UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2005.

or

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from o to o.

Commission File No. 1-9195

A.

Full title of the plan and the address of the plan, if different from that of the issuer named below:

KB Home

B.

Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

10990 Wilshire Boulevard
Los Angeles, California 90024

 

 

Financial Statements and Supplemental Schedule
KB Home 401(k) Savings Plan
Years ended December 31, 2005 and 2004

KB Home 401(k) Savings Plan

Financial Statements and Supplemental Schedule

Years ended December 31, 2005 and 2004

Contents

Report of Independent Registered Public Accounting Firm			1
Audited Financial Statements
Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004			2
Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2005 and 2004			3
Notes to Financial Statements			4
Supplemental Schedule
Schedule H, Line 4(i) — Schedule of Assets (Held at End of Year)			9
Exhibit 23.1

Report of Independent Registered Public Accounting Firm

The Administrative Committee, as Plan Administrator
of the KB Home 401(k) Savings Plan

We have audited the accompanying statements of net assets available for benefits of the KB Home 401(k) Savings Plan (the Plan) as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2005 and 2004, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2005, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

Los Angeles, California
May 12, 2006		/s/ Ernst & Young LLP

KB Home 401(k) Savings Plan

Statements of Net Assets Available for Benefits

		December 31,
		2005				2004
Assets
Investments, at fair value		$	173,960,201			$	139,540,067
Net assets available for benefits		$	173,960,201			$	139,540,067

See accompanying notes.

KB Home 401(k) Savings Plan

Statements of Changes in Net Assets Available for Benefits

		Years ended December 31,
		2005				2004
Additions
Contributions from:
Plan participants		$	23,027,992			$	16,716,980
Employer, net of forfeitures			10,316,397				8,520,678
			33,344,389				25,237,658
Investment income:
Interest and dividends			5,176,227				2,812,114
Net appreciation in fair value of investments			13,691,133				13,602,298
			18,867,360				16,414,412
Assets transferred in			649,520				6,734,652
Total additions			52,861,269				48,386,722
Deductions
Benefits paid to participants			18,397,800				12,819,478
Administrative expenses			43,335				31,533
Total deductions			18,441,135				12,851,011
Net increase in net assets available for benefits			34,420,134				35,535,711
Net assets available for benefits
Beginning of year			139,540,067				104,004,356
End of year		$	173,960,201			$	139,540,067

See accompanying notes.

KB Home 401(k) Savings Plan

Notes to Financial Statements

December 31, 2005

1. General Description of the Plan

The KB Home 401(k) Savings Plan (the “Plan”), formerly Kaufman and Broad Home Corporation Amended and Restated 401(k) Savings Plan, is a defined contribution plan in which all eligible employees of KB Home (the “Company”) are eligible to participate on the first day of the month following the date of hire.

Participants electing to participate in the Plan may contribute up to 15% of their annual compensation, on a pretax basis, by means of payroll deduction. Participants may also contribute up to an additional 15% of their annual compensation, on an after-tax basis, also by means of payroll deduction. All contributions must be in whole percentages. Pretax contributions are eligible for tax deferred treatment up to the limits provided by the Tax Reform Act of 1986, as adjusted for cost of living.

Effective August 1, 2003, each Participant whose designated rate of employee deferral contribution as of a payroll period is at least 6%, who has attained (or will attain) age 50 before the close of the plan year and whose employee deferral contributions for the plan year will exceed the limits of Internal Revenue Code Section (the “Code”) 402(s) or other Plan limit, is eligible to make a catch-up contribution in accordance with, and subject to the limitations of, Code Section 414(v) as an additional employee deferral contribution.

Unless otherwise elected by the Board of Directors, the Company will match the participant’s pretax contribution up to 6% of annual base salary (determined without regard to bonuses and a maximum of $50,000 of regular earnings for commission employees). Company matching contributions and related investment income vest to participants over five years.

Plan assets are held in trust by Fidelity Management Trust Company, Inc. (the “Trustee”). Plan participants may direct the investment of their funds among one or more of the several fund options offered by the Plan.

Terminating participants may elect to withdraw their contributions, vested Company contributions, and related investment income. Vested benefits totaling $1,000 or less will be distributed as a lump-sum payment. Vested benefits totaling more than $1,000 but less than $5,000 will be rolled into an individual retirement account. Vested benefits totaling $5,000 or more may be kept in the Plan.

KB Home 401(k) Savings Plan

Notes to Financial Statements (continued)

1. General Description of the Plan (continued)

Nonvested Company contributions for terminated employees are forfeited and used by the Company to offset future employer matching contributions. For the years ended December 31, 2005 and 2004, the Company used $1,511,312 and $717,977, respectively, of forfeitures to reduce employer contributions. The forfeiture balances available to offset future employer matching contributions were $488,357 and $451,127 at December 31, 2005 and 2004, respectively.

The Plan allows participant loans and hardship withdrawals subject to certain limitations.

In the event of Plan termination, benefits of all affected participants, if not already so, shall become 100% vested and nonforfeitable.

On February 17, 2004, the assets of the Colony Homes, LLC Employee Savings and Profit Sharing Plan were transferred into the Plan in conjunction with the Company’s acquisition of Colony Homes, LLC. On November 1, 2004, the assets of the Dura-Builders, Inc. 401(k) Profit Sharing Plan and Trust were transferred into the Plan in conjunction with the acquisition of Dura-Builders, Inc. On February 8, 2005, the assets from the PTH Holdings, LLC 401(k) Retirement Plan were transferred into the Plan in conjunction with the acquisition of Palmetto Traditional Homes.

2. Summary of Significant Accounting Policies

The financial statements of the Plan are prepared on an accrual basis. Investment income is recorded as earned. Distributions of Plan benefits to withdrawn participants are recorded when distributed. Expenses incurred in the administration of the Plan are paid by the Company.

The financial statements are based on information provided to the Company and certified as complete and accurate by the Trustee. Certain adjustments have been made to the financial statements provided by the Trustee in order for them to conform to the accrual basis of accounting. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that could affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

KB Home 401(k) Savings Plan

Notes to Financial Statements (continued)

3. Investments

Investments are valued at fair value, which is determined daily by the Trustee through reference to published market information using closing prices on the valuation date for mutual funds and common stock and based on closing balances for cash and participant loans.

The fair value of the Plan’s individual investments that represent 5% or more of the Plan’s net assets as of December 31, 2005 and 2004, were as follows:

		December 31,
		2005				2004
Fidelity Contrafund		$	20,837,284			$	16,349,251
Fidelity Equity Income			13,025,632				12,481,871
Fidelity Intermediate Bond			9,062,202				8,445,555
Fidelity Low-Priced Stock			15,092,335				14,087,417
Fidelity Magellan			18,644,166				17,829,154
Fidelity Retirement Money Market			14,225,919				13,265,807
Strong Growth			*				7,733,900
KB Home common stock			29,428,608				18,129,791

Net appreciation of the Plan’s investments (including investments bought, sold, and held during the year) for the years ended December 31, 2005 and 2004, were as follows:

		Years ended
		December 31,
		2005				2004
Mutual funds		$	6,097,874			$	8,103,235
KB Home common stock			7,593,259				5,499,063
		$	13,691,133			$	13,602,298

KB Home 401(k) Savings Plan

Notes to Financial Statements (continued)

4. Tax Status of the Plan

The Plan has received a determination letter from the Internal Revenue Service dated February 28, 2002, stating that the Plan is qualified, in form, under Code Section 401(a) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt.

Supplemental Schedule

KB Home 401(k) Savings Plan
EIN: 95-3666267    Plan Number: 001

Schedule H, Line 4(i) — Schedule of Assets (Held at End of Year)

December 31, 2005

		Description of				Current
Identity of Issue		Asset				Value
Mutual Funds:
American Beacon SmCpVal Inst		105,538.121 shares				$	2,152,978
Fidelity Asset Manager*		430,257.775 shares					6,905,637
Fidelity Consumer Index*		12,779.176 shares					320,757
Fidelity Contrafund*		321,761.638 shares					20,837,284
Fidelity Cyclical Index*		24,129.785 shares					472,220
Fidelity Equity Income*		246,791.063 shares					13,025,632
Fidelity Financial*		9,004.325 shares					1,036,308
Fidelity Freedom Income*		30,526.629 shares					347,088
Fidelity Freedom 2000*		15,175.090 shares					185,288
Fidelity Freedom 2010*		69,800.748 shares					980,700
Fidelity Freedom 2020*		202,908.810 shares					2,984,789
Fidelity Freedom 2030*		143,772.794 shares					2,159,467
Fidelity Freedom 2040*		182,134.703 shares					1,608,249
Fidelity Healthcare*		14,326.009 shares					1,949,627
Fidelity Intermediate Bond*		880,680.462 shares					9,062,202
Fidelity Low-Priced Stock*		369,547.862 shares					15,092,335
Fidelity Magellan*		175,161.270 shares					18,644,166
Fidelity Natural Resources*		66,913.373 shares					1,622,649
Fidelity Overseas*		113,818.489 shares					4,735,987
Fidelity Retirement Money Market*		14,225,919.290 shares					14,225,919
Fidelity Technology*		22,969.268 shares					1,450,509
Fidelity Utilities GR*		13,417.369 shares					578,289
Managers Fremont Institutional Micro-Cap		7,783.224 shares					108,109
Spartan US Equity Index		114,213.187 shares					5,043,654
Templeton Developing Markets A		210,997.766 shares					4,941,568
Wells Fargo Advantage Growth Fund — Investor Class		396,526.703 shares					8,362,748
KB Home Stock Fund:
KB Home common stock*		405,018.000 shares					29,428,608
Fidelity — Cash*							1,758,051
Participant loans*		Interest rates ranging					3,939,383
			from 4% to 10.5%
			with maturity dates
			through 2020
						$	173,960,201

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

				Sequentially
Exhibit No.		Description		Numbered Page
23.1		Consent of Independent Registered Public Accounting Firm			12