Operating results are weak but showing signs of improvement; Adequate liquidity, including healthy current cash position; and Significant debt reductions and no near-term debt maturities. Challenging housing operating environment will persist in 2010; Higher-than-average leverage; and Reduced but still meaningful joint-venture exposure could be a drain on current liquidity. The ratings on KB Home acknowledge demand and pricing pressures that continue to weigh on the company's weak credit and profitability metrics. Additionally, although the company's joint-venture exposure is declining, it remains significant and includes one large joint venture that carries repayment and completion guarantees that could be a potential future drain on cash. The current ratings on the company, however, remain supported by modest recent order and margin improvement, adequate
