Our rating on KB Home primarily reflects the company's highly leveraged financial profile. The prolonged housing downturn substantially reduced KB Home's revenues and negatively affected profitability and EBITDA-based credit metrics, despite meaningful debt reduction since the downturn began. Our fair business risk assessment reflects our view that KB Homes' market position in certain key metropolitan areas and investments in new product and communities should contribute to higher volume in 2012, but profitability will likely be elusive in the current fiscal year. KB Home is one of the nation's largest homebuilders, having delivered 5,812 new homes during the 12 months ended Nov. 30, 2011, at an estimated average price of about $224,600. The company operates in 29 markets, through 12 divisions
