EVOLUTION & REVOLUTION OF OUR BUSINESS

Jeff Mezger, Chairman of the Board, President and CEO

© 2016 KB Home 2

Key Messages for Today

Enduring History

Evolution and Revolution

Macroeconomics

Expectations

2

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Enduring History

Delivered 578,543 homes since our founding in 1957

Geographically diverse with operations in 36 markets

Focus on first-time and first move-up buyer segments

Built-to-Order™ strategy

Industry leader known for innovation & sustainability

© 2016 KB Home 4

Not Just Another Homebuilder

What makes us different, makes us better

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Evolution and Revolution

Disciplined business practices drive incremental change

Quality and operational excellence, supported by strong partnerships

Consumer-focused innovation

Revolutions – ask “why not?”

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Evolution and Revolution in Action

Evolution Brand recognition

Inspired designs

Amazing selection

Great value

5,000 Solar Powered Homes

10,000 Water SmartHomes

100,000 Energy Star Homes

120+ LEED Platinum Homes

Revolution

Questioning assumptions

Looking for new opportunities

Disruptive technologies

Partnering on Give Me 2 ideas

Engage | Develop | Participate

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Prototype the Future

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The Sustainable DIFFERENCE™

8582

7875

72

6865

62

2007 2008 2009 2010 2011 2012 2013 2014 2015

60

KB Home

National Average HERS Score

The average new KB home is 40% more energy efficient than a typical new home, and 70% more efficient than a typical resale home

© 2016 KB Home 9

Economic Indicators

Legend

Healthy

Caution

Concern

Economic Growth (GDP)

1.4% (Q2 2016)

Unemployment Rate

5.0% (September 2016)

Inflation

1.1% CPI (Annual Rate)

Mortgage Rates

3.48% (September 2016)

Consumer Confidence

Index 104.1 (September 2016)

[ - ]

[ ~ ]

[ ~ ]

[ + ]

[ + ]

Housing Affordability

Index 157 vs. 100 (Norm)

Housing Starts

1.14M units annualized (Up 1% YOY)

Existing Home Sales

5.33M units annualized (Up 1% YOY)

New Home Sales

609K units annualized (Up 21% YOY)

Existing Homes Inventory

4.6 months vs. 6.0 (Norm)

[~ ]

[~ ]

[ ~ ]

[ + ]

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Macro Housing

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2016 JCHS Household Projections

Source: JCHS Policy Advisory Board. Mr. Daniel McCue’s presentation.

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2016 JCHS Household Projections

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Consumer Confidence Index

12

20

40

60

80

100

120

140

160

In September, Consumer Confidence Rose to its Highest Level Since August 2007, a Favorable Indicator

For Future Homebuyer Demand

© 2016 KB Home 13

Housing Affordability Index

13

95

105

115

125

135

145

155

165

175

185

195

205

215

225

Affordability Remains Attractive Despite Reaching a Seven-Year Low Due to the Widening Gap Between

Rising Home Prices and Wage Growth

© 2016 KB Home 14

Single-Family Existing Home Sales

14

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

Existing Home Sales Decreased Year Over Year for the First TimeSince November 2015, Due to the Low Supply of Affordable Homes

(in thousands)

© 2016 KB Home 15

New Single-Family Home Sales

15

150

325

500

675

850

1,025

1,200

1,375

New Home Sales were 21% Higher than a Year Ago,Still Well Below Historical Levels

(in thousands)

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Existing and New Home Inventory

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Third Quarter 2016 Highlights

Steadily improving financial performance with gains across key operational and financial measures

Housing revenues up 14%, driven by an 11% increase in deliveries

Increased backlog value 17% to $1.85 billion

Meaningful improvement in operating margin, primarily through a reduction in SG&A ratio

Earnings per share grew 83%

Continued upswing in demand

Increased activity in affordable submarkets, primarily from first-time and first move-up buyers

Growth opportunity, based on our significant expertise in serving these buyers

© 2016 KB Home 18

Expectations for 2017 and Beyond

Work with us to further strengthen our partnerships and all our businesses

Contribute Give Me 2 ideas Brand Value Innovation

Get ready for 2017 and beyond

Engage | Develop | Participate