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KAUFMAN AND BROAD REPORTS THIRD QUARTER EARNINGS OF $5.9 MILLION

KAUFMAN AND BROAD REPORTS THIRD QUARTER EARNINGS OF $5.9 MILLION
    LOS ANGELES, Sept. 23 /PRNewswire/ -- Kaufman and Broad Home Corp. (NYSE: KBH) today reported earnings of $5.9 million for its third quarter ended Aug. 31, 1992, down 15 percent from $6.9 million in the third quarter of 1991.  Primary earnings per share were $.16 vs. $.21 in the prior year's period.  Revenues for the quarter totaled $290.3 million, up 5 percent from $277.1 million in the third quarter of 1991.
    In the first nine months of 1992, the company's earnings were flat at $13.3 million compared to the year-earlier period.  Primary earnings per share declined to $.37 from $.40 because of an increase in the average number of common shares outstanding.  Revenues for the nine-month period totaled $709.6 million, down 21 percent from $903.2 million in the first nine months of 1991.
    Bruce Karatz, president and chief executive officer of Kaufman and Broad, said the company's financial results in both the third quarter and first nine months of 1992 reflected continued improvement in its California housing business, offset by declining profitability in its French operations.  Karatz added that 1991 third quarter and nine-month earnings benefited from pretax profits from land sales of $3.1 million and $5.5 million, respectively.  Revenues in the third quarter rose on both higher housing and commercial revenues.  For the nine-month period, revenues declined largely because of lower commercial revenues in the first half of the year.
    California profitability improved in the third quarter primarily as a result of higher unit housing volume.  French profit contributions for the period declined on lower unit housing volume and lower margins in both residential and consolidated commercial operations.  This was partially offset by improvement in the company's share of pretax income from unconsolidated commercial projects.
    The company's construction gross margin in the third quarter was 16.3 percent, down from 20.6 percent in the third quarter of 1991. For the nine-month period, the construction gross margin was 17.2 percent, up from 15.4 percent in 1991.
    Selling, general and administrative expenses declined 5 percent in the third quarter to $32.5 million from $34.2 million.  These expenses were essentially flat at $87.5 million for the nine-month period.
    Worldwide, Kaufman and Broad delivered 1,309 housing units in the third quarter of 1992, up 8 percent from 1,209 units in the comparable period of 1991.  In California, new home deliveries in the third quarter rose to 1,067 units from 871 units in the prior year's period.  The average price of California deliveries decreased to $162,600 from $178,400 in the third quarter of 1991.  French deliveries in the third quarter decreased to 196 units from 274 units a year ago.  The average price of French housing deliveries increased to $273,300 from $179,600 in the prior year's period.
    Net new home orders in California, Kaufman and Broad's largest and most important housing market, rose sharply in the third quarter to 1,254 units from a depressed 463 units in the year-earlier quarter.  The third quarter order figure set a new record for the greatest number of California home sales in any three-month period in the company's history, surpassing the 1,191 net orders achieved in the third quarter of 1989.  At third quarter's end, the company was marketing homes through 54 active communities, compared with 36 a year ago.  Backlog in the state rose to 1,166 units at the end of the third quarter, up 75 percent from the year-earlier level.
    In France, net new home orders declined 46 percent in the third quarter to 105 units from 193 units in the prior year's period, reflecting persistently high interest rates and poor economic conditions.  Backlog at the end of the second quarter totaled 253 units, down 51 percent from the comparable 1991 level.
    Despite the company's significant order rate improvement in California, economic conditions in both of the company's primary markets remain difficult.  Kaufman and Broad continues to operate cautiously, with careful attention to cost control, while pursuing opportunities that will lead to further market share gains in California.
    Los Angeles-based Kaufman and Broad Home Corp. is the largest producer of single-family housing in California and the largest builder in metropolitan Paris, where the company develops commercial office properties and a variety of residential investment properties in addition to single-family homes.
                    KAUFMAN AND BROAD HOME CORP.
                    Consolidated Income Statement


For the Nine Months and Three Months Ended Aug. 31, 1992 and 1991
        (In thousands, except per share amounts -- unaudited)
                            Nine Months             Three Months
                         1992        1991         1992        1991
    Total revenues     $709,563    $903,244     $290,310    $277,062
    Construction:
     Revenues          $678,556    $870,031     $280,347    $265,729
     Costs and
      expenses         (649,118)   (823,030)    (267,232)   (245,152)
     Operating income    29,438      47,001       13,115      20,577
     Interest income      3,282       2,450          868         785
     Interest expense,
      net of amounts
      capitalized       (10,975)    (12,128)      (4,818)     (3,668)
     Minority interests
      in pretax income
      of consolidated
      joint ventures     (9,480)    (16,007)      (2,198)     (4,852)
     Equity in pretax
      income (loss) of
      unconsolidated
      joint ventures      5,881      (1,304)       1,389      (2,309)
     Construction
      pretax income      18,146      20,012        8,356      10,533
    Mortgage banking:
     Revenues:
      Interest income    25,002      28,176        7,904       9,184
      Other               6,005       5,037        2,059       2,149
      Total              31,007      33,213        9,963      11,333
     Expenses:
      Interest          (24,829)    (27,606)      (7,863)     (8,971)
      General and
       administrative    (2,957)     (2,349)      (1,065)       (807)
     Mortgage banking
      pretax income       3,221       3,258        1,035       1,555
    Total pretax income  21,367      23,270        9,391      12,088
    Income taxes         (8,100)    (10,000)      (3,500)     (5,200)
    Net income          $13,267     $13,270       $5,891      $6,888
    Earnings per common
     share:
     Primary               $.37        $.40         $.16        $.21
     Fully diluted          .37         .40          .16         .21
    Average common
     shares
     outstanding:
     Primary             36,099      33,159       36,702      33,617
     Fully diluted       36,118      33,159       36,702      33,617
                    KAUFMAN AND BROAD HOME CORP.
                     Consolidated Balance Sheet
                     (In thousands -- unaudited)
                                  Aug. 31,      Nov. 30,     Aug. 31,
                                    1992          1991         1991
    Assets
    Construction:
     Cash and cash equivalents    $35,576       $46,573      $24,243
     Receivables                  155,296       156,086      192,069
     Inventories                  781,222       654,341      697,257
     Investments in
      unconsolidated
      joint ventures               27,118        20,979       28,586
     Other assets                  36,332        38,023       37,456
     Total                      1,035,544       916,002      979,611
    Mortgage banking:
     Cash and cash equivalents      8,729         4,295        8,625
     Receivables                  411,425       442,950      440,602
     Other assets                   9,106         9,776       10,017
     Total                        429,260       457,021      459,244
    Total assets               $1,464,804    $1,373,023   $1,438,855
    Liabilities and
     Shareholders' Equity
    Construction:
     Accounts payable            $173,312      $151,089     $145,755
     Accrued expenses and
      other liabilities            58,082        73,053       67,048
     Mortgages and notes payable  296,685       230,580      310,974
     Total                        528,079       454,722      523,777
    Mortgage banking:
     Accounts payable and
      accrued expenses             17,577        15,909       20,565
     Notes payable                109,500        84,000       80,000
     Collateralized mortgage
      obligations secured by
      mortgage-backed securities  249,312       300,894      313,893
    Total                         376,389       400,803      414,458
    Convertible subordinated
     notes                        158,859       149,798      146,874
    Deferred income taxes          67,748        57,087       56,865
    Minority interests in
     consolidated joint ventures   17,637        52,507       56,529
    Shareholders' equity          316,092       258,106      240,352
    Total liabilities and
     shareholders' equity      $1,464,804    $1,373,023   $1,438,855
    -0-                    9/23/92 R
    /CONTACT:  Eileen Rose of Kaufman and Broad, 310-443-8041/
    (KBH) CO:  Kaufman and Broad Home Corp. ST:  California IN:  CST SU:  ERN 1370 09-23-92 08:33 EDT LS-KJ -- LA004 -- 2794 09/23/92 16:23 EDT
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Date:Sep 23, 1992
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