10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________________________ 

FORM 10-Q

_____________________________________________________________ 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2014

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-12822

_____________________________________________________________ 

BEAZER HOMES USA, INC.

(Exact name of registrant as specified in its charter)

 _____________________________________________________________ 

DELAWARE	58-2086934
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer Identification no.)

1000 Abernathy Road, Suite 260, Atlanta, Georgia	30328
(Address of principal executive offices)	(Zip Code)

(770) 829-3700

(Registrant’s telephone number, including area code)

 _____________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    YES  x    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check One):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

Class	Outstanding at April 30, 2014
Common Stock, $0.001 par value	26,721,886

References to “we,” “us,” “our,” “Beazer”, “Beazer Homes” and the “Company” in this quarterly report on Form 10-Q refer to Beazer Homes USA, Inc.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this quarterly report will not be achieved. These forward-looking statements can generally be identified by the use of statements that include words such as “estimate,” “project,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “goal,” “target” or other similar words or phrases. All forward-looking statements are based upon information available to us on the date of this quarterly report.

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things, the matters discussed in this quarterly report in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional information about factors that could lead to material changes in performance is contained in Part I, Item 1A— Risk Factors of our Annual Report on Form 10-K for the fiscal year ended September 30, 2013. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the operations, performance, development and results of our business, but instead are the risks that we currently perceive as potentially being material. Such factors may include:

• the availability and cost of land and the risks associated with the future value of our inventory such as additional asset impairment charges or writedowns;

• economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decreases in the price of new homes and resale homes in the market;

• the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions;

• 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;

• shortages of or increased prices for labor, land or raw materials used in housing production;

• our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any downgrades of our credit ratings or reductions in our tangible net worth or liquidity levels;

• our ability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing;

• a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing, a change in tax laws regarding the deductibility of mortgage interest, or an increased number of foreclosures;

• increased competition or delays in reacting to changing consumer preference in home design;

• factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure;

• estimates related to the potential recoverability of our deferred tax assets;

• 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;

• the results of litigation or government proceedings and fulfillment of the obligations in the Deferred Prosecution Agreement and consent orders with governmental authorities and other settlement agreements;

• the impact of construction defect and home warranty claims;

• the cost and availability of insurance and surety bonds;

• the performance of our unconsolidated entities and our unconsolidated entity partners;

• delays in land development or home construction resulting from adverse weather conditions;

• the impact of information technology failures or data security breaches;

• 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.

Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all such factors.

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BEAZER HOMES USA, INC.

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Unaudited Condensed Consolidated Balance Sheets, March 31, 2014 and September 30, 2013	4
Unaudited Condensed Consolidated Statements of Operations, Three and Six Months Ended March 31, 2014 and 2013	5
Unaudited Condensed Consolidated Statements of Cash Flows, Six Months Ended March 31, 2014 and 2013	6
Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3. Quantitative and Qualitative Disclosures about Market Risk	37
Item 4. Controls and Procedures	37
PART II. FINANCIAL INFORMATION	38
Item 1. Legal Proceedings	38
Item 6. Exhibits	39
SIGNATURES	39

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BEAZER HOMES USA, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	March 31, 2014			September 30, 2013
ASSETS
Cash and cash equivalents	$	299,620		$	504,459
Restricted cash	50,765			48,978
Accounts receivable (net of allowance of $1,278 and $1,651, respectively)	28,911			22,342
Income tax receivable	2,813			2,813
Inventory
Owned inventory	1,480,360			1,304,694
Land not owned under option agreements	7,751			9,124
Total inventory	1,488,111			1,313,818
Investments in unconsolidated entities	36,547			44,997
Deferred tax assets, net	5,407			5,253
Property, plant and equipment, net	18,142			17,000
Other assets	21,068			27,129
Total assets	$	1,951,384		$	1,986,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	71,891		$	83,800
Other liabilities	133,675			145,623
Obligations related to land not owned under option agreements	3,147			4,633
Total debt (net of discounts of $4,780 and $5,160 respectively)	1,511,873			1,512,183
Total liabilities	1,720,586			1,746,239
Stockholders’ equity:
Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued)	—			—
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 26,721,886 and 25,245,945 issued and outstanding, respectively)	27			25
Paid-in capital	849,520			846,165
Accumulated deficit	(618,749		)	(605,640		)
Total stockholders’ equity	230,798			240,550
Total liabilities and stockholders’ equity	$	1,951,384		$	1,986,789

See Notes to Unaudited Condensed Consolidated Financial Statements.

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BEAZER HOMES USA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2014			2013			2014			2013
Total revenue	$	270,021		$	287,902		$	563,191		$	534,804
Home construction and land sales expenses	216,969			241,992			455,438			452,606
Inventory impairments and option contract abandonments	880			2,025			911			2,229
Gross profit	52,172			43,885			106,842			79,969
Commissions	11,096			11,686			22,917			22,328
General and administrative expenses	32,628			28,795			61,038			55,123
Depreciation and amortization	2,831			3,093			5,738			5,808
Operating income (loss)	5,617			311			17,149			(3,290		)
Equity in (loss) income of unconsolidated entities	(17		)	68			302			104
Loss on extinguishment of debt	(153		)	(3,638		)	(153		)	(3,638		)
Other expense, net	(13,727		)	(16,195		)	(29,484		)	(31,822		)
Loss from continuing operations before income taxes	(8,280		)	(19,454		)	(12,186		)	(38,646		)
Benefit from income taxes	(56		)	(343		)	(14		)	(596		)
Loss from continuing operations	(8,224		)	(19,111		)	(12,172		)	(38,050		)
Income (loss) from discontinued operations, net of tax	253			(529		)	(937		)	(1,978		)
Net loss	$	(7,971	)	$	(19,640	)	$	(13,109	)	$	(40,028	)
Weighted average number of shares:
Basic and Diluted	25,320			24,654			25,163			24,472
Basic and Diluted (loss) income per share:
Continuing Operations	$	(0.32	)	$	(0.78	)	$	(0.48	)	$	(1.55	)
Discontinued Operations	$	0.01		$	(0.02	)	$	(0.04	)	$	(0.09	)
Total	$	(0.31	)	$	(0.80	)	$	(0.52	)	$	(1.64	)

See Notes to Unaudited Condensed Consolidated Financial Statements.

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BEAZER HOMES USA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Six Months Ended
	March 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(13,109	)	$	(40,028	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,738			5,808
Stock-based compensation expense	1,266			1,638
Inventory impairments and option contract abandonments	911			2,246
Deferred and other income tax benefit	(79		)	(577		)
Changes in allowance for doubtful accounts	(373		)	(184		)
Equity in income of unconsolidated entities	(302		)	(104		)
Cash distributions of income from unconsolidated entities	512			336
Loss on extinguishment of debt	153			1,517
Changes in operating assets and liabilities:
Increase in accounts receivable	(6,196		)	(287		)
Decrease in income tax receivable	—			3,859
Increase in inventory	(156,876		)	(40,407		)
Decrease in other assets	3,488			2,823
Decrease in trade accounts payable	(11,909		)	(7,033		)
Decrease in other liabilities	(11,037		)	(6,050		)
Other changes	(239		)	107
Net cash used in operating activities	(188,052		)	(76,336		)
Cash flows from investing activities:
Capital expenditures	(6,641		)	(3,869		)
Investments in unconsolidated entities	(3,193		)	(400		)
Return of capital from unconsolidated entities	—			432
Increases in restricted cash	(2,588		)	(1,044		)
Decreases in restricted cash	801			7,562
Net cash (used in) provided by investing activities	(11,621		)	2,681
Cash flows from financing activities:
Repayment of debt	(4,747		)	(183,319		)
Proceeds from issuance of new debt	—			200,000
Debt issuance costs	(26		)	(4,635		)
Settlement of unconsolidated entity debt obligation	—			(500		)
Payments for other financing activities	(393		)	(26		)
Net cash (used in) provided by financing activities	(5,166		)	11,520
Decrease in cash and cash equivalents	(204,839		)	(62,135		)
Cash and cash equivalents at beginning of period	504,459			487,795
Cash and cash equivalents at end of period	$	299,620		$	425,660

See Notes to Unaudited Condensed Consolidated Financial Statements.

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BEAZER HOMES USA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Beazer Homes USA, Inc. (Beazer Homes, Beazer or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Such financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. In our opinion, all adjustments (consisting primarily of normal recurring accruals) necessary for a fair presentation have been included in the accompanying financial statements. The results of our consolidated operations presented herein for the three and six months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operations and other items. For further information and a discussion of our significant accounting policies other than as discussed below, refer to our audited consolidated financial statements appearing in Beazer Homes’ Annual Report on Form 10-K for the fiscal year ended September 30, 2013 (the 2013 Annual Report).

Over the past few years, we have discontinued homebuilding operations in certain of our markets. Results from our title services business and our exit markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 14 for further discussion of our Discontinued Operations). Our net loss is equivalent to our comprehensive loss so we have not presented a separate statement of comprehensive loss. We evaluated events that occurred after the balance sheet date but before the financial statements were issued or were available to be issued for accounting treatment and disclosure.

Inventory Valuation. We assess our inventory assets no less than quarterly for recoverability in accordance with the policies as described in Notes 1 and 4 to the consolidated financial statements in our 2013 Annual Report. Our homebuilding inventories that are accounted for as held for development include land and home construction assets grouped together as communities. Homebuilding inventories held for development are stated at cost (including direct construction costs, capitalized indirect costs, capitalized interest and real estate taxes) unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. For those communities for which construction and development activities are expected to occur in the future or have been idled (land held for future development), all applicable interest and real estate taxes are expensed as incurred and the inventory is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. We record assets held for sale at the lower of the carrying value or fair value less costs to sell.

Other Liabilities. Otherliabilities include the following:

(In thousands)	March 31, 2014		September 30, 2013
Income tax liabilities	$	20,358	$	20,170
Accrued warranty expenses	12,561		11,663
Accrued interest	33,907		33,372
Accrued and deferred compensation	14,102		25,579
Customer deposits	13,847		11,408
Other	38,900		43,431
Total	$	133,675	$	145,623

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(2) Supplemental Cash Flow Information

	Six Months Ended
	March 31,
(In thousands)	2014			2013
Supplemental disclosure of non-cash activity:
Decrease in obligations related to land not owned under option agreements	$	(1,486	)	$	(1,501	)
Decrease in debt related to conversion of Mandatory Convertible Subordinated Notes and Tangible Equity Units for common stock	(2,376		)	(9,402		)
Non-cash land acquisitions	16,833			—
Supplemental disclosure of cash activity:
Interest payments	60,396			48,944
Income tax payments	91			121
Tax refunds received	—			3,925

(3) Investments in Unconsolidated Entities

As of March 31, 2014, we participated in certain land development joint ventures and other unconsolidated entities in which Beazer Homes had less than a controlling interest. The following table presents our investment in our unconsolidated entities, the total equity and outstanding borrowings of these unconsolidated entities, and our guarantees of these borrowings, as of March 31, 2014 and September 30, 2013:

(In thousands)	March 31, 2014		September 30, 2013
Beazer’s investment in unconsolidated entities	$	36,547	$	44,997
Total equity of unconsolidated entities	387,572		385,040
Total outstanding borrowings of unconsolidated entities	111,624		85,938

For the three and six months ended March 31, 2014 and 2013, our income from unconsolidated entity activities and the overall equity in income of unconsolidated entities is as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
(In thousands)	2014			2013		2014		2013
Continuing operations:
(Loss) income from unconsolidated entity activity	$	(17	)	$	68	$	302	$	104
Equity in (loss) income of unconsolidated entities - continuing operations	$	(17	)	$	68	$	302	$	104

South Edge/Inspirada

During the quarter ended March 31, 2014, we received land in exchange for our investment in Inspirada and paid $1.0 million to the joint venture related to infrastructure and development costs.We continue to have an obligation for our portion of future infrastructure and other development costs which are estimated at approximately $5.7 million.

Pre-Owned Rental Homes

Effective May 3, 2012, we contributed $0.3 million in cash and our Pre-Owned Homes business at cost, including 190 homes in Arizona and Nevada, of which 187 were leased, for an initial 23.5% equity method investment in an unconsolidated real estate investment trust (the REIT). The Company also received grants of restricted units in the REIT, of which a portion vested during the year ended September 30, 2012. As of March 31, 2014, we held a 15.0% investment in the REIT.

Periodically we provide services including treasury operations, cash management, accounting and financial reporting support, legal services, human resources support, environmental and safety services, and tax support to the REIT on an as needed basis.

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Guarantees

Historically, Beazer and our land development joint venture partners provide varying levels of guarantees of debt and other debt-related obligations for these unconsolidated entities. As of March 31, 2014 and September 30, 2013, we had no outstanding guarantees or other debt-related obligations related to our unconsolidated entities.

During the fiscal year ended September 30, 2013, we entered into a settlement agreement related to one repayment guarantee, paid $0.5 million to settle our liability and recognized the remaining $0.2 million as other income.

We and our joint venture partners generally provide unsecured environmental indemnities to land development joint venture project lenders. In each case, we have performed due diligence on potential environmental risks. These indemnities obligate us to reimburse the project lenders for claims related to environmental matters for which they are held responsible. During the three and six months ended March 31, 2014 and 2013, we were not required to make any payments related to environmental indemnities.

In assessing the need to record a liability for the contingent aspect of these guarantees, we consider our historical experience in being required to perform under the guarantees, the fair value of the collateral underlying these guarantees and the financial condition of the applicable unconsolidated entities. In addition, we monitor the fair value of the collateral of these unconsolidated entities to ensure that the related borrowings do not exceed the specified percentage of the value of the property securing the borrowings. We have not recorded a liability for the contingent aspects of any guarantees that we determined were reasonably possible but not probable.

(4) Inventory

(In thousands)	March 31, 2014		September 30, 2013
Homes under construction	$	319,758	$	262,476
Development projects in progress	681,665		578,453
Land held for future development	306,119		341,986
Land held for sale	57,537		31,331
Capitalized interest	72,256		52,562
Model homes	43,025		37,886
Total owned inventory	$	1,480,360	$	1,304,694

Homes under construction includes homes substantially finished and ready for delivery and homes in various stages of construction. We had 116 ($31.0 million) and 113 ($30.7 million) substantially completed homes that were not subject to a sales contract (spec homes at March 31, 2014 and September 30, 2013, respectively. Development projects in progress consist principally of land and land improvement costs. Certain of the fully developed lots in this category are reserved by a deposit or sales contract. Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable interest and real estate taxes on land held for future development are expensed as incurred. During the current quarter, we began development on a large project in California that was previously included in land held for future development. Land held for sale in Unallocated and Other as of March 31, 2014 includes land held for sale in the markets we have decided to exit including Charlotte, North Carolina and Detroit, Michigan. Total owned inventory, by reportable segment, is set forth in the table below:

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(In thousands)	Projects in Progress		Held for Future Development		Land Held for Sale		Total Owned Inventory
March 31, 2014
West Segment	$	411,823	$	262,399	$	14,470	$	688,692
East Segment	359,553		25,496		30,453		415,502
Southeast Segment	236,496		18,224		10,319		265,039
Unallocated and Other	108,832		—		2,295		111,127
Total	$	1,116,704	$	306,119	$	57,537	$	1,480,360
September 30, 2013
West Segment	$	339,319	$	292,875	$	16,572	$	648,766
East Segment	331,894		25,491		3,833		361,218
Southeast Segment	178,624		23,620		8,208		210,452
Unallocated and Other	81,540		—		2,718		84,258
Total	$	931,377	$	341,986	$	31,331	$	1,304,694

Inventory Impairments. When conducting our community level review for the recoverability of our homebuilding inventories held for development, we establish a quarterly “watch list” of communities with more than 10 homes remaining to sell that carry profit margins in backlog and in our forecast that are below a minimum threshold of profitability. Assets on the quarterly watch list are subject to substantial additional financial and operational analyses and review that consider the competitive environment and other factors contributing to profit margins below our threshold. For communities where the current competitive and market dynamics indicate that these factors may be other than temporary, which may call into question the recoverability of our investment, a formal impairment analysis is performed. The formal impairment analysis consists of both qualitative competitive market analyses and a quantitative analysis reflecting market and asset specific information.

As of March 31, 2014, four communities were on our quarterly watch list. As of March 31, 2013, one community was on our quarterly watch list. However, after additional financial and operational review, we determined that the factors contributing to profit margins below our threshold for a number of these communities were temporary in nature and therefore those communities were not subjected to further analysis.

($ in thousands)		Undiscounted Cash Flow Analyses Prepared
Segment	# of Communities on Watch List	# of Communities	Pre-analysis Book Value (BV)		Aggregate Undiscounted Cash Flow as a % of BV
Quarter Ended March 31, 2014
West	1	—	$	—	n/a
East	1	—	—		n/a
Southeast	2	1	7,478		107.9	%
Unallocated	—	—	—		n/a
Total	4	1	$	7,478	107.9	%
Quarter Ended March 31, 2013
West	—	—	$	—	n/a
East	1	—	—		n/a
Southeast	—	—	—		n/a
Unallocated	—	—	—		n/a
Total	1	—	$	—	n/a

There were no impairments recorded during the three and six months ended March 31, 2014 or 2013 related to our discounted cash flow analyses. The impairments on development projects and homes in process below for the six months ended March 31, 2013 related to homes sold and in backlog with net contribution margins below a minimum threshold of profitability in communities that were not otherwise impaired through our discounted cash flow analysis.

Our assumptions about future home sales prices and absorption rates require significant judgment because the residential home building industry is cyclical and is highly sensitive to changes in economic conditions. Market deterioration that exceeds our

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estimates may lead us to incur impairment charges on previously impaired homebuilding assets in addition to homebuilding assets not currently impaired but for which indicators of impairment may arise if markets deteriorate.

The impairments on land held for sale generally represent further write downs of these properties to net realizable value, less estimated costs to sell and are based on current market conditions and our review of recent comparable transactions at the applicable period end. Our assumptions about land sales prices require significant judgment because the current market is highly sensitive to changes in economic conditions. We calculated the estimated fair values of land held for sale based on current market conditions and assumptions made by management, which may differ materially from actual results and may result in additional impairments if market conditions deteriorate.

Also, we have determined the proper course of action with respect to a number of communities within each homebuilding segment was to not exercise certain options and to write-off the deposits securing the option takedowns and pre-acquisition costs, as applicable. In determining whether to abandon a lot option contract, we evaluate the lot option primarily based upon the expected cash flows from the property that is the subject of the option. If we intend to abandon or walk-away from a lot option contract, we record a charge to earnings in the period such decision is made for the deposit amount and any related capitalized costs associated with the lot option contract. Abandonment charges relate to our decision to abandon or not exercise certain option contracts that are not projected to produce adequate results or no longer fit in our long-term strategic plan.

The following table sets forth, by reportable homebuilding segment, the inventory impairments and lot option abandonment charges recorded for the three and six months ended March 31, 2014 and 2013, as applicable:

	Three Months Ended March 31,					Six Months Ended March 31,
(In thousands)	2014		2013			2014		2013
Development projects and homes in process (Held for Development)
West	$	—	$	—		$	—	$	46
East	—		—			—		13
Southeast	—		—			—		—
Unallocated	—		—			—		—
Subtotal	$	—	$	—		$	—	$	59
Land Held for Sale
West	$	—	$	—		$	—	$	—
East	—		—			31		—
Southeast	28		1,778			28		1,778
Subtotal	$	28	$	1,778		$	59	$	1,778
Lot Option Abandonments
West	$	—	$	30		$	—	$	104
East	—		(2		)	—		20
Southeast	852		219			852		268
Unallocated	—		—			—		—
Subtotal	$	852	$	247		$	852	$	392
Continuing Operations	$	880	$	2,025		$	911	$	2,229
Discontinued Operations
Held for Development	$	—	$	—		$	—	$	—
Land Held for Sale	—		—			—		17
Lot Option Abandonments	—		—			—		—
Subtotal	$	—	$	—		$	—	$	17
Total Company	$	880	$	2,025		$	911	$	2,246

Lot Option Agreements and Variable Interest Entities (VIEs). As previously discussed, we also have access to land inventory through lot option contracts, which generally enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. A majority of our lot option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land for the right to acquire lots during a specified period of time at a certain price. Under lot option contracts, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers. Our liability under option contracts is generally limited to forfeiture

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of the non-refundable deposits, letters of credit and other non-refundable amounts incurred. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining option contracts. Various factors, some of which are beyond our control, such as market conditions, weather conditions and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised.

For the VIEs in which we are the primary beneficiary, we have consolidated the VIE and reflected such assets and liabilities as land not owned under option agreements in our balance sheets. For VIEs we were required to consolidate, we recorded the remaining contractual purchase price under the applicable lot option agreement to land not owned under option agreements with an offsetting increase to obligations related to land not owned under option agreements. Also, to reflect the purchase price of this inventory consolidated, we present the related option deposits as land not owned under option agreement in the accompanying unaudited condensed consolidated balance sheets. Consolidation of these VIEs has no impact on the Company’s results of operations or cash flows.

The following provides a summary of our interests in lot option agreements as of March 31, 2014 and September 30, 2013:

(In thousands)	Deposits & Non-refundable Preacquisition Costs Incurred		Remaining Obligation		Land Not Owned Under Option Agreements
As of March 31, 2014
Consolidated VIEs	$	4,604	$	3,147	$	7,751
Unconsolidated lot option agreements	42,463		375,348		—
Total lot option agreements	$	47,067	$	378,495	$	7,751
As of September 30, 2013
Consolidated VIEs	$	4,491	$	4,633	$	9,124
Unconsolidated lot option agreements	32,822		284,005		—
Total lot option agreements	$	37,313	$	288,638	$	9,124

(5) Interest

Our ability to capitalize all interest incurred during the three and six months ended March 31, 2014 and 2013 has been limited by our inventory eligible for capitalization. The following table sets forth certain information regarding interest:

	Three Months Ended March 31,						Six Months Ended March 31,
(In thousands)	2014			2013			2014			2013
Capitalized interest in inventory, beginning of period	$	61,836		$	41,922		$	52,562		$	38,190
Interest incurred	32,458			29,177			64,899			57,595
Interest expense not qualified for capitalization and included as other expense	(14,659		)	(16,246		)	(30,691		)	(32,457		)
Capitalized interest amortized to house construction and land sales expenses	(7,379		)	(9,352		)	(14,514		)	(17,827		)
Capitalized interest in inventory, end of period	$	72,256		$	45,501		$	72,256		$	45,501

(6) Earnings Per Share

In computing diluted loss per share for the three and six months ended March 31, 2014 and 2013, all common stock equivalents were excluded from the computation of diluted loss per share as a result of their anti-dilutive effect. For the quarter ended March 31, 2014, these excluded common stock equivalents included options/stock-settled appreciation rights (SSARs) to purchase 0.7 million shares of common stock, 0.3 million shares of nonvested restricted stock and 5.2 million shares issuable upon the conversion of our Tangible Equity Unit (TEU) prepaid stock purchase contracts (PSPs).

In March 2014, the Company entered into an agreement to issue 1,368,108 shares, or 1.5372 shares per TEU, of common stock, par value $0.001, in exchange for 890,000 TEUs. Each outstanding TEU consisted of a prepaid stock purchase contract and a 7.5% senior amortizing note which was due July 15, 2015. At maturity, holders of the prepaid stock purchase contracts would have automatically received a minimum of 1.40746 shares per contract, up to a maximum of 1.72414 shares per contract, depending on the Company's common stock at such time. In lieu of paying the present value of the remaining principal and interest payments

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due to the holders in cash, the TEU exchange provided 115,433 shares over the 1,252,675 shares that would have been received at maturity, assuming the Company’s stock price remains above $17.75 per share.

As of March 31, 2014, there were approximately 3.7 million TEUs outstanding (including $9.9 million of amortizing notes). The PSPs related to the TEUs are scheduled to be settled in Beazer Homes' common stock on July 15, 2015. If on that date, our common stock price is (1) at or below $14.50 per share, the PSPs will convert to 1.72414 shares per unit, (2) at or above $17.75 per share, the PSPs will convert to 1.40746 shares per unit or (3) between $14.50 and $17.75 per share, the PSPs will convert to a number of shares of our common stock equal to $25.00 divided by the applicable market value of our common stock. If the remaining TEU PSPs were converted at the settlement factor under their agreement based on our current stock price, we would be required to issue approximately 5.2 million shares of common stock to the instrument holders upon conversion.

(7) Borrowings

At March 31, 2014 and September 30, 2013 we had the following long-term debt, net of discounts:

(In thousands)	Maturity Date	March 31, 2014			September 30, 2013
8 1/8% Senior Notes	June 2016	172,879			172,879
6 5/8% Senior Secured Notes	April 2018	300,000			300,000
9 1/8% Senior Notes	June 2018	298,000			298,000
9 1/8% Senior Notes	May 2019	235,000			235,000
7 1/2% Senior Notes	September 2021	200,000			200,000
7 1/4% Senior Notes	February 2023	200,000			200,000
TEU Senior Amortizing Notes	August 2015	9,908			16,141
Unamortized debt discounts		(4,780		)	(5,160		)
Total Senior Notes, net		1,411,007			1,416,860
Junior subordinated notes	July 2036	54,703			53,670
Cash Secured Loan	November 2017	22,368			22,368
Other secured notes payable	Various Dates	23,795			19,285
Total debt, net		$	1,511,873		$	1,512,183

Secured Revolving Credit Facility — In September 2012, we amended and expanded our Secured Revolving Credit Facility from $22 million to $150 million. The three-year amended Secured Revolving Credit Facility provides for future working capital and letter of credit needs collateralized by substantially all of the Company's personal property (excluding cash and cash equivalents) and real property. This facility is subject to various financial, collateral-based and negative covenants with which we are required to comply. As of March 31, 2014, we were in compliance with all such covenants and had $150 million of available borrowings under the Secured Revolving Credit Facility. We have elected to cash collateralize all letters of credit; however, as of March 31, 2014, we have also pledged approximately $1 billion of inventory assets to our Secured Revolving Credit Facility to collateralize potential future borrowings or letters of credit. The Secured Revolving Credit Facility contains certain covenants, including negative covenants and financial maintenance covenants, with which we are required to comply. Subject to our option to cash collateralize our obligations under the Secured Revolving Credit Facility upon certain conditions, our obligations under the Secured Revolving Credit Facility are secured by liens on substantially all of our personal property and a significant portion of our owned real properties. There were no outstanding borrowings under the Secured Revolving Credit Facility as of March 31, 2014 or September 30, 2013.

We have entered into stand-alone, cash-secured letter of credit agreements with banks to maintain our pre-existing letters of credit and to provide for the issuance of new letters of credit. The letter of credit arrangements combined with our Secured Revolving Credit Facility provide a total letter of credit capacity of approximately $220.0 million. As of March 31, 2014 and September 30, 2013, we have letters of credit outstanding of $26.5 million and $25.2 million, respectively, which are secured by cash collateral in restricted accounts. The Company may enter into additional arrangements to provide additional letter of credit capacity.

Senior Notes — The majority of our Senior Notes are unsecured or secured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of our significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes and the Secured Revolving Credit Facility. Each guarantor subsidiary is a 100% owned subsidiary of Beazer Homes.

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The Company's Senior Notes are subject to indentures containing certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur additional indebtedness and to make certain investments. Specifically, all of our Senior Notes contain covenants that restrict our ability to incur additional indebtedness unless it is refinancing indebtedness or non-recourse indebtedness. The incurrence of refinancing indebtedness and non-recourse indebtedness, as defined in the applicable indentures, are exempted from the covenant test. As of March 31, 2014, we were not able to incur additional indebtedness, except refinancing or non-recourse indebtedness. Compliance with our Senior Note covenants does not significantly impact our operations. We were in compliance with the covenants contained in all of our Senior Notes as of March 31, 2014.

Our Senior Notes due 2016 (the 2016 Notes) contain the most restrictive covenants, including the consolidated tangible net worth covenant, which states that should consolidated tangible net worth fall below $85 million for two consecutive quarters, the Company is required to make an offer to purchase 10% of the 2016 Notes at par. If triggered and fully subscribed, this could result in our having to purchase $27.5 million of the 2016 Notes, which may be reduced by certain 2016 Note repurchases (potentially at less than par) made in the open market after the triggering date. As of March 31, 2014 our consolidated tangible net worth was $206.8 million, well in excess of the minimum covenant requirement.

Subsequent to quarter-end, in April 2014, we issued and sold $325 million aggregate principal amount of 5.75% Senior Notes due June 2019 (the June 2019 Notes) at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the June 2019 Notes is payable semi-annually in cash in arrears, beginning on December 15, 2014. The June 2019 Notes will mature on June 15, 2019. Prior to maturity, we may, at our option redeem the June 2019 Notes at any time, in whole or in part, at specified redemption prices, which also include a customary make-whole premium provision through June 15, 2017.

The proceeds from the issuance of the June 2019 Notes were used to redeem all of our outstanding Senior Notes due June 2018 (the 2018 Notes), including the applicable $17.2 million call price and make-whole premiums provided for by the 2018 Notes. We anticipate recording a loss on debt extinguishment of the 2018 Notes, of approximately $19.8 million in our fiscal third quarter ending June 30, 2014 related to the premiums paid and the write-off of unamortized debt issuance costs.

In September 2013, we issued and sold $200 million aggregate principal amount of 7.500% Senior Notes due 2021 (the 2021 Notes) at a price of 98.541% (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the 2021 Notes is payable semi-annually in cash in arrears, beginning on March 15, 2014. The 2021 Notes will mature on September 15, 2021. Prior to maturity, we may, at our option, redeem the 2021 Notes at any time, in whole or in part, at specified redemption prices, which also include a customary make-whole premium provision through September 15, 2016. In January 2014, we exchanged 100% of the 2021 Notes for notes that are freely transferable and registered under the Securities Act of 1933.

In February 2013, we issued and sold $200 million aggregate principal amount of 7.25% Senior Notes due 2023 (the 2023 Notes) at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the 2023 Notes is payable semi-annually in cash in arrears, beginning August 1, 2013. The 2023 Notes will mature on February 1, 2023. Prior to maturity, we may, at our option, redeem the 2023 Notes at any time, in whole or in part, at specified redemption prices, which also include a customary make-whole premium provision through August 1, 2018. In August 2013, we exchanged 100% of the 2023 Notes for notes that are freely transferable and registered under the Securities Act of 1933.

The 2021 and 2023 Notes rank equally in right of payment with all of our existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness and effectively subordinated to the Company's existing and future secured indebtedness, including indebtedness under our revolving credit facility and our 6.625% Senior Secured Notes due 2018, to the extent of the value of the assets securing such indebtedness. The 2021 and 2023 Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee the 2021 or 2023 Notes. The 2021 and 2023 Notes are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly-owned subsidiaries party to the Indenture.

During the fiscal year ended September 30, 2013, we used a portion of the net cash proceeds from the 2023 Notes offering to redeem all of our outstanding 6.875% Senior Notes due 2015 (the 2015 Notes). The 2015 Notes were redeemed at 101.146% of the principal amount, plus accrued and unpaid interest. During fiscal 2013, we also repurchased $2 million of our outstanding 9.125% Senior Notes due 2018 in open market transactions. These transactions resulted in a loss on debt extinguishment of $3.6 million, net of unamortized discounts and debt issuance costs recognized in the quarter ended March 31, 2013. All Senior Notes redeemed/repurchased by the Company were canceled.

Senior Notes: Tangible Equity Units — In July 2012, we issued 4.6 million7.5% TEUs (the 2012 TEUs), which were comprised of prepaid stock purchase contracts (PSPs) and senior amortizing notes. As the two components of the TEUs are legally separate and detachable, we have accounted for the two components as separate items for financial reporting purposes and valued them

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based on their relative fair value at the date of issuance. The amortizing notes are unsecured senior obligations and rank equally with all of our other unsecured indebtedness. Outstanding notes pay quarterly installments of principal and interest through maturity. The PSPs were originally accounted for as equity (additional paid in capital) at the initial fair value of these contracts based on the relative fair value method. During the quarter ended March 31, 2014, we exchanged 890,000 TEUs, including approximately $2.4 million of amortizing notes, for Beazer Homes' common stock. The PSPs related to the remaining 2012 TEUs are scheduled to be settled in Beazer Homes' common stock on July 15, 2015. See Note 6 for more information related to this exchange and the future PSP settlement.

Junior Subordinated Notes —$103.1 million of unsecured junior subordinated notes mature on July 30, 2036, are redeemable at par and pay a fixed rate of 7.987% for the first ten years ending July 30, 2016. Thereafter, the securities have a variable interest rate as defined in the junior subordinated notes agreement. The obligations relating to these notes and the related securities are subordinated to our Secured Revolving Credit Facility and Senior Notes. In January 2010, we modified the terms of $75 million of these notes and recorded these notes at their estimated fair value. Over the remaining life of the notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of March 31, 2014, the unamortized accretion was $46.1 million and will be amortized over the remaining life of the notes.

As of March 31, 2014, we were in compliance with all covenants under our Junior Notes.

Cash Secured Loans — We have two separate loan facilities, totaling $22.4 million outstanding as of March 31, 2014. Borrowing under the cash secured loan facilities will replenish cash used to repay or repurchase the Company’s debt and would be considered “refinancing indebtedness” under certain of the Company’s existing indentures and debt covenants. However, because the loans are fully collateralized by cash equal to the loan amount, the loans do not provide liquidity to the Company.

The loans mature in November 2017, however, the lenders of these facilities may put the outstanding loan balances to the Company at the two or four year anniversaries of the loans. Borrowings under the facilities are fully secured by cash held by the lender or its affiliates. This secured cash is reflected as restricted cash on our unaudited condensed consolidated balance sheet as of March 31, 2014 and September 30, 2013. The cash secured loan has an interest rate equivalent to LIBOR plus 0.4% per annum which is paid every three months following the effective date of each borrowing. During the fiscal year ended September 30, 2013, we repaid $205 million of the outstanding cash secured term loans and recognized a $1 million loss on debt extinguishment in the quarter ended September 30, 2013, primarily related to the unamortized discounts and debt issuance costs related to these loans.

Other Secured Notes Payable — We periodically acquire land through the issuance of notes payable. As of March 31, 2014 and September 30, 2013, we had outstanding notes payable of $23.8 million and $19.3 million respectively, primarily related to land acquisitions. These notes payable have varying expiration dates between 2014 and 2019 and have a weighted average fixed rate of 4.03% at March 31, 2014. These notes are secured by the real estate to which they relate.

The agreements governing these secured notes payable contain various affirmative and negative covenants. There can be no assurance that we will be able to obtain any future waivers or amendments that may become necessary without significant additional cost or at all. In each instance, however, a covenant default can be cured by repayment of the indebtedness.

(8) Income Taxes

For the three and six months ended March 31, 2014 and 2013, our non-cash tax provision/benefit from continuing operations primarily related to a change in our prior year's recognized tax benefits.

As of March 31, 2014 and September 30, 2013, we had $2.7 million and $2.6 million of accrued interest and penalties related to our unrecognized tax benefits, respectively.

In the normal course of business, we are subject to audits by federal and state tax authorities. Our federal income tax returns for fiscal years 2007 through 2010 are under Internal Revenue Service (IRS) appeal. Our federal income tax returns for fiscal years 2011 through 2012 and certain state income tax returns for various fiscal years are under routine examination. The statute of limitations for our major tax jurisdictions remains open for examination for fiscal years 2007 and subsequent years. The final outcome of these appeals and examinations are not yet determinable and therefore the change in our unrecognized tax benefits that could occur within the next 12 months cannot be estimated at this time.

Based upon an evaluation of all available evidence, we established a valuation allowance for substantially all of our deferred tax assets during fiscal 2008. As of March 31, 2014, we continued our evaluation of whether the valuation allowance against our deferred tax assets was still required. We considered positive evidence including evidence of recovery in the housing markets where we operate, the prospects of continued profitability and growth, a strong backlog and sufficient balance sheet liquidity to sustain and grow operations. Although the Company’s performance and current positioning is bringing it closer to a conclusion that a valuation allowance is no longer needed, further evidence of sustained profitability is needed to reverse our valuation

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allowance against our deferred tax assets. Therefore, based upon all available positive and negative evidence, we concluded a valuation allowance is still needed for substantially all of our gross deferred tax assets at March 31, 2014. The Company's deferred tax asset valuation allowance was $491.9 million and $487.3 million as of March 31, 2014 and September 30, 2013, respectively. In future periods, we expect to reduce all or a portion of our valuation allowance, generating a non-cash tax benefit, if sufficient positive evidence is present indicating that more likely than not a portion or all of our deferred tax assets will be realized. Changes in existing tax laws could also affect actual tax results and the valuation of deferred tax assets over time.

Further, we experienced an “ownership change” as defined in Section 382 of the Internal Revenue Code (Section 382) as of January 12, 2010. Section 382 contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss carryforwards (NOLs) and certain built-in losses or deductions recognized during the five-year period after the ownership change to offset future taxable income. Therefore, our ability to utilize our pre-ownership change net operating loss carryforwards and recognize certain built-in losses or deductions is limited by Section 382 to an estimated maximum amount of approximately $11.4 million ($4 million tax-effected) annually. Certain deferred tax assets are not subject to any limitation imposed. Due to the Section 382 limitation and the maximum carryforward period of our NOLs, we will be unable to fully recognize certain deferred tax assets. As future economic conditions unfold, we will be able to confirm that certain deferred tax assets will not provide any future tax benefit. At such time, we will accordingly remove any deferred tax asset and corresponding valuation allowance.

Accordingly, a portion of our $551.5 million of total gross deferred tax assets related to accrued losses on our inventory may be unavailable due to the limitation imposed by Section 382. As of March 31, 2014, we estimate that between $52.5 million and $88.5 million may be unavailable due to our Section 382 limitation. As a result, upon the resumption of sustained profitability and reversal of our valuation allowance, between $408.8 million and $444.8 million of our net deferred tax assets may be available to us for the reduction of future cash taxes. The actual realization of our deferred tax assets is difficult to predict and will be dependent on future events.

Considering the limitation imposed by Section 382, the table below depicts the classifications of our deferred tax assets:

(In thousands)	March 31, 2014
Deferred tax assets:
Subject to annual limitation	$	98,232
Generally not subject to annual limitation	364,833
Certain components likely to be subject to annual limitation	88,455
Total deferred tax assets	551,520
Deferred tax liabilities	(54,257		)
Net deferred tax assets before valuation allowance	497,263
Valuation allowance	(491,856		)
Net deferred tax assets	$	5,407

(9) Contingencies

Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints and other legal actions. The Company is subject to the possibility of loss contingencies arising in its business. In determining loss contingencies, we consider the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that a liability has been incurred and when the amount of loss can be reasonably estimated.

Warranty Reserves. We currently provide a limited warranty (ranging from one to two years) covering workmanship and materials per our defined performance quality standards. In addition, we provide a limited warranty (generally ranging from a minimum of five years up to the period covered by the applicable statute of repose) covering only certain defined construction defects. We also provide a defined structural element warranty with single-family homes and townhomes in certain states.

We subcontract our homebuilding work to subcontractors whose contracts generally include an indemnity obligation and a requirement that certain minimum insurance requirements be met, including providing us with a certificate of insurance prior to receiving payments for their work. Therefore, many claims relating to workmanship and materials are the primary responsibility of the subcontractors.

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Warranty reserves are included in other liabilities and the provision for warranty accruals is included in home construction and land sales expenses in the unaudited condensed consolidated financial statements. We record reserves covering anticipated warranty expense for each home closed. Management reviews the adequacy of warranty reserves each reporting period based on historical experience and management’s estimate of the costs to remediate the claims and adjusts these provisions accordingly. Our review includes a quarterly analysis of the historical data and trends in warranty expense by operating segment. An analysis by operating segment allows us to consider market specific factors such as our warranty experience, the number of home closings, the prices of homes, product mix and other data in estimating our warranty reserves. In addition, our analysis also contemplates the existence of any non-recurring or community-specific warranty related matters that might not be contemplated in our historical data and trends.

As a result of our quarterly analyses, we adjust our estimated warranty liabilities, if required. While we believe our warranty reserves are adequate as of March 31, 2014, historical data and trends may not accurately predict actual warranty costs or future developments could lead to a significant change in the reserve. Our warranty reserves are as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Balance at beginning of period	$	11,911		$	14,342		$	11,663		$	15,477
Accruals for warranties issued	1,047			1,302			2,170			2,730
Changes in liability related to warranties existing in prior periods	1,480			(437		)	3,223			(1,739		)
Payments made	(1,877		)	(1,606		)	(4,495		)	(2,867		)
Balance at end of period	$	12,561		$	13,601		$	12,561		$	13,601

Litigation

As disclosed in prior SEC filings, we operated Beazer Mortgage Corporation (BMC) from 1998 through February 2008 to offer mortgage financing to buyers of our homes. BMC entered into various agreements with mortgage investors, pursuant to which BMC originated certain mortgage loans and ultimately sold these loans to investors. In general, underwriting decisions were not made by BMC but by the investors themselves or third-party service providers. From time to time we have received claims from institutions which have acquired certain of these mortgages demanding damages or indemnity arising from BMC's activities or that we repurchase such mortgages. We have been able to resolve these claims for amounts that are not material to our consolidated financial position or results of operation. We currently have an insignificant number of such claims outstanding for which we believe we have no liability. However, we cannot rule out the potential for additional mortgage loan repurchase or indemnity claims in the future from other investors, although, at this time, we do not believe that the exposure related to any such claims would be material to our consolidated financial position or results of operations. As of March 31, 2014, no liability has been recorded for any such additional claims as such exposure is not both probable and reasonably estimable.

In the normal course of business, we are subject to various lawsuits. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in any of the pending lawsuits could result in the payment by us of substantial monetary damages which may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and the Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our business, financial condition and results of operations.

Other Matters

As disclosed in our 2009 Form 10-K, on July 1, 2009, the Company announced that it had resolved the criminal and civil investigations by the United States Attorney’s Office in the Western District of North Carolina (the U.S. Attorney) and other state and federal agencies concerning matters that were the subject of the independent investigation, initiated in April 2007 by the Audit Committee of the Board of Directors (the Investigation) and concluded in May 2008. Under the terms of a deferred prosecution agreement (DPA), the Company’s liability for each of the fiscal years after 2010 through a portion of fiscal 2014 (unless extended as previously described in our 2009 Form 10-K) will be equal to4%of the Company’s adjusted EBITDA (as defined in the DPA). The total amount of such obligations will be dependent on several factors; however, the maximum liability under the DPA and other settlement agreements discussed above will not exceed$55.0 million, of which$20.2 millionhas been paid as of March 31, 2014 and an additional $1.8 million has been recorded as a liability at March 31, 2014. Positive adjusted EBITDA in future years will require us to incur additional expense in the future.

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In 2006, we received two Administrative Orders issued by the New Jersey Department of Environmental Protection. The Orders allege certain violations of wetlands disturbance permits and assess proposed fines of$630,000 and $678,000, respectively. Although we believe that we have significant defenses to the alleged violations, we reached a settlement with the Department, through an Administrative Consent Order (the “ACO”). Pursuant to the ACO, we agreed to pay a penalty of $125,000 and donate a 35-acre parcel of land to a local soil conservation district (or make an additional $250,000 payment if the parcel cannot be conveyed). We have paid the $125,000 penalty and are in the process of completing actions that will allow us to convey the 35-acre donation parcel.

We and certain of our subsidiaries have been named as defendants in various claims, complaints and other legal actions, most relating to construction defects, moisture intrusion and product liability. Certain of the liabilities resulting from these actions are covered in whole or part by insurance. In our opinion, based on our current assessment, the ultimate resolution of these matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

We have accrued $19.4 million and $19.9 million in other liabilities related to litigation and other matters, excluding warranty, as of March 31, 2014 and September 30, 2013, respectively.

We had outstanding letters of credit and performance bonds of approximately $26.5 million and $189.3 million, respectively, at March 31, 2014 related principally to our obligations to local governments to construct roads and other improvements in various developments. We have no outstanding letters of credit relating to our land option contracts as of March 31, 2014.

(10) Fair Value Measurements

As of March 31, 2014, we had no assets or liabilities in our unaudited condensed consolidated balance sheets that were required to be measured at fair value on a recurring basis. Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recovered. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

As previously disclosed, we review our long-lived assets, including inventory, for recoverability when factors that indicate an impairment may exist, but no less than quarterly. Fair value is based on estimated cash flows discounted for market risks associated with the long-lived assets. The fair values of our investments in unconsolidated entities are determined primarily using a discounted cash flow model to value the underlying net assets of the respective entities. See Notes 1, 3 and 4 for additional information related to the fair value accounting for the assets listed above. Determining which hierarchical level an asset or liability falls within requires significant judgment. We evaluate our hierarchy disclosures each quarter.

The following table presents our assets measured at fair value on a non-recurring basis for each hierarchy level and represents only those assets whose carrying values were adjusted to fair value during the six months ended March 31, 2014 and 2013:

(In thousands)	Level 1	Level 2	Level 3		Total
Six Months Ended March 31, 2014
Land held for sale	—	—	$	4,766	$	4,766
Six Months Ended March 31, 2013
Land held for sale	—	—	$	2,013	$	2,013

The fair value of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, cash secured loan and other secured notes payable approximate their carrying amounts due to the short maturity of these assets and liabilities.

Obligations related to land not owned under option agreements approximate fair value. The carrying values and estimated fair values of other financial assets and liabilities were as follows:

(In thousands)	As of March 31, 2014				As of September 30, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	1,411,007	$	1,516,051	$	1,416,860	$	1,469,904
Junior Subordinated Notes	54,703		54,703		53,670		53,670
	$	1,465,710	$	1,570,754	$	1,470,530	$	1,523,574

The estimated fair value shown above for our publicly-held Senior Notes has been determined using quoted market rates (Level 2). Since there is no trading market for our junior subordinated notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair

18

value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

(11) Stock-based Compensation

For the three months ended March 31, 2014, our total stock-based compensation, included in general and administrative expenses (G&A), was approximately $0.7 million ($0.5 million net of tax). The fair value of each option/stock-based stock appreciation right (SSAR) grant is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of each performance-based, nonvested stock grant is estimated on the date of grant using the Monte Carlo valuation method. The cash-settled component of any awards granted to employees are accounted for as a liability award and the liability is adjusted to fair value each reporting period until vested. Non-performance based, nonvested stock is valued based on the market price of the common stock on the date of the grant.

During the six months ended March 31, 2014 and 2013, employees surrendered 21,772 and 1,306 shares, respectively, to us in payment of minimum tax obligations upon the vesting of stock awards under our stock incentive plans. We valued the stock at the market price on the date of surrender, for an aggregate value of approximately $414,000 and $19,000 for the six months ended March 31, 2014 and 2013, respectively.

Stock Options: We used the following weighted-average assumptions for our options granted during the six months ended March 31, 2014:

Expected life of options	5.1 years
Expected volatility	45.99		%
Expected discrete dividends	—
Weighted average risk-free interest rate	1.42		%
Weighted average fair value	$	7.97

We considered the historic returns of our stock and the implied volatility of our publicly-traded options in determining expected volatility. We assumed no dividends would be paid since our Board of Directors has suspended payment of dividends indefinitely and payment of dividends is restricted under our Senior Note covenants. The risk-free interest rate is based on the term structure of interest rates at the time of the option grant and we have relied upon a combination of the observed exercise behavior of our prior grants with similar characteristics, the vesting schedule of the current grants, and an index of peer companies with similar grant characteristics to determine the expected life of the options.

The intrinsic value of a stock option/SSAR is the amount by which the market value of the underlying stock exceeds the exercise price of the option/SSAR. At March 31, 2014, our SSAR/stock options outstanding had an intrinsic value of $2.2 million. The intrinsic value of SSARs/stock options vested and expected to vest in the future was $2.2 million. The SSARS/stock options vested and expected to vest in the future had a weighted average expected life of 2.8 years. The aggregate intrinsic value of exercisable SSARs/stock options as of March 31, 2014 was $1.0 million.

The following table summarizes stock options and SSARs outstanding as of March 31, 2014, as well as activity during the three and six months then ended:

	Three Months Ended				Six Months Ended
	March 31, 2014				March 31, 2014
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of period	721,127		$	29.92	560,784		$	33.01
Granted	—		—		161,010		19.11
Exercised	(1,182	)	16.64		(1,288	)	16.16
Expired	(2,870	)	176.31		(2,870	)	176.31
Forfeited	(5,206	)	22.60		(5,767	)	22.23
Outstanding at end of period	711,869		$	29.41	711,869		$	29.41
Exercisable at end of period	408,929		$	39.19	408,929		$	39.19
Vested or expected to vest in the future	706,895		$	29.49	706,895		$	29.49

19

Nonvested Stock Awards: Compensation cost arising from nonvested stock awards granted to employees is recognized as an expense using the straight-line method over the vesting period. As of March 31, 2014 and September 30, 2013, there was $2.2 million and $1.0 million, respectively, of total unrecognized compensation cost related to nonvested stock awards included in paid-in capital. The cost remaining at March 31, 2014 is expected to be recognized over a weighted average period of 1.7 years.

During the six months ended March 31, 2014, we issued 28,690 shares of performance-based restricted stock (Performance Shares) to our executive officers and certain corporate employees. Each Performance Share represents a contingent right to receive one share of the Company’s common stock if vesting is satisfied at the end of the three-year performance period. The number of shares that will vest at the end of the three-year performance period will depend upon the level to which the following two performance criteria are achieved (1) Beazer’s total shareholder return (TSR) relative to a group of peer companies and (2) the compound annual growth rate (CAGR) during the three-year performance period of Beazer common stock. The target number of Performance Shares that vest may be increased by up to 50% based on the level of achievement of the above criteria as defined in the applicable award agreement. Payment for Performance Shares in excess of the target number (28,690) will be settled in cash. Any portion of the Performance Shares that do not vest at the end of the period will be forfeited. The grants of the performance-based, nonvested stock were valued using the Monte Carlo valuation method and had an estimated fair value of $15.90 per share, a portion of which is attributable to the potential cash-settled liability aspect of the grant which is included in Other Liabilities.

A Monte Carlo simulation model requires the following inputs: (1) expected dividend yield on the underlying stock, (2) expected price volatility of the underlying stock, (3) risk-free interest rate for the period corresponding with the expected term of the award and (4) fair value of the underlying stock. For the Company and each member of the peer group, the following inputs were used, as applicable, in the Monte Carlo simulation model to determine the fair value as of the grant date for the Performance Shares: 0% dividend yield for the Company, expected price volatility ranging from 35.0% to 59.1% and a risk-free interest rate of 0.66%. The methodology used to determine these assumptions is similar to that for the Black-Scholes Model used for stock option grants discussed above; however the expected term is determined by the model in the Monte Carlo simulation.

Activity relating to nonvested stock awards, including the Performance Shares for the three and six months ended March 31, 2014 is as follows:

	Three Months Ended				Six Months Ended
	March 31, 2014				March 31, 2014
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Beginning of period	312,855		$	13.18	280,416		$	12.32
Granted	—		—		135,567		17.53
Vested	(239	)	18.82		(102,277	)	16.64
Forfeited	(6,160	)	17.45		(7,250	)	16.45
End of period	306,456		$	13.08	306,456		$	13.08

(12) Segment Information

We have three homebuilding segments operating in 16 states. Revenues in our homebuilding segments are derived from the sale of homes which we construct and from land and lot sales. Our reportable segments have been determined on a basis that is used internally by management for evaluating segment performance and resource allocations. The reportable homebuilding segments and all other homebuilding operations, not required to be reported separately, include operations conducting business in the following states:

West: Arizona, California, Nevada and Texas

East: Delaware, Indiana, Maryland, New Jersey, New York, Pennsylvania, Tennessee (Nashville) and Virginia

Southeast: Florida, Georgia, North Carolina (Raleigh) and South Carolina

Management’s evaluation of segment performance is based on segment operating income. Operating income for our homebuilding segments is defined as homebuilding, land sale and other revenues less home construction, land development and land sales expense, commission expense, depreciation and amortization and certain general and administrative expenses which are incurred by or allocated to our homebuilding segments. The accounting policies of our segments are those described in Note 1 above and Note 1 to our consolidated financial statements in our 2013 Annual Report.

20

	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2014		2013		2014		2013
Revenue
West	$	121,886	$	118,996	$	244,462	$	229,122
East	83,366		117,129		190,955		213,668
Southeast	64,769		51,777		127,774		92,014
Total revenue	$	270,021	$	287,902	$	563,191	$	534,804

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Operating income (loss)
West	$	14,338		$	10,045		$	30,100		$	18,403
East	2,994			10,313			11,229			16,501
Southeast	4,162			2,050			9,790			4,380
Segment total	21,494			22,408			51,119			39,284
Corporate and unallocated (a)	(15,877		)	(22,097		)	(33,970		)	(42,574		)
Total operating income (loss)	$	5,617		$	311		$	17,149		$	(3,290	)

	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2014		2013		2014		2013
Depreciation and amortization
West	$	1,304	$	1,185	$	2,686	$	2,207
East	556		900		1,248		1,583
Southeast	358		339		749		657
Segment total	2,218		2,424		4,683		4,447
Corporate and unallocated (a)	613		669		1,055		1,361
Depreciation and amortization - continuing operations	$	2,831	$	3,093	$	5,738	$	5,808

	Six Months Ended
	March 31,
(In thousands)	2014		2013
Capital Expenditures
West	$	2,661	$	1,866
East	1,546		611
Southeast	1,022		482
Corporate and unallocated	1,412		910
Consolidated total	$	6,641	$	3,869

21

(In thousands)	March 31, 2014		September 30, 2013
Assets
West	$	709,167	$	680,346
East	428,398		369,937
Southeast	283,985		228,814
Corporate and unallocated (b)	529,834		707,692
Consolidated total	$	1,951,384	$	1,986,789

(a) 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.

(b) Primarily consists of cash and cash equivalents, consolidated inventory not owned, deferred taxes, capitalized interest and other items that are not allocated to the segments.

(13) Supplemental Guarantor Information

As discussed in Note 7, our obligations to pay principal, premium, if any, and interest under certain debt are guaranteed on a joint and several basis by substantially all of our subsidiaries. Certain of our immaterial subsidiaries do not guarantee our Senior Notes or our Secured Revolving Credit Facility. The guarantees are full and unconditional and the guarantor subsidiaries are 100% owned by Beazer Homes USA, Inc.

22

Beazer Homes USA, Inc.

Unaudited Consolidating Balance Sheet Information

March 31, 2014

(In thousands)

	Beazer Homes USA, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	$	302,176	$	1,699	$	1,689	$	(5,944	)	$	299,620
Restricted cash	49,733		1,032		—		—			50,765
Accounts receivable (net of allowance of $1,278)	—		28,908		3		—			28,911
Income tax receivable	2,813		—		—		—			2,813
Owned inventory	—		1,480,360		—		—			1,480,360
Consolidated inventory not owned	—		7,751		—		—			7,751
Investments in unconsolidated entities	773		35,774		—		—			36,547
Deferred tax assets, net	5,407		—		—		—			5,407
Property, plant and equipment, net	—		18,142		—		—			18,142
Investments in subsidiaries	155,251		—		—		(155,251		)	—
Intercompany	1,240,777		—		2,406		(1,243,183		)	—
Other assets	17,058		3,901		109		—			21,068
Total assets	$	1,773,988	$	1,577,567	$	4,207	$	(1,404,378	)	$	1,951,384
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	—	$	71,891	$	—	$	—		$	71,891
Other liabilities	52,706		79,966		1,003		—			133,675
Intercompany	2,406		1,246,721		—		(1,249,127		)	—
Obligations related to land not owned under option agreements	—		3,147		—		—			3,147
Total debt (net of discounts of $4,780)	1,488,078		23,795		—		—			1,511,873
Total liabilities	1,543,190		1,425,520		1,003		(1,249,127		)	1,720,586
Stockholders’ equity	230,798		152,047		3,204		(155,251		)	230,798
Total liabilities and stockholders’ equity	$	1,773,988	$	1,577,567	$	4,207	$	(1,404,378	)	$	1,951,384

23

Beazer Homes USA, Inc.

Unaudited Consolidating Balance Sheet Information

September 30, 2013

(In thousands)

	Beazer Homes USA, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	$	499,341	$	6,324	$	1,637	$	(2,843	)	$	504,459
Restricted cash	47,873		1,105		—		—			48,978
Accounts receivable (net of allowance of $1,651)	—		22,339		3		—			22,342
Income tax receivable	2,813		—		—		—			2,813
Owned inventory	—		1,304,694		—		—			1,304,694
Consolidated inventory not owned	—		9,124		—		—			9,124
Investments in unconsolidated entities	773		44,224		—		—			44,997
Deferred tax assets, net	5,253		—		—		—			5,253
Property, plant and equipment, net	—		17,000		—		—			17,000
Investments in subsidiaries	123,600		—		—		(123,600		)	—
Intercompany	1,088,949		—		2,747		(1,091,696		)	—
Other assets	19,602		7,147		380		—			27,129
Total assets	$	1,788,204	$	1,411,957	$	4,767	$	(1,218,139	)	$	1,986,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	—	$	83,800	$	—	$	—		$	83,800
Other liabilities	52,009		92,384		1,230		—			145,623
Intercompany	2,747		1,091,792		—		(1,094,539		)	—
Obligations related to land not owned under option agreements	—		4,633		—		—			4,633
Total debt (net of discounts of $5,160)	1,492,898		19,285		—		—			1,512,183
Total liabilities	1,547,654		1,291,894		1,230		(1,094,539		)	1,746,239
Stockholders’ equity	240,550		120,063		3,537		(123,600		)	240,550
Total liabilities and stockholders’ equity	$	1,788,204	$	1,411,957	$	4,767	$	(1,218,139	)	$	1,986,789

24

Beazer Homes USA, Inc.

Unaudited Consolidating Statement of Operations Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2014
Total revenue	$	—		$	270,021		$	100		$	(100	)	$	270,021
Home construction and land sales expenses	7,379			209,690			—			(100		)	216,969
Inventory impairments and option contract abandonments	—			880			—			—			880
Gross (loss) profit	(7,379		)	59,451			100			—			52,172
Commissions	—			11,096			—			—			11,096
General and administrative expenses	—			32,592			36			—			32,628
Depreciation and amortization	—			2,831			—			—			2,831
Operating (loss) income	(7,379		)	12,932			64			—			5,617
Equity in income of unconsolidated entities	—			(17		)	—			—			(17		)
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(14,659		)	933			(1		)	—			(13,727		)
(Loss) income before income taxes	(22,191		)	13,848			63			—			(8,280		)
(Benefit from) provision for income taxes	(210		)	131			23			—			(56		)
Equity in income of subsidiaries	13,757			—			—			(13,757		)	—
(Loss) income from continuing operations	(8,224		)	13,717			40			(13,757		)	(8,224		)
Income (loss) from discontinued operations	—			257			(4		)	—			253
Equity in income of subsidiaries	253			—			—			(253		)	—
Net (loss) income	$	(7,971	)	$	13,974		$	36		$	(14,010	)	$	(7,971	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2013
Total revenue	$	—		$	287,902		$	173		$	(173	)	$	287,902
Home construction and land sales expenses	9,352			232,813			—			(173		)	241,992
Inventory impairments and option contract abandonments	—			2,025			—			—			2,025
Gross (loss) profit	(9,352		)	53,064			173			—			43,885
Commissions	—			11,686			—			—			11,686
General and administrative expenses	—			28,762			33			—			28,795
Depreciation and amortization	—			3,093			—			—			3,093
Operating (loss) income	(9,352		)	9,523			140			—			311
Equity in income of unconsolidated entities	—			68			—			—			68
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(16,246		)	47			4			—			(16,195		)
(Loss) income before income taxes	(29,236		)	9,638			144			—			(19,454		)
(Benefit from) provision for income taxes	(583		)	193			47			—			(343		)
Equity in income of subsidiaries	9,542			—			—			(9,542		)	—
(Loss) income from continuing operations	(19,111		)	9,445			97			(9,542		)	(19,111		)
Loss from discontinued operations	—			(519		)	(10		)	—			(529		)
Equity in loss of subsidiaries	(529		)	—			—			529			—
Net (loss) income	$	(19,640	)	$	8,926		$	87		$	(9,013	)	$	(19,640	)

25

Beazer Homes USA, Inc.

Unaudited Consolidating Statement of Operations Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2014
Total revenue	$	—		$	563,191		$	180		$	(180	)	$	563,191
Home construction and land sales expenses	14,514			441,104			—			(180		)	455,438
Inventory impairments and option contract abandonments	—			911			—			—			911
Gross (loss) profit	(14,514		)	121,176			180			—			106,842
Commissions	—			22,917			—			—			22,917
General and administrative expenses	—			60,976			62			—			61,038
Depreciation and amortization	—			5,738			—			—			5,738
Operating (loss) income	(14,514		)	31,545			118			—			17,149
Equity in income of unconsolidated entities	—			302			—			—			302
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(30,692		)	1,212			(4		)	—			(29,484		)
(Loss) income before income taxes	(45,359		)	33,059			114			—			(12,186		)
(Benefit from) provision for income taxes	(199		)	145			40			—			(14		)
Equity in income of subsidiaries	32,988			—			—			(32,988		)	—
(Loss) income from continuing operations	(12,172		)	32,914			74			(32,988		)	(12,172		)
Loss from discontinued operations	—			(930		)	(7		)	—			(937		)
Equity in loss of subsidiaries	(937		)	—			—			937			—
Net (loss) income	$	(13,109	)	$	31,984		$	67		$	(32,051	)	$	(13,109	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2013
Total revenue	$	—		$	534,804		$	390		$	(390	)	$	534,804
Home construction and land sales expenses	17,827			435,169			—			(390		)	452,606
Inventory impairments and option contract abandonments	—			2,229			—			—			2,229
Gross (loss) profit	(17,827		)	97,406			390			—			79,969
Commissions	—			22,328			—			—			22,328
General and administrative expenses	—			55,063			60			—			55,123
Depreciation and amortization	—			5,808			—			—			5,808
Operating (loss) income	(17,827		)	14,207			330			—			(3,290		)
Equity in income of unconsolidated entities	—			104			—			—			104
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(32,457		)	627			8			—			(31,822		)
(Loss) income before income taxes	(53,922		)	14,938			338			—			(38,646		)
(Benefit from) provision for income taxes	(1,014		)	281			137			—			(596		)
Equity in income of subsidiaries	14,858			—			—			(14,858		)	—
(Loss) income from continuing operations	(38,050		)	14,657			201			(14,858		)	(38,050		)
(Loss) income from discontinued operations	—			(2,010		)	32			—			(1,978		)
Equity in loss of subsidiaries	(1,978		)	—			—			1,978			—
Net (loss) income	$	(40,028	)	$	12,647		$	233		$	(12,880	)	$	(40,028	)

26

Beazer Homes USA, Inc.

Unaudited Consolidating Statements of Cash Flow Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2014
Net cash (used in) provided by operating activities	$	(45,803	)	$	(142,360	)	$	111		$	—		$	(188,052	)
Cash flows from investing activities:
Capital expenditures	—			(6,641		)	—			—			(6,641		)
Investments in unconsolidated entities	—			(3,193		)	—			—			(3,193		)
Increases in restricted cash	(1,898		)	(690		)	—			—			(2,588		)
Decreases in restricted cash	39			762			—			—			801
Net cash used in investing activities	(1,859		)	(9,762		)	—			—			(11,621		)
Cash flows from financing activities:
Repayment of debt	(3,857		)	(890		)	—			—			(4,747		)
Debt issuance costs	(26		)	—			—			—			(26		)
Advances to/from subsidiaries	(145,227		)	148,387			(59		)	(3,101		)	—
Payments for other financing activities	(393		)	—			—			—			(393		)
Net cash (used in) provided by financing activities	(149,503		)	147,497			(59		)	(3,101		)	(5,166		)
(Decrease) increase in cash and cash equivalents	(197,165		)	(4,625		)	52			(3,101		)	(204,839		)
Cash and cash equivalents at beginning of period	499,341			6,324			1,637			(2,843		)	504,459
Cash and cash equivalents at end of period	$	302,176		$	1,699		$	1,689		$	(5,944	)	$	299,620
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2013
Net cash used in operating activities	$	(14,665	)	$	(61,595	)	$	(76	)	$	—		$	(76,336	)
Cash flows from investing activities:
Capital expenditures	—			(3,869		)	—			—			(3,869		)
Investments in unconsolidated entities	—			(400		)	—			—			(400		)
Return of capital from unconsolidated entities	—			432			—			—			432
Increases in restricted cash	(668		)	(376		)	—			—			(1,044		)
Decreases in restricted cash	7,367			195			—			—			7,562
Net cash provided by (used in) investing activities	6,699			(4,018		)	—			—			2,681
Cash flows from financing activities:
Repayment of debt	(183,224		)	(95		)	—			—			(183,319		)
Proceeds from issuance of new debt	200,000			—			—			—			200,000
Settlement of unconsolidated entity debt obligations	—			(500		)	—			—			(500		)
Debt issuance costs	(4,635		)	—			—			—			(4,635		)
Advances to/from subsidiaries	(62,166		)	63,544			(56		)	(1,322		)	—
Payments for other financing activities	(26		)	—			—			—			(26		)
Net cash (used in) provided by financing activities	(50,051		)	62,949			(56		)	(1,322		)	11,520
Decrease in cash and cash equivalents	(58,017		)	(2,664		)	(132		)	(1,322		)	(62,135		)
Cash and cash equivalents at beginning of period	481,394			8,215			646			(2,460		)	487,795
Cash and cash equivalents at end of period	$	423,377		$	5,551		$	514		$	(3,782	)	$	425,660

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(14) Discontinued Operations

We continually review each of our markets in order to refine our overall investment strategy and to optimize capital and resource allocations in an effort to enhance our financial position and to increase shareholder value. This review entails an evaluation of both external market factors and our position in each market and over time has resulted in the decision to discontinue certain of our homebuilding operations.

We have classified the results of operations of our discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented. There were no material assets or liabilities related to our discontinued operations as of March 31, 2014 or September 30, 2013. Discontinued operations were not segregated in the unaudited condensed consolidated statements of cash flows. Therefore, amounts for certain captions in the unaudited condensed consolidated statements of cash flows will not agree with the respective data in the unaudited condensed consolidated statements of operations. The results of our discontinued operations in the unaudited condensed consolidated statements of operations for the three and six months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Total revenue	$	—		$	192		$	464		$	288
Home construction and land sales expenses	1,497			(160		)	2,952			(66		)
Inventory impairments and lot option abandonments	—			—			—			17
Gross (loss) profit	(1,497		)	352			(2,488		)	337
General and administrative expenses (a)	(1,750		)	890			(1,561		)	2,415
Operating income (loss)	253			(538		)	(927		)	(2,078		)
Other income, net	—			—			—			69
Income (loss) from discontinued operations before income taxes	253			(538		)	(927		)	(2,009		)
(Benefit from) provision for income taxes	—			(9		)	10			(31		)
Income (loss) from discontinued operations, net of tax	$	253		$	(529	)	$	(937	)	$	(1,978	)

(a) The three and six months ended March 31, 2014 includes approximately $1.9 million of recoveries received for legal fees related to outstanding matters in Denver, Colorado.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Overview and Outlook

Executive Overview and Outlook: The fundamentals of the homebuilding industry remain favorable as new home ownership continues to provide value compared to renting and in relation to incomes in most markets. While orders, closings and land development efforts have been negatively impacted in recent months due to severe winter weather patterns across much of the country, we believe these impacts are only temporary in nature and have merely deferred the closing of a small number of homes in backlog and opening of new communities. We expect to continue to benefit from improved consumer confidence, a modest improvement in job growth, the impact of a constrained supply of new and existing homes for sale and the projected growth in the number of new households.

In November 2013, we introduced our multi-year “2B-10” plan, which provides our expected roadmap to achieve $2 billion in revenue with a 10% Adjusted EBITDA margin. Reaching these objectives depends primarily on our ability to grow our active community count, increase sales per community per month, raise our average selling prices (ASP) and expand homebuilding gross margins, all while keeping a tight watch on costs as a percentage of revenue. We anticipate achieving the objectives outlined in the “2B-10” plan in the next 2 to 3 years.

During the six months ended March 31, 2014, we made improvements on all of our “2B-10” metrics. We continued our investment in land during the quarter for continued community count in future quarters. For the six months ended March 31, 2014, we spent $252.4 million on land and land development and moved $33.9 million of land from Land Held For Future Development to active development. A significant majority of this land, as well as the land that we purchased during fiscal 2013, requires development and will become active either later in fiscal 2014 or in fiscal 2015. As a result, our average active community count for the quarter ended March 31, 2014 increased slightly over last quarter but was down 6.7% compared with a year ago.

New orders were impacted by this decline in active community count. This decline in active community count and a lower backlog conversion rate this quarter as compared to last year also contributed to the decrease in our closings year-over-year. The decrease in backlog conversion rate is due in part to 1) a greater percentage of homes scheduled to close in future quarters, 2) longer cycle times related to labor and material constraints and 3) weather related impacts in certain markets.

Sales per active community for the quarter were solid at 3.3 compared with 3.4 for the second quarter of 2013. ASP rose during the quarter to $272,400, up 7.5% over the second quarter of fiscal 2013, and homebuilding gross margins excluding impairments, abandonments and interest improved 340 basis points to 22.5% for our second quarter.

We expect continued focus on our 2B-10 plan during fiscal 2014, and based on our current expectations of the housing market and general economic conditions, we continue to believe that fiscal 2014 will be the Company’s first full year of profitability since fiscal 2006.

Subsequent to quarter end, we successfully refinanced our 9.125% 2018 Senior Notes with 5.75% Senior Notes due 2019. This transaction will reduce annual cash interest expense by over $8 million.

Critical Accounting Policies: Some of our critical accounting policies require the use of judgment in their application or require estimates of inherently uncertain matters. Although our accounting policies are in compliance with accounting principles generally accepted in the United States of America (GAAP), a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. As disclosed in our 2013 Annual Report, our most critical accounting policies relate to inventory valuation (inventory held for development and land held for sale), homebuilding revenues and costs, warranty reserves, investments in unconsolidated entities and income tax valuation allowances. Since September 30, 2013, there have been no significant changes to those critical accounting policies.

Seasonal and Quarterly Variability: Our homebuilding operating cycle generally reflects escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters.

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RESULTS OF CONTINUING OPERATIONS:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
($ in thousands)	2014			2013			2014			2013
Revenues:
Homebuilding	$	266,125		$	285,471		$	556,083		$	529,896
Land sales and other	3,896			2,431			7,108			4,908
Total	$	270,021		$	287,902		$	563,191		$	534,804
Gross profit:
Homebuilding	$	51,655		$	43,253		$	106,105		$	78,883
Land sales and other	517			632			737			1,086
Total	$	52,172		$	43,885		$	106,842		$	79,969
Gross margin:
Homebuilding	19.4		%	15.2		%	19.1		%	14.9		%
Land sales and other	13.3		%	26.0		%	10.4		%	22.1		%
Total	19.3		%	15.2		%	19.0		%	15.0		%
Commissions	$	11,096		$	11,686		$	22,917		$	22,328
General and administrative expenses (G&A)	$	32,628		$	28,795		$	61,038		$	55,123
SG&A (commissions plus G&A) as a percentage of total revenue	16.2		%	14.1		%	14.9		%	14.5		%
G&A as a percentage of total revenue	12.1		%	10.0		%	10.8		%	10.3		%
Depreciation and amortization	$	2,831		$	3,093		$	5,738		$	5,808
Operating income (loss)	$	5,617		$	311		$	17,149		$	(3,290	)
Operating income (loss) as a percentage of total revenue	2.1		%	0.1		%	3.0		%	(0.6		)%
Effective Tax Rate	0.7		%	1.8		%	0.1		%	1.5		%
Equity in (loss) income of unconsolidated entities	$	(17	)	$	68		$	302		$	104
Loss on extinguishment of debt	$	(153	)	$	(3,638	)	$	(153	)	$	(3,638	)

Homebuilding Operations Data

	Three Months Ended March 31,
	New Orders, net				Cancellation Rates
	2014	2013	14 v 13		2014		2013
West	550	658	(16.4	)%	18.3	%	18.4	%
East	424	442	(4.1	)%	22.2	%	24.2	%
Southeast	416	421	(1.2	)%	17.8	%	12.5	%
Total	1,390	1,521	(8.6	)%	19.4	%	18.7	%
	Six Months Ended March 31,
	New Orders, net				Cancellation Rates
	2014	2013	14 v 13		2014		2013
West	901	1,082	(16.7	)%	19.4	%	23.2	%
East	732	751	(2.5	)%	22.2	%	24.8	%
Southeast	652	620	5.2	%	19.5	%	15.0	%
Total	2,285	2,453	(6.8	)%	20.4	%	21.8	%

Sales per active community per month were 3.3 for the quarter ended March 31, 2014 compared to 3.4 for the quarter ended March 31, 2013. As expected and communicated in prior quarters, our average active communities for the quarter ended March 31, 2014 decreased 6.7% as compared to the prior year, driving the 8.6% decline in net new orders year-over-year. During the quarter,

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we opened and closed out of 17 communities. Weather conditions delayed the development of 13 communities and another 6 communities experienced delayed development due to a longer than expected permit process and/or third-party development delays. We still anticipate that our active community count will increase later in fiscal 2014 as recently purchased land and communities under development become active. Our West segment was especially impacted by the lower average active communities for the quarter, experiencing a 19.6% decline from the prior year due to accelerated absorptions which resulted in the close out of communities in advance of new community openings.

	As of March 31,
	2014		2013		14 v 13
Backlog Units:
West	751		918		(18.2	)%
East	798		762		4.7	%
Southeast	614		531		15.6	%
Total	2,163		2,211		(2.2	)%
Aggregate dollar value of homes in backlog (in millions)	$	637.1	$	584.2	9.1	%
ASP in backlog (in thousands)	$	294.5	$	264.2	11.5	%

Backlog above reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home.

Our backlog has been and may continue to be impacted in the short-term due to our reduced number of active communities or by increased development or home construction cycle times due to labor and/or supply shortages. The recent higher demand for trade labor has created shortages of certain skilled workers in certain markets, driving up costs and/or extending land development and home construction schedules. We expect new orders and backlog units to increase over time as our active communities increase.

Homebuilding Revenues and Average Selling Price

The table below summarizes homebuilding revenues, the average selling prices (ASP) of our homes and closings by reportable segment:

	Three Months Ended March 31,
	Homebuilding Revenues						Average Selling Price						Closings
($ in thousands)	2014		2013		14 v 13		2014		2013		14 v 13		2014	2013	14 v 13
West	$	119,044	$	117,496	1.3	%	$	262.8	$	233.1	12.7	%	453	504	(10.1	)%
East	82,366		116,537		(29.3	)%	320.5		304.3		5.3	%	257	383	(32.9	)%
Southeast	64,715		51,438		25.8	%	242.4		214.3		13.1	%	267	240	11.3	%
Total	$	266,125	$	285,471	(6.8	)%	$	272.4	$	253.3	7.5	%	977	1,127	(13.3	)%
	Six Months Ended March 31,
	Homebuilding Revenues						Average Selling Price						Closings
($ in thousands)	2014		2013		14 v 13		2014		2013		14 v 13		2014	2013	14 v 13
West	$	239,256	$	227,249	5.3	%	$	269.4	$	226.6	18.9	%	888	1,003	(11.5	)%
East	189,245		213,001		(11.2	)%	318.1		289.4		9.9	%	595	736	(19.2	)%
Southeast	127,582		89,646		42.3	%	239.8		210.4		14.0	%	532	426	24.9	%
Total	$	556,083	$	529,896	4.9	%	$	276.0	$	244.8	12.7	%	2,015	2,165	(6.9	)%

Closings and homebuilding revenues were negatively impacted by 19.6% and 7.0% declines in average active communities in our West and East segments, respectively and to a lesser extent by severe weather conditions in our East segment. Specifically, over 40 closings that we had expected to close in our second fiscal quarter ended March 31, 2014 were delayed to the third quarter due to harsh winter weather conditions in our East markets. In addition, since our East segment includes approximately 40% of our active communities, the relative decrease in closings and homebuilding revenues in our East segment, which typically has our highest ASP's, drove a sequential decrease in ASP from our first fiscal quarter.

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Generally, improved operational strategies, product mix and market conditions in our markets enhanced our ability to generate higher ASP over the past year. During fiscal 2013, we were able to increase prices or reduce incentives in response to robust demand and improved market conditions in the majority of our markets in our West segment. However, demand has softened and sale price increases have moderated over the past few months in a majority of our West markets. In select markets or communities in our East and Southeast segments, over the past few quarters, we have been able to increase prices or reduce incentives in concert with market conditions. The change in ASP for the three and six months ended March 31, 2014 was also impacted by a change in mix in closings between products and among communities and markets as compared to the prior year as a smaller percentage of closings came from our East market which has our highest ASPs. We anticipate that our average ASP will increase in future quarters as the relative closings contribution from our East segment increases.

Homebuilding Gross Profit

The following table sets forth our homebuilding gross profit and gross margin by reportable segment and total homebuilding gross profit and gross margin, and such amounts excluding inventory impairments and abandonments and interest amortized to cost of sales for the three and six months ended March 31, 2014 and 2013. Homebuilding gross profit is defined as homebuilding revenues less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs and inventory impairment and lot option abandonment charges).

($ in thousands)	Three Months Ended March 31, 2014
	HB Gross Profit (Loss)			HB Gross Margin		Impairments & Abandonments (I&A)			HB Gross Profit w/o I&A			HB Gross Margin w/o I&A		Interest Amortized to COS		HB Gross Profit w/o I&A and Interest		HB Gross Margin w/o I&A and Interest
West	$	27,008		22.7	%	$	—		$	27,008		22.7	%	$	—	$	27,008	22.7	%
East	13,697			16.6	%	—			13,697			16.6	%	—		13,697		16.6	%
Southeast	12,090			18.7	%	880			12,970			20.0	%	—		12,970		20.0	%
Corporate & unallocated	(1,140		)			—			(1,140		)			7,379		6,239
Total homebuilding	$	51,655		19.4	%	$	880		$	52,535		19.7	%	$	7,379	$	59,914	22.5	%
($ in thousands)	Three Months Ended March 31, 2013
	HB Gross Profit (Loss)			HB Gross Margin		Impairments & Abandonments (I&A)			HB Gross Profit w/o I&A			HB Gross Margin w/o I&A		Interest Amortized to COS		HB Gross Profit w/o I&A and Interest		HB Gross Margin w/o I&A and Interest
West	$	22,397		19.1	%	$	30		$	22,427		19.1	%	$	—	$	22,427	19.1	%
East	21,692			18.6	%	(2		)	21,690			18.6	%	—		21,690		18.6	%
Southeast	8,053			15.7	%	1,997			10,050			19.5	%	—		10,050		19.5	%
Corporate & unallocated	(8,889		)			—			(8,889		)			9,352		463
Total homebuilding	$	43,253		15.2	%	$	2,025		$	45,278		15.9	%	$	9,352	$	54,630	19.1	%

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($ in thousands)	Six Months Ended March 31, 2014
	HB Gross Profit (Loss)			HB Gross Margin		Impairments & Abandonments (I&A)		HB Gross Profit w/o I&A			HB Gross Margin w/o I&A		Interest Amortized to COS		HB Gross Profit w/o I&A and Interest		HB Gross Margin w/o I&A and Interest
West	$	54,806		22.9	%	$	—	$	54,806		22.9	%	$	—	$	54,806	22.9	%
East	33,113			17.5	%	31		33,144			17.5	%	—		33,144		17.5	%
Southeast	24,623			19.3	%	880		25,503			20.0	%	—		25,503		20.0	%
Corporate & unallocated	(6,437		)			—		(6,437		)			14,514		8,077
Total homebuilding	$	106,105		19.1	%	$	911	$	107,016		19.2	%	$	14,514	$	121,530	21.9	%
($ in thousands)	Six Months Ended March 31, 2013
	HB Gross Profit (Loss)			HB Gross Margin		Impairments & Abandonments (I&A)		HB Gross Profit w/o I&A			HB Gross Margin w/o I&A		Interest Amortized to COS		HB Gross Profit w/o I&A and Interest		HB Gross Margin w/o I&A and Interest
West	$	42,050		18.5	%	$	150	$	42,200		18.6	%	$	—	$	42,200	18.6	%
East	38,661			18.2	%	33		38,694			18.2	%	—		38,694		18.2	%
Southeast	15,020			16.8	%	2,046		17,066			19.0	%	—		17,066		19.0	%
Corporate & unallocated	(16,848		)			—		(16,848		)			17,827		979
Total homebuilding	$	78,883		14.9	%	$	2,229	$	81,112		15.3	%	$	17,827	$	98,939	18.7	%

Our overall homebuilding gross profit increased to $51.7 million for the three months ended March 31, 2014 from $43.3 million in the prior year. This increase in homebuilding gross profit benefited from increased ASP's which more than offset the increases in direct material, labor and land costs as compared to the prior year. Our increase in homebuilding gross margins also benefited from an increase in margins in our West segment and change in geographic mix with the decreased percentage of East segment closings. The East segment has recently experienced margins lower than our consolidated average, therefore, its lower contribution this quarter actually slightly increased overall margins. Corporate and unallocated gross profit this quarter included an increase in the capitalization of indirect spending relative to the increase in inventory and reduced closing volume and a $1.4 million benefit related to the reduction of certain reserves based on recent developments. Combined, these changes drove the 340 bps improvement in homebuilding gross margins, excluding impairments, abandonment and interest. For the six months ended March 31, 2014, the $27.2 million increase in homebuilding gross profit was due primarily to the 4.9% increase in homebuilding revenues, driven by a 12.7% increase in ASP tempered partially by increases in direct material and labor costs and a 6.9% decrease in closings compared to the prior year.

Total homebuilding gross profit and gross margin excluding inventory impairments and abandonments and interest amortized to cost of sales are not GAAP financial measures. These measures should not be considered alternatives to homebuilding gross profit determined in accordance with GAAP as an indicator of operating performance. The magnitude and volatility of non-cash inventory impairment and abandonment charges for the Company, and for other home builders, have been significant in recent periods and, as such, have made financial analysis of our industry more difficult. Homebuilding metrics excluding these charges, and other similar presentations by analysts and other companies, is frequently used to assist investors in understanding and comparing the operating characteristics of home building activities by eliminating many of the differences in companies' respective level of impairments and levels of debt. Management believes these non-GAAP measures enable holders of our securities to better understand the cash implications of our operating performance and our ability to service our debt obligations as they currently exist and as additional indebtedness is incurred in the future. These measures are also useful internally, helping management compare operating results and as a measure of the level of cash which may be available for discretionary spending.

In a given quarter, our reported gross margins arise from both communities previously impaired and communities not previously impaired. In addition as indicated above, certain gross margin amounts arise from recoveries of prior period costs, including warranty items that are not directly tied to communities generating revenue in the period. Home closings from communities previously impaired would, in most instances, generate very low or negative gross margins prior to the impact of the previously recognized impairment. Gross margins at each home closing are higher for a particular community after an impairment because the carrying value of the underlying land was previously reduced to the present value of future cash flows as a result of the impairment, leading to lower cost of sales at the home closing. This improvement in gross margin resulting from one or more prior impairments is frequently referred to in the aggregate as the “impairment turn” or “flow-back” of impairments within the reporting period. The amount of this impairment turn may exceed the gross margin for an individual impaired asset if the gross margin for that asset prior to the impairment would have been negative. The extent to which this impairment turn is greater than the reported gross margin for the individual asset is related to the specific historical cost basis of that individual asset.

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The asset valuations which result from our impairment calculations are based on discounted cash flow analyses and are not derived by simply applying prospective gross margins to individual communities. As such, impaired communities may have gross margins that are somewhat higher or lower than the gross margin for unimpaired communities. The mix of home closings in any particular quarter varies to such an extent that comparisons between previously impaired and never impaired communities would not be a reliable way to ascertain profitability trends or to assess the accuracy of previous valuation estimates. In addition, since any amount of impairment turn is tied to individual lots in specific communities it will vary considerably from period to period. As a result of these factors, we review the impairment turn impact on gross margins on a trailing 12-month basis rather than a quarterly basis as a way of considering whether our impairment calculations are resulting in gross margins for impaired communities that are comparable to our unimpaired communities. For the trailing 12-month period, the homebuilding gross margin from our continuing operations was 18.3% and excluding interest and inventory impairments, it was 21.3%. For the same trailing 12-month period, homebuilding gross margins were as follows in those communities that have previously been impaired and which represented 21.4% of total closings during this period:

Homebuilding Gross Margin from previously impaired communities:
Pre-impairment turn gross margin	(1.0	)%
Impact of interest amortized to COS related to these communities	3.4	%
Pre-impairment turn gross margin, excluding interest amortization	2.4	%
Impact of impairment turns	18.9	%
Gross margin (post impairment turns), excluding interest amortization	21.3	%

Land Sales and Other Revenues and Gross Profit. The table below summarizes land sales and other revenues and gross profit by reportable segment for the three and six months ended March 31, 2014 and 2013:

	Land Sales & Other Revenues						Land Sales and Other Gross Profit
	Three Months Ended March 31,						Three Months Ended March 31,
(In thousands)	2014		2013		14 v 13		2014		2013		14 v 13
West	$	2,842	$	1,500	89.5	%	$	463	$	165	180.6	%
East	1,000		592		68.9	%	—		130		(100.0	)%
Southeast	54		339		(84.1	)%	54		337		(84.0	)%
Total	$	3,896	$	2,431	60.3	%	$	517	$	632	(18.2	)%
	Land Sales & Other Revenues						Land Sales and Other Gross Profit (Loss)
	Six Months Ended March 31,						Six Months Ended March 31,
	2014		2013		14 v 13		2014		2013		14 v 13
West	$	5,206	$	1,873	177.9	%	$	538	$	188	186.2	%
East	1,710		667		156.4	%	7		137		(94.9	)%
Southeast	192		2,368		(91.9	)%	192		761		(74.8	)%
Total	$	7,108	$	4,908	44.8	%	$	737	$	1,086	(32.1	)%

Land sales relate to land and lots sold that did not fit within our homebuilding programs and strategic plans in these markets. Other revenues in our Southeast segment include net fees we received for general contractor services we performed on behalf of a third party and broker fees.

Operating Income. The table below summarizes operating income (loss) by reportable segment for the three and six months ended March 31, 2014 and 2013:

(In thousands)	Three Months Ended March 31,									Six Months Ended March 31,
	2014			2013			14 v 13			2014			2013			14 v 13
West	$	14,338		$	10,045		$	4,293		$	30,100		$	18,403		$	11,697
East	2,994			10,313			(7,319		)	11,229			16,501			(5,272		)
Southeast	4,162			2,050			2,112			9,790			4,380			5,410
Corporate and Unallocated	(15,877		)	(22,097		)	6,220			(33,970		)	(42,574		)	8,604
Operating Income (Loss)	$	5,617		$	311		$	5,306		$	17,149		$	(3,290	)	$	20,439

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Our operating income improved by $5.3 million to $5.6 million for the three months ended March 31, 2014, compared to $0.3 million in fiscal 2013. For the six months ended March 31, 2014, our operating income was $17.1 million compared to an operating loss of $3.3 million in the prior year. These improvements reflect higher homebuilding gross profits. As a percentage of revenue, our operating income (loss) was 2.1% and 3.0% for the three and six months ended March 31, 2014 compared to 0.1% and (0.6)% for the comparable periods of fiscal 2013.

Our second quarter SG&A (a component of operating income) as a percentage of total revenue was higher than last quarter and our annual expectations for fiscal 2014, as we typically incur higher advertising and promotional spending during this selling season. In addition, our selling, general and administrative expenses included costs incurred in anticipation of new community openings to promote sales in these communities before any revenues were generated. As a result, our SG&A as a percentage of total revenue was 16.2% this quarter compared to 14.1% last year.

Income taxes. Our income tax assets and liabilities and related effective tax rate are affected by various factors, the most significant of which is the valuation allowance recorded against substantially all of our deferred tax assets. Due to the effect of our valuation allowance adjustments beginning in fiscal 2008, a comparison of our annual effective tax rates must consider the changes in our valuation allowance.

Our overall effective tax rates from continuing operations were 0.7% and 0.1% for the three and six months ended March 31, 2014, compared to 1.8% and 1.5% for the three and six months ended March 31, 2013.

Three months ended March 31, 2014 as compared to 2013

West Segment: Homebuilding revenues increased 1.3% for the three months ended March 31, 2014, compared to the prior year, due to an increase in ASP in the majority of our markets offset partially by decreased closings. The 10.1% decrease in the number of closings was primarily driven by a 14% lower beginning backlog and a 19.6% decline in average active communities for the quarter ended March 31, 2014. As compared to the prior year, our homebuilding gross profit increased $4.6 million and homebuilding gross margins increased from 19.1% to 22.7%. These increases were primarily due to decreased incentives, product mix and modest price appreciation in most of our submarkets in the West which enabled us to better absorb increases in direct material, labor and land costs. The increase in land costs is primarily attributable to product and community mix including a shift to newer communities in certain markets which have a higher land basis. The $4.3 million increase in operating income resulted from the aforementioned increase in homebuilding gross margins.

East Segment: Homebuilding revenues decreased 29.3% for the three months ended March 31, 2014, compared to the prior year, primarily due to a 32.9% decrease in closings. The decrease in closings was driven by fewer active communities and, to a lesser extent, from the impact of severe weather conditions which deferred over 40 closings to our next quarter due to delayed construction activities and the receipt of permits due to government office weather-related closures. These weather conditions also contributed to development delays in a number of our communities. As compared to the prior year, our homebuilding gross profit decreased $8.0 million related to the aforementioned decrease in homebuilding revenues and closings and a $1 million warranty charge related to water intrusion issues in one New Jersey community. As a result, homebuilding gross margins decreased from 18.6% to 16.6%. The $7.3 million decrease in operating income resulted from the aforementioned decrease in homebuilding revenues and active communities.

Southeast Segment: As compared to the prior year, our homebuilding gross profit in the Southeast segment increased $4.0 million driven primarily by a 25.8% increase in homebuilding revenues, offset partially by increases in material, labor and land costs and a $1 million decrease in inventory impairments and abandonments. A 13.5% increase in average active communities and improving market conditions contributed to this increased revenue and closings. Homebuilding gross margins increased from 15.7% to 18.7%. Our fiscal 2014 and fiscal 2013 land sales and other revenue and gross profit in our Southeast segment include net fees received for general contractor services we performed on behalf of a third party. The $2.1 million increase in operating income resulted from the aforementioned increase in homebuilding gross profit offset by a $1.6 million increase in commissions, sales and marketing and general and administrative expenses related to the increase in homebuilding revenues and active communities.

Corporate and Unallocated: Corporate and unallocated includes amortization of capitalized interest and indirects and numerous shared services functions that benefit all segments, including information technology, national sourcing and purchasing, treasury, corporate finance, legal, branding and other national marketing costs. The costs of these shared services are not allocated to the operating segments. Corporate and unallocated gross profit this quarter included an increase in the amount of capitalized indirect spending relative to the increase in inventory and lower than anticipated closings and a $1.4 million benefit related to the reduction of certain reserves based on recent developments. Corporate and unallocated charges included in operating income decreased from the prior year due to the aforementioned changes and a $2.0 million decrease in interest amortized to cost of sales, offset partially by an increase in personnel related expenses including an increase in headcount, variable compensation plans and selling and

35

marketing costs to grow the business. The decrease in interest amortized to cost of sales is the result of a decrease in inventory capitalized per unit.

Six months ended March 31, 2014 as compared to 2013

West Segment: Homebuilding revenues increased 5.3% for the six months ended March 31, 2014, compared to the prior year, due to an increase in ASP in the majority of our markets offset partially by decreased closings. As compared to the prior year, our homebuilding gross profit increased $12.8 million and homebuilding gross margins increased from 18.5% to 22.9% due to our increased revenues and our ability to absorb increases in direct construction costs per home related to increases in material, land and labor costs. The $11.7 million increase in operating income resulted from the aforementioned increase in homebuilding gross margins offset partially by increased commissions and other sales and marketing costs.

East Segment: Homebuilding revenues decreased 11.2% for the six months ended March 31, 2014, compared to the prior year, primarily due to a 19.2% decrease in closings driven by a decrease in active communities. A change in product and geographic mix and a $1 million warranty charge related to water intrusion issues in one New Jersey community contributed to the decrease in homebuilding gross margins from 18.2% to 17.5%. Operating income decreased by $5.3 million due to the aforementioned factors.

Southeast Segment: Homebuilding revenues increased $37.9 million for the six months ended March 31, 2014. This increase in revenues drove a $9.6 million increase in homebuilding gross profit and a $5.4 million increase in operating income. For the six months ended March 31, 2014, operating income was offset slightly by increased commissions related to the revenue increase.

Corporate and Unallocated: For the six months ended March 31, 2014, corporate and unallocated expense decreased $10.4 million as compared to the prior year. Corporate and unallocated charges included in operating income decreased from the prior year due to a $3.3 million decrease in interest amortized to cost of sales, an increase in the amount of indirect spending capitalized and a $1.4 million benefit related to the reduction of certain reserves based on recent developments, offset partially by an increase in personnel related expenses including an increase in headcount and variable compensation plans related to our actual and anticipated revenue growth. The decrease in interest amortized to cost of sales is the result of a decrease in inventory capitalized per unit.

Derivative Instruments and Hedging Activities. We are exposed to fluctuations in interest rates. From time to time, we enter into derivative agreements to manage interest costs and hedge against risks associated with fluctuating interest rates. As of March 31, 2014, we were not a party to any such derivative agreements. We do not enter into or hold derivatives for trading or speculative purposes.

Liquidity and Capital Resources. Our sources of liquidity include, but are not limited to, cash from operations, proceeds from Senior Notes, our Secured Revolving Credit Facility, and other bank borrowings, the issuance of equity and equity-linked securities and other external sources of funds. Our short-term and long-term liquidity depends primarily upon our level of net income, working capital management (cash, accounts receivable, accounts payable and other liabilities) and available credit facilities.

As of March 31, 2014, our liquidity position consisted of $299.6 million in cash and cash equivalents, $150 million of capacity under our Secured Revolving Credit Facility, plus $50.8 million of restricted cash, $22.4 million of which related to our cash secured term loan. We expect to be able to meet our liquidity needs in the remainder of fiscal 2014 and to maintain a significant liquidity position, subject to changes in market conditions that would alter our expectations for land and land development expenditures or capital market transactions which could increase or decrease our cash balance on a quarterly basis.

We spent $252.4 million on land and land development activities during the six months ended March 31, 2014 as we continue to strive to replace close out communities and position the Company to increase our active community count. We spent $152.6 million on land and land development for the six months ended March 31, 2013. This spending on land and land development had a significant impact on our net cash used in operating activities in both years bringing net cash used in operating activities to $188.1 million for the six months ended March 31, 2014 and $76.3 million for the six months ended March 31, 2013. Also impacting cash used in operations in both years were the payment of accounts payable, other liabilities and interest obligations.

Net cash used in investing activities was $11.6 million for the six months ended March 31, 2014 primarily related to capital expenditures for model homes and additional investments in unconsolidated entities. Net cash provided by investing activities was $2.7 million for the six months ended March 31, 2013 primarily related to the decrease in restricted cash.

Net cash used in financing activities was $5.2 million for the six months ended March 31, 2014 primarily related to principal payments made on the 2015 TEU notes. Net cash provided by financing activities was $11.5 million for the six months ended March 31, 2013 primarily related to the proceeds from the issuance of the 2023 Notes offset by the repayment of the 2015 Notes and the repurchase of $2 million of our 9 1/8% Senior Notes due 2019 (see Note 7 to the unaudited condensed consolidated financial statements).

Subsequent to March 31, 2014, in April 2014, we issued and sold $325 million aggregate principal amount of 5.75% Senior Notes due June 2019 (the June 2019 Notes) at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. The proceeds from the issuance of the June 2019 Notes were used to redeem all of our outstanding Senior Notes due June 2018 (the 2018 Notes), including the applicable $17.2 million call price and make-whole premiums provided for by the 2018 Notes. These transactions are expected to save the Company approximately $2.1 million in cash interest payments quarterly, $8.4 million annually, beginning with the quarter ended September 30, 2014.

In September 2013, Fitch reaffirmed the Company's long-term debt rating of B-. In April 2014, Moody's reaffirmed the Company's long-term debt rating of Caa1 and increased our rating outlook from stable to positive. In December 2012, S&P reaffirmed the Company's long-term debt rating for the Company of B-. These ratings and our current credit condition affect, among other things, our ability to access new capital. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, results of operations, financial condition and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing.

We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. While we believe we possess sufficient liquidity to participate in a housing recovery, we are mindful of potential short-term, or seasonal, requirements for enhanced liquidity that may arise, especially as we increase our land and land development spending to grow our business. To facilitate this objective, we maintain our Secured Revolving Credit Facility at $150 million.

36

We have also entered into a number of stand-alone, cash secured letter of credit agreements with banks. These combined facilities will provide for letter of credit needs collateralized by either cash or assets of the Company. We currently have $26.5 million outstanding letters of credit under these facilities, secured with cash collateral which is maintained in restricted accounts totaling $27.4 million.

In the future, we may from time to time seek to continue to retire or purchase our outstanding debt through cash repurchases or in exchange for other debt securities, in open market purchases, privately negotiated transactions or otherwise. In an effort to accelerate our path to profitability, we may seek to expand our business through acquisition, which may be funded through cash, additional debt or equity. In addition, any material variance from our projected operating results could require us to obtain additional equity or debt financing. There can be no assurance that we will be able to complete any of these transactions in the future on favorable terms or at all.

Stock Repurchases and Dividends Paid — The Company did not repurchase any shares in the open market during the six months ended March 31, 2014 or 2013. Any future stock repurchases, as allowed by our debt covenants, must be approved by the Company’s Board of Directors or its Finance Committee.

The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. At March 31, 2014, under the most restrictive covenants of each indenture, none of our retained earnings was available for cash dividends. Hence, there were no dividends paid during the six months ended March 31, 2014 or 2013.

Off-Balance Sheet Arrangements and Aggregate Contractual Commitments. At March 31, 2014, we controlled 29,331 lots (a 6.0-year supply based on our trailing twelve months of closings). We owned 80.9%, or 23,729 lots, and 5,602 lots, or 19.1%, were under option contracts which generally require the payment of cash or the posting of a letter of credit for the right to acquire lots during a specified period of time at a certain price. We historically have attempted to control a portion of our land supply through options. As a result of the flexibility that these options provide us, upon a change in market conditions we may renegotiate the terms of the options prior to exercise or terminate the agreement. Under option contracts, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers and our liability is generally limited to forfeiture of the non-refundable deposits and other non-refundable amounts incurred, which aggregated approximately $47.1 million at March 31, 2014. The total remaining purchase price, net of cash deposits, committed under all options was $378.5 million as of March 31, 2014.

We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our option contracts. Various factors, some of which are beyond our control, such as market conditions, weather conditions and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised.

We have historically funded the exercise of lot options through a combination of operating cash flows. We expect these sources to continue to be adequate to fund anticipated future option exercises. Therefore, we do not anticipate that the exercise of our lot options will have a material adverse effect on our liquidity.

We participate in several land development joint ventures and have investments in other entities in which we have less than a controlling interest. We enter into investments in joint ventures and other unconsolidated entities in order to acquire attractive land positions, to manage our risk profile and to leverage our capital base. Excluding our investment in a pre-owned rental homes REIT, the remainder of our investments in our unconsolidated entities have historically been entered into with developers, other homebuilders and financial partners to develop finished lots for sale to the unconsolidated entity’s members and other third parties. We account for our interest in our unconsolidated entities under the equity method. Our unaudited condensed consolidated balance sheets include investments in unconsolidated entities totaling $36.5 million and $45.0 million at March 31, 2014 and September 30, 2013, respectively.

Our unconsolidated entities periodically obtain secured acquisition and development financing. At March 31, 2014, our unconsolidated entities had borrowings outstanding totaling $111.6 million. Historically, we and our partners have provided varying levels of guarantees of debt or other obligations of our unconsolidated entities. At March 31, 2014, we had no repayment guarantees outstanding related to the debt of our unconsolidated entities. See Note 3 to the unaudited condensed consolidated financial statements for further information.

We had outstanding performance bonds of approximately $189.3 million at March 31, 2014 related principally to our obligations to local governments to construct roads and other improvements in various developments.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to a number of market risks in the ordinary course of business. Our primary market risk exposure relates to fluctuations in interest rates. We do not believe that our exposure in this area is material to cash flows or earnings. As of March 31, 2014, we had variable rate debt outstanding totaling approximately $22.4 million. A one percent change in the interest rate would not be material to our financial statements. The estimated fair value of our fixed rate debt at March 31, 2014 was $1.59 billion, compared to a carrying value of $1.49 billion. In addition, the effect of a hypothetical one-percentage point decrease in our estimated discount rates would increase the estimated fair value of the fixed rate debt instruments from $1.59 billion to $1.66 billion at March 31, 2014.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Act). Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2014, at a reasonable assurance level.

Attached as exhibits to this Quarterly Report on Form 10-Q are certifications of our CEO and CFO, which are required by Rule 13a-14 of the Act. This Disclosure Controls and Procedures section includes information concerning management’s evaluation of disclosure controls and procedures referred to in those certifications and, as such, should be read in conjunction with the certifications of the CEO and CFO.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal controls over financial reporting during the quarter ended March 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Litigation

As disclosed in prior SEC filings, we operated Beazer Mortgage Corporation (BMC) from 1998 through February 2008 to offer mortgage financing to buyers of our homes. BMC entered into various agreements with mortgage investors, pursuant to which BMC originated certain mortgage loans and ultimately sold these loans to investors. In general, underwriting decisions were not made by BMC but by the investors themselves or third-party service providers. From time to time we have received claims from institutions which have acquired certain of these mortgages demanding damages or indemnity arising from BMC's activities or that we repurchase such mortgages. We have been able to resolve these claims for amounts that are not material to our consolidated financial position or results of operation. We currently have an insignificant number of such claims outstanding for which we believe we have no liability. However, we cannot rule out the potential for additional mortgage loan repurchase or indemnity claims in the future from other investors, although, at this time, we do not believe that the exposure related to any such claims would be material to our consolidated financial position or results of operations.

In the normal course of business, we are subject o various lawsuits. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in any of the pending lawsuits could result in the payment by us of substantial monetary damages which may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and the Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our business, financial condition and results of operations.

Other Matters

As disclosed in our 2009 Form 10-K, on July 1, 2009, the Company announced that it had resolved the criminal and civil investigations by the United States Attorney’s Office in the Western District of North Carolina (the U.S. Attorney) and other state and federal agencies concerning matters that were the subject of the independent investigation, initiated in April 2007 by the Audit Committee of the Board of Directors (the Investigation) and concluded in May 2008. Under the terms of a deferred prosecution agreement (DPA), the Company’s liability for each of the fiscal years after 2010 through a portion of fiscal 2014 (unless extended as previously described in our 2009 Form 10-K) will be equal to4%of the Company’s adjusted EBITDA (as defined in the DPA). The total amount of such obligations will be dependent on several factors; however, the maximum liability under the DPA and other settlement agreements discussed above will not exceed$55.0 million, of which$20.2 millionhas been paid as of March 31, 2014. Positive adjusted EBITDA in future years will require us to incur additional expense in the future.

In 2006, we received two Administrative Orders issued by the New Jersey Department of Environmental Protection. The Orders allege certain violations of wetlands disturbance permits and assess proposed fines of$630,000 and $678,000, respectively. Although we believe that we have significant defenses to the alleged violations, we reached a settlement with the Department, through an Administrative Consent Order (the “ACO”). Pursuant to the ACO, we agreed to pay a penalty of $125,000 and donate a 35-acre parcel of land to a local soil conservation district (or make an additional $250,000 payment if the parcel cannot be conveyed). We have paid the $125,000 penalty and are in the process of completing actions that will allow us to convey the 35-acre donation parcel.

We and certain of our subsidiaries have been named as defendants in various claims, complaints and other legal actions, most relating to construction defects, moisture intrusion and product liability. Certain of the liabilities resulting from these actions are covered in whole or part by insurance. In our opinion, based on our current assessment, the ultimate resolution of these matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

38

Item 6. Exhibits

10.1*	Beazer Homes USA, Inc. 2014 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on February 10, 2014).
31.1	Certification pursuant to 17 CFR 240.13a-14 promulgated under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to 17 CFR 240.13a-14 promulgated under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from Beazer Homes USA, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2014, filed on May 1, 2014,formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations, (iii) Unaudited Condensed Consolidated Statements of Cash Flows and (iv) Notes to Unaudited Condensed Consolidated Financial Statements.

* Represents a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	May 1, 2014	Beazer Homes USA, Inc.
		By:		/s/    ROBERT L. SALOMON
			Name:	Robert L. Salomon
				Executive Vice President and Chief Financial Officer

39

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan P. Merrill, certify that:

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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: May 1, 2014

/s/ Allan P. Merrill

Allan P. Merrill

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert L. Salomon, certify that:

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 registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date: May 1, 2014

/s/ Robert L. Salomon

Robert L. Salomon

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of Beazer Homes USA, Inc. (the “Company”) hereby certifies that the Report on Form 10-Q of the Company for the period ended March 31, 2014, accompanying this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 1, 2014
		/s/ Allan P. Merrill
		Allan P. Merrill
		President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Title 18, United States Code, and is not being filed as part of the report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of Beazer Homes USA, Inc. (the “Company”) hereby certifies that the Report on Form 10-Q of the Company for the period ended March 31, 2014, accompanying this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 1, 2014
		/s/ Robert L. Salomon
		Robert L. Salomon
		Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Title 18, United States Code, and is not being filed as part of the report or as a separate disclosure document.

XML

Inventory - Total Owned Inventory by Segment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Segment Reporting Information [Line Items]
Projects in Progress	$ 1,116,704	$ 931,377
Land held for future development	306,119	341,986
Land held for sale	57,537	31,331
Total owned inventory	1,480,360	1,304,694
West Segment
Segment Reporting Information [Line Items]
Projects in Progress	411,823	339,319
Land held for future development	262,399	292,875
Land held for sale	14,470	16,572
Total owned inventory	688,692	648,766
East Segment
Segment Reporting Information [Line Items]
Projects in Progress	359,553	331,894
Land held for future development	25,496	25,491
Land held for sale	30,453	3,833
Total owned inventory	415,502	361,218
Southeast Segment
Segment Reporting Information [Line Items]
Projects in Progress	236,496	178,624
Land held for future development	18,224	23,620
Land held for sale	10,319	8,208
Total owned inventory	265,039	210,452
Unallocated and Other
Segment Reporting Information [Line Items]
Projects in Progress	108,832	81,540
Land held for future development	0	0
Land held for sale	2,295	2,718
Total owned inventory	$ 111,127	$ 84,258

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Mar. 31, 2014 state		Mar. 31, 2013		Mar. 31, 2014 segment state		Mar. 31, 2013		Sep. 30, 2013
Segment Reporting Information [Line Items]
Number of homebuilding segments					3
Number of states in which home building segments operate	16				16
Total revenue	$ 270,021		$ 287,902		$ 563,191		$ 534,804
Total operating income (loss)	5,617		311		17,149		(3,290)
Depreciation and amortization	2,831		3,093		5,738		5,808
Capital Expenditures					6,641		3,869
Assets	1,951,384				1,951,384				1,986,789
Operating Segments
Segment Reporting Information [Line Items]
Total operating income (loss)	21,494		22,408		51,119		39,284
Depreciation and amortization	2,218		2,424		4,683		4,447
West Segment
Segment Reporting Information [Line Items]
Total revenue	121,886		118,996		244,462		229,122
Total operating income (loss)	14,338		10,045		30,100		18,403
Depreciation and amortization	1,304		1,185		2,686		2,207
Capital Expenditures					2,661		1,866
Assets	709,167				709,167				680,346
East Segment
Segment Reporting Information [Line Items]
Total revenue	83,366		117,129		190,955		213,668
Total operating income (loss)	2,994		10,313		11,229		16,501
Depreciation and amortization	556		900		1,248		1,583
Capital Expenditures					1,546		611
Assets	428,398				428,398				369,937
Southeast Segment
Segment Reporting Information [Line Items]
Total revenue	64,769		51,777		127,774		92,014
Total operating income (loss)	4,162		2,050		9,790		4,380
Depreciation and amortization	358		339		749		657
Capital Expenditures					1,022		482
Assets	283,985				283,985				228,814
Corporate and unallocated
Segment Reporting Information [Line Items]
Total operating income (loss)	(15,877)	[1]	(22,097)	[1]	(33,970)	[1]	(42,574)	[1]
Depreciation and amortization	613	[1]	669	[1]	1,055	[1]	1,361	[1]
Capital Expenditures					1,412		910
Assets	$ 529,834	[2]			$ 529,834	[2]			$ 707,692	[2]

[1] 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.

[2] Primarily consists of cash and cash equivalents, consolidated inventory not owned, deferred taxes, capitalized interest and other items that are not allocated to the segments.

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Income Taxes - Narrative (Details) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Income Tax Disclosure [Line Items]
Accrued interest and penalties	$ 2,700,000	$ 2,600,000
Limit on operating loss carryforwards and recognition	11,400,000
Limit on operating loss carryforwards and recognition, tax-effected	4,000,000
Total deferred tax assets	551,520,000
Deferred tax liabilities	(54,257,000)
Net deferred tax assets before valuation allowance	497,263,000
Valuation allowance	(491,856,000)	(487,300,000)
Net deferred tax assets	5,407,000
Maximum
Income Tax Disclosure [Line Items]
Limit on operating loss carryforwards and recognition	408,800,000
Limit on operating loss carryforwards and recognition, tax-effected	444,800,000
Certain Components Likely To Be Subject To Annual Limitation [Member]
Income Tax Disclosure [Line Items]
Total deferred tax assets	88,455,000
Certain Components Likely To Be Subject To Annual Limitation [Member] | Maximum
Income Tax Disclosure [Line Items]
Net deferred tax assets	88,500,000
Certain Components Likely To Be Subject To Annual Limitation [Member] | Minimum
Income Tax Disclosure [Line Items]
Net deferred tax assets	52,500,000
Subject To Annual Limitation [Member]
Income Tax Disclosure [Line Items]
Total deferred tax assets	98,232,000
Generally Not Subject to Annual Limitation [Member]
Income Tax Disclosure [Line Items]
Total deferred tax assets	$ 364,833,000

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Supplemental Guarantor Information - Unaudited Consolidating Balance Sheet Information (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2013	Sep. 30, 2012
ASSETS
Cash and cash equivalents	$ 299,620	$ 504,459	$ 425,660	$ 487,795
Restricted cash	50,765	48,978
Accounts receivable (net of allowance of $1,278)	28,911	22,342
Income tax receivable	2,813	2,813
Owned inventory	1,480,360	1,304,694
Consolidated inventory not owned	7,751	9,124
Investments in unconsolidated entities	36,547	44,997
Deferred tax assets, net	5,407	5,253
Property, plant and equipment, net	18,142	17,000
Investments in subsidiaries	0	0
Intercompany	0	0
Other assets	21,068	27,129
Total assets	1,951,384	1,986,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	71,891	83,800
Other liabilities	133,675	145,623
Intercompany	0	0
Obligations related to land not owned under option agreements	3,147	4,633
Total debt (net of discounts of $4,780 and $5,160 respectively)	1,511,873	1,512,183
Total liabilities	1,720,586	1,746,239
Stockholders’ equity	230,798	240,550
Total liabilities and stockholders’ equity	1,951,384	1,986,789
Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	302,176	499,341	423,377	481,394
Restricted cash	49,733	47,873
Accounts receivable (net of allowance of $1,278)	0	0
Income tax receivable	2,813	2,813
Owned inventory	0	0
Consolidated inventory not owned	0	0
Investments in unconsolidated entities	773	773
Deferred tax assets, net	5,407	5,253
Property, plant and equipment, net	0	0
Investments in subsidiaries	155,251	123,600
Intercompany	1,240,777	1,088,949
Other assets	17,058	19,602
Total assets	1,773,988	1,788,204
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	0	0
Other liabilities	52,706	52,009
Intercompany	2,406	2,747
Obligations related to land not owned under option agreements	0	0
Total debt (net of discounts of $4,780 and $5,160 respectively)	1,488,078	1,492,898
Total liabilities	1,543,190	1,547,654
Stockholders’ equity	230,798	240,550
Total liabilities and stockholders’ equity	1,773,988	1,788,204
Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	1,699	6,324	5,551	8,215
Restricted cash	1,032	1,105
Accounts receivable (net of allowance of $1,278)	28,908	22,339
Income tax receivable	0	0
Owned inventory	1,480,360	1,304,694
Consolidated inventory not owned	7,751	9,124
Investments in unconsolidated entities	35,774	44,224
Deferred tax assets, net	0	0
Property, plant and equipment, net	18,142	17,000
Investments in subsidiaries	0	0
Intercompany	0	0
Other assets	3,901	7,147
Total assets	1,577,567	1,411,957
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	71,891	83,800
Other liabilities	79,966	92,384
Intercompany	1,246,721	1,091,792
Obligations related to land not owned under option agreements	3,147	4,633
Total debt (net of discounts of $4,780 and $5,160 respectively)	23,795	19,285
Total liabilities	1,425,520	1,291,894
Stockholders’ equity	152,047	120,063
Total liabilities and stockholders’ equity	1,577,567	1,411,957
Non-Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	1,689	1,637	514	646
Restricted cash	0	0
Accounts receivable (net of allowance of $1,278)	3	3
Income tax receivable	0	0
Owned inventory	0	0
Consolidated inventory not owned	0	0
Investments in unconsolidated entities	0	0
Deferred tax assets, net	0	0
Property, plant and equipment, net	0	0
Investments in subsidiaries	0	0
Intercompany	2,406	2,747
Other assets	109	380
Total assets	4,207	4,767
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	0	0
Other liabilities	1,003	1,230
Intercompany	0	0
Obligations related to land not owned under option agreements	0	0
Total debt (net of discounts of $4,780 and $5,160 respectively)	0	0
Total liabilities	1,003	1,230
Stockholders’ equity	3,204	3,537
Total liabilities and stockholders’ equity	4,207	4,767
Consolidating Adjustments
ASSETS
Cash and cash equivalents	(5,944)	(2,843)	(3,782)	(2,460)
Restricted cash	0	0
Accounts receivable (net of allowance of $1,278)	0	0
Income tax receivable	0	0
Owned inventory	0	0
Consolidated inventory not owned	0	0
Investments in unconsolidated entities	0	0
Deferred tax assets, net	0	0
Property, plant and equipment, net	0	0
Investments in subsidiaries	(155,251)	(123,600)
Intercompany	(1,243,183)	(1,091,696)
Other assets	0	0
Total assets	(1,404,378)	(1,218,139)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	0	0
Other liabilities	0	0
Intercompany	(1,249,127)	(1,094,539)
Obligations related to land not owned under option agreements	0	0
Total debt (net of discounts of $4,780 and $5,160 respectively)	0	0
Total liabilities	(1,249,127)	(1,094,539)
Stockholders’ equity	(155,251)	(123,600)
Total liabilities and stockholders’ equity	$ (1,404,378)	$ (1,218,139)

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Borrowings - Schedule of Long-term Debt (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013	Feb. 01, 2013
Debt Instrument [Line Items]
Unamortized debt discounts	$ (4,780)	$ (5,160)
Long-term debt	1,511,873	1,512,183
Senior Notes [Member]
Debt Instrument [Line Items]
Unamortized debt discounts	(4,780)	(5,160)
Long-term debt	1,411,007	1,416,860
Senior Notes [Member] | 8 1/8% Senior Notes Maturing June 2016
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	8.125%	8.125%
Senior notes	172,879	172,879
Senior Notes [Member] | 6 5/8% Senior Secured Notes
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.625%	6.625%
Senior notes	300,000	300,000
Senior Notes [Member] | 9 1/8% Senior Notes Maturing June 2018
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	9.125%	9.125%
Senior notes	298,000	298,000
Senior Notes [Member] | 9 1/8% Senior Notes Maturing May 2019
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	9.125%	9.125%
Senior notes	235,000	235,000
Senior Notes [Member] | 7 1/2% Senior Notes Maturing September 2021 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	7.50%	7.50%
Senior notes	200,000	200,000
Senior Notes [Member] | 7 1/4% Senior Notes Maturing February 2023 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	7.25%	7.25%	7.25%
Senior notes	200,000	200,000
Senior Notes [Member] | TEU Senior Amortizing Notes
Debt Instrument [Line Items]
Senior notes	9,908	16,141
Junior Subordinated Notes
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	7.987%
Unamortized debt discounts	(46,100)
Long-term debt	54,703	53,670
Cash Secured Loan
Debt Instrument [Line Items]
Long-term debt	22,368	22,368
Other Secured Notes Payable
Debt Instrument [Line Items]
Long-term debt	$ 23,795	$ 19,285

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Summary of Significant Accounting Policies - Schedule of Other Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012
Other Liabilities [Abstract]
Income tax liabilities	$ 20,358		$ 20,170
Accrued warranty expenses	12,561	11,911	11,663	13,601	14,342	15,477
Accrued interest	33,907		33,372
Accrued and deferred compensation	14,102		25,579
Customer deposits	13,847		11,408
Other	38,900		43,431
Total	$ 133,675		$ 145,623

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Supplemental Guarantor Information - Unaudited Consolidating Statements of Cash Flows (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities	$ (188,052)	$ (76,336)
Cash flows from investing activities:
Capital expenditures	(6,641)	(3,869)
Investments in unconsolidated entities	(3,193)	(400)
Return of capital from unconsolidated entities	0	432
Increases in restricted cash	(2,588)	(1,044)
Decreases in restricted cash	801	7,562
Net cash (used in) provided by investing activities	(11,621)	2,681
Cash flows from financing activities:
Repayment of debt	(4,747)	(183,319)
Proceeds from issuance of new debt	0	200,000
Settlement of unconsolidated entity debt obligation	0	(500)
Debt issuance costs	(26)	(4,635)
Advances to/from subsidiaries	0	0
Payments for other financing activities	(393)	(26)
Net cash (used in) provided by financing activities	(5,166)	11,520
Decrease in cash and cash equivalents	(204,839)	(62,135)
Cash and cash equivalents at beginning of period	504,459	487,795
Cash and cash equivalents at end of period	299,620	425,660
Beazer Homes USA, Inc.
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities	(45,803)	(14,665)
Cash flows from investing activities:
Capital expenditures	0	0
Investments in unconsolidated entities	0	0
Return of capital from unconsolidated entities		0
Increases in restricted cash	(1,898)	(668)
Decreases in restricted cash	39	7,367
Net cash (used in) provided by investing activities	(1,859)	6,699
Cash flows from financing activities:
Repayment of debt	(3,857)	(183,224)
Proceeds from issuance of new debt		200,000
Settlement of unconsolidated entity debt obligation		0
Debt issuance costs	(26)	(4,635)
Advances to/from subsidiaries	(145,227)	(62,166)
Payments for other financing activities	(393)	(26)
Net cash (used in) provided by financing activities	(149,503)	(50,051)
Decrease in cash and cash equivalents	(197,165)	(58,017)
Cash and cash equivalents at beginning of period	499,341	481,394
Cash and cash equivalents at end of period	302,176	423,377
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities	(142,360)	(61,595)
Cash flows from investing activities:
Capital expenditures	(6,641)	(3,869)
Investments in unconsolidated entities	(3,193)	(400)
Return of capital from unconsolidated entities		432
Increases in restricted cash	(690)	(376)
Decreases in restricted cash	762	195
Net cash (used in) provided by investing activities	(9,762)	(4,018)
Cash flows from financing activities:
Repayment of debt	(890)	(95)
Proceeds from issuance of new debt		0
Settlement of unconsolidated entity debt obligation		(500)
Debt issuance costs	0	0
Advances to/from subsidiaries	148,387	63,544
Payments for other financing activities	0	0
Net cash (used in) provided by financing activities	147,497	62,949
Decrease in cash and cash equivalents	(4,625)	(2,664)
Cash and cash equivalents at beginning of period	6,324	8,215
Cash and cash equivalents at end of period	1,699	5,551
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities	111	(76)
Cash flows from investing activities:
Capital expenditures	0	0
Investments in unconsolidated entities	0	0
Return of capital from unconsolidated entities		0
Increases in restricted cash	0	0
Decreases in restricted cash	0	0
Net cash (used in) provided by investing activities	0	0
Cash flows from financing activities:
Repayment of debt	0	0
Proceeds from issuance of new debt		0
Settlement of unconsolidated entity debt obligation		0
Debt issuance costs	0	0
Advances to/from subsidiaries	(59)	(56)
Payments for other financing activities	0	0
Net cash (used in) provided by financing activities	(59)	(56)
Decrease in cash and cash equivalents	52	(132)
Cash and cash equivalents at beginning of period	1,637	646
Cash and cash equivalents at end of period	1,689	514
Consolidating Adjustments
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities	0	0
Cash flows from investing activities:
Capital expenditures	0	0
Investments in unconsolidated entities	0	0
Return of capital from unconsolidated entities		0
Increases in restricted cash	0	0
Decreases in restricted cash	0	0
Net cash (used in) provided by investing activities	0	0
Cash flows from financing activities:
Repayment of debt	0	0
Proceeds from issuance of new debt		0
Settlement of unconsolidated entity debt obligation		0
Debt issuance costs	0	0
Advances to/from subsidiaries	(3,101)	(1,322)
Payments for other financing activities	0	0
Net cash (used in) provided by financing activities	(3,101)	(1,322)
Decrease in cash and cash equivalents	(3,101)	(1,322)
Cash and cash equivalents at beginning of period	(2,843)	(2,460)
Cash and cash equivalents at end of period	$ (5,944)	$ (3,782)

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Interest (Tables)

6 Months Ended

Mar. 31, 2014

Real Estate Inventory Capitalized Interest Costs [Abstract]

Real Estate Inventory, Capitalized Interest Costs

The following table sets forth certain information regarding interest:

	Three Months Ended March 31,						Six Months Ended March 31,
(In thousands)	2014			2013			2014			2013
Capitalized interest in inventory, beginning of period	$	61,836		$	41,922		$	52,562		$	38,190
Interest incurred	32,458			29,177			64,899			57,595
Interest expense not qualified for capitalization and included as other expense	(14,659		)	(16,246		)	(30,691		)	(32,457		)
Capitalized interest amortized to house construction and land sales expenses	(7,379		)	(9,352		)	(14,514		)	(17,827		)
Capitalized interest in inventory, end of period	$	72,256		$	45,501		$	72,256		$	45,501

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Contingencies - Litigation and Other Matters (Details) (USD $)	3 Months Ended	6 Months Ended					6 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2014 Performance Bonds	Mar. 31, 2014 Letter of Credit	Sep. 30, 2013 Letter of Credit	Mar. 31, 2014 First Order New Jersey Department of Environmental Protection - Violation of Permit acre	Sep. 30, 2006 First Order New Jersey Department of Environmental Protection - Violation of Permit	Sep. 30, 2006 Second Order New Jersey Department of Environmental Protection - Violation of Permit
Loss Contingencies [Line Items]
Minimum standard product warranty period		1 year
Maximum standard product warranty period		2 years
Company's liability under Deferred Prosecution Agreement (percent)	4.00%	4.00%
Maximum liability under the DPA and other settlement agreements	$ 55,000,000	$ 55,000,000
Portion of liability under DPA that has been paid as of balance sheet date	20,200,000						125,000
Area of Land							35
Loss Contingency, Accrual, Current	1,800,000	1,800,000
Amount demanded per the complaint to recover purported losses							250,000	630,000	678,000
Accrued amounts for litigation and other contingent liabilities	19,400,000	19,400,000	19,900,000
Letters of credit secured using cash collateral					26,500,000	25,200,000
Cash collateral in restricted accounts securing letters of credit				$ 189,300,000

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Inventory - Summary of Interests in Lot Option Agreements (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Real Estate Properties [Line Items]
Deposits and non-refundable preacquisition costs incurred	$ 47,067	$ 37,313
Remaining obligations	378,495	288,638
Land not owned under option agreements	7,751	9,124
Consolidated VIEs
Real Estate Properties [Line Items]
Deposits and non-refundable preacquisition costs incurred	4,604	4,491
Remaining obligations	3,147	4,633
Land not owned under option agreements	7,751	9,124
Unconsolidated lot option agreements
Real Estate Properties [Line Items]
Deposits and non-refundable preacquisition costs incurred	42,463	32,822
Remaining obligations	375,348	284,005
Land not owned under option agreements	$ 0	$ 0

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Investments in Unconsolidated Entities Narrative (Details) (USD $)	6 Months Ended		12 Months Ended		3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013	May 03, 2012	Mar. 31, 2014 South Edge	Mar. 31, 2014 Inspirada	Mar. 31, 2014 the REIT	May 03, 2012 the REIT home	Mar. 31, 2014 Financial Guarantee [Member]	Sep. 30, 2013 Financial Guarantee [Member]
Schedule of Equity Method Investments [Line Items]
Guarantor Obligations, Current Carrying Value									$ 0	$ 0
Settlement of unconsolidated entity debt obligation	0	500,000			1,000,000
Joint Venture Obligation						5,700,000
Equity Method Investments				300,000
Number of pre-owned homes owned				190
Number of Pre-owned homes owned and leased								187
Beazer homes' ownership interest in guarantor subsidiaries (less than 10% in Inspirada Builders LLC)	100.00%						15.00%	23.50%
Payment to settle repayment guarantee obligation			500,000
Other income recorded on settlement of guarantee obligation			$ 200,000

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Fair Value Measurements - Carrying Values and Estimated Fair Values of Other Financial Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying values and estimated fair values of other financial assets and liabilities	$ 1,465,710	$ 1,470,530
Carrying Amount | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	1,411,007	1,416,860
Carrying Amount | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Junior Subordinated Notes	54,703	53,670
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying values and estimated fair values of other financial assets and liabilities	1,570,754	1,523,574
Fair Value | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes	1,516,051	1,469,904
Fair Value | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Junior Subordinated Notes	$ 54,703	$ 53,670

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Borrowings - Narrative (Details) (USD $)	3 Months Ended		6 Months Ended			6 Months Ended	3 Months Ended														1 Months Ended	3 Months Ended											6 Months Ended	12 Months Ended								6 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013	Mar. 31, 2014 Tangible Equity Units	Mar. 31, 2013 Senior Notes [Member]	Mar. 31, 2014 Senior Notes [Member]	Sep. 30, 2013 Senior Notes [Member]	Apr. 03, 2014 Senior Notes [Member] 5 3/4% Senior Notes Maturing June 2019 [Domain]	Mar. 31, 2014 Senior Notes [Member] 7 1/2% Senior Notes Maturing September 2021 [Member]	Sep. 30, 2013 Senior Notes [Member] 7 1/2% Senior Notes Maturing September 2021 [Member]	Mar. 31, 2014 Senior Notes [Member] 7 1/4% Senior Notes Maturing February 2023 [Member]	Sep. 30, 2013 Senior Notes [Member] 7 1/4% Senior Notes Maturing February 2023 [Member]	Feb. 01, 2013 Senior Notes [Member] 7 1/4% Senior Notes Maturing February 2023 [Member]	Mar. 31, 2014 Senior Notes [Member] 6.625% Senior Secured Notes	Sep. 30, 2013 Senior Notes [Member] 6.625% Senior Secured Notes	Mar. 31, 2014 Senior Notes [Member] 9 1/8% Senior Notes Maturing May 2019	Sep. 30, 2013 Senior Notes [Member] 9 1/8% Senior Notes Maturing May 2019	Mar. 31, 2014 Senior Notes [Member] 6 7/8% Senior Notes Maturing July 2015	Apr. 30, 2014 Senior Notes [Member] 9 1/8% Senior Notes Maturing June 2018	Jun. 30, 2014 Senior Notes [Member] 9 1/8% Senior Notes Maturing June 2018	Mar. 31, 2014 Senior Notes [Member] 9 1/8% Senior Notes Maturing June 2018	Sep. 30, 2013 Senior Notes [Member] 9 1/8% Senior Notes Maturing June 2018	Mar. 31, 2014 Senior Notes [Member] 8 1/8% Senior Notes Maturing June 2016	Sep. 30, 2013 Senior Notes [Member] 8 1/8% Senior Notes Maturing June 2016	Mar. 31, 2014 Senior Notes [Member] Tangible Equity Units	Jul. 17, 2012 Senior Notes [Member] Tangible Equity Units TEUs	Mar. 31, 2014 Junior Subordinated Notes	Sep. 30, 2013 Junior Subordinated Notes	Jan. 15, 2010 Junior Subordinated Notes	Jun. 15, 2006 Junior Subordinated Notes	Mar. 31, 2014 Cash Secured Loan	Sep. 30, 2013 Cash Secured Loan	Mar. 31, 2014 Other Secured Notes Payable	Sep. 30, 2013 Other Secured Notes Payable	Mar. 31, 2014 Secured Revolving Credit Facility	Sep. 30, 2013 Secured Revolving Credit Facility	Dec. 31, 2012 Secured Revolving Credit Facility	Mar. 31, 2014 Letter of Credit	Sep. 30, 2013 Letter of Credit	Mar. 31, 2014 Common Stock	Mar. 31, 2014 Optional Redemption Under Indenture [Member] Senior Notes [Member] 6 7/8% Senior Notes Maturing July 2015	Mar. 31, 2014 Debt Instrument, Convertible, Stock Price Trigger, Range Two [Member] Tangible Equity Units
Line of Credit Facility [Abstract]
Credit facility borrowing capacity																																						$ 150,000,000	$ 22,000,000	$ 220,000,000
Amount of available borrowings under the Secured Revolving Credit Facility																																					150,000,000
Inventory assets pledged as collateral																																					1,000,000,000
Outstanding borrowings under the Secured Revolving Credit Facility																																					0	0
Letters of credit secured using cash collateral																																								26,500,000	25,200,000
Senior Notes [Abstract]
Beazer homes' ownership interest in guarantor subsidiaries (less than 10% in Inspirada Builders LLC)	100.00%		100.00%
Minimum consolidated tangible net worth	85,000,000		85,000,000
Amount of original debt that could be repurchased								27,500,000
Consolidated tangible net worth	206,800,000		206,800,000												200,000,000
Aggregate principal amount of debt										325,000,000		200,000,000																			75,000,000	103,100,000
Debt Instrument, Interest Rate, Stated Percentage										5.75%	7.50%	7.50%	7.25%	7.25%	7.25%	6.625%	6.625%	9.125%	9.125%	6.875%			9.125%	9.125%	8.125%	8.125%		7.50%	7.987%
Early Repayment of Senior Debt																					17,200,000
Tangible Equity Units TEUs Converted during period units						890,000																																						1,252,675
Stock Exchange, Debt Related to Tangible Equity Unit																											2,400,000
Loss on extinguishment of debt	(153,000)	(3,638,000)	(153,000)	(3,638,000)			(3,600,000)															(19,800,000)												1,000,000
Outstanding debt instrument principal amount redeemed																								2,000,000										205,000,000
Stock Issued During Period, Shares, Conversion of Units																																										1,368,108
Debt Issuance Discount												98.541%
Tangible Capital [Abstract]
Tangible Equity Units (TEUs) issued during period, (units)																												4,600,000
Junior Subordinated Notes [Abstract]
Effective period of debt instrument interest rate																													10 years
Debt instrument redemption price (percent)																																											101.146%
Unamortized accretion	4,780,000		4,780,000		5,160,000			4,780,000	5,160,000																				46,100,000
Secured Debt [Abstract]
Three-month LIBOR																																	LIBOR
Long-term debt	$ 1,511,873,000		$ 1,511,873,000		$ 1,512,183,000			$ 1,411,007,000	$ 1,416,860,000																				$ 54,703,000	$ 53,670,000			$ 22,368,000	$ 22,368,000	$ 23,795,000	$ 19,285,000
Weighted average fixed interest rate of debt (percent)																																			4.03%
Debt Instrument, Basis Spread on Variable Rate																																	0.40%

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Inventory

6 Months Ended

Mar. 31, 2014

Real Estate [Abstract]

Inventory

Inventory

(In thousands)	March 31, 2014		September 30, 2013
Homes under construction	$	319,758	$	262,476
Development projects in progress	681,665		578,453
Land held for future development	306,119		341,986
Land held for sale	57,537		31,331
Capitalized interest	72,256		52,562
Model homes	43,025		37,886
Total owned inventory	$	1,480,360	$	1,304,694

Homes under construction includes homes substantially finished and ready for delivery and homes in various stages of construction. We had 116 ($31.0 million) and 113 ($30.7 million) substantially completed homes that were not subject to a sales contract (spec homes at March 31, 2014 and September 30, 2013, respectively. Development projects in progress consist principally of land and land improvement costs. Certain of the fully developed lots in this category are reserved by a deposit or sales contract. Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable interest and real estate taxes on land held for future development are expensed as incurred. During the current quarter, we began development on a large project in California that was previously included in land held for future development. Land held for sale in Unallocated and Other as of March 31, 2014 includes land held for sale in the markets we have decided to exit including Charlotte, North Carolina and Detroit, Michigan. Total owned inventory, by reportable segment, is set forth in the table below:

(In thousands)	Projects in Progress		Held for Future Development		Land Held for Sale		Total Owned Inventory
March 31, 2014
West Segment	$	411,823	$	262,399	$	14,470	$	688,692
East Segment	359,553		25,496		30,453		415,502
Southeast Segment	236,496		18,224		10,319		265,039
Unallocated and Other	108,832		—		2,295		111,127
Total	$	1,116,704	$	306,119	$	57,537	$	1,480,360
September 30, 2013
West Segment	$	339,319	$	292,875	$	16,572	$	648,766
East Segment	331,894		25,491		3,833		361,218
Southeast Segment	178,624		23,620		8,208		210,452
Unallocated and Other	81,540		—		2,718		84,258
Total	$	931,377	$	341,986	$	31,331	$	1,304,694

Inventory Impairments. When conducting our community level review for the recoverability of our homebuilding inventories held for development, we establish a quarterly “watch list” of communities with more than 10 homes remaining to sell that carry profit margins in backlog and in our forecast that are below a minimum threshold of profitability. Assets on the quarterly watch list are subject to substantial additional financial and operational analyses and review that consider the competitive environment and other factors contributing to profit margins below our threshold. For communities where the current competitive and market dynamics indicate that these factors may be other than temporary, which may call into question the recoverability of our investment, a formal impairment analysis is performed. The formal impairment analysis consists of both qualitative competitive market analyses and a quantitative analysis reflecting market and asset specific information.

As of March 31, 2014, four communities were on our quarterly watch list. As of March 31, 2013, one community was on our quarterly watch list. However, after additional financial and operational review, we determined that the factors contributing to profit margins below our threshold for a number of these communities were temporary in nature and therefore those communities were not subjected to further analysis.

($ in thousands)		Undiscounted Cash Flow Analyses Prepared
Segment	# of Communities on Watch List	# of Communities	Pre-analysis Book Value (BV)		Aggregate Undiscounted Cash Flow as a % of BV
Quarter Ended March 31, 2014
West	1	—	$	—	n/a
East	1	—	—		n/a
Southeast	2	1	7,478		107.9	%
Unallocated	—	—	—		n/a
Total	4	1	$	7,478	107.9	%
Quarter Ended March 31, 2013
West	—	—	$	—	n/a
East	1	—	—		n/a
Southeast	—	—	—		n/a
Unallocated	—	—	—		n/a
Total	1	—	$	—	n/a

There were no impairments recorded during the three and six months ended March 31, 2014 or 2013 related to our discounted cash flow analyses. The impairments on development projects and homes in process below for the six months ended March 31, 2013 related to homes sold and in backlog with net contribution margins below a minimum threshold of profitability in communities that were not otherwise impaired through our discounted cash flow analysis.

Our assumptions about future home sales prices and absorption rates require significant judgment because the residential home building industry is cyclical and is highly sensitive to changes in economic conditions. Market deterioration that exceeds our estimates may lead us to incur impairment charges on previously impaired homebuilding assets in addition to homebuilding assets not currently impaired but for which indicators of impairment may arise if markets deteriorate.

The impairments on land held for sale generally represent further write downs of these properties to net realizable value, less estimated costs to sell and are based on current market conditions and our review of recent comparable transactions at the applicable period end. Our assumptions about land sales prices require significant judgment because the current market is highly sensitive to changes in economic conditions. We calculated the estimated fair values of land held for sale based on current market conditions and assumptions made by management, which may differ materially from actual results and may result in additional impairments if market conditions deteriorate.

Also, we have determined the proper course of action with respect to a number of communities within each homebuilding segment was to not exercise certain options and to write-off the deposits securing the option takedowns and pre-acquisition costs, as applicable. In determining whether to abandon a lot option contract, we evaluate the lot option primarily based upon the expected cash flows from the property that is the subject of the option. If we intend to abandon or walk-away from a lot option contract, we record a charge to earnings in the period such decision is made for the deposit amount and any related capitalized costs associated with the lot option contract. Abandonment charges relate to our decision to abandon or not exercise certain option contracts that are not projected to produce adequate results or no longer fit in our long-term strategic plan.

The following table sets forth, by reportable homebuilding segment, the inventory impairments and lot option abandonment charges recorded for the three and six months ended March 31, 2014 and 2013, as applicable:

	Three Months Ended March 31,					Six Months Ended March 31,
(In thousands)	2014		2013			2014		2013
Development projects and homes in process (Held for Development)
West	$	—	$	—		$	—	$	46
East	—		—			—		13
Southeast	—		—			—		—
Unallocated	—		—			—		—
Subtotal	$	—	$	—		$	—	$	59
Land Held for Sale
West	$	—	$	—		$	—	$	—
East	—		—			31		—
Southeast	28		1,778			28		1,778
Subtotal	$	28	$	1,778		$	59	$	1,778
Lot Option Abandonments
West	$	—	$	30		$	—	$	104
East	—		(2		)	—		20
Southeast	852		219			852		268
Unallocated	—		—			—		—
Subtotal	$	852	$	247		$	852	$	392
Continuing Operations	$	880	$	2,025		$	911	$	2,229
Discontinued Operations
Held for Development	$	—	$	—		$	—	$	—
Land Held for Sale	—		—			—		17
Lot Option Abandonments	—		—			—		—
Subtotal	$	—	$	—		$	—	$	17
Total Company	$	880	$	2,025		$	911	$	2,246

Lot Option Agreements and Variable Interest Entities (VIEs). As previously discussed, we also have access to land inventory through lot option contracts, which generally enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. A majority of our lot option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land for the right to acquire lots during a specified period of time at a certain price. Under lot option contracts, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers. Our liability under option contracts is generally limited to forfeiture of the non-refundable deposits, letters of credit and other non-refundable amounts incurred. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining option contracts. Various factors, some of which are beyond our control, such as market conditions, weather conditions and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised.

For the VIEs in which we are the primary beneficiary, we have consolidated the VIE and reflected such assets and liabilities as land not owned under option agreements in our balance sheets. For VIEs we were required to consolidate, we recorded the remaining contractual purchase price under the applicable lot option agreement to land not owned under option agreements with an offsetting increase to obligations related to land not owned under option agreements. Also, to reflect the purchase price of this inventory consolidated, we present the related option deposits as land not owned under option agreement in the accompanying unaudited condensed consolidated balance sheets. Consolidation of these VIEs has no impact on the Company’s results of operations or cash flows.

The following provides a summary of our interests in lot option agreements as of March 31, 2014 and September 30, 2013:

(In thousands)	Deposits & Non-refundable Preacquisition Costs Incurred		Remaining Obligation		Land Not Owned Under Option Agreements
As of March 31, 2014
Consolidated VIEs	$	4,604	$	3,147	$	7,751
Unconsolidated lot option agreements	42,463		375,348		—
Total lot option agreements	$	47,067	$	378,495	$	7,751
As of September 30, 2013
Consolidated VIEs	$	4,491	$	4,633	$	9,124
Unconsolidated lot option agreements	32,822		284,005		—
Total lot option agreements	$	37,313	$	288,638	$	9,124

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Inventory - Narrative (Details) (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2014 home	Mar. 31, 2013	Mar. 31, 2014 home	Mar. 31, 2013	Sep. 30, 2013 home
Real Estate Properties [Line Items]
Inventory Impairment and Option Contract Abandonment	$ 0	$ 0	$ 0	$ 0
Number of substantially completed homes	116		116		113
Total value of substantially completed homes	31,000,000		31,000,000		30,700,000
Deposits and non-refundable preacquisition costs incurred	47,067,000		47,067,000		37,313,000
Total remaining purchase price committed under all options	$ 378,495,000		$ 378,495,000		$ 288,638,000

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Stock-based compensation (Tables)

6 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of assumptions for stock options granted during period

We used the following weighted-average assumptions for our options granted during the six months ended March 31, 2014:

Expected life of options	5.1 years
Expected volatility	45.99		%
Expected discrete dividends	—
Weighted average risk-free interest rate	1.42		%
Weighted average fair value	$	7.97

Schedule of stock options and SSARs outstanding, as well as related activity

The following table summarizes stock options and SSARs outstanding as of March 31, 2014, as well as activity during the three and six months then ended:

	Three Months Ended				Six Months Ended
	March 31, 2014				March 31, 2014
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of period	721,127		$	29.92	560,784		$	33.01
Granted	—		—		161,010		19.11
Exercised	(1,182	)	16.64		(1,288	)	16.16
Expired	(2,870	)	176.31		(2,870	)	176.31
Forfeited	(5,206	)	22.60		(5,767	)	22.23
Outstanding at end of period	711,869		$	29.41	711,869		$	29.41
Exercisable at end of period	408,929		$	39.19	408,929		$	39.19
Vested or expected to vest in the future	706,895		$	29.49	706,895		$	29.49

Schedule of nonvested stock awards activity

Activity relating to nonvested stock awards, including the Performance Shares for the three and six months ended March 31, 2014 is as follows:

	Three Months Ended				Six Months Ended
	March 31, 2014				March 31, 2014
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Beginning of period	312,855		$	13.18	280,416		$	12.32
Granted	—		—		135,567		17.53
Vested	(239	)	18.82		(102,277	)	16.64
Forfeited	(6,160	)	17.45		(7,250	)	16.45
End of period	306,456		$	13.08	306,456		$	13.08

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Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of fair value assets measured on a non-recurring basis

The following table presents our assets measured at fair value on a non-recurring basis for each hierarchy level and represents only those assets whose carrying values were adjusted to fair value during the six months ended March 31, 2014 and 2013:

(In thousands)	Level 1	Level 2	Level 3		Total
Six Months Ended March 31, 2014
Land held for sale	—	—	$	4,766	$	4,766
Six Months Ended March 31, 2013
Land held for sale	—	—	$	2,013	$	2,013

Schedule of carrying values and estimated fair values of other financial assets and liabilities

The carrying values and estimated fair values of other financial assets and liabilities were as follows:

(In thousands)	As of March 31, 2014				As of September 30, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	1,411,007	$	1,516,051	$	1,416,860	$	1,469,904
Junior Subordinated Notes	54,703		54,703		53,670		53,670
	$	1,465,710	$	1,570,754	$	1,470,530	$	1,523,574

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Supplemental Guarantor Information - Unaudited Consolidating Statement of Operations (Details) (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Total revenue	$ 270,021,000	$ 287,902,000	$ 563,191,000	$ 534,804,000
Home construction and land sales expenses	216,969,000	241,992,000	455,438,000	452,606,000
Inventory impairments and option contract abandonments	880,000	2,025,000	911,000	2,229,000
Gross profit	52,172,000	43,885,000	106,842,000	79,969,000
Commissions	11,096,000	11,686,000	22,917,000	22,328,000
General and administrative expenses	32,628,000	28,795,000	61,038,000	55,123,000
Depreciation and amortization	2,831,000	3,093,000	5,738,000	5,808,000
Operating income (loss)	5,617,000	311,000	17,149,000	(3,290,000)
Equity in (loss) income of unconsolidated entities	(17,000)	68,000	302,000	104,000
Loss on extinguishment of debt	(153,000)	(3,638,000)	(153,000)	(3,638,000)
Other (expense) income, net	(13,727,000)	(16,195,000)	(29,484,000)	(31,822,000)
(Loss) income before income taxes	(8,280,000)	(19,454,000)	(12,186,000)	(38,646,000)
(Benefit from) provision for income taxes	(56,000)	(343,000)	(14,000)	(596,000)
Equity in income of subsidiaries	0	0	0	0
Loss from continuing operations	(8,224,000)	(19,111,000)	(12,172,000)	(38,050,000)
Income (loss) from discontinued operations, net of tax	253,000	(529,000)	(937,000)	(1,978,000)
Equity in income of subsidiaries	0	0	0	0
Net loss	(7,971,000)	(19,640,000)	(13,109,000)	(40,028,000)
Beazer Homes USA, Inc.
Condensed Financial Statements, Captions [Line Items]
Total revenue	0	0	0	0
Home construction and land sales expenses	7,379,000	9,352,000	14,514,000	17,827,000
Inventory impairments and option contract abandonments	0	0	0	0
Gross profit	(7,379,000)	(9,352,000)	(14,514,000)	(17,827,000)
Commissions	0	0	0	0
General and administrative expenses	0	0	0	0
Depreciation and amortization	0	0	0	0
Operating income (loss)	(7,379,000)	(9,352,000)	(14,514,000)	(17,827,000)
Equity in (loss) income of unconsolidated entities	0	0	0	0
Loss on extinguishment of debt	(153,000)	(3,638,000)	(153,000)	(3,638,000)
Other (expense) income, net	(14,659,000)	(16,246,000)	(30,692,000)	(32,457,000)
(Loss) income before income taxes	(22,191,000)	(29,236,000)	(45,359,000)	(53,922,000)
(Benefit from) provision for income taxes	(210,000)	(583,000)	(199,000)	(1,014,000)
Equity in income of subsidiaries	13,757,000	9,542,000	32,988,000	14,858,000
Loss from continuing operations	(8,224,000)	(19,111,000)	(12,172,000)	(38,050,000)
Income (loss) from discontinued operations, net of tax	0	0	0	0
Equity in income of subsidiaries	253,000	(529,000)	(937,000)	(1,978,000)
Net loss	(7,971,000)	(19,640,000)	(13,109,000)	(40,028,000)
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Total revenue	270,021,000	287,902,000	563,191,000	534,804,000
Home construction and land sales expenses	209,690,000	232,813,000	441,104,000	435,169,000
Inventory impairments and option contract abandonments	880,000	2,025,000	911,000	2,229,000
Gross profit	59,451,000	53,064,000	121,176,000	97,406,000
Commissions	11,096,000	11,686,000	22,917,000	22,328,000
General and administrative expenses	32,592,000	28,762,000	60,976,000	55,063,000
Depreciation and amortization	2,831,000	3,093,000	5,738,000	5,808,000
Operating income (loss)	12,932,000	9,523,000	31,545,000	14,207,000
Equity in (loss) income of unconsolidated entities	(17,000)	68,000	302,000	104,000
Loss on extinguishment of debt	0	0	0	0
Other (expense) income, net	933,000	47,000	1,212,000	627,000
(Loss) income before income taxes	13,848,000	9,638,000	33,059,000	14,938,000
(Benefit from) provision for income taxes	131,000	193,000	145,000	281,000
Equity in income of subsidiaries	0	0	0	0
Loss from continuing operations	13,717,000	9,445,000	32,914,000	14,657,000
Income (loss) from discontinued operations, net of tax	257,000	(519,000)	(930,000)	(2,010,000)
Equity in income of subsidiaries	0	0	0	0
Net loss	13,974,000	8,926,000	31,984,000	12,647,000
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Total revenue	100,000	173,000	180,000	390,000
Home construction and land sales expenses	0	0	0	0
Inventory impairments and option contract abandonments	0	0	0	0
Gross profit	100,000	173,000	180,000	390,000
Commissions	0	0	0	0
General and administrative expenses	36,000	33,000	62,000	60,000
Depreciation and amortization	0	0	0	0
Operating income (loss)	64,000	140,000	118,000	330,000
Equity in (loss) income of unconsolidated entities	0	0	0	0
Loss on extinguishment of debt	0	0	0	0
Other (expense) income, net	(1,000)	4,000	(4,000)	8,000
(Loss) income before income taxes	63,000	144,000	114,000	338,000
(Benefit from) provision for income taxes	23,000	47,000	40,000	137,000
Equity in income of subsidiaries	0	0	0	0
Loss from continuing operations	40,000	97,000	74,000	201,000
Income (loss) from discontinued operations, net of tax	(4,000)	(10,000)	(7,000)	32,000
Equity in income of subsidiaries	0	0	0	0
Net loss	36,000	87,000	67,000	233,000
Consolidating Adjustments
Condensed Financial Statements, Captions [Line Items]
Total revenue	(100,000)	(173,000)	(180,000)	(390,000)
Home construction and land sales expenses	(100,000)	(173,000)	(180,000)	(390,000)
Inventory impairments and option contract abandonments	0	0	0	0
Gross profit	0	0	0	0
Commissions	0	0	0	0
General and administrative expenses	0	0	0	0
Depreciation and amortization	0	0	0	0
Operating income (loss)	0	0	0	0
Equity in (loss) income of unconsolidated entities	0	0	0	0
Loss on extinguishment of debt	0	0	0	0
Other (expense) income, net	0	0	0	0
(Loss) income before income taxes	0	0	0	0
(Benefit from) provision for income taxes	0	0	0	0
Equity in income of subsidiaries	(13,757,000)	(9,542,000)	(32,988,000)	(14,858,000)
Loss from continuing operations	(13,757,000)	(9,542,000)	(32,988,000)	(14,858,000)
Income (loss) from discontinued operations, net of tax	0	0	0	0
Equity in income of subsidiaries	(253,000)	529,000	937,000	1,978,000
Net loss	$ (14,010,000)	$ (9,013,000)	$ (32,051,000)	$ (12,880,000)

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Interest - Schedule of Capitalized Interest (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Real Estate Inventory, Capitalized Interest Costs [Roll Forward]
Capitalized interest in inventory, beginning of period	$ 61,836	$ 41,922	$ 52,562	$ 38,190
Interest incurred	32,458	29,177	64,899	57,595
Interest expense not qualified for capitalization and included as other expense	(14,659)	(16,246)	(30,691)	(32,457)
Capitalized interest amortized to house construction and land sales expenses	(7,379)	(9,352)	(14,514)	(17,827)
Capitalized interest in inventory, end of period	$ 72,256	$ 45,501	$ 72,256	$ 45,501

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Segment Information (Tables)

6 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Schedule of segment reporting information

	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2014		2013		2014		2013
Revenue
West	$	121,886	$	118,996	$	244,462	$	229,122
East	83,366		117,129		190,955		213,668
Southeast	64,769		51,777		127,774		92,014
Total revenue	$	270,021	$	287,902	$	563,191	$	534,804

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Operating income (loss)
West	$	14,338		$	10,045		$	30,100		$	18,403
East	2,994			10,313			11,229			16,501
Southeast	4,162			2,050			9,790			4,380
Segment total	21,494			22,408			51,119			39,284
Corporate and unallocated (a)	(15,877		)	(22,097		)	(33,970		)	(42,574		)
Total operating income (loss)	$	5,617		$	311		$	17,149		$	(3,290	)

	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2014		2013		2014		2013
Depreciation and amortization
West	$	1,304	$	1,185	$	2,686	$	2,207
East	556		900		1,248		1,583
Southeast	358		339		749		657
Segment total	2,218		2,424		4,683		4,447
Corporate and unallocated (a)	613		669		1,055		1,361
Depreciation and amortization - continuing operations	$	2,831	$	3,093	$	5,738	$	5,808

	Six Months Ended
	March 31,
(In thousands)	2014		2013
Capital Expenditures
West	$	2,661	$	1,866
East	1,546		611
Southeast	1,022		482
Corporate and unallocated	1,412		910
Consolidated total	$	6,641	$	3,869

(In thousands)	March 31, 2014		September 30, 2013
Assets
West	$	709,167	$	680,346
East	428,398		369,937
Southeast	283,985		228,814
Corporate and unallocated (b)	529,834		707,692
Consolidated total	$	1,951,384	$	1,986,789

(a) 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.

(b) Primarily consists of cash and cash equivalents, consolidated inventory not owned, deferred taxes, capitalized interest and other items that are not allocated to the segments.

XML

Supplemental Guarantor Information (Tables)

6 Months Ended

Mar. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Unaudited Consolidating Balance Sheet Information

	Beazer Homes USA, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	$	302,176	$	1,699	$	1,689	$	(5,944	)	$	299,620
Restricted cash	49,733		1,032		—		—			50,765
Accounts receivable (net of allowance of $1,278)	—		28,908		3		—			28,911
Income tax receivable	2,813		—		—		—			2,813
Owned inventory	—		1,480,360		—		—			1,480,360
Consolidated inventory not owned	—		7,751		—		—			7,751
Investments in unconsolidated entities	773		35,774		—		—			36,547
Deferred tax assets, net	5,407		—		—		—			5,407
Property, plant and equipment, net	—		18,142		—		—			18,142
Investments in subsidiaries	155,251		—		—		(155,251		)	—
Intercompany	1,240,777		—		2,406		(1,243,183		)	—
Other assets	17,058		3,901		109		—			21,068
Total assets	$	1,773,988	$	1,577,567	$	4,207	$	(1,404,378	)	$	1,951,384
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	—	$	71,891	$	—	$	—		$	71,891
Other liabilities	52,706		79,966		1,003		—			133,675
Intercompany	2,406		1,246,721		—		(1,249,127		)	—
Obligations related to land not owned under option agreements	—		3,147		—		—			3,147
Total debt (net of discounts of $4,780)	1,488,078		23,795		—		—			1,511,873
Total liabilities	1,543,190		1,425,520		1,003		(1,249,127		)	1,720,586
Stockholders’ equity	230,798		152,047		3,204		(155,251		)	230,798
Total liabilities and stockholders’ equity	$	1,773,988	$	1,577,567	$	4,207	$	(1,404,378	)	$	1,951,384

	Beazer Homes USA, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	$	499,341	$	6,324	$	1,637	$	(2,843	)	$	504,459
Restricted cash	47,873		1,105		—		—			48,978
Accounts receivable (net of allowance of $1,651)	—		22,339		3		—			22,342
Income tax receivable	2,813		—		—		—			2,813
Owned inventory	—		1,304,694		—		—			1,304,694
Consolidated inventory not owned	—		9,124		—		—			9,124
Investments in unconsolidated entities	773		44,224		—		—			44,997
Deferred tax assets, net	5,253		—		—		—			5,253
Property, plant and equipment, net	—		17,000		—		—			17,000
Investments in subsidiaries	123,600		—		—		(123,600		)	—
Intercompany	1,088,949		—		2,747		(1,091,696		)	—
Other assets	19,602		7,147		380		—			27,129
Total assets	$	1,788,204	$	1,411,957	$	4,767	$	(1,218,139	)	$	1,986,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	—	$	83,800	$	—	$	—		$	83,800
Other liabilities	52,009		92,384		1,230		—			145,623
Intercompany	2,747		1,091,792		—		(1,094,539		)	—
Obligations related to land not owned under option agreements	—		4,633		—		—			4,633
Total debt (net of discounts of $5,160)	1,492,898		19,285		—		—			1,512,183
Total liabilities	1,547,654		1,291,894		1,230		(1,094,539		)	1,746,239
Stockholders’ equity	240,550		120,063		3,537		(123,600		)	240,550
Total liabilities and stockholders’ equity	$	1,788,204	$	1,411,957	$	4,767	$	(1,218,139	)	$	1,986,789

Unaudited Consolidating Income Statement

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2014
Total revenue	$	—		$	270,021		$	100		$	(100	)	$	270,021
Home construction and land sales expenses	7,379			209,690			—			(100		)	216,969
Inventory impairments and option contract abandonments	—			880			—			—			880
Gross (loss) profit	(7,379		)	59,451			100			—			52,172
Commissions	—			11,096			—			—			11,096
General and administrative expenses	—			32,592			36			—			32,628
Depreciation and amortization	—			2,831			—			—			2,831
Operating (loss) income	(7,379		)	12,932			64			—			5,617
Equity in income of unconsolidated entities	—			(17		)	—			—			(17		)
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(14,659		)	933			(1		)	—			(13,727		)
(Loss) income before income taxes	(22,191		)	13,848			63			—			(8,280		)
(Benefit from) provision for income taxes	(210		)	131			23			—			(56		)
Equity in income of subsidiaries	13,757			—			—			(13,757		)	—
(Loss) income from continuing operations	(8,224		)	13,717			40			(13,757		)	(8,224		)
Income (loss) from discontinued operations	—			257			(4		)	—			253
Equity in income of subsidiaries	253			—			—			(253		)	—
Net (loss) income	$	(7,971	)	$	13,974		$	36		$	(14,010	)	$	(7,971	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2013
Total revenue	$	—		$	287,902		$	173		$	(173	)	$	287,902
Home construction and land sales expenses	9,352			232,813			—			(173		)	241,992
Inventory impairments and option contract abandonments	—			2,025			—			—			2,025
Gross (loss) profit	(9,352		)	53,064			173			—			43,885
Commissions	—			11,686			—			—			11,686
General and administrative expenses	—			28,762			33			—			28,795
Depreciation and amortization	—			3,093			—			—			3,093
Operating (loss) income	(9,352		)	9,523			140			—			311
Equity in income of unconsolidated entities	—			68			—			—			68
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(16,246		)	47			4			—			(16,195		)
(Loss) income before income taxes	(29,236		)	9,638			144			—			(19,454		)
(Benefit from) provision for income taxes	(583		)	193			47			—			(343		)
Equity in income of subsidiaries	9,542			—			—			(9,542		)	—
(Loss) income from continuing operations	(19,111		)	9,445			97			(9,542		)	(19,111		)
Loss from discontinued operations	—			(519		)	(10		)	—			(529		)
Equity in loss of subsidiaries	(529		)	—			—			529			—
Net (loss) income	$	(19,640	)	$	8,926		$	87		$	(9,013	)	$	(19,640	)

Beazer Homes USA, Inc.

Unaudited Consolidating Statement of Operations Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2014
Total revenue	$	—		$	270,021		$	100		$	(100	)	$	270,021
Home construction and land sales expenses	7,379			209,690			—			(100		)	216,969
Inventory impairments and option contract abandonments	—			880			—			—			880
Gross (loss) profit	(7,379		)	59,451			100			—			52,172
Commissions	—			11,096			—			—			11,096
General and administrative expenses	—			32,592			36			—			32,628
Depreciation and amortization	—			2,831			—			—			2,831
Operating (loss) income	(7,379		)	12,932			64			—			5,617
Equity in income of unconsolidated entities	—			(17		)	—			—			(17		)
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(14,659		)	933			(1		)	—			(13,727		)
(Loss) income before income taxes	(22,191		)	13,848			63			—			(8,280		)
(Benefit from) provision for income taxes	(210		)	131			23			—			(56		)
Equity in income of subsidiaries	13,757			—			—			(13,757		)	—
(Loss) income from continuing operations	(8,224		)	13,717			40			(13,757		)	(8,224		)
Income (loss) from discontinued operations	—			257			(4		)	—			253
Equity in income of subsidiaries	253			—			—			(253		)	—
Net (loss) income	$	(7,971	)	$	13,974		$	36		$	(14,010	)	$	(7,971	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2013
Total revenue	$	—		$	287,902		$	173		$	(173	)	$	287,902
Home construction and land sales expenses	9,352			232,813			—			(173		)	241,992
Inventory impairments and option contract abandonments	—			2,025			—			—			2,025
Gross (loss) profit	(9,352		)	53,064			173			—			43,885
Commissions	—			11,686			—			—			11,686
General and administrative expenses	—			28,762			33			—			28,795
Depreciation and amortization	—			3,093			—			—			3,093
Operating (loss) income	(9,352		)	9,523			140			—			311
Equity in income of unconsolidated entities	—			68			—			—			68
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(16,246		)	47			4			—			(16,195		)
(Loss) income before income taxes	(29,236		)	9,638			144			—			(19,454		)
(Benefit from) provision for income taxes	(583		)	193			47			—			(343		)
Equity in income of subsidiaries	9,542			—			—			(9,542		)	—
(Loss) income from continuing operations	(19,111		)	9,445			97			(9,542		)	(19,111		)
Loss from discontinued operations	—			(519		)	(10		)	—			(529		)
Equity in loss of subsidiaries	(529		)	—			—			529			—
Net (loss) income	$	(19,640	)	$	8,926		$	87		$	(9,013	)	$	(19,640	)

Beazer Homes USA, Inc.

Unaudited Consolidating Statement of Operations Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2014
Total revenue	$	—		$	563,191		$	180		$	(180	)	$	563,191
Home construction and land sales expenses	14,514			441,104			—			(180		)	455,438
Inventory impairments and option contract abandonments	—			911			—			—			911
Gross (loss) profit	(14,514		)	121,176			180			—			106,842
Commissions	—			22,917			—			—			22,917
General and administrative expenses	—			60,976			62			—			61,038
Depreciation and amortization	—			5,738			—			—			5,738
Operating (loss) income	(14,514		)	31,545			118			—			17,149
Equity in income of unconsolidated entities	—			302			—			—			302
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(30,692		)	1,212			(4		)	—			(29,484		)
(Loss) income before income taxes	(45,359		)	33,059			114			—			(12,186		)
(Benefit from) provision for income taxes	(199		)	145			40			—			(14		)
Equity in income of subsidiaries	32,988			—			—			(32,988		)	—
(Loss) income from continuing operations	(12,172		)	32,914			74			(32,988		)	(12,172		)
Loss from discontinued operations	—			(930		)	(7		)	—			(937		)
Equity in loss of subsidiaries	(937		)	—			—			937			—
Net (loss) income	$	(13,109	)	$	31,984		$	67		$	(32,051	)	$	(13,109	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2013
Total revenue	$	—		$	534,804		$	390		$	(390	)	$	534,804
Home construction and land sales expenses	17,827			435,169			—			(390		)	452,606
Inventory impairments and option contract abandonments	—			2,229			—			—			2,229
Gross (loss) profit	(17,827		)	97,406			390			—			79,969
Commissions	—			22,328			—			—			22,328
General and administrative expenses	—			55,063			60			—			55,123
Depreciation and amortization	—			5,808			—			—			5,808
Operating (loss) income	(17,827		)	14,207			330			—			(3,290		)
Equity in income of unconsolidated entities	—			104			—			—			104
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(32,457		)	627			8			—			(31,822		)
(Loss) income before income taxes	(53,922		)	14,938			338			—			(38,646		)
(Benefit from) provision for income taxes	(1,014		)	281			137			—			(596		)
Equity in income of subsidiaries	14,858			—			—			(14,858		)	—
(Loss) income from continuing operations	(38,050		)	14,657			201			(14,858		)	(38,050		)
(Loss) income from discontinued operations	—			(2,010		)	32			—			(1,978		)
Equity in loss of subsidiaries	(1,978		)	—			—			1,978			—
Net (loss) income	$	(40,028	)	$	12,647		$	233		$	(12,880	)	$	(40,028	)

Unaudited Consolidating Statements of Cash Flow

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2014
Net cash (used in) provided by operating activities	$	(45,803	)	$	(142,360	)	$	111		$	—		$	(188,052	)
Cash flows from investing activities:
Capital expenditures	—			(6,641		)	—			—			(6,641		)
Investments in unconsolidated entities	—			(3,193		)	—			—			(3,193		)
Increases in restricted cash	(1,898		)	(690		)	—			—			(2,588		)
Decreases in restricted cash	39			762			—			—			801
Net cash used in investing activities	(1,859		)	(9,762		)	—			—			(11,621		)
Cash flows from financing activities:
Repayment of debt	(3,857		)	(890		)	—			—			(4,747		)
Debt issuance costs	(26		)	—			—			—			(26		)
Advances to/from subsidiaries	(145,227		)	148,387			(59		)	(3,101		)	—
Payments for other financing activities	(393		)	—			—			—			(393		)
Net cash (used in) provided by financing activities	(149,503		)	147,497			(59		)	(3,101		)	(5,166		)
(Decrease) increase in cash and cash equivalents	(197,165		)	(4,625		)	52			(3,101		)	(204,839		)
Cash and cash equivalents at beginning of period	499,341			6,324			1,637			(2,843		)	504,459
Cash and cash equivalents at end of period	$	302,176		$	1,699		$	1,689		$	(5,944	)	$	299,620
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2013
Net cash used in operating activities	$	(14,665	)	$	(61,595	)	$	(76	)	$	—		$	(76,336	)
Cash flows from investing activities:
Capital expenditures	—			(3,869		)	—			—			(3,869		)
Investments in unconsolidated entities	—			(400		)	—			—			(400		)
Return of capital from unconsolidated entities	—			432			—			—			432
Increases in restricted cash	(668		)	(376		)	—			—			(1,044		)
Decreases in restricted cash	7,367			195			—			—			7,562
Net cash provided by (used in) investing activities	6,699			(4,018		)	—			—			2,681
Cash flows from financing activities:
Repayment of debt	(183,224		)	(95		)	—			—			(183,319		)
Proceeds from issuance of new debt	200,000			—			—			—			200,000
Settlement of unconsolidated entity debt obligations	—			(500		)	—			—			(500		)
Debt issuance costs	(4,635		)	—			—			—			(4,635		)
Advances to/from subsidiaries	(62,166		)	63,544			(56		)	(1,322		)	—
Payments for other financing activities	(26		)	—			—			—			(26		)
Net cash (used in) provided by financing activities	(50,051		)	62,949			(56		)	(1,322		)	11,520
Decrease in cash and cash equivalents	(58,017		)	(2,664		)	(132		)	(1,322		)	(62,135		)
Cash and cash equivalents at beginning of period	481,394			8,215			646			(2,460		)	487,795
Cash and cash equivalents at end of period	$	423,377		$	5,551		$	514		$	(3,782	)	$	425,660

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Investments in Unconsolidated Entities

6 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Joint Ventures

Investments in Unconsolidated Entities

As of March 31, 2014, we participated in certain land development joint ventures and other unconsolidated entities in which Beazer Homes had less than a controlling interest. The following table presents our investment in our unconsolidated entities, the total equity and outstanding borrowings of these unconsolidated entities, and our guarantees of these borrowings, as of March 31, 2014 and September 30, 2013:

(In thousands)	March 31, 2014		September 30, 2013
Beazer’s investment in unconsolidated entities	$	36,547	$	44,997
Total equity of unconsolidated entities	387,572		385,040
Total outstanding borrowings of unconsolidated entities	111,624		85,938

For the three and six months ended March 31, 2014 and 2013, our income from unconsolidated entity activities and the overall equity in income of unconsolidated entities is as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
(In thousands)	2014			2013		2014		2013
Continuing operations:
(Loss) income from unconsolidated entity activity	$	(17	)	$	68	$	302	$	104
Equity in (loss) income of unconsolidated entities - continuing operations	$	(17	)	$	68	$	302	$	104

South Edge/Inspirada

During the quarter ended March 31, 2014, we received land in exchange for our investment in Inspirada and paid $1.0 million to the joint venture related to infrastructure and development costs.We continue to have an obligation for our portion of future infrastructure and other development costs which are estimated at approximately $5.7 million.

Pre-Owned Rental Homes

Effective May 3, 2012, we contributed $0.3 million in cash and our Pre-Owned Homes business at cost, including 190 homes in Arizona and Nevada, of which 187 were leased, for an initial 23.5% equity method investment in an unconsolidated real estate investment trust (the REIT). The Company also received grants of restricted units in the REIT, of which a portion vested during the year ended September 30, 2012. As of March 31, 2014, we held a 15.0% investment in the REIT.

Periodically we provide services including treasury operations, cash management, accounting and financial reporting support, legal services, human resources support, environmental and safety services, and tax support to the REIT on an as needed basis.

Guarantees

Historically, Beazer and our land development joint venture partners provide varying levels of guarantees of debt and other debt-related obligations for these unconsolidated entities. As of March 31, 2014 and September 30, 2013, we had no outstanding guarantees or other debt-related obligations related to our unconsolidated entities.

During the fiscal year ended September 30, 2013, we entered into a settlement agreement related to one repayment guarantee, paid $0.5 million to settle our liability and recognized the remaining $0.2 million as other income.

We and our joint venture partners generally provide unsecured environmental indemnities to land development joint venture project lenders. In each case, we have performed due diligence on potential environmental risks. These indemnities obligate us to reimburse the project lenders for claims related to environmental matters for which they are held responsible. During the three and six months ended March 31, 2014 and 2013, we were not required to make any payments related to environmental indemnities.

In assessing the need to record a liability for the contingent aspect of these guarantees, we consider our historical experience in being required to perform under the guarantees, the fair value of the collateral underlying these guarantees and the financial condition of the applicable unconsolidated entities. In addition, we monitor the fair value of the collateral of these unconsolidated entities to ensure that the related borrowings do not exceed the specified percentage of the value of the property securing the borrowings. We have not recorded a liability for the contingent aspects of any guarantees that we determined were reasonably possible but not probable.

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Discontinued Operations (Tables)

6 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Results of Discontinued Operations

The results of our discontinued operations in the unaudited condensed consolidated statements of operations for the three and six months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Total revenue	$	—		$	192		$	464		$	288
Home construction and land sales expenses	1,497			(160		)	2,952			(66		)
Inventory impairments and lot option abandonments	—			—			—			17
Gross (loss) profit	(1,497		)	352			(2,488		)	337
General and administrative expenses (a)	(1,750		)	890			(1,561		)	2,415
Operating income (loss)	253			(538		)	(927		)	(2,078		)
Other income, net	—			—			—			69
Income (loss) from discontinued operations before income taxes	253			(538		)	(927		)	(2,009		)
(Benefit from) provision for income taxes	—			(9		)	10			(31		)
Income (loss) from discontinued operations, net of tax	$	253		$	(529	)	$	(937	)	$	(1,978	)

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Inventory - Recoverability Schedule of Inventory assets Held for Development, by Reportable Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 Community	Mar. 31, 2013 Community
Real Estate Properties [Line Items]
Number of Communities on Watch List	4	1
Undiscounted Cash Flow Analysis - Number of Communities	1	0
Undiscounted Cash Flow Analysis - Pre-analysis Book Value (BV)	$ 7,478	$ 0
Undiscounted Cash Flow Analysis - Aggregate Undiscounted Cash Flow as a % of BV	107.90%
West Segment
Real Estate Properties [Line Items]
Number of Communities on Watch List	1	0
Undiscounted Cash Flow Analysis - Number of Communities	0	0
Undiscounted Cash Flow Analysis - Pre-analysis Book Value (BV)	0	0
East Segment
Real Estate Properties [Line Items]
Number of Communities on Watch List	1	1
Undiscounted Cash Flow Analysis - Number of Communities	0	0
Undiscounted Cash Flow Analysis - Pre-analysis Book Value (BV)	0	0
Southeast Segment
Real Estate Properties [Line Items]
Number of Communities on Watch List	2	0
Undiscounted Cash Flow Analysis - Number of Communities	1	0
Undiscounted Cash Flow Analysis - Pre-analysis Book Value (BV)	7,478	0
Undiscounted Cash Flow Analysis - Aggregate Undiscounted Cash Flow as a % of BV	107.90%
Unallocated
Real Estate Properties [Line Items]
Number of Communities on Watch List	0	0
Undiscounted Cash Flow Analysis - Number of Communities	0	0
Undiscounted Cash Flow Analysis - Pre-analysis Book Value (BV)	$ 0	$ 0

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Stock-based Compensation (Details) (USD $)	3 Months Ended	6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended	3 Months Ended	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Stock Options [Member]	Mar. 31, 2014 SSARs / Stock Options [Member]	Mar. 31, 2014 SSARs / Stock Options [Member]	Mar. 31, 2014 Nonvested Stock Awards [Member]	Sep. 30, 2013 Nonvested Stock Awards [Member]	Mar. 31, 2014 Performance Shares [Member]	Mar. 31, 2014 Nonvested Stock Awards and Performance Shares [Member]	Mar. 31, 2014 Nonvested Stock Awards and Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation included in general and administrative expenses	$ 700,000
Total stock-based compensation included in general and administrative expenses, net of tax	500,000
Number of shares surrendered by emloyees (shares)		21,772	1,306
Stock Surrendered During Period, Value		414,000	19,000
Intrinsic value of SSAR/stock options outstanding					2,200,000	2,200,000
Aggregate intrinsic value of SSARs/stock options vested and expected to vest					2,200,000	2,200,000
SSARs/stock options weighted average expected life					2 years 9 months 7 days
Unrecognized compensation costs related to non-vested stock awards							2,200,000	1,000,000
Weighted average period to recognize remaining cost							1 year 8 months 12 days
Number of shares of performance-based restricted stock issued (shares)									28,690
Non-vested stock performance period (years)									3 years
Increase in target number of Performance Shares (percent)									50.00%
Expected dividend yield on performance shares (percent)									0.00%
Expected volatility rate range minimum (percent)									35.00%
Expected volatility rate range maximum (percent)									59.10%
Aggregate intrinsic value of exercisable SSARs/stock options					1,000,000	1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions [Abstract]
Expected life of options				5 years 26 days
Expected volatility				45.99%
Expected discrete dividends				$ 0
Weighted average risk-free interest rate				1.42%					0.66%
Weighted average fair value				$ 7.97
Share-based Compensation Arrangement by Share-based Payment Award, Outstanding [Roll Forward]
Shares outstanding at beginning of period (shares)					721,127	560,784
Granted (shares)					0	161,010				0	135,567
Exercised (shares)					(1,182)	(1,288)
Expired (shares)					(2,870)	(2,870)
Forfeited (shares)					(5,206)	(5,767)
Shares outstanding at end of period (shares)					711,869	711,869
Exercisable at end of period					408,929	408,929
Vested or expected to vest in the future (shares)					706,895	706,895
Share-based Compensation Arrangement by Share-based Payment Award, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted average exercise price of shares outstanding at beginning of period					$ 29.92	$ 33.01
Weighted average exercise price of shares granted					$ 0.00	$ 19.11
Weighted average exercise price of shares exercised					$ 16.64	$ 16.16
Weighted average exercise price of shares expired					$ 176.31	$ 176.31
Weighted average exercise price of shares forfeited					$ 22.60	$ 22.23
Weighted average exercise price of shares outstanding at beginning of period					$ 29.41	$ 29.41
Weighted average exercise price of shares exercisable at end of period					$ 39.19	$ 39.19
Weighted average exercise price of shares vested or expected to vest in the future					$ 29.49	$ 29.49
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Shares outstanding at beginning of period (shares)										312,855	280,416
Granted (shares)					0	161,010				0	135,567
Shares vested (shares)										(239)	(102,277)
Shares forfeited (shares)										(6,160)	(7,250)
Shares outstanding at end of period (shares)										306,456	306,456
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted average grant date fair value of shares outstanding at beginning of period										$ 13.18	$ 12.32
Weighted average grant date fair value of shares granted									$ 15.90	$ 0.00	$ 17.53
Weighted average grant date fair value of shares vested in period										$ 18.82	$ 16.64
Weighted average grant date fair value of shares forfeited in period										$ 17.45	$ 16.45
Weighted average grant date fair value of shares outstanding at end of period										$ 13.08	$ 13.08

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Unaudited Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
ASSETS
Cash and cash equivalents	$ 299,620	$ 504,459
Restricted cash	50,765	48,978
Accounts receivable (net of allowance of $1,278 and $1,651, respectively)	28,911	22,342
Income tax receivable	2,813	2,813
Inventory
Owned inventory	1,480,360	1,304,694
Land not owned under option agreements	7,751	9,124
Total inventory	1,488,111	1,313,818
Investments in unconsolidated entities	36,547	44,997
Deferred tax assets, net	5,407	5,253
Property, plant and equipment, net	18,142	17,000
Other assets	21,068	27,129
Total assets	1,951,384	1,986,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	71,891	83,800
Other liabilities	133,675	145,623
Obligations related to land not owned under option agreements	3,147	4,633
Total debt (net of discounts of $4,780 and $5,160 respectively)	1,511,873	1,512,183
Total liabilities	1,720,586	1,746,239
Stockholders’ equity:
Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued)	0	0
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 26,721,886 and 25,245,945 issued and outstanding, respectively)	27	25
Paid-in capital	849,520	846,165
Accumulated deficit	(618,749)	(605,640)
Total stockholders’ equity	230,798	240,550
Total liabilities and stockholders’ equity	$ 1,951,384	$ 1,986,789

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Earnings Per Share - Narrative (Details) (USD $) In Thousands, except Share data, unless otherwise specified			3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2014 Stock Options [Member]	Mar. 31, 2014 Common Stock	Mar. 31, 2014 Nonvested Stock Awards [Member]	Mar. 31, 2014 TEU Senior Amortizing Notes	Mar. 31, 2014 Tangible Equity Units	Mar. 31, 2014 Tangible Equity Units	Mar. 31, 2014 Debt Instrument, Convertible, Stock Price Trigger, Range One [Member] TEU Senior Amortizing Notes	Mar. 31, 2014 Debt Instrument, Convertible, Stock Price Trigger, Range Two [Member] TEU Senior Amortizing Notes	Mar. 31, 2014 Debt Instrument, Convertible, Stock Price Trigger, Range Two [Member] Tangible Equity Units	Mar. 31, 2014 Senior Notes [Member] TEU Senior Amortizing Notes	Sep. 30, 2013 Senior Notes [Member] TEU Senior Amortizing Notes	Jul. 17, 2012 Senior Notes [Member] Tangible Equity Units
Earnings Per Share [Line Items]
Stock Issued During Period, Shares, Conversion of Convertible Securities			700,000		300,000		5,200,000
Stock Issued During Period, Shares, Conversion of Units				1,368,108
Debt Instrument, Convertible, Conversion Ratio						1.5372			1.72414	1.40746
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Tangible Equity Units TEUs Converted during period units								890,000	115,433		1,252,675
Debt Instrument, Interest Rate, Stated Percentage														7.50%
Debt Instrument, Convertible, Stock Price Trigger									$ 14.50	$ 17.75
Tangible Equity Units outstanding							3,700,000	3,700,000
Senior notes												$ 9,908	$ 16,141
Shares of common stock issuable upon conversion							5,200,000

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Summary of Significant Accounting Policies

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of Beazer Homes USA, Inc. (Beazer Homes, Beazer or the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Such financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. In our opinion, all adjustments (consisting primarily of normal recurring accruals) necessary for a fair presentation have been included in the accompanying financial statements. The results of our consolidated operations presented herein for the three and six months ended March 31, 2014 are not necessarily indicative of the results to be expected for the full year due to seasonal variations in operations and other items. For further information and a discussion of our significant accounting policies other than as discussed below, refer to our audited consolidated financial statements appearing in Beazer Homes’ Annual Report on Form 10-K for the fiscal year ended September 30, 2013 (the 2013 Annual Report).

Over the past few years, we have discontinued homebuilding operations in certain of our markets. Results from our title services business and our exit markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 14 for further discussion of our Discontinued Operations). Our net loss is equivalent to our comprehensive loss so we have not presented a separate statement of comprehensive loss. We evaluated events that occurred after the balance sheet date but before the financial statements were issued or were available to be issued for accounting treatment and disclosure.

Inventory Valuation. We assess our inventory assets no less than quarterly for recoverability in accordance with the policies as described in Notes 1 and 4 to the consolidated financial statements in our 2013 Annual Report. Our homebuilding inventories that are accounted for as held for development include land and home construction assets grouped together as communities. Homebuilding inventories held for development are stated at cost (including direct construction costs, capitalized indirect costs, capitalized interest and real estate taxes) unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. For those communities for which construction and development activities are expected to occur in the future or have been idled (land held for future development), all applicable interest and real estate taxes are expensed as incurred and the inventory is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. We record assets held for sale at the lower of the carrying value or fair value less costs to sell.

Other Liabilities. Otherliabilities include the following:

(In thousands)	March 31, 2014		September 30, 2013
Income tax liabilities	$	20,358	$	20,170
Accrued warranty expenses	12,561		11,663
Accrued interest	33,907		33,372
Accrued and deferred compensation	14,102		25,579
Customer deposits	13,847		11,408
Other	38,900		43,431
Total	$	133,675	$	145,623

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Discontinued Operations - Results of Discontinued Operations (Details) (USD $)	3 Months Ended				6 Months Ended
	Mar. 31, 2014		Mar. 31, 2013		Mar. 31, 2014		Mar. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Home construction and land sales expenses	$ 216,969,000		$ 241,992,000		$ 455,438,000		$ 452,606,000
Inventory impairments and option contract abandonments	880,000		2,025,000		911,000		2,229,000
Gross (loss) profit	52,172,000		43,885,000		106,842,000		79,969,000
General and administrative expenses	32,628,000		28,795,000		61,038,000		55,123,000
Operating income (loss)	5,617,000		311,000		17,149,000		(3,290,000)
Other (expense) income, net	(13,727,000)		(16,195,000)		(29,484,000)		(31,822,000)
Benefit from income taxes	(56,000)		(343,000)		(14,000)		(596,000)
Income (loss) from discontinued operations, net of tax	253,000		(529,000)		(937,000)		(1,978,000)
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from Legal Settlements					1,900,000
Total revenue	0		192,000		464,000		288,000
Home construction and land sales expenses	1,497,000		(160,000)		2,952,000		(66,000)
Inventory impairments and option contract abandonments	0		0		0		17,000
Gross (loss) profit	(1,497,000)		352,000		(2,488,000)		337,000
General and administrative expenses	(1,750,000)	[1]	890,000	[1]	(1,561,000)	[1]	2,415,000	[1]
Operating income (loss)	253,000		(538,000)		(927,000)		(2,078,000)
Other (expense) income, net	0		0		0		69,000
Income (loss) from discontinued operations before income taxes	253,000		(538,000)		(927,000)		(2,009,000)
Benefit from income taxes	0		(9,000)		10,000		(31,000)
Income (loss) from discontinued operations, net of tax	$ 253,000		$ (529,000)		$ (937,000)		$ (1,978,000)

[1] The three and six months ended March 31, 2014 includes approximately $1.9 million of recoveries received for legal fees related to outstanding matters in Denver, Colorado.

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Investments in Unconsolidated Entities - Investments in Unconsolidated Entities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Schedule of Equity Method Investments [Line Items]
Beazer’s investment in unconsolidated entities	$ 36,547	$ 44,997
Total equity of unconsolidated entities	387,572	385,040
Total outstanding borrowings of unconsolidated entities	$ 111,624	$ 85,938

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Mar. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental disclosure of non-cash activity

	Six Months Ended
	March 31,
(In thousands)	2014			2013
Supplemental disclosure of non-cash activity:
Decrease in obligations related to land not owned under option agreements	$	(1,486	)	$	(1,501	)
Decrease in debt related to conversion of Mandatory Convertible Subordinated Notes and Tangible Equity Units for common stock	(2,376		)	(9,402		)
Non-cash land acquisitions	16,833			—
Supplemental disclosure of cash activity:
Interest payments	60,396			48,944
Income tax payments	91			121
Tax refunds received	—			3,925

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Investments in Unconsolidated Entities - Income (Loss), Impairments From, and Equity In Investments In Unconsolidated Entities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Schedule of Equity Method Investments [Line Items]
(Loss) income from unconsolidated entity activity	$ (17)	$ 68	$ 302	$ 104
Equity in (loss) income of unconsolidated entities - continuing operations	$ (17)	$ 68	$ 302	$ 104

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Inventory (Tables)

6 Months Ended

Mar. 31, 2014

Real Estate [Abstract]

Schedule of Inventory

(In thousands)	March 31, 2014		September 30, 2013
Homes under construction	$	319,758	$	262,476
Development projects in progress	681,665		578,453
Land held for future development	306,119		341,986
Land held for sale	57,537		31,331
Capitalized interest	72,256		52,562
Model homes	43,025		37,886
Total owned inventory	$	1,480,360	$	1,304,694

Schedule of Total Owned Inventory, by Segment

Total owned inventory, by reportable segment, is set forth in the table below:

(In thousands)	Projects in Progress		Held for Future Development		Land Held for Sale		Total Owned Inventory
March 31, 2014
West Segment	$	411,823	$	262,399	$	14,470	$	688,692
East Segment	359,553		25,496		30,453		415,502
Southeast Segment	236,496		18,224		10,319		265,039
Unallocated and Other	108,832		—		2,295		111,127
Total	$	1,116,704	$	306,119	$	57,537	$	1,480,360
September 30, 2013
West Segment	$	339,319	$	292,875	$	16,572	$	648,766
East Segment	331,894		25,491		3,833		361,218
Southeast Segment	178,624		23,620		8,208		210,452
Unallocated and Other	81,540		—		2,718		84,258
Total	$	931,377	$	341,986	$	31,331	$	1,304,694

Recoverability Schedule of Inventory assets Held for Development, by Reportable Segment

($ in thousands)		Undiscounted Cash Flow Analyses Prepared
Segment	# of Communities on Watch List	# of Communities	Pre-analysis Book Value (BV)		Aggregate Undiscounted Cash Flow as a % of BV
Quarter Ended March 31, 2014
West	1	—	$	—	n/a
East	1	—	—		n/a
Southeast	2	1	7,478		107.9	%
Unallocated	—	—	—		n/a
Total	4	1	$	7,478	107.9	%
Quarter Ended March 31, 2013
West	—	—	$	—	n/a
East	1	—	—		n/a
Southeast	—	—	—		n/a
Unallocated	—	—	—		n/a
Total	1	—	$	—	n/a

Schedule of Inventory Impairments and Lot Option Abandonment Charges, by Reportable Homebuilding Segment

The following table sets forth, by reportable homebuilding segment, the inventory impairments and lot option abandonment charges recorded for the three and six months ended March 31, 2014 and 2013, as applicable:

	Three Months Ended March 31,					Six Months Ended March 31,
(In thousands)	2014		2013			2014		2013
Development projects and homes in process (Held for Development)
West	$	—	$	—		$	—	$	46
East	—		—			—		13
Southeast	—		—			—		—
Unallocated	—		—			—		—
Subtotal	$	—	$	—		$	—	$	59
Land Held for Sale
West	$	—	$	—		$	—	$	—
East	—		—			31		—
Southeast	28		1,778			28		1,778
Subtotal	$	28	$	1,778		$	59	$	1,778
Lot Option Abandonments
West	$	—	$	30		$	—	$	104
East	—		(2		)	—		20
Southeast	852		219			852		268
Unallocated	—		—			—		—
Subtotal	$	852	$	247		$	852	$	392
Continuing Operations	$	880	$	2,025		$	911	$	2,229
Discontinued Operations
Held for Development	$	—	$	—		$	—	$	—
Land Held for Sale	—		—			—		17
Lot Option Abandonments	—		—			—		—
Subtotal	$	—	$	—		$	—	$	17
Total Company	$	880	$	2,025		$	911	$	2,246

Summary of Interests in Lot Option Agreements

The following provides a summary of our interests in lot option agreements as of March 31, 2014 and September 30, 2013:

(In thousands)	Deposits & Non-refundable Preacquisition Costs Incurred		Remaining Obligation		Land Not Owned Under Option Agreements
As of March 31, 2014
Consolidated VIEs	$	4,604	$	3,147	$	7,751
Unconsolidated lot option agreements	42,463		375,348		—
Total lot option agreements	$	47,067	$	378,495	$	7,751
As of September 30, 2013
Consolidated VIEs	$	4,491	$	4,633	$	9,124
Unconsolidated lot option agreements	32,822		284,005		—
Total lot option agreements	$	37,313	$	288,638	$	9,124

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Supplemental Cash Flow Information

6 Months Ended

Mar. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Six Months Ended
	March 31,
(In thousands)	2014			2013
Supplemental disclosure of non-cash activity:
Decrease in obligations related to land not owned under option agreements	$	(1,486	)	$	(1,501	)
Decrease in debt related to conversion of Mandatory Convertible Subordinated Notes and Tangible Equity Units for common stock	(2,376		)	(9,402		)
Non-cash land acquisitions	16,833			—
Supplemental disclosure of cash activity:
Interest payments	60,396			48,944
Income tax payments	91			121
Tax refunds received	—			3,925

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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
ASSETS
Allowances for accounts receivable	$ 1,278	$ 1,651
LIABILITIES AND STOCKHOLDERS’ EQUITY
Discounts on total debt	$ 4,780	$ 5,160
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	63,000,000	63,000,000
Common stock, shares issued	26,721,886	25,245,945
Common stock, shares outstanding	26,721,886	25,245,945

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Segment Information

6 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

We have three homebuilding segments operating in 16 states. Revenues in our homebuilding segments are derived from the sale of homes which we construct and from land and lot sales. Our reportable segments have been determined on a basis that is used internally by management for evaluating segment performance and resource allocations. The reportable homebuilding segments and all other homebuilding operations, not required to be reported separately, include operations conducting business in the following states:

West: Arizona, California, Nevada and Texas

East: Delaware, Indiana, Maryland, New Jersey, New York, Pennsylvania, Tennessee (Nashville) and Virginia

Southeast: Florida, Georgia, North Carolina (Raleigh) and South Carolina

Management’s evaluation of segment performance is based on segment operating income. Operating income for our homebuilding segments is defined as homebuilding, land sale and other revenues less home construction, land development and land sales expense, commission expense, depreciation and amortization and certain general and administrative expenses which are incurred by or allocated to our homebuilding segments. The accounting policies of our segments are those described in Note 1 above and Note 1 to our consolidated financial statements in our 2013 Annual Report.

	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2014		2013		2014		2013
Revenue
West	$	121,886	$	118,996	$	244,462	$	229,122
East	83,366		117,129		190,955		213,668
Southeast	64,769		51,777		127,774		92,014
Total revenue	$	270,021	$	287,902	$	563,191	$	534,804

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Operating income (loss)
West	$	14,338		$	10,045		$	30,100		$	18,403
East	2,994			10,313			11,229			16,501
Southeast	4,162			2,050			9,790			4,380
Segment total	21,494			22,408			51,119			39,284
Corporate and unallocated (a)	(15,877		)	(22,097		)	(33,970		)	(42,574		)
Total operating income (loss)	$	5,617		$	311		$	17,149		$	(3,290	)

	Three Months Ended				Six Months Ended
	March 31,				March 31,
(In thousands)	2014		2013		2014		2013
Depreciation and amortization
West	$	1,304	$	1,185	$	2,686	$	2,207
East	556		900		1,248		1,583
Southeast	358		339		749		657
Segment total	2,218		2,424		4,683		4,447
Corporate and unallocated (a)	613		669		1,055		1,361
Depreciation and amortization - continuing operations	$	2,831	$	3,093	$	5,738	$	5,808

	Six Months Ended
	March 31,
(In thousands)	2014		2013
Capital Expenditures
West	$	2,661	$	1,866
East	1,546		611
Southeast	1,022		482
Corporate and unallocated	1,412		910
Consolidated total	$	6,641	$	3,869

(In thousands)	March 31, 2014		September 30, 2013
Assets
West	$	709,167	$	680,346
East	428,398		369,937
Southeast	283,985		228,814
Corporate and unallocated (b)	529,834		707,692
Consolidated total	$	1,951,384	$	1,986,789

(a) 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.

(b) Primarily consists of cash and cash equivalents, consolidated inventory not owned, deferred taxes, capitalized interest and other items that are not allocated to the segments.

XML

Document and Entity Information	6 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	BEAZER HOMES USA INC
Entity Central Index Key	0000915840
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		26,721,886

XML

Supplemental Guarantor Information

6 Months Ended

Mar. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Supplemental Guarantor information

Supplemental Guarantor Information

As discussed in Note 7, our obligations to pay principal, premium, if any, and interest under certain debt are guaranteed on a joint and several basis by substantially all of our subsidiaries. Certain of our immaterial subsidiaries do not guarantee our Senior Notes or our Secured Revolving Credit Facility. The guarantees are full and unconditional and the guarantor subsidiaries are 100% owned by Beazer Homes USA, Inc.

	Beazer Homes USA, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	$	302,176	$	1,699	$	1,689	$	(5,944	)	$	299,620
Restricted cash	49,733		1,032		—		—			50,765
Accounts receivable (net of allowance of $1,278)	—		28,908		3		—			28,911
Income tax receivable	2,813		—		—		—			2,813
Owned inventory	—		1,480,360		—		—			1,480,360
Consolidated inventory not owned	—		7,751		—		—			7,751
Investments in unconsolidated entities	773		35,774		—		—			36,547
Deferred tax assets, net	5,407		—		—		—			5,407
Property, plant and equipment, net	—		18,142		—		—			18,142
Investments in subsidiaries	155,251		—		—		(155,251		)	—
Intercompany	1,240,777		—		2,406		(1,243,183		)	—
Other assets	17,058		3,901		109		—			21,068
Total assets	$	1,773,988	$	1,577,567	$	4,207	$	(1,404,378	)	$	1,951,384
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	—	$	71,891	$	—	$	—		$	71,891
Other liabilities	52,706		79,966		1,003		—			133,675
Intercompany	2,406		1,246,721		—		(1,249,127		)	—
Obligations related to land not owned under option agreements	—		3,147		—		—			3,147
Total debt (net of discounts of $4,780)	1,488,078		23,795		—		—			1,511,873
Total liabilities	1,543,190		1,425,520		1,003		(1,249,127		)	1,720,586
Stockholders’ equity	230,798		152,047		3,204		(155,251		)	230,798
Total liabilities and stockholders’ equity	$	1,773,988	$	1,577,567	$	4,207	$	(1,404,378	)	$	1,951,384

	Beazer Homes USA, Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
ASSETS
Cash and cash equivalents	$	499,341	$	6,324	$	1,637	$	(2,843	)	$	504,459
Restricted cash	47,873		1,105		—		—			48,978
Accounts receivable (net of allowance of $1,651)	—		22,339		3		—			22,342
Income tax receivable	2,813		—		—		—			2,813
Owned inventory	—		1,304,694		—		—			1,304,694
Consolidated inventory not owned	—		9,124		—		—			9,124
Investments in unconsolidated entities	773		44,224		—		—			44,997
Deferred tax assets, net	5,253		—		—		—			5,253
Property, plant and equipment, net	—		17,000		—		—			17,000
Investments in subsidiaries	123,600		—		—		(123,600		)	—
Intercompany	1,088,949		—		2,747		(1,091,696		)	—
Other assets	19,602		7,147		380		—			27,129
Total assets	$	1,788,204	$	1,411,957	$	4,767	$	(1,218,139	)	$	1,986,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable	$	—	$	83,800	$	—	$	—		$	83,800
Other liabilities	52,009		92,384		1,230		—			145,623
Intercompany	2,747		1,091,792		—		(1,094,539		)	—
Obligations related to land not owned under option agreements	—		4,633		—		—			4,633
Total debt (net of discounts of $5,160)	1,492,898		19,285		—		—			1,512,183
Total liabilities	1,547,654		1,291,894		1,230		(1,094,539		)	1,746,239
Stockholders’ equity	240,550		120,063		3,537		(123,600		)	240,550
Total liabilities and stockholders’ equity	$	1,788,204	$	1,411,957	$	4,767	$	(1,218,139	)	$	1,986,789

Beazer Homes USA, Inc.

Unaudited Consolidating Statement of Operations Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2014
Total revenue	$	—		$	270,021		$	100		$	(100	)	$	270,021
Home construction and land sales expenses	7,379			209,690			—			(100		)	216,969
Inventory impairments and option contract abandonments	—			880			—			—			880
Gross (loss) profit	(7,379		)	59,451			100			—			52,172
Commissions	—			11,096			—			—			11,096
General and administrative expenses	—			32,592			36			—			32,628
Depreciation and amortization	—			2,831			—			—			2,831
Operating (loss) income	(7,379		)	12,932			64			—			5,617
Equity in income of unconsolidated entities	—			(17		)	—			—			(17		)
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(14,659		)	933			(1		)	—			(13,727		)
(Loss) income before income taxes	(22,191		)	13,848			63			—			(8,280		)
(Benefit from) provision for income taxes	(210		)	131			23			—			(56		)
Equity in income of subsidiaries	13,757			—			—			(13,757		)	—
(Loss) income from continuing operations	(8,224		)	13,717			40			(13,757		)	(8,224		)
Income (loss) from discontinued operations	—			257			(4		)	—			253
Equity in income of subsidiaries	253			—			—			(253		)	—
Net (loss) income	$	(7,971	)	$	13,974		$	36		$	(14,010	)	$	(7,971	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Three Months Ended March 31, 2013
Total revenue	$	—		$	287,902		$	173		$	(173	)	$	287,902
Home construction and land sales expenses	9,352			232,813			—			(173		)	241,992
Inventory impairments and option contract abandonments	—			2,025			—			—			2,025
Gross (loss) profit	(9,352		)	53,064			173			—			43,885
Commissions	—			11,686			—			—			11,686
General and administrative expenses	—			28,762			33			—			28,795
Depreciation and amortization	—			3,093			—			—			3,093
Operating (loss) income	(9,352		)	9,523			140			—			311
Equity in income of unconsolidated entities	—			68			—			—			68
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(16,246		)	47			4			—			(16,195		)
(Loss) income before income taxes	(29,236		)	9,638			144			—			(19,454		)
(Benefit from) provision for income taxes	(583		)	193			47			—			(343		)
Equity in income of subsidiaries	9,542			—			—			(9,542		)	—
(Loss) income from continuing operations	(19,111		)	9,445			97			(9,542		)	(19,111		)
Loss from discontinued operations	—			(519		)	(10		)	—			(529		)
Equity in loss of subsidiaries	(529		)	—			—			529			—
Net (loss) income	$	(19,640	)	$	8,926		$	87		$	(9,013	)	$	(19,640	)

Beazer Homes USA, Inc.

Unaudited Consolidating Statement of Operations Information

(In thousands)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2014
Total revenue	$	—		$	563,191		$	180		$	(180	)	$	563,191
Home construction and land sales expenses	14,514			441,104			—			(180		)	455,438
Inventory impairments and option contract abandonments	—			911			—			—			911
Gross (loss) profit	(14,514		)	121,176			180			—			106,842
Commissions	—			22,917			—			—			22,917
General and administrative expenses	—			60,976			62			—			61,038
Depreciation and amortization	—			5,738			—			—			5,738
Operating (loss) income	(14,514		)	31,545			118			—			17,149
Equity in income of unconsolidated entities	—			302			—			—			302
Loss on extinguishment of debt	(153		)	—			—			—			(153		)
Other (expense) income, net	(30,692		)	1,212			(4		)	—			(29,484		)
(Loss) income before income taxes	(45,359		)	33,059			114			—			(12,186		)
(Benefit from) provision for income taxes	(199		)	145			40			—			(14		)
Equity in income of subsidiaries	32,988			—			—			(32,988		)	—
(Loss) income from continuing operations	(12,172		)	32,914			74			(32,988		)	(12,172		)
Loss from discontinued operations	—			(930		)	(7		)	—			(937		)
Equity in loss of subsidiaries	(937		)	—			—			937			—
Net (loss) income	$	(13,109	)	$	31,984		$	67		$	(32,051	)	$	(13,109	)
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2013
Total revenue	$	—		$	534,804		$	390		$	(390	)	$	534,804
Home construction and land sales expenses	17,827			435,169			—			(390		)	452,606
Inventory impairments and option contract abandonments	—			2,229			—			—			2,229
Gross (loss) profit	(17,827		)	97,406			390			—			79,969
Commissions	—			22,328			—			—			22,328
General and administrative expenses	—			55,063			60			—			55,123
Depreciation and amortization	—			5,808			—			—			5,808
Operating (loss) income	(17,827		)	14,207			330			—			(3,290		)
Equity in income of unconsolidated entities	—			104			—			—			104
Loss on extinguishment of debt	(3,638		)	—			—			—			(3,638		)
Other (expense) income, net	(32,457		)	627			8			—			(31,822		)
(Loss) income before income taxes	(53,922		)	14,938			338			—			(38,646		)
(Benefit from) provision for income taxes	(1,014		)	281			137			—			(596		)
Equity in income of subsidiaries	14,858			—			—			(14,858		)	—
(Loss) income from continuing operations	(38,050		)	14,657			201			(14,858		)	(38,050		)
(Loss) income from discontinued operations	—			(2,010		)	32			—			(1,978		)
Equity in loss of subsidiaries	(1,978		)	—			—			1,978			—
Net (loss) income	$	(40,028	)	$	12,647		$	233		$	(12,880	)	$	(40,028	)

	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2014
Net cash (used in) provided by operating activities	$	(45,803	)	$	(142,360	)	$	111		$	—		$	(188,052	)
Cash flows from investing activities:
Capital expenditures	—			(6,641		)	—			—			(6,641		)
Investments in unconsolidated entities	—			(3,193		)	—			—			(3,193		)
Increases in restricted cash	(1,898		)	(690		)	—			—			(2,588		)
Decreases in restricted cash	39			762			—			—			801
Net cash used in investing activities	(1,859		)	(9,762		)	—			—			(11,621		)
Cash flows from financing activities:
Repayment of debt	(3,857		)	(890		)	—			—			(4,747		)
Debt issuance costs	(26		)	—			—			—			(26		)
Advances to/from subsidiaries	(145,227		)	148,387			(59		)	(3,101		)	—
Payments for other financing activities	(393		)	—			—			—			(393		)
Net cash (used in) provided by financing activities	(149,503		)	147,497			(59		)	(3,101		)	(5,166		)
(Decrease) increase in cash and cash equivalents	(197,165		)	(4,625		)	52			(3,101		)	(204,839		)
Cash and cash equivalents at beginning of period	499,341			6,324			1,637			(2,843		)	504,459
Cash and cash equivalents at end of period	$	302,176		$	1,699		$	1,689		$	(5,944	)	$	299,620
	Beazer Homes USA, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Beazer Homes USA, Inc.
Six Months Ended March 31, 2013
Net cash used in operating activities	$	(14,665	)	$	(61,595	)	$	(76	)	$	—		$	(76,336	)
Cash flows from investing activities:
Capital expenditures	—			(3,869		)	—			—			(3,869		)
Investments in unconsolidated entities	—			(400		)	—			—			(400		)
Return of capital from unconsolidated entities	—			432			—			—			432
Increases in restricted cash	(668		)	(376		)	—			—			(1,044		)
Decreases in restricted cash	7,367			195			—			—			7,562
Net cash provided by (used in) investing activities	6,699			(4,018		)	—			—			2,681
Cash flows from financing activities:
Repayment of debt	(183,224		)	(95		)	—			—			(183,319		)
Proceeds from issuance of new debt	200,000			—			—			—			200,000
Settlement of unconsolidated entity debt obligations	—			(500		)	—			—			(500		)
Debt issuance costs	(4,635		)	—			—			—			(4,635		)
Advances to/from subsidiaries	(62,166		)	63,544			(56		)	(1,322		)	—
Payments for other financing activities	(26		)	—			—			—			(26		)
Net cash (used in) provided by financing activities	(50,051		)	62,949			(56		)	(1,322		)	11,520
Decrease in cash and cash equivalents	(58,017		)	(2,664		)	(132		)	(1,322		)	(62,135		)
Cash and cash equivalents at beginning of period	481,394			8,215			646			(2,460		)	487,795
Cash and cash equivalents at end of period	$	423,377		$	5,551		$	514		$	(3,782	)	$	425,660

XML

Unaudited Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
Total revenue	$ 270,021	$ 287,902	$ 563,191	$ 534,804
Home construction and land sales expenses	216,969	241,992	455,438	452,606
Inventory impairments and option contract abandonments	880	2,025	911	2,229
Gross profit	52,172	43,885	106,842	79,969
Commissions	11,096	11,686	22,917	22,328
General and administrative expenses	32,628	28,795	61,038	55,123
Depreciation and amortization	2,831	3,093	5,738	5,808
Operating income (loss)	5,617	311	17,149	(3,290)
Equity in (loss) income of unconsolidated entities	(17)	68	302	104
Loss on extinguishment of debt	(153)	(3,638)	(153)	(3,638)
Other expense, net	(13,727)	(16,195)	(29,484)	(31,822)
(Loss) income before income taxes	(8,280)	(19,454)	(12,186)	(38,646)
Benefit from income taxes	(56)	(343)	(14)	(596)
Loss from continuing operations	(8,224)	(19,111)	(12,172)	(38,050)
Income (loss) from discontinued operations, net of tax	253	(529)	(937)	(1,978)
Net loss	$ (7,971)	$ (19,640)	$ (13,109)	$ (40,028)
Weighted average number of shares:
Weighted average number of shares - basic and diluted (in shares)	25,320	24,654	25,163	24,472
Basic and Diluted (loss) income per share:
Basic and Diluted loss per share - Continuing operations (in US dollars per share)	$ (0.32)	$ (0.78)	$ (0.48)	$ (1.55)
Basic and Diluted loss per share - Discontinuing operations (in US dollars per share)	$ 0.01	$ (0.02)	$ (0.04)	$ (0.09)
Basic and Diluted loss per share (in US dollars per share)	$ (0.31)	$ (0.80)	$ (0.52)	$ (1.64)

XML

Borrowings

6 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Borrowings

Borrowings

At March 31, 2014 and September 30, 2013 we had the following long-term debt, net of discounts:

(In thousands)	Maturity Date	March 31, 2014			September 30, 2013
8 1/8% Senior Notes	June 2016	172,879			172,879
6 5/8% Senior Secured Notes	April 2018	300,000			300,000
9 1/8% Senior Notes	June 2018	298,000			298,000
9 1/8% Senior Notes	May 2019	235,000			235,000
7 1/2% Senior Notes	September 2021	200,000			200,000
7 1/4% Senior Notes	February 2023	200,000			200,000
TEU Senior Amortizing Notes	August 2015	9,908			16,141
Unamortized debt discounts		(4,780		)	(5,160		)
Total Senior Notes, net		1,411,007			1,416,860
Junior subordinated notes	July 2036	54,703			53,670
Cash Secured Loan	November 2017	22,368			22,368
Other secured notes payable	Various Dates	23,795			19,285
Total debt, net		$	1,511,873		$	1,512,183

Secured Revolving Credit Facility — In September 2012, we amended and expanded our Secured Revolving Credit Facility from $22 million to $150 million. The three-year amended Secured Revolving Credit Facility provides for future working capital and letter of credit needs collateralized by substantially all of the Company's personal property (excluding cash and cash equivalents) and real property. This facility is subject to various financial, collateral-based and negative covenants with which we are required to comply. As of March 31, 2014, we were in compliance with all such covenants and had $150 million of available borrowings under the Secured Revolving Credit Facility. We have elected to cash collateralize all letters of credit; however, as of March 31, 2014, we have also pledged approximately $1 billion of inventory assets to our Secured Revolving Credit Facility to collateralize potential future borrowings or letters of credit. The Secured Revolving Credit Facility contains certain covenants, including negative covenants and financial maintenance covenants, with which we are required to comply. Subject to our option to cash collateralize our obligations under the Secured Revolving Credit Facility upon certain conditions, our obligations under the Secured Revolving Credit Facility are secured by liens on substantially all of our personal property and a significant portion of our owned real properties. There were no outstanding borrowings under the Secured Revolving Credit Facility as of March 31, 2014 or September 30, 2013.

We have entered into stand-alone, cash-secured letter of credit agreements with banks to maintain our pre-existing letters of credit and to provide for the issuance of new letters of credit. The letter of credit arrangements combined with our Secured Revolving Credit Facility provide a total letter of credit capacity of approximately $220.0 million. As of March 31, 2014 and September 30, 2013, we have letters of credit outstanding of $26.5 million and $25.2 million, respectively, which are secured by cash collateral in restricted accounts. The Company may enter into additional arrangements to provide additional letter of credit capacity.

Senior Notes — The majority of our Senior Notes are unsecured or secured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of our significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes and the Secured Revolving Credit Facility. Each guarantor subsidiary is a 100% owned subsidiary of Beazer Homes.

The Company's Senior Notes are subject to indentures containing certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur additional indebtedness and to make certain investments. Specifically, all of our Senior Notes contain covenants that restrict our ability to incur additional indebtedness unless it is refinancing indebtedness or non-recourse indebtedness. The incurrence of refinancing indebtedness and non-recourse indebtedness, as defined in the applicable indentures, are exempted from the covenant test. As of March 31, 2014, we were not able to incur additional indebtedness, except refinancing or non-recourse indebtedness. Compliance with our Senior Note covenants does not significantly impact our operations. We were in compliance with the covenants contained in all of our Senior Notes as of March 31, 2014.

Our Senior Notes due 2016 (the 2016 Notes) contain the most restrictive covenants, including the consolidated tangible net worth covenant, which states that should consolidated tangible net worth fall below $85 million for two consecutive quarters, the Company is required to make an offer to purchase 10% of the 2016 Notes at par. If triggered and fully subscribed, this could result in our having to purchase $27.5 million of the 2016 Notes, which may be reduced by certain 2016 Note repurchases (potentially at less than par) made in the open market after the triggering date. As of March 31, 2014 our consolidated tangible net worth was $206.8 million, well in excess of the minimum covenant requirement.

Subsequent to quarter-end, in April 2014, we issued and sold $325 million aggregate principal amount of 5.75% Senior Notes due June 2019 (the June 2019 Notes) at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the June 2019 Notes is payable semi-annually in cash in arrears, beginning on December 15, 2014. The June 2019 Notes will mature on June 15, 2019. Prior to maturity, we may, at our option redeem the June 2019 Notes at any time, in whole or in part, at specified redemption prices, which also include a customary make-whole premium provision through June 15, 2017.

The proceeds from the issuance of the June 2019 Notes were used to redeem all of our outstanding Senior Notes due June 2018 (the 2018 Notes), including the applicable $17.2 million call price and make-whole premiums provided for by the 2018 Notes. We anticipate recording a loss on debt extinguishment of the 2018 Notes, of approximately $19.8 million in our fiscal third quarter ending June 30, 2014 related to the premiums paid and the write-off of unamortized debt issuance costs.

In September 2013, we issued and sold $200 million aggregate principal amount of 7.500% Senior Notes due 2021 (the 2021 Notes) at a price of 98.541% (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the 2021 Notes is payable semi-annually in cash in arrears, beginning on March 15, 2014. The 2021 Notes will mature on September 15, 2021. Prior to maturity, we may, at our option, redeem the 2021 Notes at any time, in whole or in part, at specified redemption prices, which also include a customary make-whole premium provision through September 15, 2016. In January 2014, we exchanged 100% of the 2021 Notes for notes that are freely transferable and registered under the Securities Act of 1933.

In February 2013, we issued and sold $200 million aggregate principal amount of 7.25% Senior Notes due 2023 (the 2023 Notes) at par (before underwriting and other issuance costs) through a private placement to qualified institutional buyers. Interest on the 2023 Notes is payable semi-annually in cash in arrears, beginning August 1, 2013. The 2023 Notes will mature on February 1, 2023. Prior to maturity, we may, at our option, redeem the 2023 Notes at any time, in whole or in part, at specified redemption prices, which also include a customary make-whole premium provision through August 1, 2018. In August 2013, we exchanged 100% of the 2023 Notes for notes that are freely transferable and registered under the Securities Act of 1933.

The 2021 and 2023 Notes rank equally in right of payment with all of our existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness and effectively subordinated to the Company's existing and future secured indebtedness, including indebtedness under our revolving credit facility and our 6.625% Senior Secured Notes due 2018, to the extent of the value of the assets securing such indebtedness. The 2021 and 2023 Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee the 2021 or 2023 Notes. The 2021 and 2023 Notes are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly-owned subsidiaries party to the Indenture.

During the fiscal year ended September 30, 2013, we used a portion of the net cash proceeds from the 2023 Notes offering to redeem all of our outstanding 6.875% Senior Notes due 2015 (the 2015 Notes). The 2015 Notes were redeemed at 101.146% of the principal amount, plus accrued and unpaid interest. During fiscal 2013, we also repurchased $2 million of our outstanding 9.125% Senior Notes due 2018 in open market transactions. These transactions resulted in a loss on debt extinguishment of $3.6 million, net of unamortized discounts and debt issuance costs recognized in the quarter ended March 31, 2013. All Senior Notes redeemed/repurchased by the Company were canceled.

Senior Notes: Tangible Equity Units — In July 2012, we issued 4.6 million7.5% TEUs (the 2012 TEUs), which were comprised of prepaid stock purchase contracts (PSPs) and senior amortizing notes. As the two components of the TEUs are legally separate and detachable, we have accounted for the two components as separate items for financial reporting purposes and valued them based on their relative fair value at the date of issuance. The amortizing notes are unsecured senior obligations and rank equally with all of our other unsecured indebtedness. Outstanding notes pay quarterly installments of principal and interest through maturity. The PSPs were originally accounted for as equity (additional paid in capital) at the initial fair value of these contracts based on the relative fair value method. During the quarter ended March 31, 2014, we exchanged 890,000 TEUs, including approximately $2.4 million of amortizing notes, for Beazer Homes' common stock. The PSPs related to the remaining 2012 TEUs are scheduled to be settled in Beazer Homes' common stock on July 15, 2015. See Note 6 for more information related to this exchange and the future PSP settlement.

Junior Subordinated Notes —$103.1 million of unsecured junior subordinated notes mature on July 30, 2036, are redeemable at par and pay a fixed rate of 7.987% for the first ten years ending July 30, 2016. Thereafter, the securities have a variable interest rate as defined in the junior subordinated notes agreement. The obligations relating to these notes and the related securities are subordinated to our Secured Revolving Credit Facility and Senior Notes. In January 2010, we modified the terms of $75 million of these notes and recorded these notes at their estimated fair value. Over the remaining life of the notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of March 31, 2014, the unamortized accretion was $46.1 million and will be amortized over the remaining life of the notes.

As of March 31, 2014, we were in compliance with all covenants under our Junior Notes.

Cash Secured Loans — We have two separate loan facilities, totaling $22.4 million outstanding as of March 31, 2014. Borrowing under the cash secured loan facilities will replenish cash used to repay or repurchase the Company’s debt and would be considered “refinancing indebtedness” under certain of the Company’s existing indentures and debt covenants. However, because the loans are fully collateralized by cash equal to the loan amount, the loans do not provide liquidity to the Company.

The loans mature in November 2017, however, the lenders of these facilities may put the outstanding loan balances to the Company at the two or four year anniversaries of the loans. Borrowings under the facilities are fully secured by cash held by the lender or its affiliates. This secured cash is reflected as restricted cash on our unaudited condensed consolidated balance sheet as of March 31, 2014 and September 30, 2013. The cash secured loan has an interest rate equivalent to LIBOR plus 0.4% per annum which is paid every three months following the effective date of each borrowing. During the fiscal year ended September 30, 2013, we repaid $205 million of the outstanding cash secured term loans and recognized a $1 million loss on debt extinguishment in the quarter ended September 30, 2013, primarily related to the unamortized discounts and debt issuance costs related to these loans.

Other Secured Notes Payable — We periodically acquire land through the issuance of notes payable. As of March 31, 2014 and September 30, 2013, we had outstanding notes payable of $23.8 million and $19.3 million respectively, primarily related to land acquisitions. These notes payable have varying expiration dates between 2014 and 2019 and have a weighted average fixed rate of 4.03% at March 31, 2014. These notes are secured by the real estate to which they relate.

The agreements governing these secured notes payable contain various affirmative and negative covenants. There can be no assurance that we will be able to obtain any future waivers or amendments that may become necessary without significant additional cost or at all. In each instance, however, a covenant default can be cured by repayment of the indebtedness.

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Earnings Per Share

6 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

In computing diluted loss per share for the three and six months ended March 31, 2014 and 2013, all common stock equivalents were excluded from the computation of diluted loss per share as a result of their anti-dilutive effect. For the quarter ended March 31, 2014, these excluded common stock equivalents included options/stock-settled appreciation rights (SSARs) to purchase 0.7 million shares of common stock, 0.3 million shares of nonvested restricted stock and 5.2 million shares issuable upon the conversion of our Tangible Equity Unit (TEU) prepaid stock purchase contracts (PSPs).

In March 2014, the Company entered into an agreement to issue 1,368,108 shares, or 1.5372 shares per TEU, of common stock, par value $0.001, in exchange for 890,000 TEUs. Each outstanding TEU consisted of a prepaid stock purchase contract and a 7.5% senior amortizing note which was due July 15, 2015. At maturity, holders of the prepaid stock purchase contracts would have automatically received a minimum of 1.40746 shares per contract, up to a maximum of 1.72414 shares per contract, depending on the Company's common stock at such time. In lieu of paying the present value of the remaining principal and interest payments due to the holders in cash, the TEU exchange provided 115,433 shares over the 1,252,675 shares that would have been received at maturity, assuming the Company’s stock price remains above $17.75 per share.

As of March 31, 2014, there were approximately 3.7 million TEUs outstanding (including $9.9 million of amortizing notes). The PSPs related to the TEUs are scheduled to be settled in Beazer Homes' common stock on July 15, 2015. If on that date, our common stock price is (1) at or below $14.50 per share, the PSPs will convert to 1.72414 shares per unit, (2) at or above $17.75 per share, the PSPs will convert to 1.40746 shares per unit or (3) between $14.50 and $17.75 per share, the PSPs will convert to a number of shares of our common stock equal to $25.00 divided by the applicable market value of our common stock. If the remaining TEU PSPs were converted at the settlement factor under their agreement based on our current stock price, we would be required to issue approximately 5.2 million shares of common stock to the instrument holders upon conversion.

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Investments in Unconsolidated Joint Ventures (Tables)

6 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Investments in unconsolidated joint ventures, total equity and outstanding borrowings

The following table presents our investment in our unconsolidated entities, the total equity and outstanding borrowings of these unconsolidated entities, and our guarantees of these borrowings, as of March 31, 2014 and September 30, 2013:

(In thousands)	March 31, 2014		September 30, 2013
Beazer’s investment in unconsolidated entities	$	36,547	$	44,997
Total equity of unconsolidated entities	387,572		385,040
Total outstanding borrowings of unconsolidated entities	111,624		85,938

For the three and six months ended March 31, 2014 and 2013, our income from unconsolidated entity activities and the overall equity in income of unconsolidated entities is as follows:

	Three Months Ended					Six Months Ended
	March 31,					March 31,
(In thousands)	2014			2013		2014		2013
Continuing operations:
(Loss) income from unconsolidated entity activity	$	(17	)	$	68	$	302	$	104
Equity in (loss) income of unconsolidated entities - continuing operations	$	(17	)	$	68	$	302	$	104

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Discontinued Operations

6 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

We continually review each of our markets in order to refine our overall investment strategy and to optimize capital and resource allocations in an effort to enhance our financial position and to increase shareholder value. This review entails an evaluation of both external market factors and our position in each market and over time has resulted in the decision to discontinue certain of our homebuilding operations.

We have classified the results of operations of our discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented. There were no material assets or liabilities related to our discontinued operations as of March 31, 2014 or September 30, 2013. Discontinued operations were not segregated in the unaudited condensed consolidated statements of cash flows. Therefore, amounts for certain captions in the unaudited condensed consolidated statements of cash flows will not agree with the respective data in the unaudited condensed consolidated statements of operations. The results of our discontinued operations in the unaudited condensed consolidated statements of operations for the three and six months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Total revenue	$	—		$	192		$	464		$	288
Home construction and land sales expenses	1,497			(160		)	2,952			(66		)
Inventory impairments and lot option abandonments	—			—			—			17
Gross (loss) profit	(1,497		)	352			(2,488		)	337
General and administrative expenses (a)	(1,750		)	890			(1,561		)	2,415
Operating income (loss)	253			(538		)	(927		)	(2,078		)
Other income, net	—			—			—			69
Income (loss) from discontinued operations before income taxes	253			(538		)	(927		)	(2,009		)
(Benefit from) provision for income taxes	—			(9		)	10			(31		)
Income (loss) from discontinued operations, net of tax	$	253		$	(529	)	$	(937	)	$	(1,978	)

(a) The three and six months ended March 31, 2014 includes approximately $1.9 million of recoveries received for legal fees related to outstanding matters in Denver, Colorado.

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Fair Value Measurements

6 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

As of March 31, 2014, we had no assets or liabilities in our unaudited condensed consolidated balance sheets that were required to be measured at fair value on a recurring basis. Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recovered. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

As previously disclosed, we review our long-lived assets, including inventory, for recoverability when factors that indicate an impairment may exist, but no less than quarterly. Fair value is based on estimated cash flows discounted for market risks associated with the long-lived assets. The fair values of our investments in unconsolidated entities are determined primarily using a discounted cash flow model to value the underlying net assets of the respective entities. See Notes 1, 3 and 4 for additional information related to the fair value accounting for the assets listed above. Determining which hierarchical level an asset or liability falls within requires significant judgment. We evaluate our hierarchy disclosures each quarter.

The following table presents our assets measured at fair value on a non-recurring basis for each hierarchy level and represents only those assets whose carrying values were adjusted to fair value during the six months ended March 31, 2014 and 2013:

(In thousands)	Level 1	Level 2	Level 3		Total
Six Months Ended March 31, 2014
Land held for sale	—	—	$	4,766	$	4,766
Six Months Ended March 31, 2013
Land held for sale	—	—	$	2,013	$	2,013

The fair value of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, cash secured loan and other secured notes payable approximate their carrying amounts due to the short maturity of these assets and liabilities.

Obligations related to land not owned under option agreements approximate fair value. The carrying values and estimated fair values of other financial assets and liabilities were as follows:

(In thousands)	As of March 31, 2014				As of September 30, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	1,411,007	$	1,516,051	$	1,416,860	$	1,469,904
Junior Subordinated Notes	54,703		54,703		53,670		53,670
	$	1,465,710	$	1,570,754	$	1,470,530	$	1,523,574

The estimated fair value shown above for our publicly-held Senior Notes has been determined using quoted market rates (Level 2). Since there is no trading market for our junior subordinated notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

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Income Taxes

6 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For the three and six months ended March 31, 2014 and 2013, our non-cash tax provision/benefit from continuing operations primarily related to a change in our prior year's recognized tax benefits.

As of March 31, 2014 and September 30, 2013, we had $2.7 million and $2.6 million of accrued interest and penalties related to our unrecognized tax benefits, respectively.

In the normal course of business, we are subject to audits by federal and state tax authorities. Our federal income tax returns for fiscal years 2007 through 2010 are under Internal Revenue Service (IRS) appeal. Our federal income tax returns for fiscal years 2011 through 2012 and certain state income tax returns for various fiscal years are under routine examination. The statute of limitations for our major tax jurisdictions remains open for examination for fiscal years 2007 and subsequent years. The final outcome of these appeals and examinations are not yet determinable and therefore the change in our unrecognized tax benefits that could occur within the next 12 months cannot be estimated at this time.

Based upon an evaluation of all available evidence, we established a valuation allowance for substantially all of our deferred tax assets during fiscal 2008. As of March 31, 2014, we continued our evaluation of whether the valuation allowance against our deferred tax assets was still required. We considered positive evidence including evidence of recovery in the housing markets where we operate, the prospects of continued profitability and growth, a strong backlog and sufficient balance sheet liquidity to sustain and grow operations. Although the Company’s performance and current positioning is bringing it closer to a conclusion that a valuation allowance is no longer needed, further evidence of sustained profitability is needed to reverse our valuation allowance against our deferred tax assets. Therefore, based upon all available positive and negative evidence, we concluded a valuation allowance is still needed for substantially all of our gross deferred tax assets at March 31, 2014. The Company's deferred tax asset valuation allowance was $491.9 million and $487.3 million as of March 31, 2014 and September 30, 2013, respectively. In future periods, we expect to reduce all or a portion of our valuation allowance, generating a non-cash tax benefit, if sufficient positive evidence is present indicating that more likely than not a portion or all of our deferred tax assets will be realized. Changes in existing tax laws could also affect actual tax results and the valuation of deferred tax assets over time.

Further, we experienced an “ownership change” as defined in Section 382 of the Internal Revenue Code (Section 382) as of January 12, 2010. Section 382 contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss carryforwards (NOLs) and certain built-in losses or deductions recognized during the five-year period after the ownership change to offset future taxable income. Therefore, our ability to utilize our pre-ownership change net operating loss carryforwards and recognize certain built-in losses or deductions is limited by Section 382 to an estimated maximum amount of approximately $11.4 million ($4 million tax-effected) annually. Certain deferred tax assets are not subject to any limitation imposed. Due to the Section 382 limitation and the maximum carryforward period of our NOLs, we will be unable to fully recognize certain deferred tax assets. As future economic conditions unfold, we will be able to confirm that certain deferred tax assets will not provide any future tax benefit. At such time, we will accordingly remove any deferred tax asset and corresponding valuation allowance.

Accordingly, a portion of our $551.5 million of total gross deferred tax assets related to accrued losses on our inventory may be unavailable due to the limitation imposed by Section 382. As of March 31, 2014, we estimate that between $52.5 million and $88.5 million may be unavailable due to our Section 382 limitation. As a result, upon the resumption of sustained profitability and reversal of our valuation allowance, between $408.8 million and $444.8 million of our net deferred tax assets may be available to us for the reduction of future cash taxes. The actual realization of our deferred tax assets is difficult to predict and will be dependent on future events.

Considering the limitation imposed by Section 382, the table below depicts the classifications of our deferred tax assets:

(In thousands)	March 31, 2014
Deferred tax assets:
Subject to annual limitation	$	98,232
Generally not subject to annual limitation	364,833
Certain components likely to be subject to annual limitation	88,455
Total deferred tax assets	551,520
Deferred tax liabilities	(54,257		)
Net deferred tax assets before valuation allowance	497,263
Valuation allowance	(491,856		)
Net deferred tax assets	$	5,407

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Contingencies

6 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints and other legal actions. The Company is subject to the possibility of loss contingencies arising in its business. In determining loss contingencies, we consider the likelihood of loss as well as the ability to reasonably estimate the amount of such loss or liability. An estimated loss is recorded when it is considered probable that a liability has been incurred and when the amount of loss can be reasonably estimated.

Warranty Reserves. We currently provide a limited warranty (ranging from one to two years) covering workmanship and materials per our defined performance quality standards. In addition, we provide a limited warranty (generally ranging from a minimum of five years up to the period covered by the applicable statute of repose) covering only certain defined construction defects. We also provide a defined structural element warranty with single-family homes and townhomes in certain states.

We subcontract our homebuilding work to subcontractors whose contracts generally include an indemnity obligation and a requirement that certain minimum insurance requirements be met, including providing us with a certificate of insurance prior to receiving payments for their work. Therefore, many claims relating to workmanship and materials are the primary responsibility of the subcontractors.

Warranty reserves are included in other liabilities and the provision for warranty accruals is included in home construction and land sales expenses in the unaudited condensed consolidated financial statements. We record reserves covering anticipated warranty expense for each home closed. Management reviews the adequacy of warranty reserves each reporting period based on historical experience and management’s estimate of the costs to remediate the claims and adjusts these provisions accordingly. Our review includes a quarterly analysis of the historical data and trends in warranty expense by operating segment. An analysis by operating segment allows us to consider market specific factors such as our warranty experience, the number of home closings, the prices of homes, product mix and other data in estimating our warranty reserves. In addition, our analysis also contemplates the existence of any non-recurring or community-specific warranty related matters that might not be contemplated in our historical data and trends.

As a result of our quarterly analyses, we adjust our estimated warranty liabilities, if required. While we believe our warranty reserves are adequate as of March 31, 2014, historical data and trends may not accurately predict actual warranty costs or future developments could lead to a significant change in the reserve. Our warranty reserves are as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Balance at beginning of period	$	11,911		$	14,342		$	11,663		$	15,477
Accruals for warranties issued	1,047			1,302			2,170			2,730
Changes in liability related to warranties existing in prior periods	1,480			(437		)	3,223			(1,739		)
Payments made	(1,877		)	(1,606		)	(4,495		)	(2,867		)
Balance at end of period	$	12,561		$	13,601		$	12,561		$	13,601

Litigation

As disclosed in prior SEC filings, we operated Beazer Mortgage Corporation (BMC) from 1998 through February 2008 to offer mortgage financing to buyers of our homes. BMC entered into various agreements with mortgage investors, pursuant to which BMC originated certain mortgage loans and ultimately sold these loans to investors. In general, underwriting decisions were not made by BMC but by the investors themselves or third-party service providers. From time to time we have received claims from institutions which have acquired certain of these mortgages demanding damages or indemnity arising from BMC's activities or that we repurchase such mortgages. We have been able to resolve these claims for amounts that are not material to our consolidated financial position or results of operation. We currently have an insignificant number of such claims outstanding for which we believe we have no liability. However, we cannot rule out the potential for additional mortgage loan repurchase or indemnity claims in the future from other investors, although, at this time, we do not believe that the exposure related to any such claims would be material to our consolidated financial position or results of operations. As of March 31, 2014, no liability has been recorded for any such additional claims as such exposure is not both probable and reasonably estimable.

In the normal course of business, we are subject to various lawsuits. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in any of the pending lawsuits could result in the payment by us of substantial monetary damages which may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and the Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our business, financial condition and results of operations.

Other Matters

As disclosed in our 2009 Form 10-K, on July 1, 2009, the Company announced that it had resolved the criminal and civil investigations by the United States Attorney’s Office in the Western District of North Carolina (the U.S. Attorney) and other state and federal agencies concerning matters that were the subject of the independent investigation, initiated in April 2007 by the Audit Committee of the Board of Directors (the Investigation) and concluded in May 2008. Under the terms of a deferred prosecution agreement (DPA), the Company’s liability for each of the fiscal years after 2010 through a portion of fiscal 2014 (unless extended as previously described in our 2009 Form 10-K) will be equal to4%of the Company’s adjusted EBITDA (as defined in the DPA). The total amount of such obligations will be dependent on several factors; however, the maximum liability under the DPA and other settlement agreements discussed above will not exceed$55.0 million, of which$20.2 millionhas been paid as of March 31, 2014 and an additional $1.8 million has been recorded as a liability at March 31, 2014. Positive adjusted EBITDA in future years will require us to incur additional expense in the future.

In 2006, we received two Administrative Orders issued by the New Jersey Department of Environmental Protection. The Orders allege certain violations of wetlands disturbance permits and assess proposed fines of$630,000 and $678,000, respectively. Although we believe that we have significant defenses to the alleged violations, we reached a settlement with the Department, through an Administrative Consent Order (the “ACO”). Pursuant to the ACO, we agreed to pay a penalty of $125,000 and donate a 35-acre parcel of land to a local soil conservation district (or make an additional $250,000 payment if the parcel cannot be conveyed). We have paid the $125,000 penalty and are in the process of completing actions that will allow us to convey the 35-acre donation parcel.

We and certain of our subsidiaries have been named as defendants in various claims, complaints and other legal actions, most relating to construction defects, moisture intrusion and product liability. Certain of the liabilities resulting from these actions are covered in whole or part by insurance. In our opinion, based on our current assessment, the ultimate resolution of these matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

We have accrued $19.4 million and $19.9 million in other liabilities related to litigation and other matters, excluding warranty, as of March 31, 2014 and September 30, 2013, respectively.

We had outstanding letters of credit and performance bonds of approximately $26.5 million and $189.3 million, respectively, at March 31, 2014 related principally to our obligations to local governments to construct roads and other improvements in various developments. We have no outstanding letters of credit relating to our land option contracts as of March 31, 2014.

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Stock-based Compensation

6 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

Stock-based Compensation

For the three months ended March 31, 2014, our total stock-based compensation, included in general and administrative expenses (G&A), was approximately $0.7 million ($0.5 million net of tax). The fair value of each option/stock-based stock appreciation right (SSAR) grant is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of each performance-based, nonvested stock grant is estimated on the date of grant using the Monte Carlo valuation method. The cash-settled component of any awards granted to employees are accounted for as a liability award and the liability is adjusted to fair value each reporting period until vested. Non-performance based, nonvested stock is valued based on the market price of the common stock on the date of the grant.

During the six months ended March 31, 2014 and 2013, employees surrendered 21,772 and 1,306 shares, respectively, to us in payment of minimum tax obligations upon the vesting of stock awards under our stock incentive plans. We valued the stock at the market price on the date of surrender, for an aggregate value of approximately $414,000 and $19,000 for the six months ended March 31, 2014 and 2013, respectively.

Stock Options: We used the following weighted-average assumptions for our options granted during the six months ended March 31, 2014:

Expected life of options	5.1 years
Expected volatility	45.99		%
Expected discrete dividends	—
Weighted average risk-free interest rate	1.42		%
Weighted average fair value	$	7.97

We considered the historic returns of our stock and the implied volatility of our publicly-traded options in determining expected volatility. We assumed no dividends would be paid since our Board of Directors has suspended payment of dividends indefinitely and payment of dividends is restricted under our Senior Note covenants. The risk-free interest rate is based on the term structure of interest rates at the time of the option grant and we have relied upon a combination of the observed exercise behavior of our prior grants with similar characteristics, the vesting schedule of the current grants, and an index of peer companies with similar grant characteristics to determine the expected life of the options.

The intrinsic value of a stock option/SSAR is the amount by which the market value of the underlying stock exceeds the exercise price of the option/SSAR. At March 31, 2014, our SSAR/stock options outstanding had an intrinsic value of $2.2 million. The intrinsic value of SSARs/stock options vested and expected to vest in the future was $2.2 million. The SSARS/stock options vested and expected to vest in the future had a weighted average expected life of 2.8 years. The aggregate intrinsic value of exercisable SSARs/stock options as of March 31, 2014 was $1.0 million.

The following table summarizes stock options and SSARs outstanding as of March 31, 2014, as well as activity during the three and six months then ended:

	Three Months Ended				Six Months Ended
	March 31, 2014				March 31, 2014
	Shares		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
Outstanding at beginning of period	721,127		$	29.92	560,784		$	33.01
Granted	—		—		161,010		19.11
Exercised	(1,182	)	16.64		(1,288	)	16.16
Expired	(2,870	)	176.31		(2,870	)	176.31
Forfeited	(5,206	)	22.60		(5,767	)	22.23
Outstanding at end of period	711,869		$	29.41	711,869		$	29.41
Exercisable at end of period	408,929		$	39.19	408,929		$	39.19
Vested or expected to vest in the future	706,895		$	29.49	706,895		$	29.49

Nonvested Stock Awards: Compensation cost arising from nonvested stock awards granted to employees is recognized as an expense using the straight-line method over the vesting period. As of March 31, 2014 and September 30, 2013, there was $2.2 million and $1.0 million, respectively, of total unrecognized compensation cost related to nonvested stock awards included in paid-in capital. The cost remaining at March 31, 2014 is expected to be recognized over a weighted average period of 1.7 years.

During the six months ended March 31, 2014, we issued 28,690 shares of performance-based restricted stock (Performance Shares) to our executive officers and certain corporate employees. Each Performance Share represents a contingent right to receive one share of the Company’s common stock if vesting is satisfied at the end of the three-year performance period. The number of shares that will vest at the end of the three-year performance period will depend upon the level to which the following two performance criteria are achieved (1) Beazer’s total shareholder return (TSR) relative to a group of peer companies and (2) the compound annual growth rate (CAGR) during the three-year performance period of Beazer common stock. The target number of Performance Shares that vest may be increased by up to 50% based on the level of achievement of the above criteria as defined in the applicable award agreement. Payment for Performance Shares in excess of the target number (28,690) will be settled in cash. Any portion of the Performance Shares that do not vest at the end of the period will be forfeited. The grants of the performance-based, nonvested stock were valued using the Monte Carlo valuation method and had an estimated fair value of $15.90 per share, a portion of which is attributable to the potential cash-settled liability aspect of the grant which is included in Other Liabilities.

A Monte Carlo simulation model requires the following inputs: (1) expected dividend yield on the underlying stock, (2) expected price volatility of the underlying stock, (3) risk-free interest rate for the period corresponding with the expected term of the award and (4) fair value of the underlying stock. For the Company and each member of the peer group, the following inputs were used, as applicable, in the Monte Carlo simulation model to determine the fair value as of the grant date for the Performance Shares: 0% dividend yield for the Company, expected price volatility ranging from 35.0% to 59.1% and a risk-free interest rate of 0.66%. The methodology used to determine these assumptions is similar to that for the Black-Scholes Model used for stock option grants discussed above; however the expected term is determined by the model in the Monte Carlo simulation.

Activity relating to nonvested stock awards, including the Performance Shares for the three and six months ended March 31, 2014 is as follows:

	Three Months Ended				Six Months Ended
	March 31, 2014				March 31, 2014
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Beginning of period	312,855		$	13.18	280,416		$	12.32
Granted	—		—		135,567		17.53
Vested	(239	)	18.82		(102,277	)	16.64
Forfeited	(6,160	)	17.45		(7,250	)	16.45
End of period	306,456		$	13.08	306,456		$	13.08

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Supplemental Cash Flow Information - Supplemental Disclosure of Non-cash Activity (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Supplemental disclosure of non-cash activity:
Decrease in obligations related to land not owned under option agreements	$ (1,486)	$ (1,501)
Decrease in debt related to conversion of Mandatory Convertible Subordinated Notes and Tangible Equity Units for common stock	(2,376)	(9,402)
Land acquisitions for debt	16,833	0
Supplemental disclosure of cash activity:
Interest payments	60,396	48,944
Income tax payments	91	121
Tax refunds received	$ 0	$ 3,925

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Fair Value Measurements - Fair Value Assets Measured on a Non-recurring Basis (Details) (Fair Value, Measurements, Nonrecurring, USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Land held for sale	$ 0
Right to purchase land		0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Land held for sale	0
Right to purchase land		0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Land held for sale	4,766
Right to purchase land		2,013
Total
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Land held for sale	4,766
Right to purchase land		$ 2,013

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Other Liabilities

Otherliabilities include the following:

(In thousands)	March 31, 2014		September 30, 2013
Income tax liabilities	$	20,358	$	20,170
Accrued warranty expenses	12,561		11,663
Accrued interest	33,907		33,372
Accrued and deferred compensation	14,102		25,579
Customer deposits	13,847		11,408
Other	38,900		43,431
Total	$	133,675	$	145,623

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Borrowings (Tables)

6 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Schedule of long-term debt

At March 31, 2014 and September 30, 2013 we had the following long-term debt, net of discounts:

(In thousands)	Maturity Date	March 31, 2014			September 30, 2013
8 1/8% Senior Notes	June 2016	172,879			172,879
6 5/8% Senior Secured Notes	April 2018	300,000			300,000
9 1/8% Senior Notes	June 2018	298,000			298,000
9 1/8% Senior Notes	May 2019	235,000			235,000
7 1/2% Senior Notes	September 2021	200,000			200,000
7 1/4% Senior Notes	February 2023	200,000			200,000
TEU Senior Amortizing Notes	August 2015	9,908			16,141
Unamortized debt discounts		(4,780		)	(5,160		)
Total Senior Notes, net		1,411,007			1,416,860
Junior subordinated notes	July 2036	54,703			53,670
Cash Secured Loan	November 2017	22,368			22,368
Other secured notes payable	Various Dates	23,795			19,285
Total debt, net		$	1,511,873		$	1,512,183

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Contingencies - Warranty (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 11,911	$ 14,342	$ 11,663	$ 15,477
Accruals for warranties issued	1,047	1,302	2,170	2,730
Changes in liability related to warranties existing in prior periods	1,480	(437)	3,223	(1,739)
Payments made	(1,877)	(1,606)	(4,495)	(2,867)
Balance at end of period	$ 12,561	$ 13,601	$ 12,561	$ 13,601

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Inventory - Inventory Impairments and Lot Option Abandonment Charges, by Reportable Segment (Details) (USD $)	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Real Estate, Write-down or Reserve [Line Items]
Inventory impairments and option contract abandonments	$ 880,000	$ 2,025,000	$ 911,000	$ 2,229,000
Inventory impairments and option contract abandonments	880,000	2,025,000	911,000	2,246,000
Continuing Operations
Real Estate, Write-down or Reserve [Line Items]
Development projects and homes in process (Held for Development)	0	0	0	59,000
Land Held for Sale	28,000	1,778,000	59,000	1,778,000
Lot Option Abandonments	852,000	247,000	852,000	392,000
Inventory impairments and option contract abandonments	880,000	2,025,000	911,000	2,229,000
Continuing Operations | Unallocated
Real Estate, Write-down or Reserve [Line Items]
Development projects and homes in process (Held for Development)	0	0	0	0
Lot Option Abandonments	0	0	0	0
Continuing Operations | West Segment
Real Estate, Write-down or Reserve [Line Items]
Development projects and homes in process (Held for Development)	0	0	0	46,000
Land Held for Sale	0	0	0	0
Lot Option Abandonments	0	30,000	0	104,000
Continuing Operations | East Segment
Real Estate, Write-down or Reserve [Line Items]
Development projects and homes in process (Held for Development)	0	0	0	13,000
Land Held for Sale	0	0	31,000	0
Lot Option Abandonments	0	(2,000)	0	20,000
Continuing Operations | Southeast Segment
Real Estate, Write-down or Reserve [Line Items]
Development projects and homes in process (Held for Development)	0	0	0	0
Land Held for Sale	28,000	1,778,000	28,000	1,778,000
Lot Option Abandonments	852,000	219,000	852,000	268,000
Discontinued Operations
Real Estate, Write-down or Reserve [Line Items]
Development projects and homes in process (Held for Development)	0	0	0	0
Land Held for Sale	0	0	0	17,000
Lot Option Abandonments	0	0	0	0
Inventory impairments and option contract abandonments	$ 0	$ 0	$ 0	$ 17,000

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Unaudited Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net loss	$ (13,109)	$ (40,028)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,738	5,808
Stock-based compensation expense	1,266	1,638
Inventory impairments and option contract abandonments	911	2,246
Deferred and other income tax benefit	(79)	(577)
Changes in allowance for doubtful accounts	(373)	(184)
Equity in income of unconsolidated entities	(302)	(104)
Cash distributions of income from unconsolidated entities	512	336
Loss on extinguishment of debt	153	1,517
Changes in operating assets and liabilities:
Increase in accounts receivable	(6,196)	(287)
Decrease in income tax receivable	0	3,859
Increase in inventory	(156,876)	(40,407)
Decrease in other assets	3,488	2,823
Decrease in trade accounts payable	(11,909)	(7,033)
Decrease in other liabilities	(11,037)	(6,050)
Other changes	(239)	107
Net cash used in operating activities	(188,052)	(76,336)
Cash flows from investing activities:
Capital expenditures	(6,641)	(3,869)
Investments in unconsolidated entities	(3,193)	(400)
Return of capital from unconsolidated entities	0	432
Increases in restricted cash	(2,588)	(1,044)
Decreases in restricted cash	801	7,562
Net cash (used in) provided by investing activities	(11,621)	2,681
Cash flows from financing activities:
Repayment of debt	(4,747)	(183,319)
Proceeds from issuance of new debt	0	200,000
Debt issuance costs	(26)	(4,635)
Settlement of unconsolidated entity debt obligation	0	(500)
Payments for other financing activities	(393)	(26)
Net cash (used in) provided by financing activities	(5,166)	11,520
Decrease in cash and cash equivalents	(204,839)	(62,135)
Cash and cash equivalents at beginning of period	504,459	487,795
Cash and cash equivalents at end of period	$ 299,620	$ 425,660

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Interest

6 Months Ended

Mar. 31, 2014

Real Estate Inventory Capitalized Interest Costs [Abstract]

Interest

Interest

Our ability to capitalize all interest incurred during the three and six months ended March 31, 2014 and 2013 has been limited by our inventory eligible for capitalization. The following table sets forth certain information regarding interest:

	Three Months Ended March 31,						Six Months Ended March 31,
(In thousands)	2014			2013			2014			2013
Capitalized interest in inventory, beginning of period	$	61,836		$	41,922		$	52,562		$	38,190
Interest incurred	32,458			29,177			64,899			57,595
Interest expense not qualified for capitalization and included as other expense	(14,659		)	(16,246		)	(30,691		)	(32,457		)
Capitalized interest amortized to house construction and land sales expenses	(7,379		)	(9,352		)	(14,514		)	(17,827		)
Capitalized interest in inventory, end of period	$	72,256		$	45,501		$	72,256		$	45,501

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Supplemental Guarantor Information - Unaudited Consolidating Balance Sheet Information Parentheticals (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
Allowances for accounts receivable	$ 1,278	$ 1,651

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Contingencies (Tables)

6 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Warranty reserves

Our warranty reserves are as follows:

	Three Months Ended						Six Months Ended
	March 31,						March 31,
(In thousands)	2014			2013			2014			2013
Balance at beginning of period	$	11,911		$	14,342		$	11,663		$	15,477
Accruals for warranties issued	1,047			1,302			2,170			2,730
Changes in liability related to warranties existing in prior periods	1,480			(437		)	3,223			(1,739		)
Payments made	(1,877		)	(1,606		)	(4,495		)	(2,867		)
Balance at end of period	$	12,561		$	13,601		$	12,561		$	13,601

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Inventory - Schedule of Inventory (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012
Real Estate [Abstract]
Homes under construction	$ 319,758		$ 262,476
Development projects in progress	681,665		578,453
Land held for future development	306,119		341,986
Land held for sale	57,537		31,331
Capitalized interest	72,256	61,836	52,562	45,501	41,922	38,190
Model homes	43,025		37,886
Total owned inventory	$ 1,480,360		$ 1,304,694

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Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Inventory Valuation

Inventory Valuation. We assess our inventory assets no less than quarterly for recoverability in accordance with the policies as described in Notes 1 and 4 to the consolidated financial statements in our 2013 Annual Report. Our homebuilding inventories that are accounted for as held for development include land and home construction assets grouped together as communities. Homebuilding inventories held for development are stated at cost (including direct construction costs, capitalized indirect costs, capitalized interest and real estate taxes) unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. For those communities for which construction and development activities are expected to occur in the future or have been idled (land held for future development), all applicable interest and real estate taxes are expensed as incurred and the inventory is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. We record assets held for sale at the lower of the carrying value or fair value less costs to sell.