x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
Large accelerated filer | ¨ | Accelerated filer | x |
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | |
Smaller reporting company | ¨ | Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
Class | Outstanding as of April 29, 2019 | |
Common Stock, $0.001 par value | 32,043,421 |
in thousands (except share and per share data) | March 31, 2019 | September 30, 2018 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 86,441 | $ | 139,805 | |||
Restricted cash | 12,197 | 13,443 | |||||
Accounts receivable (net of allowance of $373 and $378, respectively) | 18,486 | 24,647 | |||||
Owned inventory | 1,634,399 | 1,692,284 | |||||
Investments in unconsolidated entities | 3,726 | 4,035 | |||||
Deferred tax assets, net | 256,347 | 213,955 | |||||
Property and equipment, net | 26,662 | 20,843 | |||||
Goodwill | 10,605 | 9,751 | |||||
Other assets | 6,478 | 9,339 | |||||
Total assets | $ | 2,055,341 | $ | 2,128,102 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 125,403 | $ | 126,432 | |||
Other liabilities | 99,020 | 126,389 | |||||
Total debt (net of premium of $2,254 and $2,640, respectively, and debt issuance costs of $12,911 and $14,336, respectively) | 1,301,760 | 1,231,254 | |||||
Total liabilities | 1,526,183 | 1,484,075 | |||||
Stockholders’ equity: | |||||||
Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued) | — | — | |||||
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 32,043,664 issued and outstanding and 33,522,046 issued and outstanding, respectively) | 32 | 34 | |||||
Paid-in capital | 858,709 | 880,025 | |||||
Accumulated deficit | (329,583 | ) | (236,032 | ) | |||
Total stockholders’ equity | 529,158 | 644,027 | |||||
Total liabilities and stockholders’ equity | $ | 2,055,341 | $ | 2,128,102 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands (except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Total revenue | $ | 421,260 | $ | 455,178 | $ | 823,300 | $ | 827,667 | |||||||
Home construction and land sales expenses | 356,329 | 380,101 | 696,707 | 691,761 | |||||||||||
Inventory impairments and abandonments | 147,611 | — | 148,618 | — | |||||||||||
Gross (loss) profit | (82,680 | ) | 75,077 | (22,025 | ) | 135,906 | |||||||||
Commissions | 15,998 | 17,334 | 31,735 | 31,690 | |||||||||||
General and administrative expenses | 37,372 | 40,852 | 76,014 | 78,137 | |||||||||||
Depreciation and amortization | 2,900 | 3,066 | 5,670 | 5,573 | |||||||||||
Operating (loss) income | (138,950 | ) | 13,825 | (135,444 | ) | 20,506 | |||||||||
Equity in income of unconsolidated entities | 81 | 256 | 17 | 155 | |||||||||||
Gain (loss) on extinguishment of debt | 216 | — | 216 | (25,904 | ) | ||||||||||
Other expense, net | (337 | ) | (1,453 | ) | (379 | ) | (4,598 | ) | |||||||
(Loss) income from continuing operations before income taxes | (138,990 | ) | 12,628 | (135,590 | ) | (9,841 | ) | ||||||||
(Benefit) expense from income taxes | (38,158 | ) | 1,012 | (42,080 | ) | 109,118 | |||||||||
(Loss) income from continuing operations | (100,832 | ) | 11,616 | (93,510 | ) | (118,959 | ) | ||||||||
Loss from discontinued operations, net of tax | (30 | ) | (58 | ) | (41 | ) | (430 | ) | |||||||
Net (loss) income | $ | (100,862 | ) | $ | 11,558 | $ | (93,551 | ) | $ | (119,389 | ) | ||||
Weighted average number of shares: | |||||||||||||||
Basic | 30,714 | 32,140 | 31,263 | 32,097 | |||||||||||
Diluted | 30,714 | 32,721 | 31,263 | 32,097 | |||||||||||
Basic (loss) earnings per share: | |||||||||||||||
Continuing operations | $ | (3.28 | ) | $ | 0.36 | $ | (2.99 | ) | $ | (3.71 | ) | ||||
Discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Total | $ | (3.28 | ) | $ | 0.36 | $ | (2.99 | ) | $ | (3.72 | ) | ||||
Diluted (loss) earnings per share: | |||||||||||||||
Continuing operations | $ | (3.28 | ) | $ | 0.36 | $ | (2.99 | ) | $ | (3.71 | ) | ||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Total | $ | (3.28 | ) | $ | 0.35 | $ | (2.99 | ) | $ | (3.72 | ) |
Six Months Ended March 31, 2019 | ||||||||||||||||||
Common Stock | Paid-in Capital | Accumulated Deficit | ||||||||||||||||
in thousands | Shares | Amount | Total | |||||||||||||||
Balance as of September 30, 2018 | 33,522 | $ | 34 | $ | 880,025 | $ | (236,032 | ) | $ | 644,027 | ||||||||
Net loss and comprehensive loss | — | — | — | (93,551 | ) | (93,551 | ) | |||||||||||
Amortization of nonvested stock awards | — | — | 4,294 | — | 4,294 | |||||||||||||
Exercises of stock options | 27 | — | 278 | — | 278 | |||||||||||||
Shares issued under employee stock plans, net | 910 | — | — | — | — | |||||||||||||
Forfeiture of restricted stock | (30 | ) | — | — | — | — | ||||||||||||
Common stock redeemed | (179 | ) | — | (1,886 | ) | (1,886 | ) | |||||||||||
Share repurchases | (2,206 | ) | (2 | ) | (24,002 | ) | — | (24,004 | ) | |||||||||
Balance as of March 31, 2019 | 32,044 | $ | 32 | $ | 858,709 | $ | (329,583 | ) | $ | 529,158 |
Three Months Ended March 31, 2019 | ||||||||||||||||||
Common Stock | Paid-in Capital | Accumulated Deficit | ||||||||||||||||
in thousands | Shares | Amount | Total | |||||||||||||||
Balance as of December 31, 2018 | 32,675 | $ | 33 | $ | 863,797 | $ | (228,721 | ) | $ | 635,109 | ||||||||
Net loss and comprehensive loss | — | — | — | (100,862 | ) | (100,862 | ) | |||||||||||
Amortization of nonvested stock awards | — | — | 2,180 | — | 2,180 | |||||||||||||
Exercises of stock options | 26 | — | 271 | — | 271 | |||||||||||||
Forfeiture of restricted stock | (2 | ) | — | — | — | — | ||||||||||||
Common stock redeemed | (3 | ) | — | (35 | ) | — | (35 | ) | ||||||||||
Share repurchases | (652 | ) | (1 | ) | (7,504 | ) | — | (7,505 | ) | |||||||||
Balance as of March 31, 2019 | 32,044 | $ | 32 | $ | 858,709 | $ | (329,583 | ) | $ | 529,158 |
Six Months Ended March 31, 2018 | ||||||||||||||||||
Common Stock | Paid-in Capital | Accumulated Deficit | ||||||||||||||||
in thousands | Shares | Amount | Total | |||||||||||||||
Balance as of September 30, 2017 | 33,516 | $ | 34 | $ | 873,063 | $ | (190,657 | ) | $ | 682,440 | ||||||||
Net loss and comprehensive loss | — | — | — | (119,389 | ) | (119,389 | ) | |||||||||||
Amortization of nonvested stock awards | — | — | 5,208 | — | 5,208 | |||||||||||||
Exercises of stock options | 2 | — | 13 | — | 13 | |||||||||||||
Shares issued under employee stock plans, net | 376 | — | — | — | — | |||||||||||||
Forfeiture of restricted stock | (204 | ) | — | — | — | — | ||||||||||||
Common stock redeemed | (62 | ) | — | (1,323 | ) | — | (1,323 | ) | ||||||||||
Other activity | — | — | 17 | — | 17 | |||||||||||||
Balance as of March 31, 2018 | 33,628 | $ | 34 | $ | 876,978 | $ | (310,046 | ) | $ | 566,966 |
Three Months Ended March 31, 2018 | ||||||||||||||||||
Common Stock | Paid-in Capital | Accumulated Deficit | ||||||||||||||||
in thousands | Shares | Amount | Total | |||||||||||||||
Balance as of December 31, 2017 | 33,596 | $ | 34 | $ | 874,351 | $ | (321,604 | ) | $ | 552,781 | ||||||||
Net income and comprehensive income | — | — | — | 11,558 | 11,558 | |||||||||||||
Amortization of nonvested stock awards | — | — | 2,598 | — | 2,598 | |||||||||||||
Exercises of stock options | — | — | 13 | — | 13 | |||||||||||||
Shares issued under employee stock plans, net | 42 | — | — | — | — | |||||||||||||
Forfeiture of restricted stock | (10 | ) | — | — | — | — | ||||||||||||
Common stock redeemed | — | — | (1 | ) | — | (1 | ) | |||||||||||
Other activity | — | — | 17 | — | 17 | |||||||||||||
Balance as of March 31, 2018 | 33,628 | $ | 34 | $ | 876,978 | $ | (310,046 | ) | $ | 566,966 |
Six Months Ended | |||||||
March 31, | |||||||
in thousands | 2019 | 2018 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | (93,551 | ) | $ | (119,389 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 5,670 | 5,573 | |||||
Stock-based compensation expense | 4,294 | 5,208 | |||||
Inventory impairments and abandonments | 148,618 | 450 | |||||
Deferred and other income tax (benefit) expense | (42,392 | ) | 108,668 | ||||
Gain on sale of fixed assets | (75 | ) | (114 | ) | |||
Change in allowance for doubtful accounts | (5 | ) | 16 | ||||
Equity in income of unconsolidated entities | (16 | ) | (171 | ) | |||
Cash distributions of income from unconsolidated entities | 325 | 116 | |||||
Non-cash (gain) loss on extinguishment of debt | (216 | ) | 3,173 | ||||
Changes in operating assets and liabilities: | |||||||
Decrease in accounts receivable | 6,166 | 6,124 | |||||
Increase in income tax receivable | — | (24 | ) | ||||
Increase in inventory | (88,491 | ) | (132,683 | ) | |||
Decrease in other assets | 3,036 | 2,914 | |||||
(Decrease) increase in trade accounts payable | (1,029 | ) | 13,659 | ||||
Decrease in other liabilities | (25,368 | ) | (9,705 | ) | |||
Net cash used in operating activities | (83,034 | ) | (116,185 | ) | |||
Cash flows from investing activities: | |||||||
Capital expenditures | (11,508 | ) | (8,192 | ) | |||
Proceeds from sale of fixed assets | 94 | 133 | |||||
Acquisition, net of cash acquired | (4,088 | ) | — | ||||
Investments in unconsolidated entities | — | (421 | ) | ||||
Return of capital from unconsolidated entities | — | 176 | |||||
Net cash used in investing activities | (15,502 | ) | (8,304 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of debt | (5,062 | ) | (401,497 | ) | |||
Proceeds from issuance of new debt | — | 400,000 | |||||
Repayment of borrowings from credit facility | (150,000 | ) | (25,000 | ) | |||
Borrowings from credit facility | 225,000 | 25,000 | |||||
Debt issuance costs | (400 | ) | (5,743 | ) | |||
Repurchase of common stock | (24,004 | ) | — | ||||
Tax payments for stock-based compensation awards | (1,886 | ) | (1,323 | ) | |||
Stock option exercises | 278 | 13 | |||||
Net cash provided by (used in) financing activities | 43,926 | (8,550 | ) | ||||
Decrease in cash, cash equivalents, and restricted cash | (54,610 | ) | (133,039 | ) | |||
Cash, cash equivalents, and restricted cash at beginning of period | 153,248 | 304,609 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 98,638 | $ | 171,570 |
• | Identify the contract(s) with a customer |
• | Identify the performance obligations |
• | Determine the transaction price |
• | Allocate the transaction price |
• | Recognize revenue when the performance obligations are met |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Homebuilding revenue | $ | 420,945 | $ | 441,115 | $ | 821,927 | $ | 808,869 | |||||||
Land sales and other revenue | 315 | 14,063 | 1,373 | 18,798 | |||||||||||
Total revenue (a) | $ | 421,260 | $ | 455,178 | $ | 823,300 | $ | 827,667 |
Six Months Ended | |||||||
March 31, | |||||||
in thousands | 2019 | 2018 | |||||
Supplemental disclosure of cash activity: | |||||||
Interest payments | $ | 48,277 | $ | 43,433 | |||
Income tax payments | 61 | 10 | |||||
Tax refunds received | 12 | 39 | |||||
Reconciliation of cash, cash equivalents, and restricted cash: | |||||||
Cash and cash equivalents | $ | 86,441 | $ | 158,787 | |||
Restricted cash | 12,197 | 12,783 | |||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ | 98,638 | $ | 171,570 |
in thousands | March 31, 2019 | September 30, 2018 | |||||
Investment in unconsolidated entities | $ | 3,726 | $ | 4,035 | |||
Total equity of unconsolidated entities | 4,500 | 10,113 | |||||
Total outstanding borrowings of unconsolidated entities | 12,506 | 12,266 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Equity in income of unconsolidated entities | $ | 81 | $ | 256 | $ | 17 | $ | 155 |
in thousands | March 31, 2019 | September 30, 2018 | |||||
Homes under construction | $ | 536,039 | $ | 476,752 | |||
Development projects in progress | 836,829 | 907,793 | |||||
Land held for future development | 28,531 | 83,173 | |||||
Land held for sale | 12,926 | 7,781 | |||||
Capitalized interest | 144,756 | 144,645 | |||||
Model homes | 75,318 | 72,140 | |||||
Total owned inventory | $ | 1,634,399 | $ | 1,692,284 |
in thousands | Projects in Progress (a) | Land Held for Future Development | Land Held for Sale | Total Owned Inventory | |||||||||||
March 31, 2019 | |||||||||||||||
West Segment | $ | 736,249 | $ | 3,483 | $ | 5,077 | $ | 744,809 | |||||||
East Segment | 286,404 | 14,077 | 4,758 | 305,239 | |||||||||||
Southeast Segment | 364,900 | 10,971 | 3,091 | 378,962 | |||||||||||
Corporate and unallocated (b) | 205,389 | — | — | 205,389 | |||||||||||
Total | $ | 1,592,942 | $ | 28,531 | $ | 12,926 | $ | 1,634,399 | |||||||
September 30, 2018 | |||||||||||||||
West Segment | $ | 763,453 | $ | 58,125 | $ | — | $ | 821,578 | |||||||
East Segment | 280,761 | 14,077 | 4,580 | 299,418 | |||||||||||
Southeast Segment | 358,126 | 10,971 | 3,177 | 372,274 | |||||||||||
Corporate and unallocated (b) | 198,990 | — | 24 | 199,014 | |||||||||||
Total | $ | 1,601,330 | $ | 83,173 | $ | 7,781 | $ | 1,692,284 |
$ in thousands | Recoverability Analyses Prepared | |||||||||||
Segment (a) | # of Communities on Watch List (b) | # of Communities (c) | Pre-analysis Book Value (BV) | Aggregate Undiscounted Cash Flow as a % of BV (d) | ||||||||
Quarter Ended March 31, 2019 | ||||||||||||
West | 12 | 9 | $ | 162,362 | 79.4 | % | ||||||
Corporate and unallocated (e) | — | — | 30,037 | N/A (f) | ||||||||
Total | 12 | 9 | $ | 192,399 |
Results of Impairment Analyses | |||||||||||||||||||||||||||
$ in thousands | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
Segment | # of Communities Impaired | # of Lots Impaired | Impairment Charge | Estimated Fair Value of Impaired Inventory at time of Impairment | # of Communities Impaired | # of Lots Impaired | Impairment Charge | Estimated Fair Value of Impaired Inventory at time of Impairment | |||||||||||||||||||
March 31, 2019 | |||||||||||||||||||||||||||
West | 9 | 839 | $ | 92,912 | $ | 69,449 | 9 | 839 | $ | 92,912 | $ | 69,449 | |||||||||||||||
Southeast | — | — | — | — | 1 | 15 | 858 | 1,367 | |||||||||||||||||||
Corporate and unallocated (a) | — | — | 16,111 | 13,928 | — | — | 16,260 | 14,166 | |||||||||||||||||||
Total | 9 | 839 | $ | 109,023 | $ | 83,377 | 10 | 854 | $ | 110,030 | $ | 84,982 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Projects in Progress: | |||||||||||||||
West | $ | 92,912 | $ | — | $ | 92,912 | $ | — | |||||||
Southeast | — | — | 858 | — | |||||||||||
Corporate and unallocated (a) | 16,111 | — | 16,260 | — | |||||||||||
Total impairment charges on projects in progress | $ | 109,023 | $ | — | $ | 110,030 | $ | — | |||||||
Land Held for Sale: | |||||||||||||||
West | $ | 37,963 | $ | — | $ | 37,963 | $ | — | |||||||
Corporate and unallocated (a) | 625 | — | 625 | — | |||||||||||
Total impairment charges on land held for sale | $ | 38,588 | $ | — | $ | 38,588 | $ | — | |||||||
Discontinued Operations: | |||||||||||||||
Land Held for Sale | $ | — | $ | — | $ | — | $ | 450 | |||||||
Total impairment and abandonment charges | $ | 147,611 | $ | — | $ | 148,618 | $ | 450 |
$ in thousands | Three Months Ended | Six Months Ended | |
Unobservable Inputs | March 31, 2019 | March 31, 2019 | |
Average selling price | $350 to $615 | $350 to $615 | |
Closings per community per month | 2 - 4 | 1 - 4 | |
Discount rate | 14.7% - 16.4% | 14.7% - 16.8% |
in thousands | Deposits & Non-refundable Pre-acquisition Costs Incurred | Remaining Obligation | |||||
As of March 31, 2019 | |||||||
Unconsolidated lot option agreements | $ | 78,047 | $ | 386,913 | |||
As of September 30, 2018 | |||||||
Unconsolidated lot option agreements | $ | 72,191 | $ | 383,150 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Capitalized interest in inventory, beginning of period | $ | 151,886 | $ | 144,847 | $ | 144,645 | $ | 139,203 | |||||||
Interest incurred | 25,803 | 25,492 | 50,724 | 51,047 | |||||||||||
Capitalized interest impaired | (13,792 | ) | — | (13,907 | ) | — | |||||||||
Interest expense not qualified for capitalization and included as other expense (a) | (597 | ) | (1,650 | ) | (839 | ) | (5,085 | ) | |||||||
Capitalized interest amortized to home construction and land sales expenses (b) | (18,544 | ) | (19,655 | ) | (35,867 | ) | (36,131 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 144,756 | $ | 149,034 | $ | 144,756 | $ | 149,034 |
in thousands | Maturity Date | March 31, 2019 | September 30, 2018 | ||||||
8 3/4% Senior Notes | March 2022 | $ | 500,000 | $ | 500,000 | ||||
7 1/4% Senior Notes | February 2023 | 23,603 | 24,834 | ||||||
6 3/4% Senior Notes | March 2025 | 246,155 | 250,000 | ||||||
5 7/8% Senior Notes | October 2027 | 400,000 | 400,000 | ||||||
Unamortized debt premium, net | 2,254 | 2,640 | |||||||
Unamortized debt issuance costs | (12,911 | ) | (14,336 | ) | |||||
Total Senior Notes, net | 1,159,101 | 1,163,138 | |||||||
Junior Subordinated Notes (net of unamortized accretion of $35,737 and $36,770, respectively) | July 2036 | 65,037 | 64,003 | ||||||
Revolving Credit Facility | February 2021 | 75,000 | — | ||||||
Other Secured Notes payable | Various Dates | 2,622 | 4,113 | ||||||
Total debt, net | $ | 1,301,760 | $ | 1,231,254 |
Senior Note Description | Issuance Date | Maturity Date | Redemption Terms | |||
8 3/4% Senior Notes | September 2016 | March 2022 | Callable at any time prior to March 15, 2019, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2019, callable at a redemption price equal to 104.375% of the principal amount; on or after March 15, 2020, callable at a redemption price equal to 102.188% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 100.000% of the principal amount plus, in each case, accrued and unpaid interest | |||
7 1/4% Senior Notes | February 2013 | February 2023 | Callable at any time on or after February 1, 2018, callable at a redemption price equal to 103.625% of the principal amount; on or after February 1, 2019, callable at a redemption price equal to 102.417% of the principal amount; on or after February 1, 2020, callable at a redemption price equal to 101.208% of the principal amount; on or after February 1, 2021, callable at 100.000% of the principal amount plus, in each case, accrued and unpaid interest | |||
6 3/4% Senior Notes | March 2017 | March 2025 | Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest | |||
5 7/8% Senior Notes | October 2017 | October 2027 | Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Balance at beginning of period | $ | 13,432 | $ | 15,816 | $ | 15,331 | $ | 18,091 | |||||||
Accruals for warranties issued (a) | 2,490 | 3,400 | 4,854 | 7,613 | |||||||||||
Changes in liability related to warranties existing in prior periods | (663 | ) | (1,097 | ) | (1,968 | ) | (3,394 | ) | |||||||
Payments made | (2,674 | ) | (3,536 | ) | (5,632 | ) | (7,727 | ) | |||||||
Balance at end of period | $ | 12,585 | $ | 14,583 | $ | 12,585 | $ | 14,583 |
• | 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; and |
• | Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability. |
in thousands | Level 1 | Level 2 | Level 3 | Total | |||||||||||
As of March 31, 2019 | |||||||||||||||
Deferred compensation plan assets (a) | $ | — | $ | 1,828 | $ | — | $ | 1,828 | |||||||
Development projects in progress (b) | — | — | 84,982 | 84,982 | |||||||||||
Land held for sale (b) | — | — | 5,207 | 5,207 | |||||||||||
As of September 30, 2018 | |||||||||||||||
Deferred compensation plan assets (a) | $ | — | $ | 1,578 | $ | — | $ | 1,578 | |||||||
Development projects in progress (b) | — | — | 1,312 | 1,312 | |||||||||||
Land held for sale (b) | — | — | 1,724 | 1,724 | |||||||||||
Unconsolidated entity investments (b) | — | — | 80 | 80 |
As of March 31, 2019 | As of September 30, 2018 | ||||||||||||||
in thousands | Carrying Amount (a) | Fair Value | Carrying Amount (a) | Fair Value | |||||||||||
Senior Notes (b) | $ | 1,159,101 | $ | 1,128,049 | $ | 1,163,138 | $ | 1,096,214 | |||||||
Junior Subordinated Notes | 65,037 | 65,037 | 64,003 | 64,003 | |||||||||||
Total | $ | 1,224,138 | $ | 1,193,086 | $ | 1,227,141 | $ | 1,160,217 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Stock-based compensation expense | $ | 2,180 | $ | 2,598 | $ | 4,294 | $ | 5,208 |
Six Months Ended | ||||||
March 31, 2019 | ||||||
Shares | Weighted Average Exercise Price | |||||
Outstanding at beginning of period | 533,052 | $ | 14.26 | |||
Granted | 25,230 | 10.38 | ||||
Exercised | (26,650 | ) | 10.44 | |||
Cancelled | (2,319 | ) | 9.81 | |||
Outstanding at end of period | 529,313 | $ | 14.29 | |||
Exercisable at end of period | 478,064 | $ | 14.33 | |||
Vested or expected to vest in the future | 526,534 | $ | 14.31 |
Six Months Ended March 31, | ||||||||
Performance-Based Restricted Shares | Time-Based Restricted Shares | Total Restricted Shares | ||||||
Beginning of period | 644,785 | 431,783 | 1,076,568 | |||||
Granted (a) | 467,819 | 441,991 | 909,810 | |||||
Vested (a) | (309,843 | ) | (204,977 | ) | (514,820 | ) | ||
Forfeited | (7,020 | ) | (23,647 | ) | (30,667 | ) | ||
End of period | 795,741 | 645,150 | 1,440,891 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||
in thousands, except per share data | 2019 | 2018 | 2019 | 2018 | |||||||||||
Numerator: | |||||||||||||||
(Loss) income from continuing operations | $ | (100,832 | ) | $ | 11,616 | $ | (93,510 | ) | $ | (118,959 | ) | ||||
Loss from discontinued operations, net of tax | (30 | ) | (58 | ) | (41 | ) | (430 | ) | |||||||
Net (loss) income | $ | (100,862 | ) | $ | 11,558 | $ | (93,551 | ) | $ | (119,389 | ) | ||||
Denominator: | |||||||||||||||
Basic weighted-average shares | 30,714 | 32,140 | 31,263 | 32,097 | |||||||||||
Dilutive effect of restricted stock awards | — | 466 | — | — | |||||||||||
Dilutive effect of stock options | — | 115 | — | — | |||||||||||
Diluted weighted-average shares (a) | 30,714 | 32,721 | 31,263 | 32,097 | |||||||||||
Basic (loss) income per share: | |||||||||||||||
Continuing operations | $ | (3.28 | ) | $ | 0.36 | $ | (2.99 | ) | $ | (3.71 | ) | ||||
Discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Total | $ | (3.28 | ) | $ | 0.36 | $ | (2.99 | ) | $ | (3.72 | ) | ||||
Diluted (loss) income per share: | |||||||||||||||
Continuing operations | $ | (3.28 | ) | $ | 0.36 | $ | (2.99 | ) | $ | (3.71 | ) | ||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||
Total | $ | (3.28 | ) | $ | 0.35 | $ | (2.99 | ) | $ | (3.72 | ) |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||
Stock options | 529 | 179 | 529 | 550 | |||||||
Time-based restricted stock | 645 | 142 | 645 | 842 | |||||||
Performance-based restricted stock | 796 | — | 796 | 646 |
in thousands | March 31, 2019 | September 30, 2018 | |||||
Accrued bonus and deferred compensation | $ | 19,616 | $ | 41,508 | |||
Customer deposits | 16,232 | 14,903 | |||||
Accrued interest | 14,609 | 14,401 | |||||
Accrued warranty expense | 12,585 | 15,331 | |||||
Litigation accrual | 3,294 | 3,656 | |||||
Income tax liabilities | 961 | 710 | |||||
Other | 31,723 | 35,880 | |||||
Total | $ | 99,020 | $ | 126,389 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenue | |||||||||||||||
West | $ | 210,430 | $ | 234,510 | $ | 419,374 | $ | 412,481 | |||||||
East | 94,066 | 107,412 | 182,812 | 196,265 | |||||||||||
Southeast | 116,764 | 113,256 | 221,114 | 218,921 | |||||||||||
Total revenue | $ | 421,260 | $ | 455,178 | $ | 823,300 | $ | 827,667 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Operating (loss) income (a) | |||||||||||||||
West | $ | (107,018 | ) | $ | 31,715 | $ | (82,757 | ) | $ | 52,825 | |||||
East | 6,929 | 8,926 | 12,324 | 16,322 | |||||||||||
Southeast | 7,324 | 7,897 | 8,704 | 14,807 | |||||||||||
Segment total | (92,765 | ) | 48,538 | (61,729 | ) | 83,954 | |||||||||
Corporate and unallocated (b) | (46,185 | ) | (34,713 | ) | (73,715 | ) | (63,448 | ) | |||||||
Total operating (loss) income | $ | (138,950 | ) | $ | 13,825 | $ | (135,444 | ) | $ | 20,506 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Depreciation and amortization | |||||||||||||||
West | $ | 1,263 | $ | 1,697 | $ | 2,541 | $ | 2,953 | |||||||
East | 547 | 551 | 1,085 | 990 | |||||||||||
Southeast | 731 | 542 | 1,341 | 1,121 | |||||||||||
Segment total | 2,541 | 2,790 | 4,967 | 5,064 | |||||||||||
Corporate and unallocated (b) | 359 | 276 | 703 | 509 | |||||||||||
Total depreciation and amortization | $ | 2,900 | $ | 3,066 | $ | 5,670 | $ | 5,573 |
Six Months Ended | |||||||
March 31, | |||||||
in thousands | 2019 | 2018 | |||||
Capital Expenditures | |||||||
West | $ | 5,338 | $ | 4,238 | |||
East | 1,286 | 1,133 | |||||
Southeast | 2,055 | 1,185 | |||||
Corporate and unallocated | 2,829 | 1,636 | |||||
Total capital expenditures | $ | 11,508 | $ | 8,192 |
in thousands | March 31, 2019 | September 30, 2018 | |||||
Assets | |||||||
West | $ | 758,627 | $ | 835,230 | |||
East | 315,728 | 335,474 | |||||
Southeast | 400,954 | 414,685 | |||||
Corporate and unallocated (a) | 580,032 | 542,713 | |||||
Total assets | $ | 2,055,341 | $ | 2,128,102 |
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 80,363 | $ | 6,071 | $ | 7 | $ | — | $ | 86,441 | |||||||||
Restricted cash | 11,097 | 1,100 | — | — | 12,197 | ||||||||||||||
Accounts receivable (net of allowance of $373) | — | 18,481 | 5 | — | 18,486 | ||||||||||||||
Owned inventory | — | 1,634,399 | — | — | 1,634,399 | ||||||||||||||
Investments in unconsolidated entities | 773 | 2,953 | — | — | 3,726 | ||||||||||||||
Deferred tax assets, net | 256,347 | — | — | — | 256,347 | ||||||||||||||
Property and equipment, net | — | 26,662 | — | — | 26,662 | ||||||||||||||
Investments in subsidiaries | 636,795 | — | — | (636,795 | ) | — | |||||||||||||
Intercompany | 859,697 | — | 1,688 | (861,385 | ) | — | |||||||||||||
Goodwill | — | 10,605 | — | — | 10,605 | ||||||||||||||
Other assets | 870 | 5,604 | 4 | — | 6,478 | ||||||||||||||
Total assets | $ | 1,845,942 | $ | 1,705,875 | $ | 1,704 | $ | (1,498,180 | ) | $ | 2,055,341 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 125,403 | $ | — | $ | — | $ | 125,403 | |||||||||
Other liabilities | 15,958 | 83,043 | 19 | — | 99,020 | ||||||||||||||
Intercompany | 1,688 | 859,697 | — | (861,385 | ) | — | |||||||||||||
Total debt (net of premium and debt issuance costs) | 1,299,138 | 2,622 | — | — | 1,301,760 | ||||||||||||||
Total liabilities | 1,316,784 | 1,070,765 | 19 | (861,385 | ) | 1,526,183 | |||||||||||||
Stockholders’ equity | 529,158 | 635,110 | 1,685 | (636,795 | ) | 529,158 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 1,845,942 | $ | 1,705,875 | $ | 1,704 | $ | (1,498,180 | ) | $ | 2,055,341 |
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 93,875 | $ | 45,355 | $ | 575 | $ | — | $ | 139,805 | |||||||||
Restricted cash | 10,921 | 2,522 | — | — | 13,443 | ||||||||||||||
Accounts receivable (net of allowance of $378) | — | 24,647 | — | — | 24,647 | ||||||||||||||
Owned inventory | — | 1,692,284 | — | — | 1,692,284 | ||||||||||||||
Investments in unconsolidated entities | 773 | 3,262 | — | — | 4,035 | ||||||||||||||
Deferred tax assets, net | 213,955 | — | — | — | 213,955 | ||||||||||||||
Property and equipment, net | — | 20,843 | — | — | 20,843 | ||||||||||||||
Investments in subsidiaries | 645,086 | — | — | (645,086 | ) | — | |||||||||||||
Intercompany | 922,525 | — | 2,304 | (924,829 | ) | — | |||||||||||||
Goodwill | — | 9,751 | — | — | 9,751 | ||||||||||||||
Other assets | 694 | 8,626 | 19 | — | 9,339 | ||||||||||||||
Total assets | $ | 1,887,829 | $ | 1,807,290 | $ | 2,898 | $ | (1,569,915 | ) | $ | 2,128,102 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Trade accounts payable | $ | — | $ | 126,432 | $ | — | $ | — | $ | 126,432 | |||||||||
Other liabilities | 14,357 | 111,906 | 126 | — | 126,389 | ||||||||||||||
Intercompany | 2,304 | 922,525 | — | (924,829 | ) | — | |||||||||||||
Total debt (net of premium and debt issuance costs) | 1,227,141 | 4,113 | — | — | 1,231,254 | ||||||||||||||
Total liabilities | 1,243,802 | 1,164,976 | 126 | (924,829 | ) | 1,484,075 | |||||||||||||
Stockholders’ equity | 644,027 | 642,314 | 2,772 | (645,086 | ) | 644,027 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 1,887,829 | $ | 1,807,290 | $ | 2,898 | $ | (1,569,915 | ) | $ | 2,128,102 |
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
Three Months Ended March 31, 2019 | |||||||||||||||||||
Total revenue | $ | — | $ | 421,260 | $ | — | $ | — | $ | 421,260 | |||||||||
Home construction and land sales expenses | 18,544 | 337,785 | — | — | 356,329 | ||||||||||||||
Inventory impairments and abandonments | 13,792 | 133,819 | — | — | 147,611 | ||||||||||||||
Gross loss | (32,336 | ) | (50,344 | ) | — | — | (82,680 | ) | |||||||||||
Commissions | — | 15,998 | — | — | 15,998 | ||||||||||||||
General and administrative expenses | — | 37,372 | — | — | 37,372 | ||||||||||||||
Depreciation and amortization | — | 2,900 | — | — | 2,900 | ||||||||||||||
Operating loss | (32,336 | ) | (106,614 | ) | — | — | (138,950 | ) | |||||||||||
Equity in income of unconsolidated entities | — | 81 | — | — | 81 | ||||||||||||||
Gain on extinguishment of debt | 216 | — | — | — | 216 | ||||||||||||||
Other (expense) income, net | (597 | ) | 260 | — | — | (337 | ) | ||||||||||||
Loss from continuing operations before income taxes | (32,717 | ) | (106,273 | ) | — | — | (138,990 | ) | |||||||||||
Benefit from income taxes | (10,142 | ) | (28,016 | ) | — | — | (38,158 | ) | |||||||||||
Equity in loss of subsidiaries | (78,257 | ) | — | — | 78,257 | — | |||||||||||||
Loss from continuing operations | (100,832 | ) | (78,257 | ) | — | 78,257 | (100,832 | ) | |||||||||||
Loss from discontinued operations, net of tax | — | (25 | ) | (5 | ) | — | (30 | ) | |||||||||||
Equity in loss of subsidiaries from discontinued operations | (30 | ) | — | — | 30 | — | |||||||||||||
Net loss | $ | (100,862 | ) | $ | (78,282 | ) | $ | (5 | ) | $ | 78,287 | $ | (100,862 | ) | |||||
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||||||
Total revenue | $ | — | $ | 455,178 | $ | 23 | $ | (23 | ) | $ | 455,178 | ||||||||
Home construction and land sales expenses | 19,655 | 360,469 | — | (23 | ) | 380,101 | |||||||||||||
Gross (loss) profit | (19,655 | ) | 94,709 | 23 | — | 75,077 | |||||||||||||
Commissions | — | 17,334 | — | — | 17,334 | ||||||||||||||
General and administrative expenses | — | 40,823 | 29 | — | 40,852 | ||||||||||||||
Depreciation and amortization | — | 3,066 | — | — | 3,066 | ||||||||||||||
Operating (loss) income | (19,655 | ) | 33,486 | (6 | ) | — | 13,825 | ||||||||||||
Equity in income of unconsolidated entities | — | 256 | — | — | 256 | ||||||||||||||
Other (expense) income, net | (1,650 | ) | 203 | (6 | ) | — | (1,453 | ) | |||||||||||
(Loss) income from continuing operations before income taxes | (21,305 | ) | 33,945 | (12 | ) | — | 12,628 | ||||||||||||
(Benefit) expense from income taxes | (5,710 | ) | 6,725 | (3 | ) | — | 1,012 | ||||||||||||
Equity in income of subsidiaries | 27,211 | — | — | (27,211 | ) | — | |||||||||||||
Income (loss) from continuing operations | 11,616 | 27,220 | (9 | ) | (27,211 | ) | 11,616 | ||||||||||||
Loss from discontinued operations, net of tax | — | (52 | ) | (6 | ) | — | (58 | ) | |||||||||||
Equity in loss of subsidiaries from discontinued operations | (58 | ) | — | — | 58 | — | |||||||||||||
Net income (loss) | $ | 11,558 | $ | 27,168 | $ | (15 | ) | $ | (27,153 | ) | $ | 11,558 |
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
Six Months Ended March 31, 2019 | |||||||||||||||||||
Total revenue | $ | — | $ | 823,300 | $ | 115 | $ | (115 | ) | $ | 823,300 | ||||||||
Home construction and land sales expenses | 35,867 | 660,955 | — | (115 | ) | 696,707 | |||||||||||||
Inventory impairments and abandonments | 13,908 | 134,710 | — | — | 148,618 | ||||||||||||||
Gross (loss) profit | (49,775 | ) | 27,635 | 115 | — | (22,025 | ) | ||||||||||||
Commissions | — | 31,735 | — | — | 31,735 | ||||||||||||||
General and administrative expenses | — | 76,018 | (4 | ) | — | 76,014 | |||||||||||||
Depreciation and amortization | — | 5,670 | — | — | 5,670 | ||||||||||||||
Operating (loss) income | (49,775 | ) | (85,788 | ) | 119 | — | (135,444 | ) | |||||||||||
Equity in income of unconsolidated entities | — | 17 | — | — | 17 | ||||||||||||||
Gain on extinguishment of debt | 216 | — | — | — | 216 | ||||||||||||||
Other (expense) income, net | (839 | ) | 464 | (4 | ) | — | (379 | ) | |||||||||||
(Loss) income from continuing operations before income taxes | (50,398 | ) | (85,307 | ) | 115 | — | (135,590 | ) | |||||||||||
Expense (benefit) from income taxes | 10,241 | (52,350 | ) | 29 | — | (42,080 | ) | ||||||||||||
Equity in loss of subsidiaries | (32,871 | ) | — | — | 32,871 | — | |||||||||||||
(Loss) income from continuing operations | (93,510 | ) | (32,957 | ) | 86 | 32,871 | (93,510 | ) | |||||||||||
Loss from discontinued operations, net of tax | — | (31 | ) | (10 | ) | — | (41 | ) | |||||||||||
Equity in loss of subsidiaries from discontinued operations | (41 | ) | — | — | 41 | — | |||||||||||||
Net (loss) income | $ | (93,551 | ) | $ | (32,988 | ) | $ | 76 | $ | 32,912 | $ | (93,551 | ) | ||||||
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
Six Months Ended March 31, 2018 | |||||||||||||||||||
Total revenue | $ | — | $ | 827,667 | $ | 37 | $ | (37 | ) | $ | 827,667 | ||||||||
Home construction and land sales expenses | 36,123 | 655,675 | — | (37 | ) | 691,761 | |||||||||||||
Gross (loss) profit | (36,123 | ) | 171,992 | 37 | — | 135,906 | |||||||||||||
Commissions | — | 31,690 | — | — | 31,690 | ||||||||||||||
General and administrative expenses | — | 78,067 | 70 | — | 78,137 | ||||||||||||||
Depreciation and amortization | — | 5,573 | — | — | 5,573 | ||||||||||||||
Operating (loss) income | (36,123 | ) | 56,662 | (33 | ) | — | 20,506 | ||||||||||||
Equity in income of unconsolidated entities | — | 155 | — | — | 155 | ||||||||||||||
Loss on extinguishment of debt | (25,904 | ) | — | — | — | (25,904 | ) | ||||||||||||
Other (expense) income, net | (5,085 | ) | 500 | (13 | ) | — | (4,598 | ) | |||||||||||
(Loss) income from continuing operations before income taxes | (67,112 | ) | 57,317 | (46 | ) | — | (9,841 | ) | |||||||||||
(Benefit) expense from income taxes | (17,897 | ) | 127,029 | (14 | ) | — | 109,118 | ||||||||||||
Equity in loss of subsidiaries | (69,744 | ) | — | — | 69,744 | — | |||||||||||||
Loss from continuing operations | (118,959 | ) | (69,712 | ) | (32 | ) | 69,744 | (118,959 | ) | ||||||||||
Loss from discontinued operations, net of tax | — | (421 | ) | (9 | ) | — | (430 | ) | |||||||||||
Equity in loss of subsidiaries and discontinued operations | (430 | ) | — | — | 430 | — | |||||||||||||
Net loss | $ | (119,389 | ) | $ | (70,133 | ) | $ | (41 | ) | $ | 70,174 | $ | (119,389 | ) |
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
Six Months Ended March 31, 2019 | |||||||||||||||||||
Net cash (used in) provided by operating activities | $ | (101,323 | ) | $ | 18,324 | $ | (35 | ) | $ | — | $ | (83,034 | ) | ||||||
Cash flows from investing activities: | |||||||||||||||||||
Capital expenditures | — | (11,508 | ) | — | — | (11,508 | ) | ||||||||||||
Proceeds from sale of fixed assets | — | 94 | — | — | 94 | ||||||||||||||
Cash used for business acquisition, net of cash acquired | — | (4,088 | ) | — | — | (4,088 | ) | ||||||||||||
Advances to/from subsidiaries | 44,061 | — | (533 | ) | (43,528 | ) | — | ||||||||||||
Net cash provided by (used in) investing activities | 44,061 | (15,502 | ) | (533 | ) | (43,528 | ) | (15,502 | ) | ||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repayment of debt | (5,062 | ) | — | — | — | (5,062 | ) | ||||||||||||
Repayment of borrowings from credit facility | (150,000 | ) | — | — | — | (150,000 | ) | ||||||||||||
Borrowings from credit facility | 225,000 | — | — | — | 225,000 | ||||||||||||||
Debt issuance costs | (400 | ) | — | — | — | (400 | ) | ||||||||||||
Repurchase of common stock | (24,004 | ) | — | — | — | (24,004 | ) | ||||||||||||
Tax payments for stock-based compensation awards | (1,886 | ) | — | — | — | (1,886 | ) | ||||||||||||
Stock option exercises | 278 | — | — | — | 278 | ||||||||||||||
Advances to/from subsidiaries | — | (43,528 | ) | — | 43,528 | — | |||||||||||||
Net cash provided by (used in) financing activities | 43,926 | (43,528 | ) | — | 43,528 | 43,926 | |||||||||||||
Decrease in cash, cash equivalents, and restricted cash | (13,336 | ) | (40,706 | ) | (568 | ) | — | (54,610 | ) | ||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 104,796 | 47,877 | 575 | — | 153,248 | ||||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 91,460 | $ | 7,171 | $ | 7 | $ | — | $ | 98,638 | |||||||||
in thousands | Beazer Homes USA, Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Consolidating Adjustments | Consolidated Beazer Homes USA, Inc. | ||||||||||||||
Six Months Ended March 31, 2018 | |||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 68,837 | $ | (185,014 | ) | $ | (8 | ) | $ | — | $ | (116,185 | ) | ||||||
Cash flows from investing activities: | |||||||||||||||||||
Capital expenditures | — | (8,192 | ) | — | — | (8,192 | ) | ||||||||||||
Proceeds from sale of fixed assets | — | 133 | — | — | 133 | ||||||||||||||
Investments in unconsolidated entities | — | (421 | ) | — | — | (421 | ) | ||||||||||||
Return of capital from unconsolidated entities | — | 176 | — | — | 176 | ||||||||||||||
Advances to/from subsidiaries | (186,478 | ) | — | (22 | ) | 186,500 | — | ||||||||||||
Net cash used in investing activities | (186,478 | ) | (8,304 | ) | (22 | ) | 186,500 | (8,304 | ) | ||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repayment of debt | (400,028 | ) | (1,469 | ) | — | — | (401,497 | ) | |||||||||||
Proceeds from issuance of new debt | 400,000 | — | — | — | 400,000 | ||||||||||||||
Borrowings from credit facility | 25,000 | — | — | — | 25,000 | ||||||||||||||
Repayment of borrowings from credit facility | (25,000 | ) | — | — | — | (25,000 | ) | ||||||||||||
Debt issuance costs | (5,743 | ) | — | — | — | (5,743 | ) | ||||||||||||
Tax payments for stock-based compensation awards | (1,323 | ) | — | — | — | (1,323 | ) | ||||||||||||
Stock option exercises | 13 | — | — | — | 13 | ||||||||||||||
Advances to/from subsidiaries | — | 186,633 | — | (186,633 | ) | — | |||||||||||||
Net cash (used in) provided by financing activities | (7,081 | ) | 185,164 | — | (186,633 | ) | (8,550 | ) | |||||||||||
Decrease in cash, cash equivalents, and restricted cash | (124,722 | ) | (8,154 | ) | (30 | ) | (133 | ) | (133,039 | ) | |||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 294,192 | 16,854 | 724 | (7,161 | ) | 304,609 | |||||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 169,470 | $ | 8,700 | $ | 694 | $ | (7,294 | ) | $ | 171,570 |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Total revenue | $ | — | $ | 8 | $ | 55 | $ | 633 | |||||||
Home construction and land sales expenses | 6 | 56 | 39 | 723 | |||||||||||
Inventory impairments and lot option abandonments | — | — | — | 450 | |||||||||||
Gross (loss) profit | (6 | ) | (48 | ) | 16 | (540 | ) | ||||||||
General and administrative expenses | 34 | 31 | 67 | 47 | |||||||||||
Operating loss | (40 | ) | (79 | ) | (51 | ) | (587 | ) | |||||||
Equity in income (loss) of unconsolidated entities | — | 4 | (1 | ) | 16 | ||||||||||
Other expense, net | — | (2 | ) | (1 | ) | (5 | ) | ||||||||
Loss from discontinued operations before income taxes | (40 | ) | (77 | ) | (53 | ) | (576 | ) | |||||||
Benefit from income taxes | (10 | ) | (19 | ) | (12 | ) | (146 | ) | |||||||
Loss from discontinued operations, net of tax | $ | (30 | ) | $ | (58 | ) | $ | (41 | ) | $ | (430 | ) |
• | We recognized inventory impairment charges of $147.6 million related to 15 communities in California during the second quarter of fiscal 2019, all of which were previously land held for future development assets. Of the total impairments, $109.0 million related to 9 projects in progress in Southern California and reflected the recent weakening of demand that occurred in their respective markets. The remaining $38.6 million of impairment charges during the quarter were related to a change in strategy for 6 communities that we now plan to sell. No impairments were recognized in the second quarter of fiscal 2018. Refer to Note 5 of the notes to the condensed consolidated financial statements for additional discussion of these matters. |
• | Income tax benefit from continuing operations was $38.2 million during the quarter primarily due to impairment charges and the resulting loss from continuing operations. Income tax expense from continuing operations was $1.0 million for the prior year quarter. Refer to Note 10 of the notes to the condensed consolidated financial statements for additional details. |
• | Sales per community per month was 3.3 for the quarter ended March 31, 2019 compared to 3.7 for the quarter ended March 31, 2018. Sales per community per month decreased to 2.8 for the trailing 12 months ended March 31, 2019 versus 3.1 a year ago. We believe that we are among the industry leaders in sales absorption rates, and we are focused on maintaining a competitive sales pace going forward. |
• | Our ASP for homes closed during the quarter ended March 31, 2019 was $371.2 thousand, up 6.5% compared to the prior year quarter. ASP for closings during the trailing 12 months ended March 31, 2019 was $369.9 thousand, up 6.8% year-over-year, and our ASP in backlog as of March 31, 2019 has risen 2.8% versus the prior year quarter to $393.8 thousand; however, the dollar value of backlog decreased due to a decline in backlog units over the same period. |
• | During the quarter ended March 31, 2019, we had an average active community count of 163, up 8.2% from the prior year quarter. We ended the current quarter with 166 active communities. We invested $139.9 million in land and land development during the current quarter compared to $143.4 million in the prior year quarter. We expect our spending on land and land development activities to lead to continued growth in community count. We continually evaluate strategic opportunities to purchase land within our geographic footprint, balancing our desire to reduce leverage with land acquisition strategies that maximize the efficiency of capital employed. |
• | Homebuilding gross margin excluding impairments and abandonments and interest for the quarter ended March 31, 2019 was 19.8%, down from 21.3% in the prior year quarter. For the trailing 12 months ended March 31, 2019, this adjusted gross margin was 20.7%. In some of our markets, we have experienced pricing pressures and increased incentives due to a softening of demand that began in early fiscal 2019. We have also experienced cost pressures in land, labor, and materials driven by a variety of factors including the location and structure of our land deals, the availability of materials and labor, and shifts in community mix, including an increasing number of closings from recently activated assets formerly classified as land held for future development which generally have lower margins. We continue to take action to mitigate these cost pressures through our efforts to reduce construction costs, improve cycle time, and raise home prices where possible. |
• | SG&A for the quarter ended March 31, 2019 was 12.7% of total revenue compared to 12.8% in the prior year quarter. SG&A for the trailing 12 months ended March 31, 2019 was 11.7% of total revenue, a decrease of 40 basis points from the trailing 12 months ended March 31, 2018. The decrease in SG&A as a percentage of total revenue was due to our continued focus on improving overhead cost management in relation to our revenue growth. |
• | Capital efficiency, debt reduction, and share repurchases. We continue to employ a number of strategies to improve capital efficiency, including use of option contracts, acquisition of shorter duration land parcels, and activation of previously land held for future development communities. In addition, our Board of Directors approved a share repurchase program that authorizes us to repurchase up to $50.0 million of our outstanding common stock. As part of this program, we repurchased $7.5 million of our common stock during the current quarter, bringing the total repurchases for the six months ended March 31, 2019 to $24.0 million. As previously announced, we intend to repurchase or redeem debt in an amount in excess of our share repurchases by the end of the current fiscal year, consistent with our ongoing objective of reducing debt and cash interest expense (see the notes to our condensed consolidated financial statements in this Form 10-Q for further discussion of our share repurchases and outstanding borrowings). We may change our allocation of capital, including the level of debt and share repurchases and inventory investment, in response to and in consideration of market and business conditions, strategic opportunities, compliance with our debt agreements, and other factors. |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
$ in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenue: | |||||||||||||||
Homebuilding | $ | 420,945 | $ | 441,115 | $ | 821,927 | $ | 808,869 | |||||||
Land sales and other | 315 | 14,063 | 1,373 | 18,798 | |||||||||||
Total | $ | 421,260 | $ | 455,178 | $ | 823,300 | $ | 827,667 | |||||||
Gross (loss) profit: | |||||||||||||||
Homebuilding | $ | (44,148 | ) | $ | 74,366 | $ | 16,471 | $ | 134,598 | ||||||
Land sales and other | (38,532 | ) | 711 | (38,496 | ) | 1,308 | |||||||||
Total | $ | (82,680 | ) | $ | 75,077 | $ | (22,025 | ) | $ | 135,906 | |||||
Gross margin: | |||||||||||||||
Homebuilding | (10.5) | % | 16.9 | % | 2.0 | % | 16.6 | % | |||||||
Land sales and other (a) | (12,232.4 | )% | 5.1 | % | (2,803.8 | )% | 7.0 | % | |||||||
Total | (19.6 | )% | 16.5 | % | (2.7 | )% | 16.4 | % | |||||||
Commissions | $ | 15,998 | $ | 17,334 | $ | 31,735 | $ | 31,690 | |||||||
General and administrative expenses (G&A) | $ | 37,372 | $ | 40,852 | $ | 76,014 | $ | 78,137 | |||||||
SG&A (commissions plus G&A) as a percentage of total revenue | 12.7 | % | 12.8 | % | 13.1 | % | 13.3 | % | |||||||
G&A as a percentage of total revenue | 8.9 | % | 9.0 | % | 9.2 | % | 9.4 | % | |||||||
Depreciation and amortization | $ | 2,900 | $ | 3,066 | $ | 5,670 | $ | 5,573 | |||||||
Operating (loss) income | $ | (138,950 | ) | $ | 13,825 | $ | (135,444 | ) | $ | 20,506 | |||||
Operating (loss) income as a percentage of total revenue | (33.0 | )% | 3.0 | % | (16.5 | )% | 2.5 | % | |||||||
Effective tax rate (b) | 27.5 | % | 8.0 | % | 31.0 | % | (1,108.8 | )% | |||||||
Equity in income of unconsolidated entities | $ | 81 | $ | 256 | $ | 17 | $ | 155 | |||||||
(Gain) loss on extinguishment of debt | $ | (216 | ) | $ | — | $ | (216 | ) | $ | 25,904 |
Three Months Ended March 31, | Six Months Ended March 31, | LTM Ended March 31, (a) | |||||||||||||||||||||||||||||||||
in thousands | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | ||||||||||||||||||||||||||
Net (loss) income | $ | (100,862 | ) | $ | 11,558 | $ | (112,420 | ) | $ | (93,551 | ) | $ | (119,389 | ) | $ | 25,838 | $ | (19,537 | ) | $ | (78,612 | ) | $ | 59,075 | |||||||||||
(Benefit) expense from income taxes | (38,168 | ) | 993 | (39,161 | ) | (42,092 | ) | 108,972 | (151,064 | ) | (56,691 | ) | 118,665 | (175,356 | ) | ||||||||||||||||||||
Interest amortized to home construction and land sales expenses and capitalized interest impaired | 32,336 | 19,655 | 12,681 | 49,774 | 36,131 | 13,643 | 106,756 | 89,488 | 17,268 | ||||||||||||||||||||||||||
Interest expense not qualified for capitalization | 597 | 1,650 | (1,053 | ) | 839 | 5,085 | (4,246 | ) | 1,079 | 11,423 | (10,344 | ) | |||||||||||||||||||||||
EBIT | (106,097 | ) | 33,856 | (139,953 | ) | (85,030 | ) | 30,799 | (115,829 | ) | 31,607 | 140,964 | (109,357 | ) | |||||||||||||||||||||
Depreciation and amortization and stock-based compensation amortization | 5,080 | 5,664 | (584 | ) | 9,964 | 10,781 | (817 | ) | 23,248 | 22,600 | 648 | ||||||||||||||||||||||||
EBITDA | (101,017 | ) | 39,520 | (140,537 | ) | (75,066 | ) | 41,580 | (116,646 | ) | 54,855 | 163,564 | (108,709 | ) | |||||||||||||||||||||
(Gain) loss on extinguishment of debt | (216 | ) | — | (216 | ) | (216 | ) | 25,904 | (26,120 | ) | 1,719 | 22,971 | (21,252 | ) | |||||||||||||||||||||
Inventory impairments and abandonments (b) | 133,819 | — | 133,819 | 134,711 | 450 | 134,261 | 139,249 | 2,557 | 136,692 | ||||||||||||||||||||||||||
Joint venture impairment and abandonment charges | — | — | — | — | — | — | 341 | — | 341 | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 32,586 | $ | 39,520 | $ | (6,934 | ) | $ | 59,429 | $ | 67,934 | $ | (8,505 | ) | $ | 196,164 | $ | 189,092 | $ | 7,072 |
Three Months Ended March 31, | ||||||||||||||
New Orders, net | Cancellation Rates | |||||||||||||
2019 | 2018 | 19 vs 18 | 2019 | 2018 | ||||||||||
West | 806 | 906 | (11.0 | )% | 15.2 | % | 13.7 | % | ||||||
East | 334 | 321 | 4.0 | % | 15.0 | % | 18.5 | % | ||||||
Southeast | 458 | 452 | 1.3 | % | 12.9 | % | 14.2 | % | ||||||
Total | 1,598 | 1,679 | (4.8 | )% | 14.5 | % | 14.9 | % | ||||||
Six Months Ended March 31, | ||||||||||||||
New Orders, net | Cancellation Rates | |||||||||||||
2019 | 2018 | 19 vs 18 | 2019 | 2018 | ||||||||||
West | 1,325 | 1,440 | (8.0 | )% | 16.8 | % | 15.5 | % | ||||||
East | 535 | 580 | (7.8 | )% | 17.3 | % | 20.7 | % | ||||||
Southeast | 714 | 769 | (7.2 | )% | 15.7 | % | 14.9 | % | ||||||
Total | 2,574 | 2,789 | (7.7 | )% | 16.6 | % | 16.5 | % |
As of March 31, | ||||||||||
2019 | 2018 | 19 vs 18 | ||||||||
Backlog Units: | ||||||||||
West | 976 | 1,141 | (14.5 | )% | ||||||
East | 415 | 489 | (15.1 | )% | ||||||
Southeast | 598 | 682 | (12.3 | )% | ||||||
Total | 1,989 | 2,312 | (14.0 | )% | ||||||
Aggregate dollar value of homes in backlog (in millions) | $ | 783.3 | $ | 885.4 | (11.5 | )% | ||||
ASP in backlog (in thousands) | $ | 393.8 | $ | 383.0 | 2.8 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||||||
Homebuilding Revenue | Average Selling Price | Closings | ||||||||||||||||||||||||||||
$ in thousands | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | |||||||||||||||||||||
West | $ | 210,430 | $ | 224,361 | (6.2 | )% | $ | 347.2 | $ | 344.1 | 0.9 | % | 606 | 652 | (7.1 | )% | ||||||||||||||
East | 93,751 | 103,731 | (9.6 | )% | 440.1 | 371.8 | 18.4 | % | 213 | 279 | (23.7 | )% | ||||||||||||||||||
Southeast | 116,764 | 113,023 | 3.3 | % | 370.7 | 337.4 | 9.9 | % | 315 | 335 | (6.0 | )% | ||||||||||||||||||
Total | $ | 420,945 | $ | 441,115 | (4.6 | )% | $ | 371.2 | $ | 348.4 | 6.5 | % | 1,134 | 1,266 | (10.4 | )% | ||||||||||||||
Six Months Ended March 31, | ||||||||||||||||||||||||||||||
Homebuilding Revenue | Average Selling Price | Closings | ||||||||||||||||||||||||||||
$ in thousands | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | |||||||||||||||||||||
West | $ | 419,374 | $ | 400,917 | 4.6 | % | $ | 347.5 | $ | 340.3 | 2.1 | % | 1,207 | 1,178 | 2.5 | % | ||||||||||||||
East | 181,516 | 189,419 | (4.2 | )% | 452.7 | 375.8 | 20.5 | % | 401 | 504 | (20.4 | )% | ||||||||||||||||||
Southeast | 221,037 | 218,533 | 1.1 | % | 363.0 | 336.2 | 8.0 | % | 609 | 650 | (6.3 | )% | ||||||||||||||||||
Total | $ | 821,927 | $ | 808,869 | 1.6 | % | $ | 370.7 | $ | 346.9 | 6.9 | % | 2,217 | 2,332 | (4.9 | )% |
Three Months Ended March 31, 2019 | ||||||||||||||||||||||||||||
$ in thousands | HB Gross Profit (Loss) | HB Gross Margin | Impairments & Abandonments (I&A) | HB Gross Profit (Loss) w/o I&A | HB Gross Margin w/o I&A | Interest Amortized to COS (Interest) | HB Gross Profit w/o I&A and Interest | HB Gross Margin w/o I&A and Interest | ||||||||||||||||||||
West | $ | (49,821 | ) | (23.7 | )% | $ | 92,912 | $ | 43,091 | 20.5 | % | $ | — | $ | 43,091 | 20.5 | % | |||||||||||
East | 16,432 | 17.5 | % | — | 16,432 | 17.5 | % | — | 16,432 | 17.5 | % | |||||||||||||||||
Southeast | 20,201 | 17.3 | % | — | 20,201 | 17.3 | % | — | 20,201 | 17.3 | % | |||||||||||||||||
Corporate & unallocated | (30,960 | ) | 16,111 | (14,849 | ) | 18,544 | 3,695 | |||||||||||||||||||||
Total homebuilding | $ | (44,148 | ) | (10.5 | )% | $ | 109,023 | $ | 64,875 | 15.4 | % | $ | 18,544 | $ | 83,419 | 19.8 | % | |||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||||||||||||||
$ in thousands | HB Gross Profit (Loss) | HB Gross Margin | Impairments & Abandonments (I&A) | HB Gross Profit (Loss) w/o I&A | HB Gross Margin w/o I&A | Interest Amortized to COS (Interest) | HB Gross Profit w/o I&A and Interest | HB Gross Margin w/o I&A and Interest | ||||||||||||||||||||
West | $ | 51,921 | 23.1 | % | $ | — | $ | 51,921 | 23.1 | % | $ | — | $ | 51,921 | 23.1 | % | ||||||||||||
East | 19,489 | 18.8 | % | — | 19,489 | 18.8 | % | — | 19,489 | 18.8 | % | |||||||||||||||||
Southeast | 19,522 | 17.3 | % | — | 19,522 | 17.3 | % | — | 19,522 | 17.3 | % | |||||||||||||||||
Corporate & unallocated | (16,566 | ) | — | (16,566 | ) | 19,655 | 3,089 | |||||||||||||||||||||
Total homebuilding | $ | 74,366 | 16.9 | % | $ | — | $ | 74,366 | 16.9 | % | $ | 19,655 | $ | 94,021 | 21.3 | % |
Six Months Ended March 31, 2019 | ||||||||||||||||||||||||||||
$ in thousands | HB Gross Profit (Loss) | HB Gross Margin | Impairments & Abandonments (I&A) | HB Gross Profit (Loss) w/o I&A | HB Gross Margin w/o I&A | Interest Amortized to COS (Interest) | HB Gross Profit w/o I&A and Interest | HB Gross Margin w/o I&A and Interest | ||||||||||||||||||||
West | $ | (5,961 | ) | (1.4 | )% | $ | 92,912 | $ | 86,951 | 20.7 | % | $ | — | $ | 86,951 | 20.7 | % | |||||||||||
East | 30,828 | 17.0 | % | — | 30,828 | 17.0 | % | — | 30,828 | 17.0 | % | |||||||||||||||||
Southeast | 34,306 | 15.5 | % | 858 | 35,164 | 15.9 | % | — | 35,164 | 15.9 | % | |||||||||||||||||
Corporate & unallocated | (42,702 | ) | 16,260 | (26,442 | ) | 35,867 | 9,425 | |||||||||||||||||||||
Total homebuilding | $ | 16,471 | 2.0 | % | $ | 110,030 | $ | 126,501 | 15.4 | % | $ | 35,867 | $ | 162,368 | 19.8 | % | ||||||||||||
Six Months Ended March 31, 2018 | ||||||||||||||||||||||||||||
$ in thousands | HB Gross Profit (Loss) | HB Gross Margin | Impairments & Abandonments (I&A) | HB Gross Profit (Loss) w/o I&A | HB Gross Margin w/o I&A | Interest Amortized to COS (Interest) | HB Gross Profit w/o I&A and Interest | HB Gross Margin w/o I&A and Interest | ||||||||||||||||||||
West | $ | 90,003 | 22.4 | % | $ | — | $ | 90,003 | 22.4 | % | $ | — | $ | 90,003 | 22.4 | % | ||||||||||||
East | 35,925 | 19.0 | % | — | 35,925 | 19.0 | % | — | 35,925 | 19.0 | % | |||||||||||||||||
Southeast | 38,100 | 17.4 | % | — | 38,100 | 17.4 | % | — | 38,100 | 17.4 | % | |||||||||||||||||
Corporate & unallocated | (29,430 | ) | — | (29,430 | ) | 36,123 | 6,693 | |||||||||||||||||||||
Total homebuilding | $ | 134,598 | 16.6 | % | $ | — | $ | 134,598 | 16.6 | % | $ | 36,123 | $ | 170,721 | 21.1 | % |
Homebuilding Gross Margin from previously impaired communities: | ||
Pre-impairment turn gross margin | (3.4 | )% |
Impact of interest amortized to COS related to these communities | 5.6 | % |
Pre-impairment turn gross margin, excluding interest amortization | 2.2 | % |
Impact of impairment turns | 15.9 | % |
Gross margin (post impairment turns), excluding interest amortization | 18.1 | % |
Land Sales and Other Revenue | Land Sales and Other Gross (Loss) Profit | ||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||
in thousands | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | |||||||||||||||||
West | $ | — | $ | 10,149 | $ | (10,149 | ) | $ | (37,963 | ) | $ | 583 | $ | (38,546 | ) | ||||||||
East | 315 | 3,681 | (3,366 | ) | 56 | 108 | (52 | ) | |||||||||||||||
Southeast | — | 233 | (233 | ) | — | 20 | (20 | ) | |||||||||||||||
Corporate and unallocated (a) | — | — | — | (625 | ) | — | (625 | ) | |||||||||||||||
Total | $ | 315 | $ | 14,063 | $ | (13,748 | ) | $ | (38,532 | ) | $ | 711 | $ | (39,243 | ) | ||||||||
Land Sales and Other Revenues | Land Sales and Other Gross (Loss) Profit | ||||||||||||||||||||||
Six Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
in thousands | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | |||||||||||||||||
West | $ | — | $ | 11,564 | $ | (11,564 | ) | $ | (37,963 | ) | $ | 946 | $ | (38,909 | ) | ||||||||
East | 1,296 | 6,846 | (5,550 | ) | 96 | 321 | (225 | ) | |||||||||||||||
Southeast | 77 | 388 | (311 | ) | (4 | ) | 51 | (55 | ) | ||||||||||||||
Corporate and unallocated (a) | — | — | — | (625 | ) | (10 | ) | (615 | ) | ||||||||||||||
Total | $ | 1,373 | $ | 18,798 | $ | (17,425 | ) | $ | (38,496 | ) | $ | 1,308 | $ | (39,804 | ) |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
in thousands | 2019 | 2018 | 19 vs 18 | 2019 | 2018 | 19 vs 18 | |||||||||||||||||
West | $ | (107,018 | ) | $ | 31,715 | $ | (138,733 | ) | $ | (82,757 | ) | $ | 52,825 | $ | (135,582 | ) | |||||||
East | 6,929 | 8,926 | (1,997 | ) | 12,324 | 16,322 | (3,998 | ) | |||||||||||||||
Southeast | 7,324 | 7,897 | (573 | ) | 8,704 | 14,807 | (6,103 | ) | |||||||||||||||
Corporate and Unallocated (a) | (46,185 | ) | (34,713 | ) | (11,472 | ) | (73,715 | ) | (63,448 | ) | (10,267 | ) | |||||||||||
Operating (loss) income (b) | $ | (138,950 | ) | $ | 13,825 | $ | (152,775 | ) | $ | (135,444 | ) | $ | 20,506 | $ | (155,950 | ) |
Six Months Ended March 31, | |||||||
in thousands | 2019 | 2018 | |||||
Cash used in operating activities | $ | (83,034 | ) | $ | (116,185 | ) | |
Cash used in investing activities | (15,502 | ) | (8,304 | ) | |||
Cash provided by (used in) financing activities | 43,926 | (8,550 | ) | ||||
Net decrease in cash, cash equivalents, and restricted cash | $ | (54,610 | ) | $ | (133,039 | ) |
• | $86.4 million in cash and cash equivalents; |
• | $135.0 million of remaining capacity under the Credit Facility; and |
• | $12.2 million of restricted cash, the majority of which is used to secure certain stand-alone letters of credit. |
• | Identify the contract(s) with a customer |
• | Identify the performance obligations |
• | Determine the transaction price |
• | Allocate the transaction price |
• | Recognize revenue when the performance obligations are met |
• | the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; |
• | economic changes nationally or in local markets, changes in consumer confidence, wage levels, declines in employment levels, inflation or increases in the quantity and decreases in the price of new homes and resale homes on the market; |
• | shortages of or increased prices for labor, land or raw materials used in housing production, and the level of quality and craftsmanship provided by our subcontractors; |
• | factors affecting margins, such as decreased land values underlying land option agreements, increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our production and overhead cost structure; |
• | the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; |
• | estimates related to homes to be delivered in the future (backlog) are imprecise, as they are subject to various cancellation risks that cannot be fully controlled; |
• | increases in mortgage interest rates, increased disruption in the availability of mortgage financing, changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures; |
• | our allocation of capital and the cost of and ability to access capital, due to factors such as limitations in the capital markets or adverse credit market conditions, and ability to otherwise meet our ongoing liquidity needs, including the impact of any downgrades of our credit ratings or liquidity levels; |
• | our ability to reduce our outstanding indebtedness and to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; |
• | our ability to implement and complete our capital allocation plans, including our share and debt repurchase programs; |
• | increased competition or delays in reacting to changing consumer preferences in home design; |
• | natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas; |
• | 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 or governmental policies, including those related to the environment; |
• | the results of litigation or government proceedings and fulfillment of any related obligations; |
• | the impact of construction defect and home warranty claims; |
• | the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; |
• | the impact of information technology failures, cybersecurity issues or data security breaches; |
• | terrorist acts, natural disasters, acts of war or other factors over which the Company has little or no control; or |
• | the impact on homebuilding in key markets of governmental regulations limiting the availability of water. |
10.1 | |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Schema Document |
101.CAL | XBRL Calculation Linkbase Document |
101.LAB | XBRL Labels Linkbase Document |
101.PRE | XBRL Presentation Linkbase Document |
101.DEF | XBRL Definition Linkbase Document |
Date: | May 2, 2019 | Beazer Homes USA, Inc. | ||
By: | /s/ Robert L. Salomon | |||
Name: | Robert L. Salomon | |||
Executive Vice President and Chief Financial Officer |
BEAZER HOMES USA, INC. | |||
By: | /s/ David I. Goldberg | ||
Name: | David I. Goldberg | ||
Title: | Vice President, Treasurer and Investor Relations |
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Agent | |||
By: | /s/ William O'Daly | ||
Name: | William O'Daly | ||
Title: | Authorized Signatory | ||
By: | /s/ Marc Zihlmann | ||
Name: | Marc Zihlmann | ||
Title: | Authorized Signatory |
LENDER: | |||
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender | |||
By: | /s/ William O'Daly | ||
Name: | William O'Daly | ||
Title: | Authorized Signatory | ||
By: | /s/ Marc Zihlmann | ||
Name: | Marc Zihlmann | ||
Title: | Authorized Signatory |
LENDER: | |||
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender | |||
By: | /s/ Yumi Okabe | ||
Name: | Yumi Okabe | ||
Title: | Vice President | ||
By: | /s/ Alicia Schug | ||
Name: | Alicia Schug | ||
Title: | Vice President |
LENDER: | |||
GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender | |||
By: | /s/ Jamie Minieri | ||
Name: | Jamie Minieri | ||
Title: | Authorized Signatory |
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 2, 2019 | |
/s/ Allan P. Merrill | ||
Allan P. Merrill | ||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The 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 2, 2019 | |
/s/ Robert L. Salomon | ||
Robert L. Salomon | ||
Executive Vice President and Chief Financial Officer |
Date: | May 2, 2019 | |
/s/ Allan P. Merrill | ||
Allan P. Merrill | ||
President and Chief Executive Officer |
Date: | May 2, 2019 | |
/s/ Robert L. Salomon | ||
Robert L. Salomon | ||
Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
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Mar. 31, 2019 |
Apr. 29, 2019 |
|
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, 2019 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,043,421 |
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Sep. 30, 2018 |
---|---|---|
ASSETS | ||
Allowances for accounts receivable | $ 373 | $ 378 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Debt (premium) discounts | (2,254) | (2,640) |
Debt issuance costs | $ 12,911 | $ 14,336 |
Preferred stock, par value (in US$ per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in US$ per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 63,000,000 | 63,000,000 |
Common stock, shares issued | 33,043,664 | 33,522,046 |
Common stock, shares outstanding | 32,043,664 | 33,522,046 |
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
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Income Statement [Abstract] | ||||
Total revenue | $ 421,260 | $ 455,178 | $ 823,300 | $ 827,667 |
Home construction and land sales expenses | 356,329 | 380,101 | 696,707 | 691,761 |
Inventory impairments and abandonments | 147,611 | 0 | 148,618 | 0 |
Gross (loss) profit | (82,680) | 75,077 | (22,025) | 135,906 |
Commissions | 15,998 | 17,334 | 31,735 | 31,690 |
General and administrative expenses | 37,372 | 40,852 | 76,014 | 78,137 |
Depreciation and amortization | 2,900 | 3,066 | 5,670 | 5,573 |
Operating (loss) income | (138,950) | 13,825 | (135,444) | 20,506 |
Equity in income of unconsolidated entities | 81 | 256 | 17 | 155 |
Gain (loss) on extinguishment of debt | 216 | 0 | 216 | (25,904) |
Other expense, net | (337) | (1,453) | (379) | (4,598) |
Loss from continuing operations before income taxes | (138,990) | 12,628 | (135,590) | (9,841) |
(Benefit) expense from income taxes | (38,158) | 1,012 | (42,080) | 109,118 |
(Loss) income from continuing operations | (100,832) | 11,616 | (93,510) | (118,959) |
Loss from discontinued operations, net of tax | (30) | (58) | (41) | (430) |
Net (loss) income | $ (100,862) | $ 11,558 | $ (93,551) | $ (119,389) |
Weighted average number of shares: | ||||
Basic (in shares) | 30,714 | 32,140 | 31,263 | 32,097 |
Diluted (in shares) | 30,714 | 32,721 | 31,263 | 32,097 |
Basic (loss) earnings per share: | ||||
Continuing Operations (in dollars per share) | $ (3.28) | $ 0.36 | $ (2.99) | $ (3.71) |
Discontinued Operations (in dollars per share) | 0.00 | 0.00 | 0.00 | (0.01) |
Total (in dollars per share) | (3.28) | 0.36 | (2.99) | (3.72) |
Diluted (loss) earnings per share: | ||||
Continuing operations (in dollars per share) | (3.28) | 0.36 | (2.99) | (3.71) |
Discontinued operations (in dollars per share) | 0.00 | (0.01) | 0.00 | (0.01) |
Total (in dollars per share) | $ (3.28) | $ 0.35 | $ (2.99) | $ (3.72) |
Description of Business |
6 Months Ended |
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Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” and the “Company”) is a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States: the West, East, and Southeast. Our homes are designed to appeal to homeowners at different price points across various demographic segments and are generally offered for sale in advance of their construction. Our objective is to provide our customers with homes that incorporate exceptional value and quality, while seeking to maximize our return on invested capital over the course of a housing cycle. For an additional description of our business, refer to Item 1 within our Annual Report on Form 10-K for the fiscal year ended September 30, 2018 (2018 Annual Report). |
Basis of Presentation and Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of 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. The unaudited condensed consolidated financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2018. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of the Company's consolidated operations presented herein for the three and six months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors. Basis of Consolidation The accompanying condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net (loss) income is equivalent to our comprehensive (loss) income, so we have not presented a separate statement of comprehensive (loss) income. In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 16 for a further discussion of our discontinued operations). Our fiscal year 2019 began on October 1, 2018 and ends on September 30, 2019. Our fiscal year 2018 began on October 1, 2017 and ended on September 30, 2018. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates. Business Combinations On July 13, 2018, the Company acquired substantially all of the assets, operations, and certain assumed liabilities of Venture Homes, a leading private homebuilder in the Atlanta market, for a purchase price of $61.3 million, net of cash acquired. The acquired assets consisted of more than 1,100 total owned or controlled lots within 27 single-family communities in the greater Atlanta metropolitan area. The acquired lots included a backlog of 48 homes and 6 model homes. The acquired assets and liabilities were recorded at their estimated fair values and resulted in inventory of $55.8 million and goodwill of $10.7 million, and other assets of $0.7 million as well as accounts payable of $5.5 million and other liabilities of $0.2 million. The purchase price accounting reflected above is preliminary and is based on estimates and assumptions that are subject to change within the measurement period, which is generally up to one year from the acquisition date pursuant to ASC 805. The purchase price allocation of Venture Homes is provisional pending completion of the fair value analysis of acquired assets and assumed liabilities. Share Repurchase Program On November 13, 2018, the Company announced that its Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. As part of this program, the Company executed an accelerated share repurchase agreement (ASR) on November 15, 2018 to repurchase an aggregate of $16.5 million of its outstanding common stock. During December 2018, the ASR was completed with a repurchase of approximately 1.6 million shares at an average price per share of $10.62. The Company repurchased an additional 0.7 million shares of common stock for $7.5 million at an average price per share of $11.53 during the three months ended March 31, 2019, bringing the total repurchases for the six months ended March 31, 2019 to 2.2 million shares of its common stock for $24.0 million at an average price per share of $10.89, inclusive of the aforementioned ASR. As of March 31, 2019, the remaining availability of the share repurchase program was $26.0 million. The Company made no share repurchases in the prior year. Inventory Valuation Inventory assets are assessed for recoverability no less than quarterly in accordance with the policies described in Notes 2 and 5 to the audited consolidated financial statements within our 2018 Annual Report. Homebuilding inventories that are accounted for as held for development (projects in progress) 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 communities that 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 land held for sale at the lower of the carrying value or fair value less costs to sell. Revenue Recognition We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the following five-step process specified in Accounting Standards Codification Topic 606.
The following table presents our total revenue disaggregated by revenue stream:
(a) Please see Note 14 for total revenue disaggregated by reportable segment. Homebuilding revenue Homebuilding revenue is reported net of any discounts and incentives and is generally recognized when title to and possession of the home are transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, and are considered deposits in-transit and classified as cash. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $16.2 million and $14.9 million as of March 31, 2019 and September 30, 2018, respectively. Of the customer liabilities outstanding as of September 30, 2018, $4.0 million and $12.4 million were recognized in revenue during the three and six months ended March 31, 2019, respectively, upon closing of the related homes. Land sales and other revenue Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. In some periods, we also have other revenue related to broker fees as well as fees received for general contractor services that we perform on behalf of third parties. Revenue for broker and general contractor services are typically immaterial and are generally recognized as performance obligations are satisfied. Recent Accounting Pronouncements Revenue from Contracts with Customers. On October 1, 2018, we adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, collectively referred to as ASC 606. ASC 606 provides a new model for accounting for revenue arising from contracts with customers that supersedes most revenue recognition guidance. Under the new guidance, entities are required to recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled upon transferring control of goods or services to a customer. As part of our adoption of ASC 606, we applied the modified retrospective method to contracts that were not completed as of October 1, 2018. Further, results for reporting periods beginning on or after October 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported under the previous accounting standards. The adoption of ASC 606 had no impact on opening retained earnings and did not materially affect the amount or timing of our revenue. Leases. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASU 2016-02). ASU 2016-02 requires lessees to record most leases on their balance sheets. The timing and classification of lease-related expenses for lessees will depend on whether a lease is determined to be an operating lease or a finance lease using updated criteria within ASU 2016-02. Operating leases will result in straight-line expense (similar to current operating leases), while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Regardless of lease type, the lessee will recognize a right-of-use asset, representing the right to use the identified asset during the lease term, and a related lease liability, representing the present value of the lease payments over the lease term. Lessor accounting will be largely similar to that under the current lease accounting rules. ASU 2016-02 also requires significantly enhanced disclosures around an entity's leases and the related accounting. The guidance within ASU 2016-02 will be effective for the Company's fiscal year beginning October 1, 2019, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements (ASU 2018-11), which provides an optional transition method to apply the requirements of the new lease standard through a cumulative-effect adjustment in the period of adoption. The Company expects to adopt the standard on October 1, 2019 using the optional transition method. We continue to evaluate the impact of ASU 2016-02 on our consolidated financial statements. However, a large majority of our leases are for office space, which we have determined will be treated as operating leases under ASU 2016-02. As such, we anticipate recording a right-of-use asset and related lease liability for these leases. We do not anticipate any significant change to our statements of operations or cash flows as a result of adopting ASU 2016-02. Intangibles - Goodwill and Other. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 eliminates Step 2 from the goodwill impairment test. This change will allow an entity to avoid calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, thus reducing the cost and complexity of evaluating goodwill for impairment. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted, and applied prospectively. We do not believe the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements and disclosures. Fair Value Measurements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework (ASU 2018-13). The updated guidance improves the disclosure requirements for fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We are currently assessing the impact of adopting the updated provisions. Internal-Use Software. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. Interim Disclosure Requirement: Changes in Stockholders’ Equity. In August 2018, the SEC issued SEC Final Rule 33-10532, Disclosure Update and Simplification, which revised or eliminated certain of the SEC’s disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded in light of other SEC and or GAAP disclosure requirements. As a result of the final rule’s amendments, the SEC now requires a registrant to reconcile its changes in stockholders' equity for both the current and comparative interim and year-to-date periods, with subtotals. This final rule is effective on November 5, 2018. Our Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended March 31, 2019 and 2018 reflect adoption of this final rule. |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:
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Investments in Unconsolidated Entities |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities Unconsolidated Entities As of March 31, 2019, the Company participated in certain joint ventures and had investments in unconsolidated entities in which it had less than a controlling interest. The following table presents the Company's investment in these unconsolidated entities as well as the total equity and outstanding borrowings of these unconsolidated entities as of March 31, 2019 and September 30, 2018:
Equity in income from unconsolidated entity activities included in income from continuing operations is as follows for the periods presented:
For the three and six months ended March 31, 2019 and 2018, there were no impairments related to investments in unconsolidated entities. Guarantees Historically, the Company's joint ventures typically obtained secured acquisition, development, and construction financing. In addition, the Company and its joint venture partners provided varying levels of guarantees of debt and other debt-related obligations for these unconsolidated entities. However, as of March 31, 2019 and September 30, 2018, the Company had no outstanding guarantees or other debt-related obligations related to our investments in unconsolidated entities. The Company and its joint venture partners generally provide unsecured environmental indemnities to land development joint venture project lenders. These indemnities obligate the Company 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, 2019 and 2018, the Company was not required to make any payments related to environmental indemnities. In assessing the need to record a liability for these guarantees, the Company considers its 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, the fair value of the collateral of unconsolidated entities is monitored to ensure that the related borrowings do not exceed the specified percentage of the value of the property securing the borrowings. As of March 31, 2019, no liability was recorded for the contingent aspects of any guarantees that were determined to be reasonably possible but not probable. |
Inventory |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory The components of our owned inventory are as follows as of March 31, 2019 and September 30, 2018:
Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including the cost of the underlying lot. We had 159 (with a cost of $60.0 million) and 240 (with a cost of $84.8 million) substantially completed homes that were not subject to a sales contract (spec homes) as of March 31, 2019 and September 30, 2018, 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 customer 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. Land held for sale includes land and lots that do not fit within our homebuilding programs and strategic plans in certain markets and land is classified as held for sale once certain criteria are met. These assets are recorded at the lower of the carrying value or fair value less costs to sell. The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and development projects in progress, but excludes land held for future development and land held for sale (see Note 6 for additional information on capitalized interest). Total owned inventory by reportable segment is presented in the table below as of March 31, 2019 and September 30, 2018:
(a) Projects in progress include homes under construction, development projects in progress, capitalized interest, and model home categories from the preceding table. (b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment. Land held for sale amount includes parcels held by our discontinued operations. Inventory Impairments When conducting our community level review for the recoverability of inventory related to projects in progress, we establish a quarterly “watch list” comprised of communities that carry profit margins in backlog and in our forecast that are below a minimum threshold of profitability. Our watch list also includes communities with recent closings that have gross margins less than a specific threshold. Each community is first evaluated qualitatively to determine if there are temporary factors driving the low profitability levels. Following our qualitative evaluation, communities with more than ten homes remaining to close are subjected to substantial additional financial and operational analysis and review that considers the competitive environment and other factors contributing to gross margins below our watch list threshold. Our assumptions about future home sales prices and absorption rates require significant judgment because the residential homebuilding industry is cyclical and is highly sensitive to changes in economic conditions. For certain communities, it may be prudent to reduce sales prices or further increase sales incentives in response to a variety of factors, including competitive market conditions in those specific submarkets for the product and locations of these communities. For communities where the current competitive and market dynamics indicate that assets may not be recoverable, a formal impairment analysis is performed. The formal impairment analysis consists of both qualitative considerations and quantitative analyses reflecting market and asset specific information. We recognized impairment charges of $147.6 million related to 15 communities during the current quarter, all of which were previously land held for future development assets. As of the beginning of the quarter, 9 of these communities were included in projects in progress due to their activation for development in prior periods, while the remaining 6 communities were classified as land held for future development. The impairments were determined as described below. We identified 12 communities on our current quarter watch list that required further analysis after considering certain quantitative and qualitative factors in accordance with our watch list procedures. This additional analysis led to impairment charges of $109.0 million for 9 of these communities representing 839 lots in our Southern California market. The impairments were primarily driven by a reduction in average selling prices based on current competitive dynamics in the market. Concurrently, we performed a strategic review of our remaining land held for future development assets in California and determined to sell all of these parcels. As a consequence of the change in strategy with respect to the future use of these assets, we recognized land held for sale impairments totaling $38.6 million for 6 communities representing 732 lots in our Northern and Southern California markets. While steps to initiate planned sales of land held for sale assets have been taken, the timing of completion of such asset dispositions is unknown. For the quarter ended March 31, 2018, there were two communities on our quarterly watch list. However, neither of these communities required impairment after considering certain quantitative and qualitative factors. The table below summarizes the results of our recoverability tests by reportable segment, where applicable, for the quarter ended March 31, 2019:
(a) We have elected to aggregate our disclosure at the reportable segment level because we believe this level of disclosure is most meaningful to the readers of our financial statements. (b) Number of communities in this column excludes communities that are closing out and have fewer than ten closings remaining. (c) Some of the communities on the watch list were not tested for recoverability on an undiscounted cash flow basis due to certain quantitative and qualitative considerations that indicated that their carrying values are recoverable. (d) An aggregate undiscounted cash flow as a percentage of book value under 100% would indicate a possible impairment and is consistent with our "watch list" methodology. The book value of each project assessed for recoverability on an undiscounted cash flow basis includes all inventory costs applicable to the project as of the date of the analysis, including capitalized interest and indirects. (e) Amount represents capitalized interest and indirects balance related to the communities for which a recoverability analysis was prepared. Capitalized interest and indirects are maintained within our Corporate and unallocated segment. (f) N/A - not applicable. The following table presents, by reportable segment, details of the impairment charges taken on projects in progress for the periods presented:
(a) Amount represents the capitalized interest and indirects balances that were impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment. Impairments on land held for sale generally represent write downs of these properties to net realizable value and are based on current market conditions and our review of recent comparable transactions. Our assumptions related to land sales prices require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results. From time-to-time, we also determine that the proper course of action with respect to a community is to not exercise an option and to write off the deposit securing the option takedown and the related pre-acquisition costs, as applicable. In determining whether to abandon lots or lot option contracts, our evaluation is primarily based upon the expected cash flows from the property. Additionally, in certain limited instances, we are forced to abandon lots due to permitting or other regulatory issues that do not allow us to build on those lots. If we intend to abandon or walk away from a property, we record a charge to earnings for the deposit amount and any related capitalized costs in the period such decision is made. Abandonment charges generally relate to our decision to abandon lots or not exercise certain option contracts that are not projected to produce adequate results, no longer fit with our long-term strategic plan or, in limited circumstances, are not suitable for building due to regulatory or environmental restrictions that are enacted. The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:
(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment. Valuation assumptions for communities tested for impairment are specific to each community. For projects in progress impaired during the periods presented, we determined the fair value of each community by discounting its estimated future cash flows at a rate commensurate with the risks inherent in the project. The discount rate used depends on the development stage and expected duration of the project, local market conditions, and other specific factors. The estimated future cash flows for each community were determined based on the expected pace of closings and average sales price of the community less expected costs for land acquisition and land development, direct construction, overhead, and interest. We determined the fair value of land held for sale assets impaired during the periods presented based on sales contracts, letters of intent, and recent comparable land sale transactions, as applicable. The assumptions used in the determination of fair value of both projects in progress and land held for sale communities are based on factors known to us at the time such estimates are made and our expectations of future operations and market conditions. Should the estimates or expectations used in determining estimated fair values deteriorate in the future, we may be required to recognize additional impairment charges and write-offs related to these assets, and such amounts could be material. The following table presents the ranges or values of significant quantitative unobservable inputs we used in determining the fair value of the communities impaired during the periods presented:
Lot Option Agreements and Variable Interest Entities (VIE) 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. The 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 specified 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 at all. The following table provides a summary of our interests in lot option agreements as of March 31, 2019 and September 30, 2018:
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Interest |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest | Interest Interest capitalized during the three and six months ended March 31, 2019 and 2018 was limited by the balance of inventory eligible for capitalization. The following table presents certain information regarding interest for the periods presented:
(a) The amount of interest capitalized depends on the qualified inventory balance, which considers the status of the Company's inventory holdings. The qualified inventory balance includes the majority of homes under construction and development projects in progress but excludes land held for future development and land held for sale. (b) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors. |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings The Company's debt, net of premiums, discounts, and unamortized debt issuance costs consisted of the following as of March 31, 2019 and September 30, 2018:
Secured Revolving Credit Facility The Secured Revolving Credit Facility (the Facility) provides working capital and letter of credit capacity. In October 2018, the Company executed a Fifth Amendment to the Facility, extending the termination date of the Facility from February 15, 2020 to February 15, 2021 and increasing the maximum aggregate amount of commitments under the Facility, including borrowings and letters of credit, from $200.0 million to $210.0 million. The aggregate collateral ratio (as defined by the underlying Credit Agreement) remained at 4.00 to 1.00 and the after-acquired exclusionary condition (also as defined by the underlying Credit Agreement) remained at $840.0 million. The Facility continues to be with three lenders. For additional discussion of the Facility, refer to Note 8 to the consolidated financial statements within our 2018 Annual Report. As of March 31, 2019, $75.0 million of borrowings and no letters of credit were outstanding under the Facility, resulting in a remaining capacity of $135.0 million. As of September 30, 2018, no borrowings and no letters of credit were outstanding under the Facility, resulting in a remaining capacity of $200.0 million. The Facility requires compliance with certain covenants, including negative covenants and financial maintenance covenants. As of March 31, 2019, the Company was in compliance with all such covenants. Letter of Credit Facilities The Company has entered into stand-alone, cash-secured letter of credit agreements with banks to maintain pre-existing letters of credit and to provide for the issuance of new letters of credit (in addition to the letters of credit issued under the Facility). As of March 31, 2019 and September 30, 2018, the Company had letters of credit outstanding under these additional facilities of $10.9 million and $10.4 million, respectively, all of which were secured by cash collateral in restricted accounts. The Company may enter into additional arrangements to provide additional letter of credit capacity. In May 2018, the Company entered into a reimbursement agreement, which provides for the issuance of performance letters of credit, and an unsecured credit agreement that provides for the issuance of up to $50.0 million of standby letters of credit to backstop the Company's obligations under the reimbursement agreement (collectively, the "Bilateral Facility"). The Bilateral Facility will terminate on June 10, 2021. As of March 31, 2019, the total stated amount of performance letters of credit issued under the reimbursement agreement was $36.3 million (and the stated amount of the backstop standby letter of credit issued under the credit agreement was $40.0 million). The Company may enter into additional arrangements to provide greater letter of credit capacity. Senior Notes The Company's Senior Notes are unsecured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of the Company's 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 Facility. Each guarantor subsidiary is a 100% owned subsidiary of Beazer Homes. See Note 15 for further information. All unsecured Senior Notes rank equally in right of payment with all 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 the Facility, if outstanding, to the extent of the value of the assets securing such indebtedness. The unsecured Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes but are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly-owned subsidiaries party to each applicable indenture. The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company is in compliance with the covenants contained in the indentures of all of its Senior Notes as of March 31, 2019. During the three months ended March 31, 2019, the Company redeemed $1.2 million and $3.8 million of the 7.25% unsecured Senior Notes due February 2023 and 6.75% unsecured Senior Notes due February 2025, respectively, using cash on hand, resulting in a gain on extinguishment of debt of $0.2 million, which was net of a $0.1 million non-cash write-off of debt issuance costs. For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:
Junior Subordinated Notes The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036. The Junior Subordinated Notes are redeemable at par and paid interest at a fixed rate of 7.987% for the first ten years ending July 30, 2016. The securities now have a floating interest rate as defined in the Junior Subordinated Notes Indenture, which was a weighted-average of 5.20% as of March 31, 2019 (because the rate on the portion of the Junior Subordinated Notes that was modified, as discussed below, is subject to a floor). The obligations relating to these notes are subordinated to the Facility and the Senior Notes. In January 2010, the Company modified the terms of $75.0 million of these notes and recorded them at their then estimated fair value. Over the remaining life of the Junior Subordinated Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of March 31, 2019, the unamortized accretion was $35.7 million and will be amortized over the remaining life of the notes. As of March 31, 2019, the Company was in compliance with all covenants under the Junior Subordinated Notes. Other Secured Notes Payable The Company periodically acquires land through the issuance of notes payable. As of March 31, 2019 and September 30, 2018, the Company had outstanding notes payable of $2.6 million and $4.1 million, respectively, primarily related to land acquisitions. These secured notes payable have varying expiration dates in 2019, a weighted-average fixed interest rate of 1.88% as of March 31, 2019, and are secured by the real estate to which they relate. The agreements governing these other secured notes payable contain various affirmative and negative covenants. There can be no assurance that the Company 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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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 related to these defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded when it is considered probable that a liability has been incurred and 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 quality standards. In addition, we provide a limited warranty for up to ten years covering only certain defined structural element failures. Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors. In addition, we maintain insurance coverage related to our construction efforts that can result in recoveries of warranty and construction defect costs above certain specified limits. Warranty reserves are included in other liabilities within the condensed consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the condensed consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. Such analysis considers market-specific factors such as warranty experience, the number of home closings, the prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve. Changes in warranty reserves are as follows for the periods presented:
(a) Accruals for warranties issued are a function of the number of home closings in the period, the selling prices of the homes closed, and the rates of accrual per home estimated as a percentage of the selling price of the home. Insurance Recoveries The Company has insurance policies that provide for the reimbursement of certain warranty costs incurred above specified thresholds for each period covered. Amounts recorded for anticipated insurance recoveries are reflected within the condensed consolidated statements of income as a reduction of home construction expenses. Amounts not yet received from our insurer are recorded on a gross basis, without any reduction for the associated warranty expense, within accounts receivable on our condensed consolidated balance sheets. Litigation 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 that 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 our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows. Other Matters 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 in 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 an accrual of $3.3 million and $3.7 million in other liabilities on our condensed consolidated balance sheets related to litigation and other matters, excluding warranty, as of March 31, 2019 and September 30, 2018, respectively. We had outstanding letters of credit and performance bonds of approximately $47.2 million and $271.6 million, respectively, as of March 31, 2019, related principally to our obligations to local governments to construct roads and other improvements in various developments. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. 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:
Certain of our assets are required to be recorded at fair value on a recurring basis. The fair value of our deferred compensation plan assets is based on market-corroborated inputs (Level 2). 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 of these assets may not be recovered. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. Fair value on assets deemed to be impaired is determined based upon the type of asset being evaluated. Fair value of our owned inventory assets, when required to be calculated, is further discussed within Notes 2 and 5. The fair value of our investments in unconsolidated entities is determined primarily using a discounted cash flow model to value the underlying net assets of the respective entities. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3. During the three months ended March 31, 2019, we recognized impairments of $109.0 million on projects in process and $38.6 million on land held for sale compared to no such impairments during the three months ended March 31, 2018. During the six months ended March 31, 2019, we recognized impairments of $110.0 million on projects in process and $38.6 million on land held for sale compared to no impairment on projects in process and $0.5 million of impairments on land held for sale during the six months ended March 31, 2018. Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value on a recurring basis and the impairment-date fair value of certain assets measured at fair value on a non-recurring basis for each hierarchy level. These balances represent only those assets whose carrying values were adjusted to fair value during the periods presented:
(a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis, including the capitalized interest and indirects related to the asset. The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, amounts due under the Facility (if outstanding), and other secured notes payable approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value. The following table presents the carrying value and estimated fair value of certain other financial liabilities as of March 31, 2019 and September 30, 2018:
(a) Carrying amounts are net of unamortized debt premiums/discounts, debt issuance costs, or accretion. (b) The estimated fair value for our publicly-held Senior Notes has been determined using quoted market rates (Level 2). |
Income Taxes |
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Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Provision The Company's income tax provision for quarterly interim periods is based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items. The total income tax provision, including discontinued operations, was a tax benefit of $38.2 million and $42.1 million for the three and six months ended March 31, 2019, respectively, compared to an income tax expense of $1.0 million and $109.0 million for the three and six months ended March 31, 2018, respectively. The current fiscal year income tax benefit was primarily driven by (1) the loss from continuing operations due to the $148.6 million of impairments on our land inventory assets and (2) the completion of work necessary to claim an additional $5.4 million in tax credits related to prior fiscal years, partially offset by discrete impacts related to stock-based compensation. The tax expense for the six months ended March 31, 2018 was primarily driven by the remeasurement of the Company's deferred tax assets as a result of the enactment of the Tax Cuts and Jobs Act and several discrete tax items, including stock-based compensation. These items were partially offset by the loss incurred from continuing operations and completion of the work necessary to claim an additional $2.3 million in tax credits related to prior fiscal years. Deferred Tax Assets and Liabilities As of March 31, 2019, the net deferred tax asset is comprised of various tax attributes that include $9.6 million of minimum tax credit carryforwards. Beginning with the fiscal 2019 tax return, the Company will be able to make cash refund claims for significant portions of these credits due to the elimination of the alternative minimum tax in the Tax Cuts and Jobs Act. The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of March 31, 2019, management concluded that it is more likely than not that a substantial portion of our deferred tax assets will be realized. As part of our analysis, we considered both positive and negative factors, including current quarter impairments, that impact profitability and whether those factors would lead to a change in the estimate of our deferred tax assets that may be realized in the future. Our conclusions on the valuation allowance and Internal Revenue Code Section 382 limitations related to our deferred tax assets remain consistent with the determinations we made during the period ended September 30, 2018, and such conclusions are based on similar company specific and industry factors to those discussed in Note 13 to the audited consolidated financial statements within our 2018 Annual Report. |
Stock-based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense is included in general and administrative expenses in the condensed consolidated statements of operations. Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three and six months ended March 31, 2019 and March 31, 2018, respectively.
Stock Options Following is a summary of stock option activity for the six months ended March 31, 2019:
As of March 31, 2019 and September 30, 2018, total unrecognized compensation cost related to unvested stock options was $0.3 million and $0.2 million, respectively. The remaining cost as of March 31, 2019 is expected to be recognized over a weighted-average period of 1.5 years. Restricted Stock Awards During the six months ended March 31, 2019, the Company issued time-based restricted stock awards that vest ratably over three years on each anniversary from the grant date and performance-based restricted stock awards with a payout subject to the achievement of performance and market conditions over a three-year period. Following is a summary of restricted stock activity for the six months ended March 31, 2019:
(a) Grant and vesting activity during the six months ended March 31, 2019 include 86,050 shares that were issued above target based on the performance level achieved under performance-based restricted stock vesting in the current period. As of March 31, 2019 and September 30, 2018, total unrecognized compensation cost related to unvested restricted stock awards was $13.1 million and $8.8 million, respectively. The remaining cost as of March 31, 2019 is expected to be recognized over a weighted average period of 2.0 years. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic (loss) income per share is calculated by dividing net (loss) income by the weighted-average number of shares outstanding during the period. Diluted (loss) income per share adjusts the basic (loss) income per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method. Following is a summary of the components of basic and diluted (loss) income per share for the periods presented:
(a) The following potentially dilutive shares were excluded from the calculation of diluted (loss) income per share as a result of their anti-dilutive effect. Due to the reported net loss for the three and six months ended March 31, 2019 and six months ended March 31, 2018, all common stock equivalents were excluded from the computation of diluted loss per share for those periods because inclusion would have resulted in anti-dilution.
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Other Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities | Other Liabilities Other liabilities include the following as of March 31, 2019 and September 30, 2018:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information We currently operate in 13 states that are grouped into three homebuilding segments based on geography. Revenues from our homebuilding segments are derived from the sale of homes that 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. We have considered the applicable aggregation criteria and have combined our homebuilding operations into three reportable segments as follows: West: Arizona, California, Nevada, and Texas East: Delaware, Indiana, Maryland, New Jersey(a), Tennessee, and Virginia Southeast: Florida, Georgia, North Carolina, and South Carolina (a) During our fiscal 2015, we made the decision that we would not continue to reinvest in new homebuilding assets in our New Jersey division; therefore, it is no longer considered an active operation. However, it is included in this listing because the segment information below continues to include New Jersey. Management’s evaluation of segment performance is based on segment operating (loss) income. Operating (loss) income for our homebuilding segments is defined as homebuilding and land sales and other revenue less home construction, land development, and land sales expense, commission expense, depreciation and amortization, and certain G&A expenses that are incurred by or allocated to our homebuilding segments. The accounting policies of our segments are those described in Note 2 to the consolidated financial statements within our 2018 Annual Report. The following tables contain our revenue, operating (loss) income, and depreciation and amortization by segment for the periods presented:
(a) Operating (loss) income is impacted by impairment and abandonment charges incurred during the periods presented (see Note 5). (b) Corporate and unallocated operating loss includes amortization of capitalized interest; movement in capitalized indirects; expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing; and other amounts that are not allocated to our operating segments. Corporate and unallocated depreciation and amortization represents depreciation and amortization related to assets held by our corporate functions that benefit all segments. The following table presents capital expenditures by segment for the periods presented:
The following table presents assets by segment as of March 31, 2019 and September 30, 2018:
(a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirects, and other items that are not allocated to the segments. |
Supplemental Guarantor Information |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor information | Supplemental Guarantor Information As discussed in Note 7, the Company's obligations to pay principal, premium, if any, and interest under certain debt agreements are guaranteed on a joint and several basis by substantially all of the Company's subsidiaries. Some of the immaterial subsidiaries do not guarantee the Senior Notes or the Facility. The guarantees are full and unconditional and the guarantor subsidiaries are 100% owned by Beazer Homes USA, Inc. The following unaudited financial information presents the line items of the Company's unaudited condensed consolidated financial statements separated by amounts related to the parent issuer, guarantor subsidiaries, non-guarantor subsidiaries, and consolidating adjustments as of or for the periods presented. Beazer Homes USA, Inc. Condensed Consolidating Balance Sheet Information March 31, 2019 (Unaudited)
Beazer Homes USA, Inc. Condensed Consolidating Balance Sheet Information September 30, 2018 (Unaudited)
Beazer Homes USA, Inc. Condensed Consolidating Statements of Operations (Unaudited)
Beazer Homes USA, Inc. Condensed Consolidating Statements of Cash Flow Information (Unaudited)
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Discontinued Operations |
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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 stockholder 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. During our fiscal 2015, we made the decision that we would not continue to reinvest in new homebuilding assets in our New Jersey division; therefore, it is no longer considered an active operation. However, the results of our New Jersey division are not included in the discontinued operations information shown below. We have classified the results of operations of our discontinued operations separately in the accompanying 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, 2019 or September 30, 2018. Discontinued operations were not segregated in the condensed consolidated statements of cash flows. Therefore, amounts for certain captions in the condensed consolidated statements of cash flows will not agree with the respective data in the condensed consolidated statements of operations. The results of our discontinued operations in the condensed consolidated statements of operations for the periods presented were as follows:
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||
Basis of Consolidation | Basis of Consolidation The accompanying condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net (loss) income is equivalent to our comprehensive (loss) income, so we have not presented a separate statement of comprehensive (loss) income. In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 16 for a further discussion of our discontinued operations). Our fiscal year 2019 began on October 1, 2018 and ends on September 30, 2019. Our fiscal year 2018 began on October 1, 2017 and ended on September 30, 2018. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates. |
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Business Combinations | Business Combinations On July 13, 2018, the Company acquired substantially all of the assets, operations, and certain assumed liabilities of Venture Homes, a leading private homebuilder in the Atlanta market, for a purchase price of $61.3 million, net of cash acquired. The acquired assets consisted of more than 1,100 total owned or controlled lots within 27 single-family communities in the greater Atlanta metropolitan area. The acquired lots included a backlog of 48 homes and 6 model homes. The acquired assets and liabilities were recorded at their estimated fair values and resulted in inventory of $55.8 million and goodwill of $10.7 million, and other assets of $0.7 million as well as accounts payable of $5.5 million and other liabilities of $0.2 million. The purchase price accounting reflected above is preliminary and is based on estimates and assumptions that are subject to change within the measurement period, which is generally up to one year from the acquisition date pursuant to ASC 805. The purchase price allocation of Venture Homes is provisional pending completion of the fair value analysis of acquired assets and assumed liabilities. |
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Inventory Valuation | Inventory Valuation Inventory assets are assessed for recoverability no less than quarterly in accordance with the policies described in Notes 2 and 5 to the audited consolidated financial statements within our 2018 Annual Report. Homebuilding inventories that are accounted for as held for development (projects in progress) 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 communities that 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 land held for sale at the lower of the carrying value or fair value less costs to sell. |
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Revenue Recognition | Revenue Recognition We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the following five-step process specified in Accounting Standards Codification Topic 606.
Homebuilding revenue Homebuilding revenue is reported net of any discounts and incentives and is generally recognized when title to and possession of the home are transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held in escrow for our benefit, typically for less than five days, and are considered deposits in-transit and classified as cash. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $16.2 million and $14.9 million as of March 31, 2019 and September 30, 2018, respectively. Of the customer liabilities outstanding as of September 30, 2018, $4.0 million and $12.4 million were recognized in revenue during the three and six months ended March 31, 2019, respectively, upon closing of the related homes. Land sales and other revenue Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. In some periods, we also have other revenue related to broker fees as well as fees received for general contractor services that we perform on behalf of third parties. Revenue for broker and general contractor services are typically immaterial and are generally recognized as performance obligations are satisfied. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue from Contracts with Customers. On October 1, 2018, we adopted Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, and ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers, collectively referred to as ASC 606. ASC 606 provides a new model for accounting for revenue arising from contracts with customers that supersedes most revenue recognition guidance. Under the new guidance, entities are required to recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled upon transferring control of goods or services to a customer. As part of our adoption of ASC 606, we applied the modified retrospective method to contracts that were not completed as of October 1, 2018. Further, results for reporting periods beginning on or after October 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported under the previous accounting standards. The adoption of ASC 606 had no impact on opening retained earnings and did not materially affect the amount or timing of our revenue. Leases. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (ASU 2016-02). ASU 2016-02 requires lessees to record most leases on their balance sheets. The timing and classification of lease-related expenses for lessees will depend on whether a lease is determined to be an operating lease or a finance lease using updated criteria within ASU 2016-02. Operating leases will result in straight-line expense (similar to current operating leases), while finance leases will result in a front-loaded expense pattern (similar to current capital leases). Regardless of lease type, the lessee will recognize a right-of-use asset, representing the right to use the identified asset during the lease term, and a related lease liability, representing the present value of the lease payments over the lease term. Lessor accounting will be largely similar to that under the current lease accounting rules. ASU 2016-02 also requires significantly enhanced disclosures around an entity's leases and the related accounting. The guidance within ASU 2016-02 will be effective for the Company's fiscal year beginning October 1, 2019, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements (ASU 2018-11), which provides an optional transition method to apply the requirements of the new lease standard through a cumulative-effect adjustment in the period of adoption. The Company expects to adopt the standard on October 1, 2019 using the optional transition method. We continue to evaluate the impact of ASU 2016-02 on our consolidated financial statements. However, a large majority of our leases are for office space, which we have determined will be treated as operating leases under ASU 2016-02. As such, we anticipate recording a right-of-use asset and related lease liability for these leases. We do not anticipate any significant change to our statements of operations or cash flows as a result of adopting ASU 2016-02. Intangibles - Goodwill and Other. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 eliminates Step 2 from the goodwill impairment test. This change will allow an entity to avoid calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, thus reducing the cost and complexity of evaluating goodwill for impairment. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted, and applied prospectively. We do not believe the adoption of ASU 2017-04 will have a material impact on our consolidated financial statements and disclosures. Fair Value Measurements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework (ASU 2018-13). The updated guidance improves the disclosure requirements for fair value measurements. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We are currently assessing the impact of adopting the updated provisions. Internal-Use Software. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. Interim Disclosure Requirement: Changes in Stockholders’ Equity. In August 2018, the SEC issued SEC Final Rule 33-10532, Disclosure Update and Simplification, which revised or eliminated certain of the SEC’s disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded in light of other SEC and or GAAP disclosure requirements. As a result of the final rule’s amendments, the SEC now requires a registrant to reconcile its changes in stockholders' equity for both the current and comparative interim and year-to-date periods, with subtotals. This final rule is effective on November 5, 2018. Our Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended March 31, 2019 and 2018 reflect adoption of this final rule. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table presents our total revenue disaggregated by revenue stream:
(a) Please see Note 14 for total revenue disaggregated by reportable segment. |
Supplemental Cash Flow Information (Tables) |
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Supplemental disclosure of non-cash activity | The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:
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Investments in Unconsolidated Entities (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in unconsolidated joint ventures, total equity and outstanding borrowings | The following table presents the Company's investment in these unconsolidated entities as well as the total equity and outstanding borrowings of these unconsolidated entities as of March 31, 2019 and September 30, 2018:
Equity in income from unconsolidated entity activities included in income from continuing operations is as follows for the periods presented:
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Inventory (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | The components of our owned inventory are as follows as of March 31, 2019 and September 30, 2018:
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Schedule of total owned inventory, by segment | Total owned inventory by reportable segment is presented in the table below as of March 31, 2019 and September 30, 2018:
(a) Projects in progress include homes under construction, development projects in progress, capitalized interest, and model home categories from the preceding table. (b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment. Land held for sale amount includes parcels held by our discontinued operations. |
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Schedule of Undiscounted Cash Flow Analysis Prepared | The table below summarizes the results of our recoverability tests by reportable segment, where applicable, for the quarter ended March 31, 2019:
(a) We have elected to aggregate our disclosure at the reportable segment level because we believe this level of disclosure is most meaningful to the readers of our financial statements. (b) Number of communities in this column excludes communities that are closing out and have fewer than ten closings remaining. (c) Some of the communities on the watch list were not tested for recoverability on an undiscounted cash flow basis due to certain quantitative and qualitative considerations that indicated that their carrying values are recoverable. (d) An aggregate undiscounted cash flow as a percentage of book value under 100% would indicate a possible impairment and is consistent with our "watch list" methodology. The book value of each project assessed for recoverability on an undiscounted cash flow basis includes all inventory costs applicable to the project as of the date of the analysis, including capitalized interest and indirects. (e) Amount represents capitalized interest and indirects balance related to the communities for which a recoverability analysis was prepared. Capitalized interest and indirects are maintained within our Corporate and unallocated segment. (f) N/A - not applicable. |
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Schedule of Discounted Cash Flow Analysis | The following table presents, by reportable segment, details of the impairment charges taken on projects in progress for the periods presented:
(a) Amount represents the capitalized interest and indirects balances that were impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment. |
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Quantitative unobservable inputs for inventory impairment | The following table presents the ranges or values of significant quantitative unobservable inputs we used in determining the fair value of the communities impaired during the periods presented:
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Schedule of inventory impairments and lot option abandonment charges, by reportable homebuilding segment | The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:
(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment. |
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Summary of interests in lot option agreements | The following table provides a summary of our interests in lot option agreements as of March 31, 2019 and September 30, 2018:
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Interest (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Inventory, Capitalized Interest Costs | The following table presents certain information regarding interest for the periods presented:
(a) The amount of interest capitalized depends on the qualified inventory balance, which considers the status of the Company's inventory holdings. The qualified inventory balance includes the majority of homes under construction and development projects in progress but excludes land held for future development and land held for sale. (b) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors. |
Borrowings (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | The Company's debt, net of premiums, discounts, and unamortized debt issuance costs consisted of the following as of March 31, 2019 and September 30, 2018:
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Debt Instrument Redemption | For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:
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Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warranty reserves | Changes in warranty reserves are as follows for the periods presented:
(a) Accruals for warranties issued are a function of the number of home closings in the period, the selling prices of the homes closed, and the rates of accrual per home estimated as a percentage of the selling price of the home. |
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value assets measured on a recurring and non-recurring basis | The following table presents the period-end balances of assets measured at fair value on a recurring basis and the impairment-date fair value of certain assets measured at fair value on a non-recurring basis for each hierarchy level. These balances represent only those assets whose carrying values were adjusted to fair value during the periods presented:
(a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis, including the capitalized interest and indirects related to the asset. |
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Schedule of carrying values and estimated fair values of other financial assets and liabilities | The following table presents the carrying value and estimated fair value of certain other financial liabilities as of March 31, 2019 and September 30, 2018:
(a) Carrying amounts are net of unamortized debt premiums/discounts, debt issuance costs, or accretion. (b) The estimated fair value for our publicly-held Senior Notes has been determined using quoted market rates (Level 2). |
Stock-based compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of compensation cost | Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three and six months ended March 31, 2019 and March 31, 2018, respectively.
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Schedule of stock options and SSARs outstanding | Following is a summary of stock option activity for the six months ended March 31, 2019:
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Schedule of nonvested stock awards activity | Following is a summary of restricted stock activity for the six months ended March 31, 2019:
(a) Grant and vesting activity during the six months ended March 31, 2019 include 86,050 shares that were issued above target based on the performance level achieved under performance-based restricted stock vesting in the current period. |
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted earnings per share | Following is a summary of the components of basic and diluted (loss) income per share for the periods presented:
(a) The following potentially dilutive shares were excluded from the calculation of diluted (loss) income per share as a result of their anti-dilutive effect. Due to the reported net loss for the three and six months ended March 31, 2019 and six months ended March 31, 2018, all common stock equivalents were excluded from the computation of diluted loss per share for those periods because inclusion would have resulted in anti-dilution. |
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share |
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Other Liabilities Other Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other liabilities | Other liabilities include the following as of March 31, 2019 and September 30, 2018:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information | The following tables contain our revenue, operating (loss) income, and depreciation and amortization by segment for the periods presented:
(a) Operating (loss) income is impacted by impairment and abandonment charges incurred during the periods presented (see Note 5). (b) Corporate and unallocated operating loss includes amortization of capitalized interest; movement in capitalized indirects; expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing; and other amounts that are not allocated to our operating segments. Corporate and unallocated depreciation and amortization represents depreciation and amortization related to assets held by our corporate functions that benefit all segments. The following table presents capital expenditures by segment for the periods presented:
The following table presents assets by segment as of March 31, 2019 and September 30, 2018:
(a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirects, and other items that are not allocated to the segments. |
Supplemental Guarantor Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited Condensed Consolidating Balance Sheet Information | Beazer Homes USA, Inc. Condensed Consolidating Balance Sheet Information March 31, 2019 (Unaudited)
Beazer Homes USA, Inc. Condensed Consolidating Balance Sheet Information September 30, 2018 (Unaudited)
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Unaudited Condensed Consolidating Statements of Income (Loss) and Unaudited Comprehensive Income (Loss) | Beazer Homes USA, Inc. Condensed Consolidating Statements of Operations (Unaudited)
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Unaudited Condensed Consolidating Statements of Cash Flow Information | Beazer Homes USA, Inc. Condensed Consolidating Statements of Cash Flow Information (Unaudited)
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Discontinued Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Results of Discontinued Operations | The results of our discontinued operations in the condensed consolidated statements of operations for the periods presented were as follows:
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Description of Business (Details) |
Mar. 31, 2019
state
region
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which home building segments operate | state | 13 |
Number of regions in which entity operates | region | 3 |
Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
Sep. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 421,260 | $ 455,178 | $ 823,300 | $ 827,667 | |
Customer deposits | 16,232 | 16,232 | $ 14,903 | ||
Contract with customer, liability, revenue recognized | 4,000 | 12,400 | |||
Homebuilding revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 420,945 | 441,115 | 821,927 | 808,869 | |
Land sales and other revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 315 | $ 14,063 | $ 1,373 | $ 18,798 |
Basis of Presentation and Summary of Significant Accounting Policies - Share Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Nov. 15, 2018 |
Dec. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2019 |
Nov. 13, 2018 |
|
Accounting Policies [Abstract] | |||||
Authorized amount repurchase of common stock | $ 50,000 | ||||
Share repurchases | $ 16,500 | $ 7,505 | $ 24,004 | ||
Average price per share (in dollars per share) | $ 11.53 | $ 10.89 | |||
Completed common stock repurchase (in shares) | 1.6 | 0.7 | 2.2 | ||
Average price per share (in dollars per share) | $ 10.62 | ||||
Remaining authorized repurchase amount | $ 26,000 | $ 26,000 |
Basis of Presentation and Summary of Significant Accounting Policies - Business Combinations (Details) - Venture Homes $ in Millions |
Jul. 13, 2018
USD ($)
home
lot
Community
|
---|---|
Business Acquisition [Line Items] | |
Purchase price, net of cash acquired | $ 61.3 |
Number of active communities | Community | 27 |
Number of homes in backlog | home | 48 |
Number of model homes in backlog | home | 6 |
Inventory acquired | $ 55.8 |
Intangible Assets, Net (Including Goodwill) | 10.7 |
Other assets acquired | 0.7 |
Accounts payable | 5.5 |
Other liabilities assumed | $ 0.2 |
Minimum | |
Business Acquisition [Line Items] | |
Number of lots acquired | lot | 1,100 |
Supplemental Cash Flow Information - Supplemental Disclosure of Non-cash Activity (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Sep. 30, 2018 |
|
Supplemental disclosure of cash activity: | |||
Interest payments | $ 48,277 | $ 43,433 | |
Income tax payments | 61 | 10 | |
Tax refunds received | 12 | 39 | |
Reconciliation of cash, cash equivalents, and restricted cash: | |||
Cash and cash equivalents | 86,441 | 158,787 | $ 139,805 |
Restricted cash | 12,197 | 12,783 | $ 13,443 |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 98,638 | $ 171,570 |
Investments in Unconsolidated Entities - Outstanding Borrowings of Unconsolidated Entities and Equity in Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
Sep. 30, 2018 |
|
Equity Method Investments and Joint Ventures [Abstract] | |||||
Investment in unconsolidated entities | $ 3,726 | $ 3,726 | $ 4,035 | ||
Total equity of unconsolidated entities | 4,500 | 4,500 | 10,113 | ||
Total outstanding borrowings of unconsolidated entities | 12,506 | 12,506 | $ 12,266 | ||
Equity in income of unconsolidated entities | $ 81 | $ 256 | $ 17 | $ 155 |
Investments in Unconsolidated Entities - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
Sep. 30, 2018 |
|
Equity Method Investments and Joint Ventures [Abstract] | |||||
Impairment of unconsolidated entity investments | $ 0 | $ 0 | $ 0 | $ 0 | |
Financial Guarantee | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Outstanding guarantees | $ 0 | $ 0 | $ 0 |
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
---|---|---|---|---|---|---|
Inventory Disclosure [Abstract] | ||||||
Homes under construction | $ 536,039 | $ 476,752 | ||||
Development projects in progress | 836,829 | 907,793 | ||||
Land held for future development | 28,531 | 83,173 | ||||
Land held for sale | 12,926 | 7,781 | ||||
Capitalized interest | 144,756 | $ 151,886 | 144,645 | $ 149,034 | $ 144,847 | $ 139,203 |
Model homes | 75,318 | 72,140 | ||||
Total owned inventory | $ 1,634,399 | $ 1,692,284 |
Inventory - Recoverability Schedule of Inventory assets Held for Development, by Reportable Segment (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
Community
|
Mar. 31, 2018
Community
|
---|---|---|
Real Estate Properties [Line Items] | ||
Number of Communities on Watch List | 12 | 2 |
Number of Communities | 9 | 0 |
Pre-analysis Book Value | $ | $ 192,399 | |
West Segment | ||
Real Estate Properties [Line Items] | ||
Number of Communities on Watch List | 12 | |
Number of Communities | 9 | |
Pre-analysis Book Value | $ | $ 162,362 | |
Aggregate Undiscounted Cash Flow as a % of BV | 79.40% | |
Corporate and unallocated | ||
Real Estate Properties [Line Items] | ||
Number of Communities on Watch List | 0 | |
Number of Communities | 0 | |
Pre-analysis Book Value | $ | $ 30,037 |
Inventory - Quantitative Unobservable Inputs (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Mar. 31, 2019
USD ($)
home
|
Mar. 31, 2019
USD ($)
home
|
|
Minimum | ||
Quantitative unobservable inputs for inventory impairment [Line Items] | ||
Average selling price | $ | $ 350 | $ 350 |
Closings per community per month | home | 2 | 1 |
Maximum | ||
Quantitative unobservable inputs for inventory impairment [Line Items] | ||
Average selling price | $ | $ 615 | $ 615 |
Closings per community per month | home | 4 | 4 |
Measurement Input, Discount Rate | Minimum | ||
Quantitative unobservable inputs for inventory impairment [Line Items] | ||
Discount rate | 0.147 | 0.147 |
Measurement Input, Discount Rate, Three Months Ended | Maximum | ||
Quantitative unobservable inputs for inventory impairment [Line Items] | ||
Discount rate | 0.164 | 0.164 |
Measurement Input, Discount Rate, Six Months Ended | Maximum | ||
Quantitative unobservable inputs for inventory impairment [Line Items] | ||
Discount rate | 0.168 | 0.168 |
Inventory - Summary of Interests in Lot Option Agreements (Details) - Unconsolidated lot option agreements - USD ($) $ in Thousands |
Mar. 31, 2019 |
Sep. 30, 2018 |
---|---|---|
Real Estate Properties [Line Items] | ||
Deposits & Non-refundable Pre-acquisition Costs Incurred | $ 78,047 | $ 72,191 |
Remaining Obligation | $ 386,913 | $ 383,150 |
Interest - Schedule of Capitalized Interest (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||||
Capitalized interest in inventory, beginning of period | $ 151,886 | $ 144,847 | $ 144,645 | $ 139,203 |
Interest incurred | 25,803 | 25,492 | 50,724 | 51,047 |
Capitalized interest impaired | (13,792) | 0 | (13,907) | 0 |
Interest expense not qualified for capitalization and included as other expense | (597) | (1,650) | (839) | (5,085) |
Capitalized interest amortized to home construction and land sales expenses | (18,544) | (19,655) | (35,867) | (36,131) |
Capitalized interest in inventory, end of period | $ 144,756 | $ 149,034 | $ 144,756 | $ 149,034 |
Contingencies - Warranty (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Standard product warranty length, minimum | 1 year | |||
Standard product warranty length, maximum | 2 years | |||
Limited product warranty length (up to) | 10 years | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at beginning of period | $ 13,432 | $ 15,816 | $ 15,331 | $ 18,091 |
Accruals for warranties issued | 2,490 | 3,400 | 4,854 | 7,613 |
Changes in liability related to warranties existing in prior periods | (663) | (1,097) | (1,968) | (3,394) |
Payments made | (2,674) | (3,536) | (5,632) | (7,727) |
Balance at end of period | $ 12,585 | $ 14,583 | $ 12,585 | $ 14,583 |
Contingencies - Litigation and Other Matters (Details) - USD ($) $ in Millions |
Mar. 31, 2019 |
Sep. 30, 2018 |
---|---|---|
Legal Reserve | ||
Loss Contingencies [Line Items] | ||
Accrued amounts for litigation and other contingent liabilities | $ 3.3 | $ 3.7 |
Performance Bonds | ||
Loss Contingencies [Line Items] | ||
Letters of credit secured using cash collateral | 47.2 | |
Outstanding performance bonds | $ 271.6 |
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Land Held for Sale | $ 38,588 | $ 0 | $ 38,588 | $ 0 |
Discontinued Operations | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Land Held for Sale | 0 | 0 | 0 | 450 |
Continuing Operations | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment charges on projects in progress | $ 109,023 | $ 0 | $ 110,030 | $ 0 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit), including discontinued operations | $ (38,200) | $ 1,000 | $ (42,100) | $ 109,000 |
Inventory impairments and abandonments | 147,611 | $ 0 | 148,618 | 0 |
Tax credit | 5,400 | $ 2,300 | ||
Deferred tax assets, tax credit carryforwards | $ 9,600 | $ 9,600 |
Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Stock-based compensation expense | $ 2,180 | $ 2,598 | $ 4,294 | $ 5,208 |
Stock-based Compensation - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Sep. 30, 2018 |
|
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs related to non-vested stock options award | $ 0.3 | $ 0.2 |
Weighted average period to recognize remaining cost | 1 year 5 months 27 days | |
Nonvested Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs related to non-vested stock awards | $ 13.1 | $ 8.8 |
Weighted average period to recognize remaining cost | 2 years 7 days |
Stock-based Compensation - Stock Options Outstanding (Details) - Stock Options - $ / shares |
6 Months Ended |
---|---|
Mar. 31, 2019 | |
Shares | |
Outstanding at beginning of period (shares) | 533,052 |
Granted (shares) | 25,230 |
Exercised (shares) | (26,650) |
Forfeited (shares) | (2,319) |
Outstanding at end of period (shares) | 529,313 |
Exercisable at end of period (shares) | 478,064 |
Vested or expected to vest in the future (shares) | 526,534 |
Weighted Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ 14.26 |
Granted (in dollars per share) | 10.38 |
Exercised (in dollars per share) | 10.44 |
Forfeited (in dollars per share) | 9.81 |
Outstanding at end of period (in dollars per share) | 14.29 |
Exercisable at end of period (in dollars per share) | 14.33 |
Vested or expected to vest in the future (in dollars per share) | $ 14.31 |
Stock-based Compensation - Restricted Stock Awards (Details) |
6 Months Ended |
---|---|
Mar. 31, 2019
shares
| |
Performance-Based Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant and vesting activity (in shares) | 86,050 |
Restricted Stock | |
Shares | |
Beginning of period (in shares) | 1,076,568 |
Granted (in shares) | 909,810 |
Vested (in shares) | (514,820) |
Forfeited (in shares) | (30,667) |
End of period (in shares) | 1,440,891 |
Performance-Based Restricted Stock Awards | |
Shares | |
Beginning of period (in shares) | 644,785 |
Granted (in shares) | 467,819 |
Vested (in shares) | (309,843) |
Forfeited (in shares) | (7,020) |
End of period (in shares) | 795,741 |
Time Based Restricted Stock Awards | |
Shares | |
Beginning of period (in shares) | 431,783 |
Granted (in shares) | 441,991 |
Vested (in shares) | (204,977) |
Forfeited (in shares) | (23,647) |
End of period (in shares) | 645,150 |
Earnings Per Share - Antidilutive Securities (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Stock options | ||||
Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 529 | 179 | 529 | 550 |
Time-based restricted stock | ||||
Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 645 | 142 | 645 | 842 |
Performance-based restricted stock | ||||
Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 796 | 0 | 796 | 646 |
Other Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
---|---|---|---|---|---|---|
Other Liabilities Disclosure [Abstract] | ||||||
Accrued bonus and deferred compensation | $ 19,616 | $ 41,508 | ||||
Customer deposits | 16,232 | 14,903 | ||||
Accrued interest | 14,609 | 14,401 | ||||
Accrued warranty expense | 12,585 | $ 13,432 | 15,331 | $ 14,583 | $ 15,816 | $ 18,091 |
Litigation accrual | 3,294 | 3,656 | ||||
Income tax liabilities | 961 | 710 | ||||
Other | 31,723 | 35,880 | ||||
Total | $ 99,020 | $ 126,389 |
Supplemental Guarantor Information - Unaudited Condensed Consolidating Balance Sheet Information (Additional Information) (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Sep. 30, 2018 |
---|---|---|
Condensed Financial Statements, Captions [Line Items] | ||
Allowances for accounts receivable | $ 373 | $ 378 |
Beazer Homes USA, Inc. | ||
Condensed Financial Statements, Captions [Line Items] | ||
Allowances for accounts receivable | $ 373 | $ 378 |
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