The ratings on KB Home (KB) acknowledge the company's good geographic diversity and position within its markets, as well as a greater commitment to growing organically and pursuing market additive acquisitions while maintaining a more moderate financial profile. These strengths are mitigated by the company's growing use of joint ventures for large-scale land development, a meaningful geographic concentration of profits, and the general potential for cooling in the housing sector in light of rising interest rates and more subdued economic growth. Los Angeles, Calif.-based KB is the fifth-largest homebuilder in the U.S., based on revenues and home closings. In 2004, the company generated nearly $7 billion in revenues from deliveries of 31,646 homes in 36 U.S. markets and in France.
