þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 58-2086934 | |
(State or other jurisdiction of | (I.R.S. employer | |
incorporation or organization) | Identification no.) |
1000 Abernathy Road, Suite 1200, Atlanta, Georgia
(Address of principal executive offices) |
30328
(Zip Code) |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Class | Outstanding at July 31, 2008 | |
Common Stock, $0.001 par value | 39,240,011 shares |
| the timing and final outcome of the United States Attorney investigation, the Securities and Exchange Commissions (SEC) investigation and other state and federal agency investigations, the putative class action lawsuits, the derivative claims, multi-party suits and similar proceedings as well as the results of any other litigation or government proceedings; | ||
| material weaknesses in our internal control over financial reporting; | ||
| additional asset impairment charges or writedowns; | ||
| economic changes nationally or in local markets, including changes in consumer confidence, volatility of mortgage interest rates and inflation; | ||
| continued or increased downturn in the homebuilding industry; | ||
| estimates related to homes to be delivered in the future (backlog) are imprecise as they are subject to various cancellation risks which cannot be fully controlled; | ||
| continued or increased disruption in the availability of mortgage financing; | ||
| our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any further downgrades of our credit ratings; | ||
| potential inability to comply with covenants in our debt agreements; | ||
| continued negative publicity; | ||
| increased competition or delays in reacting to changing consumer preference in home design; | ||
| shortages of or increased prices for labor, land or raw materials used in housing production; | ||
| factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on projects under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; | ||
| the performance of our joint ventures and our joint venture partners; | ||
| the impact of construction defect and home warranty claims and the cost and availability of insurance, including the availability of insurance for the presence of moisture intrusion; | ||
| a material failure on the part of our subsidiary Trinity Homes LLC to satisfy the conditions of the class action settlement agreement, including assessment and remediation with respect to moisture intrusion related issues; | ||
| delays in land development or home construction resulting from adverse weather conditions; | ||
| potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations, or governmental policies and possible penalties for failure to comply with such laws, regulations and governmental policies; | ||
| effects of changes in accounting policies, standards, guidelines or principles; or | ||
| terrorist acts, acts of war and other factors over which the Company has little or no control. |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
(in thousands, except share and per share data)
Table of Contents
(in thousands, except per share data)
Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
455,578
$
753,456
$
1,361,649
$
2,373,048
407,512
647,489
1,223,252
2,022,687
95,482
154,244
451,854
399,856
(47,416
)
(48,277
)
(313,457
)
(49,495
)
83,517
96,327
245,696
302,323
6,046
7,773
18,250
22,838
4,365
29,752
52,470
29,752
(141,344
)
(182,129
)
(629,873
)
(404,408
)
(18,568
)
(939
)
(75,069
)
(7,012
)
(13,489
)
2,664
(20,907
)
7,870
(173,401
)
(180,404
)
(725,849
)
(403,550
)
(63,707
)
(61,474
)
(249,771
)
(145,161
)
(109,694
)
(118,930
)
(476,078
)
(258,389
)
(148
)
183
(1,893
)
2,548
$
(109,842
)
$
(118,747
)
$
(477,971
)
$
(255,841
)
38,551
38,459
38,546
38,388
38,551
38,459
38,546
38,388
$
(2.85
)
$
(3.09
)
$
(12.35
)
$
(6.73
)
$
$
$
(0.05
)
$
0.07
$
(2.85
)
$
(3.09
)
$
(12.40
)
$
(6.66
)
$
(2.85
)
$
(3.09
)
$
(12.35
)
$
(6.73
)
$
$
$
(0.05
)
$
0.07
$
(2.85
)
$
(3.09
)
$
(12.40
)
$
(6.66
)
$
$
0.10
$
$
0.30
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(in thousands)
Nine Months Ended
June 30,
2008
2007
$
(477,971
)
$
(255,841
)
18,415
23,169
8,694
7,406
451,854
399,856
52,470
29,752
(118,817
)
(108,092
)
454
(3,212
)
75,069
7,012
2,096
3,625
(5,647
)
265,092
(80,563
)
(42,209
)
261,324
(116,057
)
688
67,803
40,636
(12,083
)
(28,176
)
(47,947
)
(169,673
)
(97,175
)
(6,354
)
950
24,499
122,049
(7,949
)
(23,948
)
(11,137
)
(18,666
)
4,268
(619
)
1,732
(14,818
)
(41,501
)
130,031
(204,138
)
(100,472
)
(14,431
)
(30,413
)
5,061
(27,728
)
(5,618
)
(21,135
)
(324
)
4,423
(27
)
(304
)
(454
)
3,212
(11,708
)
(149,816
)
(124,209
)
(140,135
)
(43,661
)
454,337
167,570
$
314,202
$
123,909
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Three Months Ended
Nine Months Ended
June 30, 2008
June 30, 2008
Weighted
Weighted
Average Grant
Average Grant
Date Fair
Date Fair
Shares
Value
Shares
Value
849,396
$
47.71
905,898
$
48.42
0.00
26,411
8.49
(5,706
)
51.91
(34,237
)
48.44
(841
)
44.57
(55,223
)
45.05
842,849
$
47.39
842,849
$
47.39
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Three Months Ended
Nine Months Ended
June 30, 2008
June 30, 2008
Weighted-
Weighted-
Average
Average
Shares
Exercise Price
Shares
Exercise Price
1,924,315
$
45.25
2,052,379
$
45.01
(13,215
)
45.81
(141,279
)
41.88
1,911,100
$
45.24
1,911,100
$
45.24
744,646
$
28.73
744,646
$
28.73
1,554,911
$
42.02
1,554,911
$
42.02
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Actual Net Contribution Margin (defined as homebuilding revenues less homebuilding
costs and direct selling expenses) for homes closed in the current fiscal quarter, fiscal
year to date and prior two fiscal quarters. Homebuilding costs include land and land
development costs (based upon an allocation of such costs, including costs to complete the
development, or specific lot costs), home construction costs (including an estimate of
costs, if any, to complete home construction), previously capitalized indirect costs
(principally for construction supervision), capitalized interest and estimated warranty
costs;
Projected Net Contribution Margin for homes in backlog;
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Actual and trending new orders and cancellation rates;
Actual and trending base home sales prices and sales incentives for home sales that
occurred in the prior two fiscal quarters that remain in backlog at the end of the fiscal
quarter and expected future homes sales prices and sales incentives and absorption over the
expected remaining life of the community;
A comparison of our community to our competition to include, among other things, an
analysis of various product offerings, including the size and style of the homes currently
offered for sale, community amenity levels, availability of lots in our community and our
competitions, desirability and uniqueness of our community and other market factors; and
Other events that may indicate that the carrying value may not be recoverable.
management has the authority and commits to a plan to sell the land;
the land is available for immediate sale in its present condition;
there is an active program to locate a buyer and the plan to sell the land has been
initiated;
the sale of the land is probable within one year;
the land is being actively marketed at a reasonable sale price relative to its current
fair value; and
it is unlikely that the plan to sell will be withdrawn or that significant changes to
the plan will be made.
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September 30,
Goodwill
(in thousands)
2007
Impairment
June 30, 2008
$
29,034
$
(29,034
)
$
23,286
(19,072
)
4,214
5,044
5,044
11,249
(4,364
)
6,885
$
68,613
$
(52,470
)
$
16,143
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Nine Months Ended
June 30,
2008
2007
$
(94,926
)
$
(67,653
)
32,786
46,539
94
426
September 30,
(in thousands)
June 30, 2008
2007
$
626,890
$
787,102
600,175
1,233,140
364,163
324,350
215,679
49,473
101,320
143,726
$
1,908,227
$
2,537,791
June 30, 2008
September 30, 2007
Projects in
Held for Future
Land Held for
Total Owned
Projects in
Held for Future
Land Held for
Total Owned
Progress
Development
Sale
Inventory
Progress
Development
Sale
Inventory
$
339,665
$
293,179
$
35,529
$
668,373
$
581,763
$
286,912
$
35,578
$
904,253
295,504
41,072
86,873
423,449
430,677
9,035
439,712
89,747
13,912
13,172
116,831
196,080
7,337
203,417
211,020
10,502
58,437
279,959
362,609
10,502
1,407
374,518
246,083
5,498
21,668
273,249
396,630
10,564
12,488
419,682
146,366
146,366
196,209
196,209
$
1,328,385
$
364,163
$
215,679
$
1,908,227
$
2,163,968
$
324,350
$
49,473
$
2,537,791
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June 30,
September 30,
(in thousands)
2008
2007
$
37,727
$
109,143
367,353
523,597
640,191
785,437
5,970
7,717
39,080
42,307
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Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
78,665
$
93,239
$
87,560
$
78,996
34,234
37,394
105,214
112,102
(1,875
)
(3,314
)
(12,468
)
(9,140
)
(15,873
)
(35,866
)
(26,693
)
(30,040
)
(75,982
)
(84,679
)
$
68,458
$
97,279
$
68,458
$
97,279
Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
(109,694
)
$
(118,930
)
$
(476,078
)
$
(258,389
)
(148
)
183
(1,893
)
2,548
$
(109,842
)
$
(118,747
)
$
(477,971
)
$
(255,841
)
38,551
38,459
38,546
38,388
38,551
38,459
38,546
38,388
$
(2.85
)
$
(3.09
)
$
(12.35
)
$
(6.73
)
$
$
$
(0.05
)
$
0.07
$
(2.85
)
$
(3.09
)
$
(12.40
)
$
(6.66
)
$
(2.85
)
$
(3.09
)
$
(12.35
)
$
(6.73
)
$
$
$
(0.05
)
$
0.07
$
(2.85
)
$
(3.09
)
$
(12.40
)
$
(6.66
)
Table of Contents
June 30,
September 30,
Maturity Date
2008
2007
July 2011
$
$
May 2011
180,000
180,000
April 2012
340,000
340,000
November 2013
200,000
200,000
July 2015
350,000
350,000
June 2016
275,000
275,000
June 2024
180,000
180,000
July 2036
103,093
103,093
Various Dates
50,388
118,073
Various Dates
86,388
114,116
(2,682
)
(3,033
)
$
1,762,187
$
1,857,249
*
Collectively, the Senior Notes
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Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
47,103
$
87,467
$
57,053
$
99,030
631
(4,163
)
6,863
6,495
(5,558
)
(10,124
)
(21,740
)
(32,345
)
$
42,176
$
73,180
$
42,176
$
73,180
(1)
Upon review of the adequacy of the warranty reserves, it was determined that the warranty
reserve as of June 30, 2008 and 2007, respectively, contained reserves in excess of anticipated
claims related to the Trinity moisture intrusion issues. As a result, the provision for warranty
reserves for the three and nine months ended June 30, 2007 was reduced by $6.0 million and $12.0
million, respectively, and the provision for warranty reserves for the three and nine months ended
June 30, 2008 was reduced by $0.9 million and $1.9 million, respectively.
Table of Contents
Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
5,909
$
36,975
$
12,116
$
47,704
(936
)
(6,000
)
(1,906
)
(12,000
)
(778
)
(3,309
)
(6,015
)
(8,038
)
$
4,195
$
27,666
$
4,195
$
27,666
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An additional putative class action was filed on April 8, 2008 in the United States District Court
for the Middle District of North Carolina, Salisbury Division, against Beazer Homes, U.S.A., Inc.,
Beazer Homes Corp. and Beazer Mortgage Corporation. The Complaint alleges that Beazer violated the
Real Estate Settlement Practices Act (RESPA) and North Carolina Gen. Stat. § 75-1.1 by
(1) improperly requiring homebuyers to use Beazer-owned mortgage and settlement services as part of
a down payment assistance program, and (2) illegally increasing the cost of homes and settlement
services sold by Beazer Homes Corp. The purported class consists of all residents of North Carolina
who purchased a home from Beazer, using mortgage financing provided by and through Beazer that
included seller-funded down payment assistance, between January 1, 2000 and October 11, 2007. The
Complaint demands an unspecified amount of damages, equitable relief, treble damages, attorneys
fees and litigation expenses. The defendants moved to dismiss the Complaint on June 4, 2008. On
July 25, 2008, in lieu of a response to the motion to dismiss, plaintiff filed an amended
complaint. The Company has not yet filed a responsive pleading or motion, but intends to vigorously
defend this action.
Table of Contents
Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
111,557
$
248,830
$
344,942
$
814,792
108,294
113,840
284,780
309,176
32,751
72,470
127,205
270,124
77,204
152,121
246,013
491,359
124,892
164,417
355,770
482,128
880
1,778
2,939
5,469
$
455,578
$
753,456
$
1,361,649
$
2,373,048
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Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
(41,402
)
$
(62,394
)
$
(158,245
)
$
(122,582
)
5,061
(11,852
)
(50,024
)
(37,205
)
(10,801
)
(20,166
)
(44,830
)
(42,560
)
(12,313
)
(1,917
)
(75,784
)
17,788
(17,582
)
(14,580
)
(75,139
)
(52,429
)
202
1,188
1,012
3,144
(76,835
)
(109,721
)
(403,010
)
(233,844
)
(64,509
)
(72,408
)
(226,863
)
(170,564
)
(141,344
)
(182,129
)
(629,873
)
(404,408
)
(18,568
)
(939
)
(75,069
)
(7,012
)
(13,489
)
2,664
(20,907
)
7,870
$
(173,401
)
$
(180,404
)
$
(725,849
)
$
(403,550
)
Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
2008
2007
$
1,705
$
3,037
$
4,778
$
8,364
1,169
940
2,829
2,637
289
427
1,183
1,320
524
859
2,189
2,862
1,532
1,544
4,739
4,503
8
(11
)
22
24
5,227
6,796
15,740
19,710
819
977
2,510
3,128
$
6,046
$
7,773
$
18,250
$
22,838
June 30,
September 30,
2008
2007
$
716,876
$
940,161
480,146
546,182
125,273
242,733
308,144
403,472
296,161
469,520
37,258
36,035
1,182,199
1,279,017
314
12,901
$
3,146,371
$
3,930,021
(a)
Operating loss includes charges related to the abandonment of lot option agreements totaling
$27.8 million and $44.8 million for the three months ended June 30, 2008 and 2007 and $67.9
million and $89.1 million for the nine months ended June 30, 2008 and 2007, respectively.
Operating loss also includes inventory impairment charges in the amounts of $67.7 million and
$109.4 million for the three months ended June 30, 2008 and 2007 and $383.9 million and $310.8
million for the nine months ended June 30, 2008 and 2007, respectively, which have been
recorded in the segments to which the inventory relates (see Note 3).
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(b)
Corporate and unallocated includes amortization of capitalized interest and numerous shared
services functions that benefit all segments, the costs of which are not allocated to the
operating segments reported above including information technology, national sourcing and
purchasing, treasury, corporate finance, legal, branding and other national marketing costs.
In addition, for the three and nine months ended June 30, 2008, corporate and unallocated also
includes $11.0 million and $28.2 million, respectively, of investigation and related expenses.
The three and nine months ended June 30, 2007 included $0.9 million of investigation and
related expenses.
(c)
Segment assets as of both June 30, 2008 and September 30, 2007 include goodwill assigned from
prior acquisitions. See Note 1 for goodwill by segment as of June 30, 2008 and September 30,
2007.
(d)
Primarily consists of cash and cash equivalents, consolidated inventory not owned, deferred
taxes, capitalized interest and other corporate items that are not allocated to the segments.
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Condensed Consolidating Balance Sheet Information
June 30, 2008
(in thousands)
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Unaudited Consolidating Balance Sheet Information
September 30, 2007
(in thousands)
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Unaudited Condensed Consolidating Statement of Operations Information
Three Months Ended June 30, 2008
(in thousands)
Beazer
Consolidated
Beazer Homes
Guarantor
Mortgage
Non-Guarantor
Consolidating
Beazer Homes
USA, Inc.
Subsidiaries
Corp.
Subsidiaries
Adjustments
USA, Inc.
$
$
455,427
$
$
151
$
$
455,578
26,693
380,819
407,512
1,875
93,607
95,482
(28,568
)
(18,999
)
151
(47,416
)
83,452
65
83,517
6,046
6,046
4,365
4,365
(28,568
)
(112,862
)
86
(141,344
)
(18,568
)
(18,568
)
(14,083
)
567
27
(13,489
)
(42,651
)
(130,863
)
113
(173,401
)
(15,964
)
(47,776
)
33
(63,707
)
(83,007
)
83,007
(109,694
)
(83,087
)
80
83,007
(109,694
)
(148
)
(148
)
(148
)
148
$
(109,842
)
$
(83,087
)
$
(148
)
$
80
$
83,155
$
(109,842
)
Unaudited Condensed Consolidating Statement of Operations Information
Nine Months Ended June 30, 2008
(in thousands)
Beazer
Consolidated
Beazer Homes
Guarantor
Mortgage
Non-Guarantor
Consolidating
Beazer Homes
USA, Inc.
Subsidiaries
Corp. (a)
Subsidiaries
Adjustments
USA, Inc.
$
$
1,361,146
$
$
503
$
$
1,361,649
75,982
1,147,270
1,223,252
12,468
439,386
451,854
(88,450
)
(225,510
)
503
(313,457
)
245,472
224
245,696
18,250
18,250
52,470
52,470
(88,450
)
(541,702
)
279
(629,873
)
(75,069
)
(75,069
)
(28,122
)
7,036
179
(20,907
)
(116,572
)
(609,735
)
458
(725,849
)
(43,633
)
(206,298
)
160
(249,771
)
(403,139
)
403,139
(476,078
)
(403,437
)
298
403,139
(476,078
)
(1,893
)
(1,893
)
(1,893
)
1,893
$
(477,971
)
$
(403,437
)
$
(1,893
)
$
298
$
405,032
$
(477,971
)
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Unaudited Condensed Consolidating Statement of Operations Information
Three Months Ended June 30, 2007
(in thousands)
Beazer
Consolidated
Beazer Homes
Guarantor
Mortgage
Non-Guarantor
Consolidating
Beazer Homes
USA, Inc.
Subsidiaries
Corp.
Subsidiaries
Adjustments
USA, Inc.
$
$
752,968
$
$
488
$
$
753,456
37,394
617,449
(7,354
)
647,489
154,244
154,244
(37,394
)
(18,725
)
488
7,354
(48,277
)
96,138
189
96,327
7,773
7,773
29,752
29,752
(37,394
)
(152,388
)
299
7,354
(182,129
)
(939
)
(939
)
2,617
47
2,664
(37,394
)
(150,710
)
346
7,354
(180,404
)
(15,516
)
(49,222
)
141
3,123
(61,474
)
(97,052
)
97,052
(118,930
)
(101,488
)
205
101,283
(118,930
)
183
183
183
(183
)
$
(118,747
)
$
(101,488
)
$
183
$
205
$
101,100
$
(118,747
)
Unaudited Condensed Consolidating Statement of Operations Information
Nine Months Ended June 30, 2007
(in thousands)
Beazer
Consolidated
Beazer Homes
Guarantor
Mortgage
Non-Guarantor
Consolidating
Beazer Homes
USA, Inc.
Subsidiaries
Corp.
Subsidiaries
Adjustments
USA, Inc.
$
$
2,371,672
$
$
1,376
$
$
2,373,048
112,102
1,938,008
(27,423
)
2,022,687
399,856
399,856
(112,102
)
33,808
1,376
27,423
(49,495
)
301,712
611
302,323
22,838
22,838
29,752
29,752
(112,102
)
(320,494
)
765
27,423
(404,408
)
(7,012
)
(7,012
)
7,738
132
7,870
(112,102
)
(319,768
)
897
27,423
(403,550
)
(43,534
)
(112,625
)
348
10,650
(145,161
)
(189,821
)
189,821
(258,389
)
(207,143
)
549
206,594
(258,389
)
2,548
2,548
2,548
(2,548
)
$
(255,841
)
$
(207,143
)
$
2,548
$
549
$
204,046
$
(255,841
)
Table of Contents
Unaudited Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2008
(in thousands)
Beazer
Consolidated
Beazer Homes
Guarantor
Mortgage
Non-Guarantor
Consolidating
Beazer Homes
USA, Inc.
Subsidiaries
Corp.
Subsidiaries
Adjustments
USA, Inc.
$
(193,242
)
$
221,400
$
(3,952
)
$
293
$
$
24,499
(8,487
)
536
2
(7,949
)
(11,137
)
(11,137
)
4,268
4,268
(15,356
)
536
2
(14,818
)
(100,472
)
(100,472
)
(27,728
)
(27,728
)
(21,135
)
(21,135
)
(27
)
(27
)
(454
)
(454
)
118,873
(96,870
)
(6,109
)
(111
)
(15,783
)
69,529
(197,342
)
(6,109
)
(111
)
(15,783
)
(149,816
)
(123,713
)
8,702
(9,525
)
184
(15,783
)
(140,135
)
447,296
9,700
1,559
(4,218
)
454,337
$
323,583
$
8,702
$
175
$
1,743
$
(20,001
)
$
314,202
Table of Contents
Unaudited Condensed Consolidating Statement of Cash Flows
Nine Months Ended June 30, 2007
(in thousands)
Beazer
Consolidated
Beazer Homes
Guarantor
Mortgage
Non-Guarantor
Consolidating
Beazer Homes
USA, Inc.
Subsidiaries
Corp.
Subsidiaries
Adjustments
USA, Inc.
$
(248,780
)
$
300,159
$
71,062
$
(392
)
$
$
122,049
(23,768
)
(180
)
(23,948
)
(18,666
)
(18,666
)
(619
)
(619
)
1,732
1,732
(41,321
)
(180
)
(41,501
)
130,031
130,031
(204,138
)
(204,138
)
(14,431
)
(14,431
)
(30,413
)
(30,413
)
5,061
5,061
(5,618
)
(5,618
)
(324
)
(324
)
4,423
4,423
(304
)
(304
)
3,212
3,212
(11,708
)
(11,708
)
205,262
(244,407
)
1,696
(200
)
37,649
169,915
(258,838
)
(72,735
)
(200
)
37,649
(124,209
)
(78,865
)
(1,853
)
(592
)
37,649
(43,661
)
254,915
10,664
829
(98,838
)
167,570
$
176,050
$
$
8,811
$
237
$
(61,189
)
$
123,909
Table of Contents
Three Months Ended June 30,
Nine Months Ended June 30,
2008
2007
2008
2007
$
$
4,690
$
3,497
$
16,966
(28
)
(621
)
(237
)
381
(3,034
)
4,165
(89
)
198
(1,141
)
1,617
$
(148
)
$
183
$
(1,893
)
$
2,548
June 30,
September 30,
2008
2007
$
175
$
9,700
6
1,038
93
781
40
1,382
$
314
$
12,901
$
373
$
4,958
$
373
$
4,958
Table of Contents
Table of Contents
West
Mid-Atlantic
Florida
Southeast
Other
Delaware
Florida
Georgia
Colorado
California
Maryland
Nashville, TN
Indiana
Nevada
New Jersey
North Carolina
Kentucky
New Mexico
New York
South Carolina
Memphis, TN
Pennsylvania
Ohio
Virginia
Texas
West Virginia
Table of Contents
Table of Contents
Table of Contents
Three Months Ended June 30,
Nine Months Ended June 30,
($ in thousands)
2008
2007
2008
2007
$
431,723
$
732,491
$
1,324,166
$
2,294,186
22,975
19,187
34,544
73,393
880
1,778
2,939
5,469
$
455,578
$
753,456
$
1,361,649
$
2,373,048
$
(50,338
)
$
(49,303
)
$
(317,398
)
$
(56,409
)
2,042
(752
)
1,002
1,445
880
1,778
2,939
5,469
$
(47,416
)
$
(48,277
)
$
(313,457
)
$
(49,495
)
$
82,847
$
95,726
$
243,790
$
300,022
670
601
1,906
2,301
$
83,517
$
96,327
$
245,696
$
302,323
$
6,046
$
7,773
$
18,250
$
22,838
-10.4
%
-6.4
%
-23.0
%
-2.1
%
18.2
%
12.7
%
17.9
%
12.6
%
0.1
%
0.1
%
0.1
%
0.1
%
$
(91
)
$
(939
)
$
(12,027
)
$
(3,936
)
(18,477
)
(63,042
)
(3,076
)
$
(18,568
)
$
(939
)
$
(75,069
)
$
(7,012
)
36.7
%
34.1
%
34.4
%
36.0
%
(a)
The impact of deferrals (net reversal of deferrals) in accordance with SFAS 66 on
homebuilding revenues related to certain homes for which the sale of a related mortgage
loan to a third-party investor had not been completed as of the balance sheet date was
$(3.9) million and $25.6 million for the three and nine months ended June 30, 2007 .
(b)
Homebuilding gross loss for the three months and nine months ended June 30, 2008
include $67.7 million and $383.9 million, respectively, of inventory impairment charges and
$27.8 million and $67.9 million, respectively, of charges related to the
abandonment of lot option agreements. Homebuilding gross profit (loss) for the three months
and nine months ended June 30, 2007 include $109.4 million and $310.8 million, respectively,
of inventory impairment charges and $44.8 million and $89.1 million, respectively, of
charges related to the abandonment of lot option agreements.
(c)
Includes investigation and related expenses of $11.0 million and $28.2 million for the
three and nine months ended June 30, 2008 and $0.9 million for both the three and nine
months ended June 30, 2007.
Table of Contents
Table of Contents
Three Months Ended June 30,
Homebuilding Revenues
Average Selling Price
2008
2007
Change
2008
2007
Change
$
111,557
$
248,830
-55.2
%
$
274.1
$
350.8
-21.9
%
108,294
107,153
1.1
%
443.8
465.4
-4.6
%
32,751
72,470
-54.8
%
215.5
267.9
-19.6
%
74,245
142,191
-47.8
%
229.2
232.9
-1.6
%
104,876
161,847
-35.2
%
190.7
202.3
-5.7
%
$
431,723
$
732,491
-41.1
%
$
257.4
$
282.1
-8.8
%
Nine Months Ended June 30,
Homebuilding Revenues
Average Selling Price
2008
2007
Change
2008
2007
Change
$
340,672
$
771,091
-55.8
%
$
281.7
$
358.4
-21.4
%
282,260
302,489
-6.7
%
407.9
457.6
-10.9
%
126,745
270,124
-53.1
%
232.6
303.4
-23.3
%
242,238
474,003
-48.9
%
228.5
232.0
-1.5
%
332,251
476,479
-30.3
%
190.1
198.3
-4.1
%
$
1,324,166
$
2,294,186
-42.3
%
$
252.0
$
281.8
-10.6
%
Three Months Ended June 30,
Nine Months Ended June 30,
2008
2007
Change
2008
2007
Change
$
$
n/a
$
4,270
$
43,701
-90.2
%
6,687
n/a
2,520
6,687
-62.3
%
n/a
460
n/a
2,959
9,930
-70.2
%
3,775
17,356
-78.2
%
20,016
2,570
678.8
%
23,519
5,649
316.3
%
$
22,975
$
19,187
19.7
%
$
34,544
$
73,393
-52.9
%
Table of Contents
Three Months Ended June 30,
Nine Months Ended June 30,
2008
2007
2008
2007
Gross Profit
Gross
Gross Profit
Gross
Gross Profit
Gross
Gross Profit
Gross
(Loss)
Margin
(Loss)
Margin
(Loss)
Margin
(Loss)
Margin
$
(27,421
)
-24.6
%
$
(36,489
)
-14.7
%
$
(114,401
)
-33.6
%
$
(44,713
)
-5.8
%
15,333
14.2
%
209
0.2
%
(19,295
)
-6.8
%
272
0.1
%
(4,424
)
-13.5
%
(9,844
)
-13.6
%
(25,223
)
-19.9
%
(10,570
)
-3.9
%
(1,085
)
-1.5
%
15,537
10.9
%
(40,209
)
-16.6
%
73,380
15.5
%
(2,950
)
-2.8
%
8,324
5.1
%
(23,845
)
-7.2
%
15,946
3.3
%
(29,791
)
(27,040
)
(94,425
)
(90,724
)
(50,338
)
-11.7
%
(49,303
)
-6.7
%
(317,398
)
-23.9
%
(56,409
)
-2.5
%
2,042
(752
)
1,002
1,445
880
1,778
2,939
5,469
$
(47,416
)
-10.4
%
$
(48,277
)
-6.4
%
$
(313,457
)
-23.0
%
$
(49,495
)
-2.1
%
Three Months Ended June 30,
Nine Months Ended June 30,
2008
2007
Change
2008
2007
Change
$
$
(520
)
n/a
$
1,582
$
2,419
-34.6
%
1,475
907
62.6
%
1,482
907
63.4
%
n/a
99
n/a
120
239
-49.8
%
236
64
268.8
%
447
(1,378
)
132.4
%
(2,397
)
(1,945
)
-23.2
%
$
2,042
$
(752
)
371.5
%
$
1,002
$
1,445
-30.7
%
Table of Contents
Quarter Ended June 30,
Nine Months Ended June 30,
2008
2007
2008
2007
$
20,371
$
57,623
$
145,792
$
140,532
2,402
6,516
52,280
41,495
9,032
16,931
21,171
54,904
9,817
7,204
27,427
12,075
2,085
14,960
7,409
39,450
3,053
6,194
19,790
18,389
$
46,760
$
109,428
$
273,869
$
306,845
$
6,910
$
$
7,714
$
3,105
5,631
14,802
804
23,839
3,793
19,246
500
3,828
44,458
350
$
20,966
$
$
110,059
$
3,955
$
14,134
$
19,858
$
14,962
$
31,616
21
14,477
6,679
19,174
606
7,209
4,354
21,481
684
2,685
28,074
5,934
12,311
587
13,857
10,851
$
27,756
$
44,816
$
67,926
$
89,056
$
95,482
$
154,244
$
451,854
$
399,856
Table of Contents
New Orders, net
Cancellation Rates
Three Months Ended
Nine Months Ended
Three Months Ended
Nine Months Ended
June 30,
June 30,
June 30,
June 30,
2008
2007
Change
2008
2007
Change
2008
2007
2008
2007
594
726
-18.2
%
1,420
2,224
-36.2
%
30.0
%
40.0
%
36.3
%
38.2
%
107
327
-67.3
%
411
1,128
-63.6
%
67.2
%
31.0
%
60.0
%
23.8
%
188
357
-47.3
%
509
891
-42.9
%
26.8
%
30.1
%
28.5
%
33.2
%
409
647
-36.8
%
1,117
2,128
-47.5
%
19.8
%
33.3
%
23.8
%
30.7
%
476
991
-52.0
%
1,525
2,550
-40.2
%
44.9
%
38.8
%
42.9
%
39.4
%
1,774
3,048
-41.8
%
4,982
8,921
-44.2
%
36.8
%
36.3
%
38.5
%
34.8
%
Closings
Three Months Ended
Nine Months Ended
June 30,
June 30,
2008
2007
Change
2008
2007
Change
407
721
-43.6
%
1,206
2,125
-43.2
%
244
263
-7.2
%
692
676
2.4
%
152
266
-42.9
%
545
861
-36.7
%
324
608
-46.7
%
1,060
2,018
-47.5
%
550
801
-31.3
%
1,748
2,391
-26.9
%
1,677
2,659
-36.9
%
5,251
8,071
-34.9
%
Table of Contents
Backlog at June 30,
2008
2007
Change
705
1,274
-44.7
%
362
1,029
-64.8
%
202
538
-62.5
%
561
1,431
-60.8
%
886
1,680
-47.3
%
2,716
5,952
-54.4
%
Table of Contents
June 30,
September 30,
Maturity Date
2008
2007
July 2011
$
$
May 2011
180,000
180,000
April 2012
340,000
340,000
November 2013
200,000
200,000
July 2015
350,000
350,000
June 2016
275,000
275,000
June 2024
180,000
180,000
July 2036
103,093
103,093
Various Dates
50,388
118,073
Various Dates
86,388
114,116
(2,682
)
(3,033
)
$
1,762,187
$
1,857,249
*
Collectively, the Senior Notes
Table of Contents
Financial Covenant
Covenant Requirement
Actual
> $100 million
$784.2 million
> $120 million
of unrestricted
cash and borrowing
base availability
OR Adjusted
Coverage Ratio >
1.75x
$314.2 million of
unrestricted cash
and borrowing base
availability and
Adjusted Coverage
Ratio of 3.94x
Table of Contents
Table of Contents
Table of Contents
Management, under the supervision and with the participation of its Chief Executive Officer (CEO)
and Chief Financial Officer (CFO), evaluated the effectiveness of the Companys disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Act), as
of the end of period covered by this report. Management concluded that, as of June 30, 2008, the
Companys disclosure controls and procedures were not effective primarily because of the
identification of material weaknesses in our internal control over financial reporting, further
described below and in Item 9A of our fiscal 2007 Form 10-K, which we view as an integral part of
our disclosure controls and procedures. In addition, our disclosure controls and procedures not
relating to internal control over financial reporting were not sufficiently documented and were not
designed to require all accounting and financial employees, and other corporate employees with
specific knowledge of, or responsibility for, other disclosures to complete quarterly
certifications (management representations).
Table of Contents
Code of Conduct Violations
The operating effectiveness of the Companys Code of Business Conduct and Ethics Policy (the
Code), which governs the execution by our employees of their duties and responsibilities
within established procedures, was deficient. As a result, the Code was not consistently and
strictly adhered to, including by certain of the Companys former officers, and violations
of the Code were not promptly and appropriately reported. This deficiency led to an
environment where improper and erroneous accounting information was utilized related to
certain transactions and financial statement matters and inappropriate decisions could have
been made, and were made, including with respect to certain model home sale-leaseback
transactions and certain home closings in California, that were not in accordance with GAAP.
Compliance With Laws and Regulations
The design of the Companys controls related to our mortgage origination practices was not
sufficient to ensure compliance with all applicable laws, rules, and regulations, or to
enable a determination of the financial statement impact of such violations to the Companys
financial statement amounts and disclosures. This resulted in the violation of certain
applicable federal and/or state regulations, and could result in reimbursement of losses and
payment of regulatory and/or criminal fines.
Segregation of Duties
Our former Chief Accounting Officer had primary review and oversight responsibilities for
many financial reporting activities and controls designed to ensure the accuracy of our
financial statements. This lack of segregation of duties was a deficiency in the design of
our internal control over financial reporting that allowed for improprieties or errors in
the application of accounting practices to go undetected.
Management Override and Collusion
Based on the results of the independent investigation by the Audit Committee, we believe
that our former Chief Accounting Officer caused or permitted deficiencies to occur in the
operating effectiveness of our internal controls through the override of certain
documentation and financial accounting and reporting controls. In addition, the results of
the investigation uncovered collusion with some of the Companys business unit employees to
inappropriately manipulate earnings.
Table of Contents
Establish objective guidelines that should be applied in the determination of certain
accruals;
Require detailed analyses and review of certain subjective estimates;
Require significant estimates and related assumptions to be documented and approved;
Require dual approval for material journal entries that directly impact earnings through
the adjustment of accruals and reserves;
Establish consistent guidelines for the compilation of financial and operational
reports; and
Provide visibility into accruals and estimates which were recorded in the consolidated
financial statements in amounts that were different from the sum of such accruals recorded
at a divisional level.
Inappropriate reserves and other accrued liabilities were recorded relating to land
development costs, house construction costs and warranty accruals. These errors were caused
by a failure to require a determination and documentation of the reasonableness of the
assumptions used to develop such estimates of future expenditures for land development,
house construction and warranty claims.
Asset impairments were misstated because certain assumptions used to calculate
impairments, indirect costs and capitalized interest were improper or inaccurate.
The accounting for certain model home sale and leaseback agreements was not in
compliance with GAAP. GAAP does not permit a sale of real estate to be recognized if the
seller has a continuing involvement in the real estate sold. The Companys arrangement for
certain sale and leaseback transactions included various forms of continuing involvement
which prevented the Company from accounting for the transactions as sales.
Certain sale and leaseback agreements entered into by the former Chief Accounting
Officer were not properly documented and considered in the evaluation of the accounting for
the transaction.
Certain home closings in California were not reflected in the Companys accounting
records in the proper accounting periods.
An Awareness Campaign was launched in May 2008 in order to introduce all employees to
the new Ethics Hotline process and to encourage reporting of all concerns.
We have designed and/or clarified and implemented several accounting policies related to
estimates involving significant management judgments. We are continuing to design and/or
clarify and implement additional policies related to other financial reporting areas to
ensure that we have the appropriate review and approval, defining minimum documentation
requirements, establishing objective guidelines to minimize the degree of judgment in the
determination of certain accruals, enforcing consistent reporting practices, and enabling
effective account reconciliation, trend analyses, and exception reporting capabilities.
We launched a comprehensive training program in April 2008 that emphasizes adherence to
and the vital importance of the Companys Code of Business Conduct and Ethics. Every
employee in the Company is required to participate in the training program which was
developed by an outside company that specializes in ethics and other employee training
programs.
Table of Contents
The Chief Accounting Officer and Regional CFOs are taking, or
plan to take in the near term, the following additional
actions:
Conducting reviews of accounting processes to
incorporate technology improvements to
strengthen the design and operation of
controls;
Formalizing the process, analytics, and
documentation around the monthly analysis of
actual results against budgets and forecasts
conducted within the accounting and finance
departments;
Improving quality control reviews within the
accounting function to ensure account
analyses and reconciliations are completed
accurately, timely, and with proper
management review;
Formalizing and expanding the documentation
of the Companys procedures for review and
oversight of financial reporting.
We are continuing to develop and/or clarify existing
accounting policies related to estimates involving
significant management judgments, as well as other financial
reporting areas. The new policies will focus on ensuring
appropriate review and approval, defining minimum
documentation requirements, establishing objective guidelines
to minimize the degree of judgment in the determination of
certain accruals, enforcing consistent reporting practices,
and enabling effective account reconciliation, trend
analyses, and exception reporting capabilities.
Judgments in decision-making can be faulty, and control and process
breakdowns can occur because of simple errors or mistakes.
Controls can be circumvented by individuals, acting alone or in
collusion with each other, or by management override.
The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals
under all potential future conditions.
Over time, controls may become inadequate because of changes in
conditions or deterioration in the degree of compliance with
associated policies or procedures.
The design of a control system must reflect the fact that resources
are constrained, and the benefits of controls must be considered
relative to their costs.
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56
57
58
59
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An additional putative class action was filed on April 8, 2008 in the United States District Court
for the Middle District of North Carolina, Salisbury Division, against Beazer Homes, U.S.A., Inc.,
Beazer Homes Corp. and Beazer Mortgage Corporation. The
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Third Amendment, dated as of August 7, 2008, to and
under the Credit Agreement, dated as of July 25, 2007, among the Company,
the lenders thereto and Wachovia Bank, National Association, as Agent
Amended and Restated 1999 Stock Incentive Plan (as
amended through August 5, 2008)
Certification pursuant to 17 CFR 240.13a-14
promulgated under Section 302 of the Sarbanes-Oxley Act of 2002
Certification pursuant to 17 CFR 240.13a-14
promulgated under Section 302 of the Sarbanes-Oxley Act of 2002
Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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60
Beazer Homes USA, Inc.
Date: August 8, 2008
By:
/s/ Allan P. Merrill
Name:
Allan P. Merrill
Executive Vice President and
Chief Financial Officer
- 1 -
Minimum Consolidated | ||
Consolidated Tangible Net Worth | Tangible Net Worth Level | |
Greater than or equal to $350,000,000
|
Level I | |
Less than $350,000,000 but greater
than $250,000,000
|
Level II | |
Less than $250,000,000 but greater
than $100,000,000
|
Level III |
- 2 -
Minimum Consolidated Tangible Net Worth Level | Aggregate Commitment Amount | |
Level I
|
$400,000,000 | |
Level II
|
$250,000,000 | |
Level III
|
$100,000,000 |
- 3 -
- 4 -
- 5 -
- 6 -
Minimum Consolidated Tangible Net Worth Level | Applicable Eurodollar Margin | |
Level I
|
4.50% | |
Level II
|
5.00% | |
Level III
|
5.50% |
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
- 12 -
- 13 -
- 14 -
- 15 -
- 16 -
- 17 -
- 18 -
BORROWER: |
BEAZER HOMES USA, INC.,
a Delaware corporation |
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President |
WACHOVIA BANK, NATIONAL ASSOCIATION
,
as Agent and as a Lender |
||||
By: | ||||
Name: | ||||
Title: | ||||
CITIBANK, N.A.
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
BNP PARIBAS
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: | ||||
THE ROYAL BANK OF SCOTLAND
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
GUARANTY BANK
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
REGIONS FINANCIAL CORPORATION
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
JPMORGAN CHASE BANK, N.A.
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
CITY NATIONAL BANK
, a national banking
association, as a Lender |
||||
By: | ||||
Name: | ||||
Title: | ||||
PNC BANK, N.A.
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
UBS LOAN FINANCE, LLC,
as a Lender
|
||||
By: | ||||
Name: | ||||
Title: | ||||
COMERICA BANK
, as a Lender
|
||||
By: | ||||
Name: | ||||
Title: |
- 22 -
GUARANTORS : |
APRIL CORPORATION
|
|
BEAZER ALLIED COMPANIES HOLDINGS, INC.
|
||
BEAZER GENERAL SERVICES, INC.
|
||
BEAZER HOMES CORP.
|
||
BEAZER HOMES HOLDINGS CORP.
|
||
BEAZER HOMES INDIANA HOLDINGS CORP.
|
||
BEAZER HOMES SALES, INC.
|
||
BEAZER HOMES TEXAS HOLDINGS, INC.
|
||
BEAZER REALTY, INC.
|
||
BEAZER REALTY CORP.
|
||
BEAZER REALTY LOS ANGELES, INC.
|
||
BEAZER REALTY SACRAMENTO, INC.
|
||
BEAZER/SQUIRES REALTY, INC.
|
||
HOMEBUILDERS TITLE SERVICES, INC.
|
||
HOMEBUILDERS TITLE SERVICES OF VIRGINIA, INC.
|
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
BEAZER MORTGAGE CORPORATION
|
By: | ||||
Name: | Mike Furlow | |||
Title: | Executive Vice President | |||
ARDEN PARK VENTURES, LLC
|
||
BEAZER CLARKSBURG, LLC
|
||
BEAZER COMMERCIAL HOLDINGS, LLC
|
||
BEAZER HOMES INVESTMENTS, LLC
|
||
BEAZER HOMES MICHIGAN, LLC
|
||
DOVE BARRINGTON DEVELOPMENT LLC
|
By: BEAZER HOMES CORP., its Managing Member
|
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
BEAZER SPE, LLC
|
By: BEAZER HOMES HOLDINGS CORP.,
its Member |
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
BEAZER HOMES INDIANA, LLP
|
||
BEAZER REALTY SERVICES, LLC
|
||
PARAGON TITLE, LLC
|
||
TRINITY HOMES, LLC
|
By: BEAZER HOMES INVESTMENTS, LLC,
its Managing Member or Managing Partner |
By: BEAZER HOMES CORP.,
its Managing Member |
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
BEAZER HOMES TEXAS, L.P.
TEXAS LONE STAR TITLE, L.P. |
By: BEAZER HOMES TEXAS HOLDINGS, INC.,
its General Partner
|
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
BH BUILDING PRODUCTS, LP
|
By: BH PROCUREMENT SERVICES, LLC,
its General Partner |
||
|
||
By: BEAZER HOMES TEXAS, L.P.,
its Managing Member |
||
|
||
By: BEAZER HOMES TEXAS HOLDINGS, INC.,
its General Partner |
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
BH PROCUREMENT SERVICES, LLC
|
By: BEAZER HOMES TEXAS, L.P.,
its Managing Member |
By:
BEAZER HOMES TEXAS HOLDINGS, INC.,
its General Partner |
By: | ||||
Name: | Robert S. Salomon | |||
Title: | Senior Vice President | |||
A-1
A-2
A-3
A-4
A-5
A-6
A-7
A-8
A-9
A-10
A-11
1. | I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants third fiscal quarter of the fiscal year ended September 30, 2008 that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Ian J. McCarthy
|
||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants third fiscal quarter of the fiscal year ended September 30, 2008 that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Allan P. Merrill
|
||
Executive Vice President and Chief Financial Officer |
Date: August 8, 2008 | /s/ Ian J. McCarthy | |||
Ian J. McCarthy | ||||
President and Chief Executive Officer | ||||
August 8, 2008 | Date:/s/ Allan P. Merrill | |||
Allan P. Merrill | ||||
Executive Vice President and Chief
Financial Officer |
||||