KB Home : 2023 Sustainability Report

A1

2023 Sustainability Report

CEO Letter

Our Company

People-Driven

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

CEO Letter

2

Our Company

3

People- Driven

10

Better Homes

21

Strong Communities

31

Our Foundation

42

Data & Disclosures

54

People-Driven

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

"We believe that a KB home is a better home, one that

is more efficient and affordable to operate, and delivers on the enduring promise of the American Dream."

Letter from Jeffrey Mezger

KB Home Chairman and Chief Executive Officer

For 17 years, we have been honored to publish our annual sustainability report, sharing our progress in advancing our key initiatives. This was another landmark year for KB Home, distinguished by significant strides in sustainability that raise the standard for our industry. Highlights include:

Energy-EfficiencyLeadership: We have built over 190,000 ENERGY STAR® certified homes, more than any other homebuilder in the nation. Our 2023 national average Home Energy Rating System® (HERS) Index score of 46 underscores our longstanding commitment to helping our homebuyers lower their utility bills and preserve natural resources.

Promoting Water Resiliency: We constructed a record-high number of WaterSense® labeled homes in all our new communities across the southwestern U.S. to support the region's long-term resilience. This initiative is not just about reducing utility costs; it's about safeguarding our future.

Customer Satisfaction Excellence: Our customer-centric approach and dedication to being the most customer-obsessed homebuilder in the world helped us improve our satisfaction rates by three points in a single year to an impressive 94%.

Empowering Communities: We donated $1.93 million and dedicated over 5,300 volunteer hours through our KB Cares philanthropic program, investing in and strengthening the places where we live, work and build, and demonstrating our employees' desire to make a meaningful difference in the wider communities we call home.

Recognized With Preeminent Honors: In recognition for these and other achievements, we earned some of the premier sustainability awards, a distinction we carry with pride and that confirms we are on the right path.

Our philosophy of doing well by doing good has made us a stronger, nimbler company, and driven innovation across our industry. We seek out opportunities to leverage our scale in order to propel tested and viable emerging sustainability technologies forward, aiming to reduce costs and facilitate widespread adoption.

While there are clear business benefits, our focus on sustainability has always been fundamentally about our customers. We have demonstrated that a sustainable home can significantly reduce the total cost of homeownership while exceeding our customers' dreams. We estimate our impact over the last nearly two decades in the billions - both utility dollars saved for our customers and pounds of carbon emissions avoided for our planet.

We believe that a KB home is a better home, one that is more efficient and affordable to operate, and delivers on the enduring promise of the American Dream. In this report, we share with you the positive strides we have made in 2023 in building better homes and creating a sustainable business that serves the needs of its customers, employees and its other stakeholders. We know that the journey is never over, and we invite you to join us as we continue to move forward with purpose on our path.

Our

Company

At KB Home, we believe that sustainability is built on one essential idea: balance. We strive to ensure that today's buyers can achieve the dream of homeownership while balancing that objective with mindfulness about the sustainability needs of future generations and our environment. Sustaining the dream of homeownership both today and into the future is what we do every day.

KB Home has a proud history of being a leader in sustainability. For over two decades, we have been building energy- and water-efficient homes and advancing innovation, while also making a positive social impact by supporting the attainability and expansion of the American Dream. Together, we believe our approach creates a resilient business built to deliver long-term value for our customers, employees, partners and stockholders.

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

KB Home at a glance

KB Home is one of the largest and most trusted homebuilders in the United States, operating in over 47 markets from coast to coast and building over 680,000 quality homes in our more than 65-year history.

We are honored to be the #1 customer-ranked national homebuilder based on third-party buyer ratings and reviews in 2023. What sets KB Home apart is our focus

Founded: 1957

Chairman and CEO

Jeffrey T. Mezger

Principal Business

Building personalized new homes with features and options selected by the homebuyer - whether first-time, move up or active adult - based on what they value and can afford.

2023 Total Revenue

$6.41 billion

Ticker Symbol: KBH (NYSE)

First homebuilder listed on NYSE

on building strong, personal relationships with every customer and creating an exceptional experience that offers our homebuyers the ability to personalize their home based on what they value.

As the industry leader in sustainability, KB Home has achieved one of the highest residential energy-efficiency ratings and delivered more ENERGY STAR® certified homes than any other builder, helping to lower the total cost of homeownership.

Market listing as of

report publication date.

Our Vision

To be the most customer-obsessed homebuilder in the world.

Our Mission

Give our customers the ability to purchase a new home that reflects what they value and how they want to live, at a price they can afford.

Our Values

We make relationships

the foundation for all we do.

We build homes that make lives better.

We believe that everyone deserves a home that's as unique as they are.

We deliver more for less.

We strive for a better shared future.

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

Sustainability is not just the right thing to do - it's also right for our business

We believe that prioritizing sustainability provides long-term benefits for our customers, our operations and the environment, while also providing us with a competitive advantage and making us a more resilient business.

Increasing new-home affordability

We design and build homes that help address the significant need for housing that is affordable.

Lowering the total cost of homeownership

Energy- and water-efficient homes can be more affordable to operate than typical new or resale homes without

the same features, making sustainability a compelling competitive advantage.

Elevating water conservation

The water-saving features in our homes reduce our customers' water bills and help to mitigate strain on local communities.

Designing homes

to be healthier for residents

We design homes that can promote the health of their residents as well as the environment.

Integrating sustainability technology for increased comfort

Many sustainability-related technologies that we use also offer greater comfort and personal efficiency, along with user-friendly smart home interfaces.

Preserving the environment and natural resources for long-term value

The positive environmental attributes of our homes support a business strategy for long-term value creation for our stakeholders as well as emit fewer greenhouse gases (GHGs).

Containing the cost to build

Our scale and waste-reduction efforts allow us to build sustainable homes more economically.

Becoming the builder of choice for partners

We believe our legacy of vibrant, sustainable communities and industry leadership makes us a partner of choice for municipalities, land sellers, developers and other partners.

Improving strength of supply chain

We select our partners in part based on their sustainable business practices. We also require specific product-sourcing certifications in certain cases, waste-reduction practices as available and ethical conduct.

Becoming an employer of choice

We aim to attract top-tier talent by creating a culture of excellence and providing a safe work environment that supports inclusion, equity and meaningful work.

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2023 Sustainability Report

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

Sustainable action adds up

KB Home's nearly two decades of consistent commitment to sustainable homebuilding have created measurable results and a resilient business.

13,236 new KB homeowners in 2023

190,000+

ENERGY STAR certified homes built since 2000

54%

Average increased energy efficiency of a 2023 KB home vs. a typical home built as recently as 2006

150+

Zero Energy Ready certified homes built since 2010

20,900+

solar-powered new homes built since 2010

70

cumulative megawatts of solar power installed

131M

estimated kilowatt hours of renewable solar energy produced annually

21,800+

total WaterSense labeled and Water Smart homes built since 2005

30%-40%

average water savings by these KB homes vs. a typical home

1.1M+

total WaterSense labeled fixtures installed

49% are first-time homebuyers

6

Sustainability now and for the future

Throughout KB Home's journey over the past two decades to become a recognized sustainability leader in the homebuilding industry, we have proactively focused

on how the steps we take to effectively help lower our customers' long-term homeownership costs can also enable us to minimize our homes' environmental impact over the years to come.

We have developed, implemented and maintained initiatives, systems and practices that address our environmental impact, as described in this and our past sustainability reports, as well as our core environmental policy framework. We seek to make our products, including the home designs and options we offer our customers as well as our community development and house construction processes as efficient and sustainable as possible, while balancing that objective with our homebuyers' affordability priorities and our business performance and growth goals. For our complete Task Force on Climate-Related Financial Disclosures (TCFD) reporting, please see the Data & Disclosures chapter of this report.

Based on the above foundations, our climate-related priorities include the following:

For more on our approach and risk factors related to climate, please reference the complete TCFD reporting as well as our 2023 Annual Report on Form 10-K.

Our Foundation

Data & Disclosures

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

Our journey toward sustainability has led the way

for our industry for over two decades

2000

• Built our first
  ENERGY STAR certified homes

2005

• Launched Water Smart homes in
  Las Vegas
• Offered solar photovoltaic options in
  California

2007

• Committed to using 100%
  ENERGY STAR certified appliances

2008

• Published first annual sustainability report
• Committed to building ENERGY STAR certified new homes company-wide

2009

• Launched National Advisory Board (NAB) to provide external expert guidance to our sustainability efforts
• Committed to build with 100% WaterSense labeled fixtures

2010

• Built our first
  WaterSense labeled homes
• Built our first Net Zero home

2017

• Achieved national record for most WaterSense labeled and Water Smart homes in industry
• Opened first EPA Indoor airPLUS certified community
• Formalized KB Cares company-wide giving program

2016

• Built 100,000th ENERGY STAR certified new home
• Built 5,000th solar-powered home
• Built first KB ProjeKt® concept home to demonstrate next- generation sustainable home design and technology

2015

• Built 10,000th Water Smart home

2014

• Built demonstration homes with energy storage and greywater recycling systems

2013

• Achieved average 20% increase in energy efficiency in our new homes compared to 2007

2012

• Built 1,000th solar-powered home

2011

• Built first all-solar communities in California
• Introduced consumer tool, now known Energy Savings Comparison® (ESC®), which shares expected energy performance and utility costs of home designs

2018

• Co-leddevelopment
  of RESNET® HERS H2O® water-efficiency rating system

2019

• Built KB ProjeKt 2.0: Where Tomorrow Lives concept home to demonstrate newest sustainable home technology in a fully functioning home
• Reached national record for building the most ENERGY STAR certified homes

2020

• Became first national builder to implement EPA WaterSense
  Labeled Homes Version 2.0
• Declared 5-year goal of 45 national average
  HERS score

2021

• Achieved lowest
  national HERS H2O score among participating builders

2022

• Launched first-ever residential microgrid communities in California
• Committed to building all future communities in Arizona, California and Nevada to WaterSense labeled homes standard
• Reached milestone of $1 billion in cumulative estimated savings for our homeowners on their utility bills
• Installed our 1,000,000th WaterSense labeled fixture

2023

• Achieved 46 average HERS score on the path toward our 5-year goal of 45 national average HERS score by 2025
• Built 190,000th ENERGY STAR certified home since 2000, more than any other builder
• Built our 20,000th solar-powered home
• Reached milestone of two billion gallons estimated annual water savings for our homeowners through our water efficiency initiatives
• Launched a pilot project in Arizona communities using lower carbon building materials

8

Better Homes

Strong Communities

Our Foundation

Data & Disclosures

2023 awards and recognition

Notable past awards and recognition

USA Today's 2023 List of

America's

Climate

Leaders

Award

Newsweek's

2023

America's

Most

Trustworthy

Companies

Fortune's

World's Most

Admired

Companies

Award

Also in 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022

29 total Market Leader

awards in 2023

2023

DOE Builders Challenge

Award, 2011, 2012

2015, 2019

2016

EPA ENERGY STAR

2011, 2012, 2013, 20142014, 2015, 2016Award for Excellence, 2009, 2010