Rising revenue: Assessing KB Home's Q2 2014 earnings

Part 2
Rising revenue: Assessing KB Home's Q2 2014 earnings (Part 2 of 6)

KB Home’s green initiative: A leader in energy-efficient homes

KB Home is a leader in energy-efficient homes

KB Home (KBH) is a believer in sustainability. The company has taken the lead in developing energy-efficient homes. It has been able to build a four-bedroom, 2,500-square-foot home that has an average energy bill of less than $100 a month. It has been expanding its ZeroHouse 2.0 program, which strives to build a home that will have projected energy costs of zero.

KB Home - GreenEnlarge Graph

Sustainability guiding principles

KB Home releases a sustainability report every year. Its guiding principles are:

  • “Offer environmentally friendly and affordably priced homes, products, and features that minimize our homeowners’ carbon footprint and energy usage, conserve natural resources and create more sustainable homes and communities.”
  • “Utilize our history of innovation and our process-driven approach to reduce waste and natural resource usage throughout our organization.”
  • “Be an active and responsible member of the communities in which we operate.”
  • “Be an environmental educator for all our employees, homebuyers and business partners regarding home energy conservation and environmental sustainability.”
  • “Maintain our standards of transparency and corporate citizenship by publicly reporting on the progress in and challenges to our sustainability efforts.”

Specific measures to make homes more sustainable include:

  • Installation of Energy Star appliances in all homes and adherence to the new Energy Star Version 3 standards
  • Continuing to provide solar panel installation as a standard or optional feature in selected markets—also, it continues to explore future ways to facilitate offering solar power systems in more homes
  • Providing an energy monitoring system in every home as a standard feature to increase homeowners’ awareness of their consumption—this can result in additional energy savings of up to 10%
  • Improving indoor air quality with low-VOC paints
  • Continuing to promote its WaterSense-labeled new homes, which consume less water
  • Expanding low-water-usage landscaping standards

KB advertises, as the above graph shows, the projected energy savings a homeowner could expect to achieve under its green initiatives. This initiative gives KB an advantage over other homebuilders like D.R. Horton (DHI), Lennar (LEN), PulteGroup (PHM), and Toll Brothers (TOL).

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