Adequate liquidity, including a currently healthy cash position; Significant debt reductions achieved to date, along with manageable near-term debt maturities; and A build-to-order model that limits intended speculative homes. The current very challenging housing operating environment; Higher-than-average leverage and significant, although reduced, joint-venture exposure; Lower–than-average margins; and The likelihood that continued cash generation from operations will be challenging. The ratings on KB Home reflect deteriorating macroeconomic conditions that will further pressure the company's already challenged key housing markets. Consumer confidence remains low and mortgage lending continues to be tight, contributing to stubbornly high inventory levels. These conditions will further stress KB Home's already weak profitability and credit metrics and could hurt its currently sound liquidity. Additionally, relative to its rated
