Standard&Poor's Ratings Services rating on KB Home primarily reflects the company's "highly leveraged" financial profile marked by weak EBITDA-based credit metrics and high book leverage, despite meaningful debt reduction since the downturn began. Liquidity is adequate and was enhanced after tapping the debt market to reduce future refinance risk and bolster cash. Our "fair" business risk assessment reflects our view that KB Home has underperformed when compared with its peers recently and we do not expect the company to achieve profitability in fiscal 2012 (ending Nov. 30) although the company could achieve modest profitability in 2013. We believe the housing recovery is gaining traction but we remain concerned that it could face some headwinds. Year-to-date, KB Home has
