Earnings Per Share

9 Months Ended

Jun. 30, 2015

Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted income per share adjusts the basic income per share for the effects of any potentially dilutive instruments, only in periods in which the Company has net income and such effects are dilutive under the treasury stock method. Basic and diluted income (loss) per share is calculated using unrounded numbers.

The Company reported a net loss for the three months ended June 30, 2014 and the nine months ended June 30, 2015 and 2014. Accordingly, all common stock equivalents were excluded from the computation of diluted loss per share because inclusion would have resulted in anti-dilution. For the quarter ended June 30, 2015, 1.2 million common stock equivalents were excluded from our calculation of diluted income per share as a result of their anti-dilutive effect.

The weighted-average number of common shares outstanding used to calculate basic income per share is reconciled to shares used to calculate diluted income per share as follows for the period presented.



	Three Months Ended June 30,		Nine Months Ended June 30,
(in thousands)	2015	2014	2015	2014
Basic shares	26,482	26,421	26,473	25,582
Shares issuable upon conversion of TEUs	5,221	—	—	—
Shares issuable upon vesting/exercise of stock awards/options	97	—	—	—
Diluted shares	31,800	26,421	26,473	25,582

As of June 30, 2015, there were approximately 3.7 million tangible equity units (TEUs) outstanding (including $1.7 million of amortizing notes). The majority of the remaining prepaid stock purchase contracts (PSPs) related to the TEUs were settled in Beazer Homes' common stock on July 15, 2015 at a rate of 1.40746 shares per TEU outstanding because our average share price during the pricing period as per the TEU agreement was greater than $17.75. This conversion required us to issue approximately 5.2 million shares of common stock to the instrument holders subsequent to June 30, 2015. Refer to Note 8 for a further discussion regarding the structure of these TEUs.