Mr. Karatz: KB Home has been building homes for nearly half a century. Today, it's one of the largest homebuilders in the world with very strong market positions in every single market we operate in ' we're the largest homebuilder in California, Texas and Nevada; the second largest in Colorado and Arizona; the third largest in New Mexico; and the largest homebuilder in France. We took Kaufman and Broad France public last year and it is the first pure real estate play on the French bourse. With our recent purchase of Trademark Homes, marking our entry into Florida, we have just become the second largest builder in Jacksonville. We focus on the first-time homebuyer and the first-time move-up homebuyer, which is the largest segment of the home-buying market. We have a proprietary, risk-averse business model we call KBnxt that provides high earnings visibility and high margins, as well as the ability to sustain growth in most economic cycles. Our business model also involves pre-selling homes instead of the traditional method of building first and selling later. This process has allowed us to give the power of choice directly to homebuyers. KB Home offers each buyer a maximum number of floor plans and over 5,000 custom options at our KB Home Studios that buyers can select from ' all this before we ever break ground on their new home. We are able to provide this wide range of choice while building more than 24,000 homes a year.
TWST: Who are your nearest competitors and how have you attained your
strong market position?
Mr. Karatz: KB Home's competitors today are Pulte, Lennar, Centex and
D.R. Horton. With KBnxt, we have re-focused our business to dominate the
markets we're in, not just participate in them. We believe that this
strategy allows us to serve the customer better, and offers the greatest
value with the largest range of choice.
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