

ancestry, family status, age, veteran status, physical or mental disabilities, medical conditions, gender, gender identity, sexual

orientation, marital status, or any other status protected by law.

As detailed in our Human Rights Standards, our organization is

dedicated to cultivating a workplace where every employee is treated with dignity and fairness.

We also provide career

development and progression opportunities determined by merit, giving each person the ability to succeed and flourish based on

their unique skills and achievements.

As of November 30, 2025, females accounted for 44% of our workforce and 35% of

managerial employees.

Furthermore, individuals from ethnic or racial minority groups represented 36% of our workforce and

22% of our managerial population.

Employee Safety and Wellness.

We strive to provide a safe and supportive working environment for our employees and

trade partners, as discussed under the “ Safety and Community Investment Initiatives ” section of this report.

Ensuring the well-

being of our team members is a top priority, and we have implemented several initiatives to achieve this goal.

In addition to the

comprehensive benefits programs previously described, we offer an extensive wellness program designed to support the overall

health and well-being of our employees, including mental health and stress management.

Our wellness program is accessible to

all employees through an online platform, ensuring that everyone, regardless of location or work schedule, can benefit from the

resources provided.

The program features monthly interactive webinars that cover a range of topics related to holistic health.

These webinars are designed to educate employees on various aspects of wellness, including nutrition, mental health, physical

fitness, and preventive care.

We believe that by offering these resources, we can help our employees lead healthier, more

balanced lives, which in turn can lead to increased productivity and job satisfaction.

By continuously enhancing and expanding

our offerings, we aim to create a positive and supportive work environment that benefits both our employees and the

organization as a whole.

We strive to foster a secure and encouraging workplace for our employees and trade

partners, as outlined in the “ Safety and Community Investment Initiatives ” section of this report.

In prioritizing the well-being

of our team, we have implemented a variety of initiatives beyond the benefits packages previously mentioned, including a

comprehensive wellness program focused on promoting the physical and mental health of our workforce, available to all staff

members regardless of their location or working hours.

The program includes monthly interactive webinars that address diverse

topics related to overall health, such as balanced nutrition, mental resilience, fitness, and preventive healthcare.

Through these

offerings, we aim to empower employees to maintain healthier lifestyles, fostering greater job satisfaction and productivity.

Our ongoing efforts to improve and broaden these initiatives are designed to cultivate a positive and supportive workplace for

the benefit of both our people and the organization.

Sustainability Principles and Practices

For more than 17 years, we have made a dedicated effort to be an industry leader in sustainability and seek to integrate

sustainable features, products and design elements into our homes in ways that maintain their affordability to our core customer

segments and, as noted above under “ Business Strategy ,” help to lower long-term homeownership costs.

We believe our

initiatives provide tangible benefits for our customers, our operations and the environment, and distinctly differentiate us from

other builders of new homes and from resale homes.

Since beginning our sustainability focus over two decades ago, we have made a dedicated effort to be an industry leader in

We seek to integrate sustainable features, products and design elements into our homes in ways that maintain their

affordability to our core customer segments and, as noted above under “ Business Strategy ,” help to lower long-term

homeownership costs.

We believe our initiatives provide tangible benefits for our customers, our operations and the

environment, and distinctly differentiate us from other builders of new homes and from resale homes.

Sustainability Practices.

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experiences and expertise, help us shape our sustainability priorities and reporting, as well as our approach to stakeholder

Energy Efficiency Commitment .

With most of the energy consumption during a home’s life occurring after it is delivered

to the customer, our products’ energy efficiency is a key part of our efforts to help minimize a home’s impact on the

environment from its day-to-day use.

Reflecting our long-standing focus on enhancing the energy efficiency of our homes, in

2008 we became the first national homebuilder to make a broad commitment to building ENERGY STAR certified homes.

2024, we achieved the significant milestone of over 200,000 ENERGY STAR certified new homes built, more than any other

builder in the nation.

By comparison, the U.S.

Environmental Protection Agency (“ EPA”) estimates that fewer than 12% of

new homes nationwide meet ENERGY STAR certification standards.

ENERGY STAR is a voluntary EPA and Department of Energy program that seeks to help consumers, businesses and

industry save money and protect the environment through the adoption of energy-efficient products and practices.

the EPA, ENERGY STAR certified new homes achieve on average up to 20% energy-efficiency improvement compared to

Energy Efficiency and Water Conservation Leadership .

Our sustainability program has primarily focused on progressively

enhan cing the energy efficiency and water-saving capability of our homes to help minimize their impact on the environment

from day-to-day use.

These priorities reflect that most of the energy consumption during a home’s life occurs after it is

delivered to a customer, and that we operate in some of the most water-challenged regions of the country.

To guide our efforts in these key areas, we have set increasingly higher energy efficiency and water conservation goals

based on the rigorous, well-respected and widely recognized standards established under the U.S.

Environmental Protection

Agency’s (“EPA”) voluntary ENERGY STAR ® and WaterSense ® programs, which seek to help businesses and consumers

save money and conserve natural resources by using labeled products and certain practices that are energy- or water-efficient,

respectively.

Milestones we have achieved under these programs include the following:

• In 2008, we became the first national homebuilder to make a broad commitment to building ENERGY STAR certified

homes, which, according to the EPA, achieve on average up to a 20% energy-efficiency improvement compared to

new homes built to local code, and even more compared to resale homes without certification.

Each certified home is estimated

by the EPA to produce approximately 3,287 pounds (1.5 metric tons) per year less GHG emissions than a typical new home .

Based on our energy use analysis, our homes currently save our homeowners an estimated average of $1,400 annually on utility

bills compared to typical resale homes.

We built our first solar home in 2005 and introduced our first all solar community in 2011.

In 2024, essentially all of our

homes built in California were solar homes.

As of November 30, 2024 , most of our model homes and sales offices in

California were powered by solar energy.

We are also building all-electric homes in many areas across the country per local

requirements and conditions.

Each all-electric home produces approximately 3,800 pounds less CO 2 per year compared to dual-

fuel homes, minimizing the GHG emissions generated over the life cycle of our homes.

GHG Emission Goal .

In 2020, we set a goal to lower the estimated GHG emissions (metric tons per year) produced

through the use of our average home built in 2025 by 0.5 metric tons per year, or 8%, from the estimated 6 metric tons per year

average for a KB home built in 2020.

We use the Home Energy Rating System (HERS®) Index to measure our progress, as

each point reduction in the HERS Index equates to a 1% improvement in energy efficiency relative to a standard new home and

potentially produces an average of 0.1 metric tons less GHG emissions (as calculated based on the states in which we operate).

Accordingly, our goal was to lower our national average HERS Index score by five points, from 50 for 2020 to 45 for 2025.

We achieved a HERS Index score of 45 in 2024, a year earlier than we targeted.

For comparison, a typical resale home today

has a HERS Index score of 130 .

Water Conservation .

As a homebuilder operating in some of the most water-challenged regions of the country, we also

prioritize water conservation.

We provide water-saving features in our homes that reduce our homeowners’ bills and may help

to mitigate strain on local communities’ water resources.

As water availability is an important consideration for local

governments in approving new-home developments, we believe our leadership in this area has positioned us to effectively

address water-related development concerns and help preserve this critical resource.

We were the first national homebuilder to join the EPA’s WaterSense® program, which is a voluntary partnership program

that is both a label for water-efficient products and a resource for helping conserve water, and have made a commitment to

using WaterSense labeled products in our homes.

According to the EPA, WaterSense labeled products use at least 20% less

water compared to products that are not WaterSense labeled.

In 2021, we were also the first national homebuilder to implement

the new WaterSense Labeled Homes Program, Version 2, under which homes are to be at least 30% more water efficient than a

typical new home.

In July 2022, we committed to building WaterSense labeled homes in all our future Arizona, California and

Nevada communities.

To date, we have built over 26,000 WaterSense labeled and Water Smart homes, which we believe is more than any other

homebuilder, and installed over 1.2 million WaterSense labeled fixtures, collectively helping to save an estimated 2.1 billion

gallons of water per year based on calculations derived from WaterSense program and supplier data.

This initiative helps

homeowners use less water, as well as lower their utility bills, in some of the most drought-affected areas of the country.

◦ The EPA estimated as of 2024 that each certified home produces approximately 3,287 pounds (1.5 metric tons)

per year less GHG emissions than a typical new home.

◦ Based on our energy use analysis, our homes currently save our homeowners an estimated average of over $1,400

annually on utility bills compared to typical resale homes.

• In 2025, the cumulative number of ENERGY STAR certified new homes we have built totaled over 217,000, more

than any other builder in the nation.

◦ In 2005, we built our first solar home, and in 2011, we introduced our first all-solar community.

◦ In 2025, all our homes built in California were solar homes.

As of November 30, 2025, most of our model homes

and sales offices in California were powered by solar energy.

We are also building all-electric homes in many

areas across the country per local requirements and conditions.

• In 2008, we were the first national homebuilder to join the WaterSense program, and in 2009, we made a commitment

to using WaterSense labeled products in our homes.

• In 2021, we were the first national homebuilder to implement the WaterSense Labeled Homes Program, Version 2,

under which homes are to be at least 30% more water efficient than a typical new home.

In July 2022, we committed

to building WaterSense labeled homes in all our future Arizona, California and Nevada communities.

• To date, we have built approximately 30,000 WaterSense labeled and Southern Nevada Water Authority Water Smart

homes, which we believe is more than any other homebuilder, and installed over 1.3 million WaterSense labeled

fixtures, collectively helping to save an estimated 2.2 billion gallons of water per year based on calculations derived

from WaterSense program and supplier data.

In 2025, the EPA outlined plans to phase out the ENERGY STAR program as a federally supported initiative, with the

fiscal year 2026 federal budget allocating no funding for its continuation, and to revise the WaterSense labeling criteria for

These decisions, along with a broader agency restructuring, have made the long-term future of these programs

While the programs remain operational at this time, we are monitoring developments, including evolving federal,

state and local regulations and consumer expectations, and evaluating alternative energy and water efficiency programs and

Presently, we have no plans to materially change the high efficiency performance of our new homes built in 2026.

Indoor Environments .

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homes’ indoor environment with air-sealing designs and high-performance ventilation systems and low- or zero-VOC products.

Our homes also feature interior door hardware with antimicrobial protection that helps reduce the spread of bacteria and germs.

Our homes also feature door hardware with antimicrobial protection that helps reduce the spread of bacteria and germs.

Awards and Recognition .

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commitment, including:

• 2024 ENERGY STAR Partner of the Year – Sustained Excellence Award – This was our 14th consecutive award for

demonstrating leadership in building highly energy-efficient homes;

• 2024 ENERGY STAR Market Leader Awards – We set a new industry record by earning an unprecedented 30 awards,

more than any other homebuilder;

• 2024 WaterSense Sustained Excellence Award – We were once again the only national homebuilder to receive this

honor in 2024, which is the highest level of recognition given by the EPA WaterSense program.

This is the 14th

consecutive year we have been recognized for our achievements in constructing water-efficient homes;

• Newsweek’s 2026 list of America’s Most Responsible Companies – We were once again named by Newsweek as one

of America’s most responsible companies, the only homebuilder to make this distinguished list five years in a row.

This recognition is based on our industry-leading environmental and social practices;

• Newsweek’s 2024 list of America’s Most Trustworthy Companies – This is the third consecutive year we have

received this recognition, which is based on three main public pillars:

customer trust, investor trust and employee trust;

• USA Today’s 2024 List of America’s Climate Leaders – We were the highest-ranked homebuilder and ranked in the

top five percent of all companies, in consideration of, among other things, our annualized reductions in emission

intensity and carbon disclosure rating;

• Time Magazine’s 2024 America’s Best Midsize Companies – We were the only national homebuilder to receive this

distinction on this inaugural list, which evaluates employee satisfaction, revenue growth and sustainability

transparency;

• Forbes’ 2024 America’s Best Midsize Employers – We were recognized for a third time, the only national

homebuilder to receive this distinction.

We earned a place in the top 20% of all listed companies through our focus on

cultivating a supportive and inclusive workplace culture that encourages the growth and development of our

of America’s most responsible companies, the highest-ranked national builder and the only one to make this

distinguished list six years in a row.

This recognition is based on our industry-leading environmental and social

• Time Magazine’s 2025 list of World’s Best Companies – We were the only national homebuilder to make this list.

The recognition is based on a comprehensive analysis conducted to identify the top-performing companies around the

globe and is based on evaluation criteria of employee satisfaction, revenue growth and sustainability;

• Time Magazine’s 2025 list of America’s Best Midsize Companies – We have been the only national homebuilder to

receive this distinction every year since its inception, which is based on more than 15 different criteria, including

employee satisfaction, revenue growth and sustainability transparency;

• USA Today’s 2025 list of America’s Climate Leaders – We were the highest-ranked homebuilder in consideration of,

among other things, our annualized reductions in emission intensity and carbon disclosure rating;

• In 2025, we were recognized by AvidCX TM , a trusted platform of homebuyer experience insights, with an

unprecedented 18 division-level AvidCX awards, including the prestigious 2025 AvidCX Cup, based on customer

surveys taken during the first year of homeownership.

We also received an impressive 108 AvidCX Service awards

honoring our team members in sales, design, construction, mortgage and customer care as being in the top 5%

nationally in customer satisfaction.

Our annual sustainability reports, which we have published on our website since 2008, contain more information about our

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IBACOS®, a nationally recognized expert in home construction quality and performance, to conduct annual jobsite safety

In March 2025, we introduced the nation’s first new-home community that meets the home- and neighborhood-level

wildfire resilience standards developed by the Insurance Institute for Business and Home Safety (“IBHS”), an independent

nonprofit research organization.

Utilizing fire-resistant building materials, methods and features based on IBHS research, this

community is designed to IBHS’ highest level of protection against direct flame contact, radiant heat and embers, which helps

to meaningfully reduce the likelihood of wildfire spread.

Each home in the community is built to the Wildfire Prepared Home

Plus standard and receives a designation certifying that it has met IBHS’ most stringent requirements for homesite-level fire

We intend to selectively expand our application of IBHS’ standards to other new-home communities in 2026 and

Our commitment to the communities we serve is not solely about the homes we build, as we strive to also make wider

community contributions that intersect with the nature of our business.

Our KB Cares philanthropic program has four key focus

Our KB Cares philanthropic program helps to build

strong social ties by, among other things, providing our employees with an opportunity to give back to the areas in which we

operate through efforts ranging from assisting people in challenging circumstances to educating the next generation.

has four key focus areas:

shelter, community, sustainability/environment and construction skills/employment.

KB Cares helps to build strong

social ties by, among other things, providing our employees a means of giving back to the areas in which we operate through

efforts ranging from assisting people in challenging circumstances to educating the next generation.

We have partnered with

local nonprofits and community organizations to contribute to the long-term social fabric of the areas in which we build.

instance, we work with Sackcloth & Ashes, an organization that donates a blanket to a local homeless shelter for every blanket

we purchase as a housewarming gift for our new homeowners.

In 2023, we partnered with the National Forest Foundation and

their mission to plant 50 million trees to help restore public lands, and conserve America’s mature and old growth forests .

noted above under “ Human Capital Resources ,” w e are also one of the founding partners of the Building Talent Foundation,

whose mission is to advance the education, training and career progression of young people and people from underrepresented

groups as skilled technical workers and business owners in residential construction.

partnered with local nonprofits and community organizations to contribute to the long-term social fabric of the areas in which

we build, including Jared Allen’s Homes for Wounded Warriors, which raises money to build or modify homes for injured

military veterans;

Sackcloth & Ashes, which donates a blanket to a local homeless shelter for every blanket we purchase as a

housewarming gift for our new homeowners;

and Sleep in Heavenly Peace, for which our employees and various trade partners

help build and deliver handmade, fully furnished beds to children in need.

Since 2023, we have partnered with the National

Forest Foundation to support its mission to replenish and preserve national forests by replanting thousands of acres of habitat

nationwide and protect the future of national forests.

In addition, as noted above under “ Human Capital ,” w e are also one of the

founding partners of the Building Talent Foundation, whose mission is to advance the education, training and career

progression of young people and people from underrepresented groups as skilled technical workers and business owners in

residential construction.

We have a Supplier Code of Conduct that builds upon the principles, guidelines and standards within our Ethics Policy,

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50% are women or racial or ethnic

• The average tenure of our board members is approximately seven

• The average tenure of our board members is approximately eight

years, with five of the directors on the Board having joined since

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business