##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C. 20549
  FORM 10-K
 (Mark One)x

Annual report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934For
    the fiscal year ended September 30, 2008o

Transition report pursuant to Section 13 or 15(d) of the
    Securities Exchange Act of 1934
   Commission file number:
    001-12822
  BEAZER HOMES USA,
    INC.
   Delaware

58-2086934(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)   1000 Abernathy Road, Suite 1200, Atlanta, Georgia
    30328
  (770) 829-3700
   Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Securities

Exchanges on which RegisteredCommon Stock, $.001 par value per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
  o x
  o x
  x o
  Regulation S-K Form 10-K Form 10-K. x
  Rule 12b-2
  Large accelerated
    filer  o

Accelerated
    filer  x

Non-accelerated
    filer  o

Smaller reporting
    company  o   Rule 12b-2 o x
      DOCUMENTS
    INCORPORATED BY REFERENCE
 Part of 10-Kwhere
    incorporatedPortions of the registrants Proxy Statement for the 2009
    Annual Meeting of Stockholders


III







---



##### 



BEAZER
    HOMES USA, INC.
  FORM 10-K
  INDEX
   
 PageNumberIntroductionForward-Looking Statements

3PART I.Item 1

Business

4Item 1A.

Risk Factors

15Item 1B.

Unresolved Staff Comments

22Item 2

Properties

23Item 3.

Legal Proceedings

23Item 4.

Submission of Matters to a Vote of Security
    Holders

27PART II.Item 5

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

27Item 6.

Selected Financial Data

30Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations

32Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk

61Item 8

Financial Statements and Supplementary Data

62Item 9

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure

110Item 9A

Controls and Procedures

110Item 9B

Other Information

114PART III.Item 10

Directors, Executive Officers and Corporate
    Governance

114Item 11

Executive Compensation

114Item 12

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters

114Item 13

Certain Relationships and Related Transactions,
    and Director Independence

115Item 14

Principal Accountant Fees and Services

115PART IV.Item 15.

Exhibits and Financial Statement Schedules

115SIGNATURES



120EX-3.1EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2   2




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##### Table of Contents



Form 10-K
 FORWARD-LOOKING
    STATEMENTS  Form 10-K
    
    the timing and final outcome of the United States Attorney
    investigation and other state and federal agency investigations,
    the putative class action lawsuits, the derivative claims,
    multi-party suits and similar proceedings as well as the results
    of any other litigation or government proceedings;
    additional asset impairment charges or writedowns;
    economic changes nationally or in local markets, including
    changes in consumer confidence, volatility of mortgage interest
    rates and inflation;
    continued or increased downturn in the homebuilding industry;
    estimates related to homes to be delivered in the future
    (backlog) are imprecise as they are subject to various
    cancellation risks which cannot be fully controlled;
    continued or increased disruption in the availability of
    mortgage financing;
    our cost of and ability to access capital and otherwise meet our
    ongoing liquidity needs including the impact of any further
    downgrades of our credit ratings or reductions in our tangible
    net worth or liquidity levels;
    potential inability to comply with covenants in our debt
    agreements;
    increased competition or delays in reacting to changing consumer
    preference in home design;
    shortages of or increased prices for labor, land or raw
    materials used in housing production;
    factors affecting margins such as decreased land values
    underlying land option agreements, increased land development
    costs on projects under development or delays or difficulties in
    implementing initiatives to reduce production and overhead cost
    structure;
    the performance of our joint ventures and our joint venture
    partners;
    the impact of construction defect and home warranty claims and
    the cost and availability of insurance, including the
    availability of insurance for the presence of moisture intrusion;
    delays in land development or home construction resulting from
    adverse weather conditions;
    potential delays or increased costs in obtaining necessary
    permits as a result of changes to, or complying with, laws,
    regulations, or governmental policies and possible penalties for
    failure to comply with such laws, regulations and governmental
    policies;
    effects of changes in accounting policies, standards, guidelines
    or principles; or
    terrorist acts, acts of war and other factors over which the
    Company has little or no control.   3




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##### Table of Contents



PART I Item 1.
    Business   (770) 829-3700. http://www.beazer.com.
  Industry
    Overview and Current Market Conditions
           4




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##### Table of Contents



Managements Discussion and
    Analysis of Results of Operations and Financial Condition
       5




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##### Table of Contents



Long-Term
    Business Strategy
    Geographic Diversification in Growth Markets.
  Diversity of Product Offerings. move-up,
  Consistent Use of National Brand.
  Operational Scale Efficiencies.
  Balanced Land Policies.
  Reportable
    Business Segments
   6




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##### Table of Contents



Segment/State

Market(s) / Year
    EnteredWest:Arizona

Phoenix (1993)California

Los Angeles County (1993), Orange County (1993), Riverside and
    San Bernardino Counties (1993), San Diego County
    (1992), Ventura County (1993), Sacramento (1993), Kern County
    (2005)Nevada

Las Vegas (1993)New Mexico

Albuquerque (2005)Texas

Dallas/Ft. Worth (1995), Houston (1995)East:Maryland

Baltimore (1998), Metro-Washington, D.C. (1998)Delaware

Delaware (2003)New Jersey/New York/

Central and Southern New Jersey (1998), Orange County, NY (2005),Pennsylvania

Bucks County, PA (1998)Virginia

Fairfax County (1998), Loudoun County (1998), Prince William
    County (1998)North Carolina

Raleigh/Durham (1992)Indiana

Indianapolis (2002)Tennessee

Nashville (1987)Southeast:Florida

Jacksonville (1993), Fort Myers/Naples (1996), Tampa/St.
    Petersburg (1996), Orlando (1997), Sarasota (2005), Tallahassee
    (2006)Georgia

Atlanta (1985), Savannah (2005)South Carolina

Charleston (1987), Myrtle Beach (2002)Other Homebuilding (Exit Markets):California

Fresno (2005)Colorado

Denver (2001), Colorado Springs (2003)Kentucky

Lexington (2002)North Carolina

Charlotte (1987), Greensboro (1999)Ohio

Columbus (2002), Cincinnati/Dayton (2002)Tennessee

Memphis (2002)South Carolina

Columbia (1993)     Financial
    Services:
   Seasonal
    and Quarterly Variability
    Markets
    and Product Description
   7




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##### Table of Contents



Managements Discussion and Analysis of
    Results of Operations and Financial Condition
  2008


2007


2006Number of





Number of





Number of


AverageHomes


Average


Homes


Average


Homes


ClosingClosed


Closing Price


Closed


Closing Price


Closed


PriceWest


2,777


$
240.5



4,369


$
288.5



6,484


$
311.4East


2,405



279.9



2,821



313.2



4,617



306.8Southeast


1,515



232.0



2,970



258.9



4,483



266.3Other


995



221.8



1,860



226.6



2,777



221.9Total Company


7,692


$
248.7



12,020


$
277.4



18,361


$
285.7   September 30, 2008


September 30, 2007


September 30, 2006Units in


Dollar Value


Units in


Dollar Value


Units in


Dollar ValueBacklog


in Backlog


Backlog


in Backlog


Backlog


in BacklogWest


527


$
117,721



805


$
217,122



1,730


$
558,994East


485



132,766



1,317



410,659



1,322



464,629Southeast


306



67,959



490



123,309



1,343



373,484Other


40



8,153



373



87,716



707



158,349Total Company


1,358


$
326,599



2,985


$
838,806



5,102


$
1,555,456   Corporate
    Operations
   
    evaluate and select geographic markets;
    allocate capital resources to particular markets for land
    acquisitions;
    maintain and develop relationships with lenders and capital
    markets to create access to financial resources;
    plan and design homes and community projects;
    operate and manage information systems and technology support
    operations; and
    monitor the operations of our subsidiaries and divisions.   8




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##### Table of Contents



Field
    Operations
    Land
    Acquisition and Development
     
    internal and external demographic and marketing studies;
    suitability for development during the time period of one to
    five years from the beginning of the development process to the
    last closing;
    centralized corporate-level management review of all significant
    land decisions;
    financial review as to the feasibility of the proposed project,
    including profit margins and returns on capital employed;
    the ability to secure governmental approvals and entitlements;
    environmental and legal due diligence;
    competition in the area;
    proximity to local traffic corridors and amenities; and
    managements judgment as to the real estate market and
    economic trends and our experience in a particular market.      Option Contracts.
 9




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##### Table of Contents



Lots OwnedLots for Current








Homes






Total LotsUndeveloped


and Future


Finished


Land Held


Under


Total Lots



Under



Total LotsLots (1)


Development


Lots


for Sale


Construction (2)


Owned



Contract



ControlledWestArizona



-



680



546



826



150



2,202




792




2,994California



-



3,931



1,032



238



436



5,637




174




5,811Nevada



-



895



502



-



124



1,521




1,448




2,969Texas



85



1,106



1,850



-



360



3,401




528




3,929New Mexico



-



-



90



-



18



108




162




270Total West



85



6,612



4,020



1,064



1,088



12,869




3,104




15,973EastVirginia



-



-



339



-



134



473




473




946Maryland



-



573



828



-



176



1,577




509




2,086Delaware



-



906



157



-



36



1,099




217




1,316Indiana



294



1,655



1,104



265



237



3,555




162




3,717North Carolina



-



339



97



190



66



692




107




799Tennessee



-



1,151



10



-



93



1,254




651




1,905New Jersey



-



165



292



-



99



556




870




1,426Total East



294



4,789



2,827



455



841



9,206




2,989




12,195SoutheastGeorgia



-



88



183



162



86



519




-




519Florida



-



1,518



856



206



241



2,821




2,907




5,728South Carolina



-



1,160



548



59



152



1,919




1,504




3,423Total Southeast



-



2,766



1,587



427



479



5,259




4,411




9,670OtherExit Markets



-



-



35



1,703



51



1,789




-




1,789Total



379



14,167



8,469



3,649



2,459



29,123




10,504




39,627   (1)
    
    Undeveloped Lots consists of raw land that is
    expected to be developed into the respective number of lots
    reflected in this table.(2)
    
    The category Homes Under Construction represents
    lots upon which construction of a home has commenced. 10




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##### Table of Contents



Land Held forLand Held for



Future



Land Held forDevelopment



Development



SaleWest


$
171,293



$
341,784



$
26,515East



239,101




44,387




3,642Southeast



104,134




21,149




14,841Other



1,722




-




40,738Unallocated



102,002




-




-Total


$
618,252



$
407,320



$
85,736   Joint Ventures.
    Construction
    project-by-project
   11




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##### Table of Contents



Warranty
    Program
      Managements Discussion and Analysis of Results of
    Operations and Financial Condition
  and/or and/or
  Marketing
    and Sales
  (http:// www.beazer.com
  on-site
   12




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Customer
    Financing
      Competition
  and/or
    Government
    Regulation and Environmental Matters
     13




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##### Table of Contents



Bonds and
    Other Obligations
    Employees
    and Subcontractors
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-0330.
     14




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##### Table of Contents



Item 1A.
    Risk
    Factors  The homebuilding industry is experiencing a severe downturn
    that may continue for an indefinite period and continue to
    adversely affect our business, results of operations and
    stockholders equity.
        Our home sales and operating revenues could decline due to
    macro-economic and other factors outside of our control, such as
    changes in consumer confidence, declines in employment levels
    and increases in the quantity and decreases in the price of new
    homes and resale homes in the market.
    We are the subject of ongoing governmental criminal and civil
    investigations and pending civil litigation which could result
    in criminal charges and could require us to pay substantial
    fines, damages or other penalties or could otherwise have a
    material adverse effect on us. The failure to fulfill our
    obligations under the consent order with the SEC could have a
    material adverse effect on our operations.
   15




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##### Table of Contents



and/or
      We are dependent on the services of certain key employees,
    and the loss of their services could hurt our business.
    Recent and potential future downgrades of our credit ratings
    could adversely affect our access to capital and could otherwise
    have a material adverse effect on us.
   16




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Our revolving credit facility, bonds and certain other debt
    impose significant restrictions and obligations on us.
    Restrictions on our ability to borrow could adversely affect our
    liquidity. In addition, our substantial indebtedness could
    adversely affect our financial condition, limit our growth and
    make it more difficult for us to satisfy our debt
    obligations.
  and/or
    
    causing us to be unable to satisfy our obligations under our
    debt agreements;
    making us more vulnerable to adverse general economic and
    industry conditions;
    making it difficult to fund future working capital, land
    purchases, acquisitions, share repurchases, general corporate
    purposes or other purposes; and
    causing us to be limited in our flexibility in planning for, or
    reacting to, changes in our business.  and/or
  A substantial increase in mortgage interest rates or
    unavailability of mortgage financing may reduce consumer demand
    for our homes.
  move-up move-up
 17




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##### Table of Contents



If we are unsuccessful in competing against our homebuilding
    competitors, our market share could decline or our growth could
    be impaired and, as a result, our financial results could
    suffer.
    Our financial condition, results of operations and
    stockholders equity may be adversely affected by any
    decrease in the value of our inventory, as well as by the
    associated carrying costs.
    We conduct certain of our operations through unconsolidated
    joint ventures with independent third parties in which we do not
    have a controlling interest and we can be adversely impacted by
    joint venture partners failure to fulfill their
    obligations.
       18




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##### Table of Contents



We may not be able to utilize all of our deferred tax
    assets.
  Accounting for Income Taxes
  We could experience a reduction in home sales and revenues or
    reduced cash flows due to our inability to acquire land for our
    housing developments if we are unable to obtain reasonably
    priced financing to support our homebuilding activities.
  and/or
  Our stock price is volatile, has recently declined
    substantially and could continue to decline.
    
    operating results that vary from the expectations of securities
    analysts and investors;
    factors influencing home purchases, such as availability of home
    mortgage loans and interest rates, credit criteria applicable to
    prospective borrowers, ability to sell existing residences, and
    homebuyer sentiment in general;
    the operating and securities price performance of companies that
    investors consider comparable to us;
    announcements of strategic developments, acquisitions and other
    material events by us or our competitors; and 19




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##### Table of Contents




    changes in global financial markets and global economies and
    general market conditions, such as interest rates, commodity and
    equity prices and the value of financial assets.    The tax benefits of our pre-ownership change net operating
    loss carryforwards and any future recognized built-in losses in
    our assets will be substantially limited since we recently
    experienced an ownership change as defined in
    Section 382 of the Internal Revenue Code.
  20-year
      We are subject to extensive government regulation which could
    cause us to incur significant liabilities or restrict our
    business activities.
   20




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##### Table of Contents



We may incur additional operating expenses due to compliance
    programs or fines, penalties and remediation costs pertaining to
    environmental regulations within our markets.
    We may be subject to significant potential liabilities as a
    result of construction defect, product liability and warranty
    claims made against us.
      and/or
  Our operating expenses could increase if we are required to
    pay higher insurance premiums or litigation costs for various
    claims, which could cause our net income to decline.
       21




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##### Table of Contents



We are dependent on the continued availability and
    satisfactory performance of our subcontractors, which, if
    unavailable, could have a material adverse effect on our
    business.
    We experience fluctuations and variability in our operating
    results on a quarterly basis and, as a result, our historical
    performance may not be a meaningful indicator of future
    results.
    
    the timing of home closings and land sales;
    our ability to continue to acquire additional land or secure
    option contracts to acquire land on acceptable terms;
    conditions of the real estate market in areas where we operate
    and of the general economy;
    raw material and labor shortages;
    seasonal home buying patterns; and
    other changes in operating expenses, including the cost of labor
    and raw materials, personnel and general economic conditions.  The occurrence of natural disasters could increase our
    operating expenses and reduce our revenues and cash flows.
    Future terrorist attacks against the United States or
    increased domestic or international instability could have an
    adverse effect on our operations.
    Item 1B.
    Unresolved
    Staff Comments   22




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##### Table of Contents



Item 2.
    Properties    Item 3.
    Legal
    Proceedings Investigations
  United States Attorney, State and Federal Agency
    Investigations. Form 10-K.
  Securities and Exchange Commission Investigation. and/or
  Independent Investigation. and/or and/or Form 10-K.
  Litigation
  Securities Class Action.
 23




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##### Table of Contents



Rule 10b-5
  Derivative Shareholder Actions. Rule 10b-5
  ERISA Class Actions.
  Homeowners Class Action Lawsuits and Multi-Plaintiff
    Lawsuit.
 24




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##### Table of Contents



§ 75-1.1
     25




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##### Table of Contents



and/or and/or
  Bond Indenture Trustee Litigation. Form 10-Q
  and/or
  Other
    Matters
     26




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders    1.
    The stockholders elected six members to the Board of Directors
    to serve until the 2009 annual meeting of stockholders. The
    results of the voting were as follows:  Director

For

Against

AbstainLaurent Alpert

23,516,413

7,565,117

560,364Brian C. Beazer

27,036,033

4,056,069

549,792Peter G. Leemputte

23,512,125

7,572,320

557,449Ian J. McCarthy

27,114,131

3,976,293

551,470Larry T. Solari

23,645,131

7,437,409

559,354Stephen P. Zelnak, Jr.

23,534,376

7,554,755

552,763   2.
    The stockholders voted to ratify the selection of
    Deloitte & Touche LLP by the Audit Committee of the
    Board of Directors as the Companys independent registered
    public accounting firm for the fiscal year ending
    September 30, 2008 as follows:  For


Against


Abstain30,935,978



619,593



86,323   3.
    The stockholders voted to approve amendments to the Amended and
    Restated 1999 Stock Incentive Plan to authorize a stock
    option/stock-settled appreciation right (SSAR)
    exchange program for eligible employees other than executive
    officers and directors as follows:  For


Against


Abstain


Broker Non-vote21,572,347



1,450,611



40,563



8,576,373   4.
    The stockholders voted to approve amendments to the Amended and
    Restated 1999 Stock Incentive Plan to treat awards of SSARs
    under the Plan in the same manner as stock options as follows:  For


Against


Abstain


Broker Non-vote21,747,365



1,274,359



41,797



8,578,373  PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
   27




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##### Table of Contents



1st Qtr


2nd Qtr


3rd Qtr


4th QtrFiscal Year 2008:High

$
12.49


$
11.44


$
12.40


$
9.34Low

$
7.00


$
4.53


$
5.02


$
3.36Fiscal Year 2007:High

$
48.60


$
47.07


$
38.76


$
25.00Low

$
38.10


$
27.71


$
24.02


$
8.08   Dividends
    Securities
    Authorized for Issuance under Equity Compensation
    Plans
    Number of Common





Number of Common SharesShares to be Issued


Weighted Average


Remaining Available for FutureUpon Exercise of


Exercise Price of


Issuance Under Equity CompensationOutstanding Options,


Outstanding Options,


Plans (Excluding Common SharesPlan Category

Warrants and Rights


Warrants and Rights


Reflected in Column (a))(a)


(b)


(c)Equity compensation plans approved by stockholders


1,848,995


$
45.78



1,088,797   Issuer
    Purchases of Equity Securities
     28




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##### Table of Contents



Performance
    Graph
    
  Fiscal Year Ended September 30,2003

2004

2005

2006

2007

2008Beazer Homes USA, Inc.

$
100.00


$
127.13


$
210.37


$
141.10


$
30.34


$
21.99S&P 500


100.00



113.87



127.82



141.62



164.90



128.66S&P Homebuilding


100.00



158.25



226.75



164.23



83.46



70.63  29




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##### Table of Contents



Item 6.
    Selected
    Financial Data ($ in millions, except per share amounts)

Year Ended September 30,2008


2007


2006


2005


2004Statement of Operations Data:Total revenue

$
2,074


$
3,467


$
5,322


$
4,955


$
3,876Gross (loss) profit (i)


(323
)


(105
)


1,197



1,167



803Operating (loss) income (i)


(748
)


(605
)


569



491



382Net (loss) income from continuing operations (i)


(951
)


(410
)


362



266



234EPS from continuing operations -basic (i), (ii)


(24.68
)


(10.68
)


9.10



6.57



5.88EPS from continuing operations -diluted (i), (ii)


(24.68
)


(10.68
)


8.29



5.95



5.56Dividends paid per common share


-



0.40



0.40



0.33



0.13Balance Sheet Data (end of year):Cash and cash equivalents and restricted cash

$
585


$
460


$
172


$
297


$
321Inventory


1,652



2,775



3,608



2,934



2,355Total assets (i)


2,642



3,930



4,715



3,829



3,199Total debt


1,747



1,857



1,956



1,322



1,152Stockholders equity


375



1,324



1,730



1,553



1,267Supplemental Financial Data:Cash (used in)/provided by:Operating activities

$
316


$
509


$
(378
)

$
(46
)

$
(46
)Investing activities


(18
)


(52
)


(105
)


(85
)


(57
)Financing activities


(167
)


(171
)


353



108



351Financial Statistics:Total debt as a percentage of total debt and stockholders
    equity


82.3
%


58.4
%


53.1
%


46.0
%


47.6
%Net debt as a percentage of net debt and stockholders
    equity (iii)


75.6
%


51.4
%


50.9
%


39.7
%


39.6
%Gross margin (iii)


-15.6
%


-3.0
%


22.5
%


23.5
%


20.7
%EBIT margin (iv)


-33.0
%


-13.9
%


12.7
%


11.9
%


12.0
%Operating Statistics:New orders, net


6,065



9,903



14,191



18,925



17,483Closings


7,692



12,020



18,361



18,109



16,453Units in backlog


1,358



2,985



5,102



9,272



8,456Average selling price (in thousands)

$
248.7


$
277.4


$
285.7


$
271.3


$
232.2   (i)
    
    The housing market continued to deteriorate during the fiscal
    year ended September 30, 2008. This deterioration has
    resulted in an oversupply of inventory, reduced levels of
    demand, aggressive price competition, higher than normal
    cancellation rates and increased incentives for homes sales. As
    a result, gross profit (loss) includes inventory impairment
    charges of $429.4 million and lot option abandonment
    charges of $81.2 million for the fiscal year ended
    September 30, 2008. Gross profit (loss) for fiscal year
    2007 includes inventory impairment charges of
    $488.9 million and lot option abandonment charges of
    $122.9 million. Gross profit for fiscal year 2006 includes
    inventory impairment charges of $6.4 million and lot option
    abandonment charges of $37.8 million. Gross profit for
    fiscal year 2005 includes lot option abandonment charges of
    $5.5 million. Operating losses for fiscal year 2008 and
    2007 also include non-cash goodwill impairment charges of
    $52.5 million and $52.8 million, respectively. Fiscal
    year 2005 operating profit includes the impact of a non-cash,
    non-tax deductible goodwill impairment charge of
    $130.2 million associated with the 2002 acquisition of
    Crossmann Communities. Fiscal 2008 and 2007 net loss also
    include charges to write down our investment in certain of our
    joint ventures which reflect $68.8 million and
    $28.6 million, respectively, of impairments of inventory
    held within those ventures. Fiscal 2007 includes a charge of
    $3.4 million related to joint venture contractual
    obligation abandonments. 30




---



##### Table of Contents



Net loss for fiscal 2008 also includes a $400.3 million
    charge for our valuation allowance established for substantially
    all of our deferred tax assets.(ii)
    
    In October 2004, the Emerging Issues Task Force
    (EITF) of the Financial Accounting Standards Board
    (FASB) ratified the consensus on EITF Issue
    No. 04-8:
    The Effect of Contingently Convertible Debt on Diluted
    Earnings Per Share. EITF
    04-8
    requires that shares issuable upon conversion of contingently
    convertible debt instruments (Co-Cos) be
    included in diluted EPS computations using the
    if-converted method regardless of whether the
    issuers stock price exceeds the contingent conversion
    price. In fiscal 2005, per share amounts in 2004 were
    retroactively adjusted to reflect the Companys March 2005
    three-for-one stock split and the Companys adoption of
    EITF 04-8,
    as applicable.(iii)
    
    Net Debt = Debt less unrestricted cash and cash equivalents;
    Gross margin = Gross (loss) profit divided by total revenue.(iv)
    
    EBIT margin = EBIT divided by total revenues; EBIT (earnings
    before interest and taxes) equals net (loss) income before
    (a) previously capitalized interest amortized to home
    construction and land sales expenses and interest expense and
    (b) income taxes. EBITDA (earnings before interest, taxes,
    depreciation and amortization) is calculated by adding
    depreciation and amortization for the period to EBIT. EBIT and
    EBITDA are not GAAP financial measures. EBIT and EBITDA should
    not be considered alternatives to net income determined in
    accordance with GAAP as an indicator of operating performance,
    nor an alternative to cash flows from operating activities
    determined in accordance with GAAP as a measure of liquidity.
    Because some analysts and companies may not calculate EBIT and
    EBITDA in the same manner as Beazer Homes, the EBIT and EBITDA
    information presented above may not be comparable to similar
    presentations by others.   31




---



##### Table of Contents



Year Ended September 30,2008


2007


2006


2005


2004Net cash provided by (used in) operating activities

$
315,567


$
509,371


$
(377,996
)

$
(46,156
)

$
(46,339
)(Decrease) increase in inventory


(572,746
)


(134,953
)


486,727



593,521



430,024Provision (benefit) for income taxes


84,763



(222,207
)


214,421



237,315



157,050Deferred income tax (provision) benefit


(260,410
)


161,605



(25,963
)


51,186



25,308Interest amortized to home construction and land sales expenses
    and inventory impairments and option contract abandonments


126,057



139,880



95,974



80,180



66,528Interest expense not qualified for capitalization


55,185



-



-



-



-Decrease (increase) in trade accounts payable and other
    liabilities


189,029



130,787



84,685



(227,130
)


(128,651
)Goodwill impairment


(52,470
)


(52,755
)


-



(130,235
)


-Inventory impairments and option contract abandonments


(510,628
)


(611,864
)


(44,175
)


(5,511
)


(3,180
)Increase (decrease) in accounts and income tax receivables and
    allowance for doubtful accounts


108,629



(228,551
)


181,639



84,637



2,088(Decrease) increase in mortgage loans available for sale and
    other assets


(49,600
)


(100,556
)


112,893



16,780



16,499Equity in (loss) earnings in joint ventures, net of income
    distributions


(83,753
)


(40,439
)


991



(823
)


(554
)Tax (benefit) deficiency from stock transactions


(1,158
)


2,635



8,205



(11,551
)


(9,077
)Other


5,901



(1,610
)


8



(806
)


(1,837
)EBITDA


(645,634
)


(448,657
)


737,409



641,407



507,859Less depreciation and amortization and stock compensation
    amortization


40,273



44,743



58,178



48,013



38,105EBIT

$
(685,907
)

$
(493,400
)

$
679,231


$
593,394


$
469,754   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Executive
    Overview
       32




---



##### Table of Contents



Form 10-K, and/or and/or
     33




---



##### Table of Contents



Outlook
               34




---



##### Table of Contents



and/or
  Critical
    Accounting Policies
    Inventory Valuation  Held for Development
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
      
    Actual Net Contribution Margin (defined as
    homebuilding revenues less homebuilding costs and direct selling
    expenses) for homes closed in the current fiscal quarter, fiscal
    year to date and prior two fiscal quarters. Homebuilding costs
    include land and land development costs (based upon an
    allocation of such costs, including costs to complete the
    development, or specific lot costs), home construction costs
    (including an estimate of costs, if any, to complete home
    construction), previously capitalized indirect costs
    (principally for construction supervision), capitalized interest
    and estimated warranty costs; 35




---



##### Table of Contents




    Projected Net Contribution Margin for homes in backlog;
    Actual and trending new orders and cancellation rates;
    Actual and trending base home sales prices and sales incentives
    for home sales that occurred in the prior two fiscal quarters
    that remain in backlog at the end of the fiscal quarter and
    expected future homes sales prices and sales incentives and
    absorption over the expected remaining life of the community;
    A comparison of our community to our competition to include,
    among other things, an analysis of various product offerings
    including, the size and style of the homes currently offered for
    sale, community amenity levels, availability of lots in our
    community and our competitions, desirability and
    uniqueness of our community and other market factors; and
    Other events that may indicate that the carrying value may not
    be recoverable.           36




---



##### Table of Contents



Asset
    Valuation  Land Held for Sale
    
    management has the authority and commits to a plan to sell the
    land;
    the land is available for immediate sale in its present
    condition;
    there is an active program to locate a buyer and the plan to
    sell the property has been initiated;
    the sale of the land is probable within one year;
    the property is being actively marketed at a reasonable sale
    price relative to its current fair value; and
    it is unlikely that the plan to sell will be withdrawn or that
    significant changes to the plan will be made.        Goodwill
      and/or
 37




---



##### Table of Contents



Homebuilding Revenues and Costs
  Accounting for Sales
    of Real Estate
  Warranty Reserves
       38




---



##### Table of Contents



Investments in Unconsolidated Joint Ventures
  SOP 78-9,
  The Equity Method of Accounting for Investments in Common
    Stock
      Income Taxes  Valuation Allowance
     39




---



##### Table of Contents



Seasonal and Quarterly Variability:
  New Orders (net of
    cancellations)1st Qtr


2nd Qtr


3rd Qtr


4th Qtr


Total2008


1,252



1,956



1,774



1,083



6,0652007


1,783



4,090



3,048



982



9,9032006


3,782



4,145



4,343



1,921



14,191   Closings1st Qtr


2nd Qtr


3rd Qtr


4th Qtr


Total2008


2,006



1,568



1,677



2,441



7,6922007


2,664



2,748



2,659



3,949



12,0202006


3,755



4,217



4,121



6,268



18,361  40




---



##### Table of Contents



RESULTS
    OF OPERATIONS:
  Fiscal Year Ended September 30,($ in thousands)

2008


2007


2006Revenues:Homebuilding

$
1,914,304


$
3,359,594


$
5,220,021Land and lot sales


155,801



99,063



90,217Financial Services


4,193



8,068



11,464Total

$
2,074,298


$
3,466,725


$
5,321,702Gross (loss) profitHomebuilding

$
(334,711
)

$
(116,290
)

$
1,186,378Land and lot sales


7,677



3,423



(1,114
)Financial Services


4,193



8,068



11,464Total

$
(322,841
)

$
(104,799
)

$
1,196,728Selling, general and administrative (SG&A) expenses:Homebuilding

$
342,440


$
410,432


$
581,203Financial Services


2,483



3,342



4,453Total

$
344,923


$
413,774


$
585,656Depreciation and amortization


27,544



33,176



41,999As a percentage of total revenue:Gross Margin


-15.6
%


-3.0
%


22.5
%SG&A - homebuilding


16.5
%


11.8
%


10.9
%SG&A - Financial Services


0.1
%


0.1
%


0.1
%Goodwill impairment


52,470



52,755



-Equity in (loss) income of unconsolidated joint ventures
    from:Joint venture activities

$
(12,523
)

$
(3,215
)

$
1,343Impairments


(68,791
)


(28,553
)


-Abandonments


-



(3,386
)


-Equity in (loss) income of unconsolidated joint ventures

$
(81,314
)

$
(35,154
)

$
1,343Effective tax rate


-9.8
%


35.1
%


36.8
%   Fiscal
    Year Ended September 30, 2008 Compared to Fiscal Year Ended
    September 30, 2007
  Revenues.
    Gross Profit (Loss).
 41




---



##### Table of Contents



Selling, General and Administrative
    Expense.
  Depreciation and Amortization.
  Goodwill Impairment Charges.
  Joint Venture Impairment Charges.
 42




---



##### Table of Contents



Income Taxes.
    Segment
    Results for Fiscal 2008 Compared to Fiscal 2007:
  Homebuilding Revenues and Average Selling Price.
  Homebuilding Revenues


Average Selling Price2008


2007


Change


2008


2007


ChangeWest

$
668,900


$
1,276,480



-47.6
%

$
240.5


$
288.5



-16.6
%East


673,251



877,705



-23.3
%


279.9



313.2



-10.6
%Southeast


351,432



781,715



-55.0
%


232.0



258.9



-10.4
%Other


220,721



423,694



-47.9
%


221.8



226.6



-2.1
%Total

$
1,914,304


$
3,359,594



-43.0
%

$
248.7


$
277.4



-10.3
%   and/or
       43




---



##### Table of Contents



Land and Lot Sales Revenues.
  Land and Lot Sales Revenues2008


2007


ChangeWest

$
5,203


$
45,390



-88.5
%East


107,129



11,892



800.8
%Southeast


3,405



35,738



-90.5
%Other


40,064



6,043



563.0
%Total

$
155,801


$
99,063



57.3
%     Gross Profit (Loss).
  2008


2007Gross (Loss)





Gross (Loss)


GrossProfit


Gross Margin


Profit


MarginWest

$
(57,471
)


-8.6
%

$
(95,309
)


-7.5%East


11,563



1.7
%


41,545



4.7%Southeast


(57,338
)


-16.3
%


66,644



8.5%Other


(87,023
)


-39.4
%


6,029



1.4%Corporate & unallocated


(144,442
)






(135,199
)Total homebuilding


(334,711
)


-17.5
%


(116,290
)


-3.5%Land and lot sales


7,677







3,423Financial services


4,193







8,068Total

$
(322,841
)


-15.6
%

$
(104,799
)


-3.0%     Corporate and unallocated.
 44




---



##### Table of Contents



Land and Lot Sales Gross Profit (Loss).
  Land and Lot Sales Gross Profit (Loss)2008


2007


ChangeWest

$
2,139


$
2,957



-27.7
%East


7,454



2,374



214.0
%Southeast


(23
)


(221
)


89.6
%Other


(1,893
)


(1,687
)


-12.2
%Total

$
7,677


$
3,423



124.3
%     Inventory Impairments.
  Fiscal Year Ended September 30,2008


2007Development projects and homes in process (Held for Development)West

$
147,278


$
224,782East


72,040



95,734Southeast


51,663



68,220Other


19,872



28,326Unallocated


21,769



23,853Subtotal

$
312,622


$
440,915Land Held for SaleWest

$
8,505


$
46,138East


18,068



798Southeast


34,608



500Other


55,593



588Subtotal

$
116,774


$
48,024Lot Option AbandonmentsWest

$
15,356


$
54,703East


10,362



23,979Southeast


26,519



33,332Other


28,995



10,911Subtotal

$
81,232


$
122,925Total

$
510,628


$
611,864    45




---



##### Table of Contents



Estimated FairInventory Impairments


Value of ImpairedHeld for


Held for





Inventory at Period


Lots


CommunitiesQuarter Ended

Development


Sale


Total


End


Impaired


ImpairedDecember 31, 2007

$
108,071


$
33,440


$
141,511


$
186,490



2,886



62March 31, 2008


119,038



55,653



174,691



205,482



3,534



85June 30, 2008


46,760



20,966



67,726



110,509



2,430



44September 30, 2008


38,753



6,715



45,468



76,718



1,903



30Fiscal 2008

$
312,622


$
116,774


$
429,396







10,753



221   Unit Data
    by Segment
  New Orders, net


Cancellation Rates


Closings2008


2007


Change


2008


2007


2008


2007


ChangeWest


2,499



3,444



-27.4
%


41.1
%


46.4
%


2,777



4,369



-36.4
%East


1,573



2,816



-44.1
%


45.2
%


34.3
%


2,405



2,821



-14.7
%Southeast


1,331



2,117



-37.1
%


27.4
%


40.4
%


1,515



2,970



-49.0
%Other


662



1,526



-56.6
%


42.4
%


39.3
%


995



1,860



-46.5
%Total


6,065



9,903



-38.8
%


39.9
%


40.9
%


7,692



12,020



-36.0
%   New Orders and Backlog:
 46




---



##### Table of Contents



Backlog at September 30,2008


2007


ChangeWest


527



805



-34.5
%East


485



1,317



-63.2
%Southeast


306



490



-37.6
%Other


40



373



-89.3
%Total


1,358



2,985



-54.5
%     Fiscal
    Year Ended September 30, 2007 Compared to Fiscal Year Ended
    September 30, 2006
  Revenues.
    Gross Profit (Loss).
 47




---



##### Table of Contents



Selling, General and Administrative Expense.
  Depreciation and Amortization.
  Goodwill Impairment Charges.
  Joint Venture Impairment Charges.
  Income Taxes.
   48




---



##### Table of Contents



Segment Results for Fiscal 2007 Compared to Fiscal
    2006:
  Homebuilding Revenues and Average Selling Price.
  Homebuilding Revenues


Average Selling Price2007


2006


Change


2007


2006


ChangeWest

$
1,276,480


$
2,009,982



-36.5
%

$
288.5


$
311.4



-7.4
%East


877,705



1,422,467



-38.3
%


313.2



306.8



2.1
%Southeast


781,715



1,181,192



-33.8
%


258.9



266.3



-2.8
%Other


423,694



606,380



-30.1
%


226.6



221.9



2.1
%Total

$
3,359,594


$
5,220,021



-35.6
%

$
277.4


$
285.7



-2.9
%           Land and Lot Sales Revenues.
  Land and Lot Sales Revenues2007


2006


ChangeWest

$
45,390


$
39,601



14.6
%East


11,892



21,734



-45.3
%Southeast


35,738



-



n/aOther


6,043



28,882



-79.1
%Total

$
99,063


$
90,217



9.8
%    49




---



##### Table of Contents



Gross Profit (Loss).
  2007


2006Gross (Loss)


Gross


Gross (Loss)


GrossProfit


Margin


Profit


MarginWest

$
(95,309
)


-7.5
%

$
453,879



22.6
%East


41,545



4.7
%


363,264



25.5
%Southeast


66,644



8.5
%


318,195



26.9
%Other


6,029



1.4
%


73,053



12.0
%Corporate & unallocated


(135,199
)






(22,013
)Total homebuilding


(116,290
)


-3.5
%


1,186,378



22.7
%Land and lot sales


3,423







(1,114
)Financial services


8,068







11,464Total

$
(104,799
)


-3.0
%

$
1,196,728



22.5
%           Corporate and unallocated.
 50




---



##### Table of Contents



Land and Lot Sales Gross Profit (Loss).
  Land and Lot Sales Gross Profit (Loss)2007


2006


ChangeWest

$
2,957


$
1,971



50.0
%East


2,374



3,057



-22.3
%Southeast


(221
)


-



n/aOther


(1,687
)


(6,142
)


72.5
%Total

$
3,423


$
(1,114
)


407.3
%     Inventory Impairments.
  Fiscal Year Ended September 30,2007


2006Development projects and homes in process (Held for Development)West

$
224,782


$
230East


95,734



667Southeast


68,220



302Other


28,326



5,224Unallocated


23,853



-Subtotal

$
440,915


$
6,423Land Held for SaleWest

$
46,138


$
-East


798



-Southeast


500



-Other


588



-Subtotal

$
48,024


$
-Lot Option AbandonmentsWest

$
54,703


$
16,076East


23,979



7,328Southeast


33,332



4,060Other


10,911



10,288Subtotal

$
122,925


$
37,752Total

$
611,864


$
44,175    51




---



##### Table of Contents



Estimated FairInventory Impairments


Value of ImpairedHeld for


Held for





Inventory at Period


Lots


CommunitiesQuarter Ended

Development


Sale


Total


End


Impaired


ImpairedDecember 31, 2006

$
115,192


$
-


$
115,192


$
265,804



3,069



44March 31, 2007


82,225



3,955



86,180



170,881



2,564



40June 30, 2007


109,428



-



109,428



236,023



3,498



45September 30, 2007


134,070



44,069



178,139



224,428



3,278



39Fiscal 2007

$
440,915


$
48,024


$
488,939







12,409



168    52




---



##### Table of Contents



Unit Data
    by Segment
  New Orders, net


Cancellation Rates


Closings2007


2006


Change


2007


2006


2007


2006


ChangeWest


3,444



4,779



-27.9
%


46.4
%


45.8
%


4,369



6,484



-32.6
%East


2,816



3,440



-18.1
%


34.3
%


32.3
%


2,821



4,617



-38.9
%Southeast


2,117



3,492



-39.4
%


40.4
%


31.4
%


2,970



4,483



-33.7
%Other


1,526



2,480



-38.5
%


39.3
%


31.6
%


1,860



2,777



-33.0
%Total


9,903



14,191



-30.2
%


40.9
%


37.2
%


12,020



18,361



-34.5
%   New Orders, net and backlog.
    Backlog at September 30,2007


2006


ChangeWest


805



1,730



-53.5
%East


1,317



1,322



-0.4
%Southeast


490



1,343



-63.5
%Other


373



707



-47.2
%Total


2,985



5,102



-41.5
%   Derivative Instruments and Hedging Activities.
  Liquidity and Capital Resources.
     53




---



##### Table of Contents



and/or and/or
 54




---



##### Table of Contents



Borrowings
  (in thousands):
  September 30,


September 30,Maturity Date

2008


2007Secured Revolving Credit Facility

July 2011

$
-


$
-8 5/8% Senior Notes*

May 2011


180,000



180,0008 3/8% Senior Notes*

April 2012


340,000



340,0006 1/2% Senior Notes*

November 2013


200,000



200,0006 7/8% Senior Notes*

July 2015


350,000



350,0008 1/8% Senior Notes*

June 2016


275,000



275,0004 5/8% Convertible Senior Notes*

June 2024


180,000



180,000Junior subordinated notes

July 2036


103,093



103,093Other secured notes payable

Various Dates


50,618



118,073Model home financing obligations

Various Dates


71,231



114,116Unamortized debt discounts




(2,565
)


(3,033
)Total



$
1,747,377


$
1,857,249     Secured Revolving Credit Facility
  and/or
   55




---



##### Table of Contents



56




---



##### Table of Contents



Financial Covenant

Covenant Requirement

ActualConsolidated Tangible Net Worth

> $100 million

$314.4 millionMinimum Liquidity

> $120 million of unrestricted cash and borrowing base
    availability OR Adjusted Coverage Ratio > 1.75x

$584.3 million of unrestricted cash and borrowing base
    availability and Adjusted Coverage Ratio of 3.5x     Senior Notes
      EITF 96-19 
 57




---



##### Table of Contents



Junior Subordinated Notes
    Other Secured Notes Payable
    Model Home Financing Obligations Accounting for Leases.
  Stock Repurchases and Dividends Paid
 58




---



##### Table of Contents



Off-Balance Sheet Arrangements and Aggregate Contractual
    Commitments. 5-year
      Consolidation of
    Variable Interest Entities, an Interpretation of ARB
    No. 51 Product Financing
    Arrangements.
 59




---



##### Table of Contents



Payments Due by PeriodLess than 1








More than 5Contractual obligations

Total


Year


1-3 Years


3-5 Years


YearsSenior Notes and other notes payable

$
1,749,942


$
24,340


$
252,936


$
364,573


$
1,108,093Interest commitments under Senior Notes and other notes payable
    (1)


872,905



128,863



221,973



147,077



374,992Operating leases


38,282



11,517



15,204



9,510



2,051Uncertain tax positions (2)


-



-



-



-



-Purchase obligations (3)


56,025



46,025



10,000



-



-Total

$
2,717,154


$
210,745


$
500,113


$
521,160


$
1,485,136          Recent Accounting Pronouncements. No. 06-8, Applicability of the Assessment of a Buyers Continuing
    Investment Under FASB Statement No. 66, Accounting for
    Sales of Real Estate, for Sales of Condominiums. EITF 06-08 states EITF 06-8 EITF 06-8
 60




---



##### Table of Contents



Fair Value
    Measurements, 157-2, Effective Date of FASB Statement No. 157
  The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115.
  Noncontrolling Interests in Consolidated Financial
    Statements  an Amendment of ARB 51.
   Item 7A.
    Quantitative and Qualitative Disclosures About Market
    Risk     61




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  (in thousands, except share and per share amounts)
  Fiscal Year Ended September 30,2008


2007


2006Total revenue


$ 2,074,298



$ 3,466,725



$5,321,702Home construction and land sales expenses


1,886,511



2,959,660



4,080,799Inventory impairments and option contract abandonments


510,628



611,864



44,175Gross (loss) income


(322,841
)


(104,799
)


1,196,728Selling, general and administrative expenses


344,923



413,774



585,656Depreciation and amortization


27,544



33,176



41,999Goodwill impairment


52,470



52,755



-Operating (loss) income


(747,778
)


(604,504
)


569,073Equity in (loss) income of unconsolidated joint ventures


(81,314
)


(35,154
)


1,343Other (expense) income, net


(36,992
)


7,499



2,450(Loss) income from continuing operations before income taxes


(866,084
)


(632,159
)


572,866Provision for (benefit from) income taxes


85,164



(221,778
)


210,601(Loss) income from continuing operations


(951,248
)


(410,381
)


362,265(Loss) income from discontinued operations, net of tax


(664
)


(692
)


6,571Net (loss) income


$ (951,912
)


$(411,073
)


$368,836Weighted average number of shares:Basic


38,549



38,410



39,812Diluted


38,549



38,410



44,345Earnings (loss) per share:Basic (loss) earnings per share from continuing operations


$ (24.68
)


$(10.68
)


$9.10Basic (loss) earnings per share from discontinued operations


$ (0.01
)


$(0.02
)


$0.16Basic (loss) earnings per share


$(24.69
)


$(10.70
)


$9.26Diluted (loss) earnings per share from continuing operations


$(24.68
)


$(10.68
)


$8.29Diluted (loss) earnings per share from discontinued operations


$(0.01
)


$(0.02
)


$0.15Diluted (loss) earnings per share


$(24.69
)


$(10.70
)


$8.44Cash dividends per share


$-



$0.40



$0.40    62




---



##### Table of Contents



(in thousands, except share and per share amounts)
  September 30,2008


2007ASSETSCash and cash equivalents


$584,334



$454,337Restricted cash


297



5,171Accounts receivable, net


46,555



45,501Income tax receivable


173,500



63,981InventoryOwned inventory


1,545,006



2,537,791Consolidated inventory not owned


106,655



237,382Total inventory


1,651,661



2,775,173Residential mortgage loans available-for-sale


94



781Investments in unconsolidated joint ventures


33,065



109,143Deferred tax assets, net


20,216



232,949Property, plant and equipment, net


39,822



71,682Goodwill


16,143



68,613Other assets


76,112



102,690Total assets


$2,641,799



$3,930,021LIABILITIES AND STOCKHOLDERS EQUITYTrade accounts payable


$90,371



$118,030Other liabilities


358,592



453,089Obligations related to consolidated inventory not owned


70,608



177,931Senior Notes (net of discounts of $2,565 and $3,033,
    respectively)


1,522,435



1,521,967Junior subordinated notes


103,093



103,093Other secured notes payable


50,618



118,073Model home financing obligations


71,231



114,116Total liabilities


2,266,948



2,606,299Stockholders equity:Preferred stock (par value $.01 per share, 5,000,000 shares
    authorized, no shares issued)


-



-Common stock (par value $0.001 per share, 80,000,000 shares
    authorized, 42,612,801 and 42,597,229 issued and 39,270,038 and
    39,261,721 outstanding, respectively)


43



43Paid-in capital


556,910



543,705Retained earnings


1,845



963,869Treasury stock, at cost (3,342,763 and 3,335,508 shares,
    respectively)


(183,947
)


(183,895
)Total stockholders equity


374,851



1,323,722Total liabilities and stockholders equity


$2,641,799



$3,930,021    63




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##### Table of Contents



($ in thousands)
  Preferred


Common


Paid in


Retained


Treasury


UnearnedStock


Stock


Capital


Earnings


Stock


Compensation


TotalBalance, September 30, 2005



$-



$ 42



$535,473



$1,037,860



$(8,092
)


$  (12,126
)


$1,553,157Net income and comprehensive income



-



-



-



368,836



-



-



368,836Dividends paid



-



-



-



(16,144
)


-



-



(16,144
)Purchase of treasury stock (3,648,300 shares)



-



-



-



-



(205,416
)


-



(205,416
)Transfer of unearned compensation to paid in capital



-



-



(12,126
)


-



-



12,126



-Amortization of nonvested stock awards



-



-



8,669



-



-



-



8,669Amortization of stock option awards



-



-



7,084



-



-



-



7,084Exercises of stock options (415,938 shares)



-



-



7,298



-



-



-



7,298Tax benefit from stock transactions



-



-



8,205



-



-



-



8,205Issuance of bonus stock (62,121 shares)



-



-



1,402



-



-



-



1,402Issuance of restricted stock (409,759 shares)



-



-



(26,679
)


-



26,679



-



-Common stock redeemed (47,544 shares)



-



-



-



-



(2,624
)


-



(2,624
)Balance, September 30, 2006



-



42



529,326



1,390,552



(189,453
)


-



1,730,467Net loss and comprehensive loss



-



-



-



(411,073
)


-



-



(411,073
)Dividends paid



-



-



-



(15,610
)


-



-



(15,610
)Amortization of nonvested stock awards



-



-



5,318



-



-



-



5,318Amortization of stock option awards



-



-



5,831



-



-



-



5,831Exercises of stock options (312,501 shares)



-



1



4,421



-



-



-



4,422Tax benefit from stock transactions



-



-



2,635



-



-



-



2,635Issuance of bonus stock (71,429 shares)



-



-



2,080



-



-



-



2,080Issuance of restricted stock (159,378 shares)



-



-



(5,906
)


-



5,906



-



-Common stock redeemed (13,946 shares)



-



-



-



-



(348
)


-



(348
)Balance, September 30, 2007



-



43



543,705



963,869



(183,895
)


-



1,323,722Net loss and comprehensive loss



-



-



-



(951,912
)


-



-



(951,912
)Amortization of nonvested stock awards



-



-



6,160



-



-



-



6,160Amortization of stock option awards



-



-



6,404



-



-



-



6,404Tax benefit from stock transactions



-



-



(1,158
)


-



-



-



(1,158
)Issuance of bonus stock (43,075 shares)



-



-



1,799



-



-



-



1,799Adoption of FIN 48



-



-



-



(10,112
)


-



-



(10,112
)Common stock redeemed (7,255 shares)



-



-



-



-



(52
)


-



(52
)Balance, September 30, 2008



$     -



$  43



$  556,910



$  1,845



$  (183,947
)


$-



$  374,851    64




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##### Table of Contents



(in thousands)
  Fiscal Year Ended September 30,2008


2007


2006Cash flows from operating activities:Net (loss) income

$
(951,912
)

$
(411,073
)

$
368,836Adjustments to reconcile net (loss) income to net cash provided
    by (used in) operating activities:Depreciation and amortization


27,709



33,594



42,425Stock-based compensation expense


12,564



11,149



15,753Inventory impairments and option contract abandonments


510,628



611,864



44,175Goodwill impairment charge


52,470



52,755



-Deferred income tax provision (benefit)


260,410



(161,605
)


25,963Provision for doubtful accounts


8,710



(862
)


563Excess tax (benefit) deficiency from equity-based compensation


1,158



(2,635
)


(8,205
)Equity in loss (income) of unconsolidated joint ventures


81,314



35,154



(1,343
)Cash distributions of income from unconsolidated joint ventures


2,439



5,285



352Changes in operating assets and liabilities:(Increase) decrease in accounts receivable


(7,820
)


293,394



(182,202
)Increase in income tax receivable


(109,519
)


(63,981
)


-Decrease (increase) in inventory


572,746



134,953



(486,727
)Decrease (increase) in residential mortgage loans
    available-for-sale


687



91,376



(92,157
)Decrease (increase) in other assets


48,913



9,180



(20,736
)Decrease in trade accounts payable


(27,916
)


(21,978
)


(1,641
)Decrease in other liabilities


(161,113
)


(108,809
)


(83,044
)Other changes


(5,901
)


1,610



(8
)Net cash provided by (used in) operating activities


315,567



509,371



(377,996
)Cash flows from investing activities:Capital expenditures


(10,566
)


(29,474
)


(55,088
)Investments in unconsolidated joint ventures


(13,758
)


(24,505
)


(49,458
)Changes in restricted cash


4,874



(298
)


(4,873
)Distributions from unconsolidated joint ventures


1,050



2,229



4,655Net cash used in investing activities


(18,400
)


(52,048
)


(104,764
)Cash flows from financing activities:Borrowings under credit facilities and warehouse line


-



169,888



1,937,528Repayment of credit facilities and warehouse line


-



(264,769
)


(1,842,647
)Repayment of other secured notes payable


(100,740
)


(31,139
)


(20,934
)Borrowings under senior notes


-



-



275,000Borrowings under junior notes


-



-



103,093Repurchase of senior notes


-



(30,413
)


-Borrowings under model home financing obligations


-



5,919



117,365Repayment of model home financing obligations


(42,885
)


(8,882
)


(286
)Debt issuance costs


(22,335
)


(2,259
)


(7,206
)Proceeds from stock option exercises


-



4,422



7,298Common stock redeemed


(52
)


(348
)


(2,624
)Treasury stock purchases


-



-



(205,416
)Excess tax (benefit) deficiency from equity-based compensation


(1,158
)


2,635



8,205Dividends paid


-



(15,610
)


(16,144
)Net cash (used in) provided by financing activities


(167,170
)


(170,556
)


353,232Increase (decrease) in cash and cash equivalents


129,997



286,767



(129,528
)Cash and cash equivalents at beginning of period


454,337



167,570



297,098Cash and cash equivalents at end of period

$
584,334


$
454,337


$
167,570    65




---



##### Table of Contents



(1)
    Summary
    of Significant Accounting Policies  Organization.
  Presentation.
  Cash and Cash Equivalents and Restricted Cash.
  Accounts Receivable.
  Inventory. Consolidation of Variable Interest Entities and/or Product Financing
    Arrangements
  Residential Mortgage Loans Available-for-Sale.
 66




---



##### Table of Contents



Investments in Unconsolidated Joint Ventures. SOP 78-9, Accounting for Investments in Real Estate Ventures
  Property, Plant and Equipment.
  Buildings

15  30 yearsMachinery and equipment

3  10 yearsInformation systems

5 yearsFurniture and fixtures

3  7 yearsModel and sales office improvements

Estimated useful life of communityLeasehold improvements

Lesser of the lease term or the  estimated useful life of the
    asset   Inventory Valuation  Held for Development. Accounting for the
    Impairment or Disposal of Long-Lived Assets
     
    Actual Net Contribution Margin (defined as
    homebuilding revenues less homebuilding costs and direct selling
    expenses) for homes closed in the current fiscal quarter, fiscal
    year to date and prior two fiscal quarters. Homebuilding costs
    include land and land development costs (based upon an
    allocation of such costs, including costs to complete the
    development, or specific lot costs), home 67




---



##### Table of Contents



construction costs (including an estimate of costs, if any, to
    complete home construction), previously capitalized indirect
    costs (principally for construction supervision), capitalized
    interest and estimated warranty costs; 
    Projected Net Contribution Margin for homes in backlog;
    Actual and trending new orders and cancellation rates;
    Actual and trending base home sales prices and sales incentives
    for home sales that occurred in the prior two fiscal quarters
    that remain in backlog at the end of the fiscal quarter and
    expected future homes sales prices and sales incentives and
    absorption over the expected remaining life of the community;
    A comparison of our community to our competition to include,
    among other things, an analysis of various product offerings
    including, the size and style of the homes currently offered for
    sale, community amenity levels, availability of lots in our
    community and our competitions, desirability and
    uniqueness of our community and other market factors; and
    Other events that may indicate that the carrying value may not
    be recoverable.           68




---



##### Table of Contents



Asset Valuation  Land Held for Sale.
 
    management has the authority and commits to a plan to sell the
    land;
    the land is available for immediate sale in its present
    condition;
    there is an active program to locate a buyer and the plan to
    sell the property has been initiated;
    the sale of the land is probable within one year;
    the property is being actively marketed at a reasonable sale
    price relative to its current fair value; and
    it is unlikely that the plan to sell will be withdrawn or that
    significant changes to the plan will be made.       69




---



##### Table of Contents



Inventory Impairments. (in thousands)
  Fiscal Year Ended September 30,2008


2007


2006Development projects and homes in process (Held for Development)West

$
147,278


$
224,782


$
230East


72,040



95,734



667Southeast


51,663



68,220



302Other


19,872



28,326



5,224Unallocated


21,769



23,853



-Subtotal

$
312,622


$
440,915


$
6,423Land Held for SaleWest

$
8,505


$
46,138


$
-East


18,068



798



-Southeast


34,608



500



-Other


55,593



588



-Subtotal

$
116,774


$
48,024


$
-Lot Option AbandonmentsWest

$
15,356


$
54,703


$
16,076East


10,362



23,979



7,328Southeast


26,519



33,332



4,060Other


28,995



10,911



10,288Subtotal

$
81,232


$
122,925


$
37,752Total

$
510,628


$
611,864


$
44,175      70




---



##### Table of Contents



Goodwill. Goodwill
    and Other Intangible Assets
    Fiscal 2007





Fiscal 2008(In thousands)

2006


Impairments


2007


Impairments


2008West

$
62,337


$
(26,418
)

$
35,919


$
(29,034
)

$
6,885East


28,330



-



28,330



(19,072
)


9,258Southeast


25,207



(25,207
)


-



-



-Other


5,494



(1,130
)


4,364



(4,364
)


-Total

$
121,368


$
(52,755
)

$
68,613


$
(52,470
)

$
16,143     Other Assets.
 71




---



##### Table of Contents



Income Taxes. Accounting for Income Taxes
    and Accounting for
    Uncertainty in Income Taxes  An Interpretation of
    FASB Statement No. 109
  Accounting for Income Taxes
  Other Liabilities.
  Income Recognition and Classification of Costs. Accounting for Sales of Real-Estate and No. 06-8, Applicability of the Assessment of a Buyers Continuing
    Investment under FASB Statement No. 66, Accounting for
    Sales of Real Estate, for Sales of Condominiums,
    and/or
        Earnings Per Share (EPS).
 72




---



##### Table of Contents



Fair Value of Financial Instruments.
  Stock-Based Compensation. Share-Based Payment No. 96-18: Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services Black-Scholes
    Use of Estimates.
  Recently Adopted Accounting Pronouncements. EITF 06-8 percentage-of-completion EITF 06-8 EITF 06-8
 73




---



##### Table of Contents



Recent Accounting Pronouncements Not Yet Adopted. Business Combinations
  Fair Value
    Measurements 157-2, Effective Date of FASB Statement No. 157
  The Fair
    Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115
  Noncontrolling Interests in Consolidated Financial
    Statements  an Amendment of ARB 51
    (2)
    Supplemental
    Cash Flow Information  (in thousands)
  2008


2007


2007Supplemental disclosure of non-cash activity:(Decrease) increase in consolidated inventory not owned

$
(107,323
)

$
(152,772
)

$
164,540Land acquired through issuance of notes payable


33,285



59,948



64,144Issuance of stock under deferred bonus stock plans


1,799



2,080



1,402FIN 48 adoption


(10,112
)


-



-   (3)
    Investments
    in Unconsolidated Joint Ventures   74




---



##### Table of Contents



The Equity Method
    of Accounting for Investments in Common Stock.
    (in thousands)

2008


2007Beazers investment in joint ventures

$
33,065


$
109,143Total equity of joint ventures


340,674



523,597Total outstanding borrowings of joint ventures


524,431



785,437Beazers portion of loan to maintenance guarantees


5,839



7,717Beazers portion of repayment guarantees


39,166



42,307            75




---



##### Table of Contents



(4)
    Inventory  (in thousands)
  September 30,


September 30,2008


2007Homes under construction

$
338,971


$
787,102Development projects in progress


618,252



1,233,140Land held for future development


407,320



324,350Land held for sale


85,736



49,473Model homes


94,727



143,726Total owned inventory

$
1,545,006


$
2,537,791       September 30, 2008


September 30, 2007Projects in


Held for Future


Land Held for


Total Owned


Projects in


Held for Future


Land Held for


Total OwnedProgress


Development


Sale


Inventory


Progress


Development


Sale


InventoryWest Segment

$
348,475


$
341,784


$
26,515


$
716,774


$
662,674


$
291,215


$
35,578


$
989,467East Segment


394,643



44,387



3,642



442,672



624,423



16,432



4,221



645,076Southeast Segment


165,231



21,149



14,841



201,221



386,428



16,703



-



403,131Other


15,302



-



40,738



56,040



294,234



-



9,674



303,908Unallocated


128,299



-



-



128,299



196,209



-



-



196,209Total

$
1,051,950


$
407,320


$
85,736


$
1,545,006


$
2,163,968


$
324,350


$
49,473


$
2,537,791        76




---



##### Table of Contents



(5)
    Interest    Fiscal Year Ended September 30,2008


2007


2006Capitalized interest in inventory, beginning of period


$   87,560


$
78,996


$
50,808Interest incurred


139,659



148,444



124,162Capitalized interest impaired


(13,795
)


(12,350
)


-Interest expense not qualified for capitalization and included
    as other expense


(55,185
)


-



-Capitalized interest amortized to house construction and land
    sales expenses


(112,262
)


(127,530
)


(95,974
)Capitalized interest in inventory, end of period


$  45,977


$
87,560


$
78,996  77




---



##### Table of Contents



(6)
    Property,
    Plant and Equipment  (in thousands)
  September 30,2008


2007Building

$
2,391


$
2,462Model and sales office improvements


65,040



120,275Leasehold improvements


8,809



11,168Machinery and equipment


19,354



26,245Information systems


22,625



22,806Furniture and fixtures


8,696



13,400126,915



196,356Less: Accumulated depreciation


(87,093
)


(124,674
)$
39,822


$
71,682   (7)
    Borrowings  (in thousands)
  September 30,


September 30,Maturity Date

2008


2007Secured Revolving Credit Facility

July 2011

$
-


$
-8 5/8% Senior Notes*

May 2011


180,000



180,0008 3/8% Senior Notes*

April 2012


340,000



340,0006 1/2% Senior Notes*

November 2013


200,000



200,0006 7/8% Senior Notes*

July 2015


350,000



350,0008 1/8% Senior Notes*

June 2016


275,000



275,0004 5/8% Convertible Senior Notes*

June 2024


180,000



180,000Junior subordinated notes

July 2036


103,093



103,093Other secured notes payable

Various Dates


50,618



118,073Model home financing obligations

Various Dates


71,231



114,116Unamortized debt discounts




(2,565
)


(3,033
)Total



$
1,747,377


$
1,857,249      Warehouse Line 364-day
  Secured Revolving Credit Facility
 78




---



##### Table of Contents



and/or
           79




---



##### Table of Contents



Financial Covenant

Covenant Requirement

ActualConsolidated Tangible Net Worth

> $100 million

$314.4 millionMinimum Liquidity

> $120 million of unrestricted cash and borrowing base
    availability OR Adjusted Coverage Ratio > 1.75x

$584.3 million of unrestricted cash and borrowing base
    availability and Adjusted Coverage Ratio of 3.5x     Senior Notes
    Form S-3
 80




---



##### Table of Contents



EITF 96-19 
  Junior Subordinated Notes
    Other Secured Notes Payable
   81




---



##### Table of Contents



Model Home Financing Obligations Accounting for Leases.
  (in thousands)
  Year Ending September 30,2009


$24,3402010


65,5762011


187,3602012


364,5732013


-Thereafter


1,018,093Total


$1,749,942   (8)
    Income
    Taxes  (in thousands)
  Fiscal Year Ended September 30,2008


2007


2006Current federal


$ (171,561
)


$(61,513
)


$  165,733Current state


(3,685
)


1,340



18,905Deferred federal


251,520



(143,544
)


21,885Deferred state


8,890



(18,061
)


4,078Total


$85,164



$ (221,778
)


$210,601   (in
    thousands)
  Fiscal Year Ended September 30,2008


2007


2006Income tax computed at statutory rate


$(303,129
)


$(221,255
)


$201,991State income taxes, net of federal benefit(1)


8,068



(18,474
)


13,521Impairment of non-deductible goodwill


17,973



16,634



-Valuation allowance


366,332



-



-Section 199 tax benefit (2)


-



-



(5,240
)Other, net


(4,080
)


1,317



329Total


$85,164



$(221,778
)


$210,601     109-1
 82




---



##### Table of Contents



Accounting
    for Income Taxes.
  (in thousands)
  September 30,2008


2007Deferred tax assets:Warranty and other reserves


$24,927



$29,172Incentive compensation


20,854



30,855Property, equipment and other assets


4,320



2,968Federal and state tax carryforwards


85,711



7,030Inventory adjustments


237,487



173,559FIN 48


47,677



-Other


3,505



5,220Total deferred tax assets


424,481



248,804Deferred tax liabilities:Inventory adjustments


-



(15,599
)Other


(3,686
)


-Total deferred tax liabilities


(3,686
)


(15,599
)Valuation allowance


(400,579
)


(256
)Net deferred tax assets


$20,216



$232,949      83




---



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and/or
   84




---



##### Table of Contents



Balance at October 1, 2007


$72,500Additions for tax positions related to current year


891Additions for tax positions related to prior years


12,232Reductions for tax positions of prior years


(22,440
)Settlements with taxing authorities


(3,767
)Lapse of statute of limitations


(1,500
)Balance at September 30, 2008


$57,916     Accounting
    for Contingencies
    (9)
    Leases  (in
    thousands)
  Year Ending September 30,2009


$11,5172010


8,4412011


6,7632012


5,0712013


4,439Thereafter


2,051Total


$ 38,282   (10)
    Stockholders Equity  Preferred Stock.
  Common Stock Repurchase Plan.
 85




---



##### Table of Contents



Shareholder Rights Plan.
  Dividends.
 86




---



##### Table of Contents



(11)
    Earnings
    Per Share  in thousands, except per share amounts
  Fiscal Year Ended September 30,2008


2007


2006Loss (income) from continuing operations


$(951,248
)


$(410,381
)


$362,265(Loss) income from discontinued operations, net of tax


(664
)


(692
)


6,571Net loss (income)


$(951,912
)


$(411,073
)


$368,836Weighted average number of shares outstanding - basic


38,549



38,410



39,812Basic (loss) earnings per share from continuing operations


$(24.68
)


$(10.68
)


$9.10Basic (loss) earnings per share from discontinued operations


$(0.01
)


$(0.02
)


$0.16Basic (loss) earnings per share


$(24.69
)


$(10.70
)


$9.26Diluted:Interest on convertible debt -net of taxes


$-



$-



$5,367Loss (income) from continuing operations for diluted EPS


$(951,248
)


$(410,381
)


$367,632(Loss) income from discontinued operations, net of tax for
    diluted EPS


(664
)


(692
)


6,571Net loss (income) for diluted EPS


$ (951,912
)


$ (411,073
)


$ 374,203Weighted average number of shares outstanding
    - basic


38,549



38,410



39,812Effect of dilutive securities:Shares issuable upon conversion of convertible debt


-



-



3,503Options to aquire common stock


-



-



504Contingent shares (performance based stock)


-



-



35Nonvested restricted stock


-



-



491Weighted average number of shares outstanding
    - diluted


38,549



38,410



44,345Diluted (loss) earnings per share from continuing operations


$(24.68
)


$(10.68
)


$8.29Diluted (loss) earnings per share from discontinued operations


$(0.01
)


$(0.02
)


$0.15Diluted (loss) earnings per share


$(24.69
)


$(10.70
)


$8.44     (12)
    Retirement Plan and Incentive Awards  401(k) Retirement Plan.
 87




---



##### Table of Contents



Deferred Compensation Plan.
  Stock Incentive Plans.
  Stock Option and SSAR Awards.
    Fiscal Year Ended September 30,

2008


2007


2006Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOutstanding at beginning of year


2,052,379



$45.01



2,135,572



$43.82



1,654,751



$  23.91Granted


-



-



538,594



38.61



945,500



67.03Exercised


-



-



(312,501
)


14.15



(415,938
)


17.55Forfeited


(111,670
)


46.55



(309,286
)


56.84



(48,741
)


42.06Expired


(91,714
)


27.71



-



-



-



-Outstanding at end of year


1,848,995



$45.78



2,052,379



$ 45.01



2,135,572



$43.82Exercisable at end of year


704,762



$ 29.31



617,914



$26.36



681,753



$18.19  88




---



##### Table of Contents



Stock Options/SSARs Outstanding


Stock Options/SSARs ExercisableWeighted








WeightedAverage








AverageContractual


Weighted





Contractual


WeightedRange of




Remaining


Average





Remaining


AverageExercise

Number


Life


Exercise


Number


Life


ExercisePrices

Outstanding


(Years)


Price


Exercisable


(Years)


Price$6 - $9


14,115



1.60


$
6.81



14,115



1.60


$
6.81$18 - $21


189,774



4.17



20.52



189,774



4.17



20.52$24 - $29


136,326



3.52



26.85



136,326



3.52



26.85$30 - $39


622,334



3.93



34.75



356,547



2.69



35.30$40 - $49


176,894



5.36



43.10



1,500



1.24



43.10$62 - $66


140,707



4.12



62.15



6,500



3.91



62.15$68 - $69


568,845



4.34



68.56



-



-



-$6 -  $69


1,848,995



4.18


$
45.78



704,762



3.24


$
29.31   options/SSARs
      Nonvested Stock Awards.
   89




---



##### Table of Contents



Weighted AverageShares


Fair ValueBeginning of year


905,898


$
48.42Granted


26,411



8.49Vested


(93,838
)


52.78Forfeited


(55,605
)


44.91End of year


782,866


$
46.80     (13)
    Contingencies
   90




---



##### Table of Contents



Accounting for
    Contingencies
  Warranty Reserves.
      Fiscal Year EndedSeptember 30,2008


2007


2006Balance at beginning of year

$
57,053


$
99,030


$
136,481Provisions (1)


11,630



4,736



16,944Payments


(27,861
)


(46,713
)


(54,395
)Balance at end of year

$
40,822


$
57,053


$
99,030     Trinity Moisture Intrusion Reserves.
   91




---



##### Table of Contents



92




---



##### Table of Contents



Fiscal Year Ended2008


2007


2006Balance at beginning of period

$
12,116


$
47,704


$
80,708Reductions


(2,456
)


(23,772
)


(21,700
)Payments


(6,901
)


(11,816
)


(11,304
)Balance at end of period

$
2,759


$
12,116


$
47,704     Guarantees
 Construction
    Completion Guarantees
   Loan to
    Value Maintenance Agreements
   Repayment
    Guarantees
  93




---



##### Table of Contents



Environmental
    Indemnities
     Guarantors Accounting and Disclosure
    Requirements for Guarantees, Including Indirect Guarantees of
    Indebtedness of Others
  Investigations
 United States Attorney, State and Federal Agency
    Investigations.
  Securities and Exchange Commission Investigation. and/or
 94




---



##### Table of Contents



Independent Investigation. and/or and/or Form 10-K
  Litigation
  Securities Class Action. Rule 10b-5
  Derivative Shareholder Actions. Rule 10b-5
 95




---



##### Table of Contents



ERISA Class Actions.
  Homeowners Class Action Lawsuits and Multi-Plaintiff
    Lawsuit.
   96




---



##### Table of Contents



§ 75-1.1
    and/or and/or
  Bond Indenture Trustee Litigation. Form 10-Q
 97




---



##### Table of Contents



and/or
  Other
    Matters
           98




---



##### Table of Contents



(14)
    Segment
    Information  Mid-Atlantic,
  Disclosures About Segments of an
    Enterprise and Related Information
  West:
 East:
 Southeast:
 Other Homebuilding:
      Fiscal Year Ended September 30,2008


2007


2006RevenueWest

$
674,103


$
1,321,870


$
2,049,583East


780,380



889,597



1,444,201Southeast


354,837



817,453



1,181,192Other homebuilding


260,785



429,737



635,262Financial Services


4,193



8,068



11,464Consolidated total

$
2,074,298


$
3,466,725


$
5,321,702   99




---



##### Table of Contents



Fiscal Year Ended September 30,2008


2007


2006Operating (loss) incomeWest

$
(140,989
)

$
(229,121
)

$
268,360East


(63,913
)


(66,725
)


217,340Southeast


(109,675
)


(19,921
)


197,045Other homebuilding


(127,355
)


(55,111
)


(14,744
)Financial Services


1,681



4,696



6,975Segment operating loss


(440,251
)


(366,182
)


674,976Corporate and unallocated (a)


(307,527
)


(238,322
)


(105,903
)Total operating loss


(747,778
)


(604,504
)


569,073Equity in (loss) income of unconsolidated joint ventures


(81,314
)


(35,154
)


1,343Other (expense) income, net


(36,992
)


7,499



2,450(Loss) income before income taxes

$
(866,084
)

$
(632,159
)

$
572,866   Fiscal Year Ended September 30,2008


2007


2006Depreciation and amortizationWest

$
8,832


$
13,196


$
18,535East


8,103



7,075



9,027Southeast


3,187



3,915



4,945Other homebuilding


2,836



4,932



5,329Financial Services


29



30



36Segment total


22,987



29,148



37,872Corporate and unallocated (a)


4,557



4,028



4,127Consolidated total

$
27,544


$
33,176


$
41,999   September 30,


September 30,2008


2007Assets (b)West

$
779,863


$
1,044,236East


507,412



766,795Southeast


225,125



454,797Other homebuilding


64,123



336,240Financial Services


38,156



36,035Corporate and unallocated (c)


1,024,681



1,279,017Discontinued operations


2,439



12,901Consolidated total

$
2,641,799


$
3,930,021   a.
    Corporate and unallocated includes the amortization of
    capitalized interest and numerous shared services functions that
    benefit all segments, the costs of which are not allocated to
    the operating segments reported above including information
    technology, national sourcing and purchasing, treasury,
    corporate finance, legal, branding and other national marketing
    costs. Fiscal 2008, 2007 and fiscal 2006 include reductions of 100




---



##### Table of Contents



$2.5 million, $23.8 million and $21.7 million,
    respectively, in the accrual and costs related to construction
    defect claims for moisture intrusion in Indiana (see
    Note 13). Fiscal 2008 and 2007 also include
    $31.8 million and $10.8 million, respectively, of
    investigation-related costs (an additional $6.4 million was
    incurred in fiscal 2007 related to Beazer Mortgage and is
    recorded in our discontinued operations). Fiscal 2008 and 2007
    include $52.5 million and $52.8 million of non-cash
    goodwill impairment charges to write-off all of the goodwill
    allocated to certain underperforming markets (see Note 1).
    There was no change in goodwill during fiscal 2006.  b.
    Segment assets as of both September 30, 2008 and 2007
    include goodwill assigned from prior acquisitions. See
    Note 1 for goodwill by segment as of September 30,
    2008 and 2007.c.
    Primarily consists of cash and cash equivalents, consolidated
    inventory not owned, income tax receivable, deferred taxes, and
    capitalized interest and other corporate items that are not
    allocated to the segments.  (15)
    Discontinued
    Operations      $ in thousands
  Fiscal Year Ended September 30,2008


2007


2006Total revenue

$
3,842


$
24,094


$
34,802Exit and disposal charges of mortgage origination business


761



-



-(Loss) income from discontinued operations before income taxes


(1,065
)


(1,121
)


10,391(Benefit from) provision for income taxes


(401
)


(429
)


3,820(Loss) income from discontinued operations, net of tax

$
(664
)

$
(692
)

$
6,571    101




---



##### Table of Contents



2008


2007ASSETSCash and cash equivalents

$
-


$
9,700Accounts receivable


2,305



1,038Residential mortgage loans available-for-sale


94



781Other


40



1,382Assets of discontinued operations

$
2,439


$
12,901LIABILITIESTrade accounts payable and other liabilities

$
360


$
4,958Liabilities of discontinued operations

$
360


$
4,958   (16)
    Supplemental
    Guarantor Information   102




---



##### Table of Contents



Beazer
    Homes USA, Inc.
  Consolidating
    Balance Sheet Information
  September 30,
    2008
  (in
    thousands)
  ConsolidatedBeazer Homes


Guarantor


Non-Guarantor


Consolidating


Beazer HomesUSA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.ASSETSCash and cash equivalents


$
575,856


$
14,806


$
5


$
(6,333
)

$
584,334Restricted cash



-



297



-



-



297Accounts receivable, net



-



46,504



51



-



46,555Income tax receivable



173,500



-



-



-



173,500Owned inventory



-



1,545,006



-



-



1,545,006Consolidated inventory not owned



-



106,655



-



-



106,655Residential mortgage loans available-for-sale



-



94



-



-



94Investments in unconsolidated joint ventures



3,093



29,972



-



-



33,065Deferred tax assets, net



20,216



-



-



-



20,216Property, plant and equipment, net



-



39,822



-



-



39,822Goodwill



-



16,143



-



-



16,143Investments in subsidiaries



393,783



-



-



(393,783
)


-Intercompany



979,646



(989,138
)


3,159



6,333



-Other assets



35,701



33,424



6,987



-



76,112Total assets


$
2,181,795


$
843,585


$
10,202


$
(393,783
)

$
2,641,799LIABILITIES AND STOCKHOLDERS EQUITYTrade accounts payable


$
-


$
90,371


$
-


$
-


$
90,371Other liabilities



108,975



243,010



6,607



-



358,592Intercompany



1,210



-



(1,210
)


-



-Obligations related to consolidated inventory not owned



-



70,608



-



-



70,608Senior notes (net of discounts of $2,565)



1,522,435



-



-



-



1,522,435Junior subordinated notes



103,093



-



-



-



103,093Other notes payable



-



50,618



-



-



50,618Model home financing obligations



71,231



-



-



-



71,231Total liabilities



1,806,944



454,607



5,397



-



2,266,948Stockholders equity



374,851



388,978



4,805



(393,783
)


374,851Total liabilities and stockholders equity


$
2,181,795


$
843,585


$
10,202


$
(393,783
)

$
2,641,799  103




---



##### Table of Contents



Beazer
    Homes USA, Inc.
    Consolidating Balance Sheet Information
    September 30, 2007
    (in thousands)
  ConsolidatedBeazer





Other





BeazerHomes


Guarantor


Non-Guarantor


Consolidating


HomesUSA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.ASSETSCash and cash equivalents


$
447,296


$
9,700


$
1,559


$
(4,218
)

$
454,337Restricted cash



-



5,171



-



-



5,171Accounts receivable, net



-



45,487



14



-



45,501Income tax receivable



63,981



-



-



-



63,981Owned inventory



-



2,537,791



-



-



2,537,791Consolidated inventory not owned



-



237,382



-



-



237,382Residential mortgage loans available-for-sale



-



781



-



-



781Investments in unconsolidated joint ventures



3,093



106,050



-



-



109,143Deferred tax assets, net



232,537



412



-



-



232,949Property, plant and equipment, net



-



71,680



2



-



71,682Goodwill



-



68,613



-



-



68,613Investments in subsidiaries



1,397,158



-



-



(1,397,158
)


-Intercompany



956,941



(988,802
)


6,729



25,132



-Other assets



19,650



76,081



6,959



-



102,690Total assets


$
3,120,656


$
2,170,346


$
15,263


$
(1,376,244
)

$
3,930,021LIABILITIES AND STOCKHOLDERS EQUITYTrade accounts payable


$
-


$
118,030


$
-


$
-


$
118,030Other liabilities



60,419



377,008



7,657



8,005



453,089Intercompany



(2,661
)


-



2,661



-



-Obligations related to consolidated inventory not owned



-



177,931



-



-



177,931Senior Notes (net of discounts of $3,033)



1,521,967



-



-



-



1,521,967Junior subordinated notes



103,093



-



-



-



103,093Other secured notes payable



-



118,073



-



-



118,073Model home financing obligations



114,116



-



-



-



114,116Total liabilities



1,796,934



791,042



10,318



8,005



2,606,299Stockholders equity



1,323,722



1,379,304



4,945



(1,384,249
)


1,323,722Total liabilities and stockholders equity


$
3,120,656


$
2,170,346


$
15,263


$
(1,376,244
)

$
3,930,021  104




---



##### Table of Contents



Beazer
    Homes USA, Inc.
    Consolidating Statement of Operations Information
    Fiscal Year Ended September 30, 2008
    (in thousands)
  ConsolidatedBeazer Homes


Guarantor


Non-Guarantor


Consolidating


Beazer HomesUSA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.Total revenue


$
-


$
2,073,644


$
654


$
-


$
2,074,298Home construction and land sales expenses



112,262



1,774,249



-



-



1,886,511Inventory impairments and option contract abandonments



13,795



496,833



-



-



510,628Gross (loss) profit



(126,057
)


(197,438
)


654



-



(322,841
)Selling, general and administrative expenses



-



344,658



265



-



344,923Depreciation and amortization



-



27,544



-



-



27,544Goodwill impairment



-



52,470



-



-



52,470Operating (loss) income



(126,057
)


(622,110
)


389



-



(747,778
)Equity in (loss) of unconsolidated joint ventures



-



(81,314
)


-



-



(81,314
)Other (expense) income, net



(55,185
)


17,954



239



-



(36,992
)(Loss) income before income taxes



(181,242
)


(685,470
)


628



-



(866,084
)(Benefit from) provision for income taxes



(67,567
)


152,511



220



-



85,164Equity in loss of subsidiaries



(837,573
)


-



-



837,573



-Net (loss) income from continuing operations



(951,248
)


(837,981
)


408



837,573



(951,248
)Net loss from discontinued operations



-



(664
)


-



-



(664
)Equity in loss of subsidiaries



(664
)


-



-



664



-Net (loss) income


$
(951,912
)

$
(838,645
)

$
408


$
838,237


$
(951,912
)   Beazer
    Homes USA, Inc.
    Consolidating Statement of Operations Information
    Fiscal Year Ended September 30, 2007
    (in thousands)
  ConsolidatedBeazer Homes


Guarantor


Non-Guarantor


Consolidating


Beazer HomesUSA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.Total revenue


$
-


$
3,464,800


$
1,925


$
-


$
3,466,725Home construction and land sales expenses



148,444



2,832,130



-



(20,914
)


2,959,660Inventory impairments and option contract abandonments



-



611,864



-



-



611,864Gross (loss) profit



(148,444
)


20,806



1,925



20,914



(104,799
)Selling, general and administrative expenses



-



412,759



1,015



-



413,774Depreciation and amortization



-



33,176



-



-



33,176Goodwill impairment



-



52,755



-



-



52,755Operating (loss) income



(148,444
)


(477,884
)


910



20,914



(604,504
)Equity in (loss) of unconsolidated joint ventures



-



(35,154
)


-



-



(35,154
)Other income, net



-



7,320



179



-



7,499(Loss) income before income taxes



(148,444
)


(505,718
)


1,089



20,914



(632,159
)(Benefit from) provision for income taxes



(56,820
)


(173,380
)


417



8,005



(221,778
)Equity in loss of subsidiaries



(318,757
)


-



-



318,757



-Net (loss) income from continuing operations



(410,381
)


(332,338
)


672



331,666



(410,381
)Net loss from discontinued operations



-



(692
)


-



-



(692
)Equity in loss of subsidiaries



(692
)


-



-



692



-Net (loss) income


$
(411,073
)

$
(333,030
)

$
672


$
332,358


$
(411,073
)  105




---



##### Table of Contents



Beazer
    Homes USA, Inc.
    Consolidating Statement of Operations Information
    Fiscal Year Ended September 30, 2006
    (in thousands)
  ConsolidatedBeazer Homes


Guarantor


Non-Guarantor


Consolidating


Beazer HomesUSA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.Total revenue


$
-


$
5,318,829


$
2,873


$
-


$
5,321,702Home construction and land sales expenses



124,162



3,984,825



-



(28,188
)


4,080,799Inventory impairments and option contract abandonments



-



44,175



-



-



44,175Gross (loss) profit



(124,162
)


1,289,829



2,873



28,188



1,196,728Selling, general and administrative expenses



-



584,911



745



-



585,656Depreciation and amortization



-



41,999



-



-



41,999Operating (loss) income



(124,162
)


662,919



2,128



28,188



569,073Equity in (income) of unconsolidated joint ventures



-



1,343



-



-



1,343Other income, net







2,284



166



-



2,450(Loss) income before income taxes



(124,162
)


666,546



2,294



28,188



572,866(Benefit from) provision for income taxes



(45,646
)


245,041



843



10,363



210,601Equity in income of subsidiaries



440,781



-



-



(440,781
)


-Net income from continuing operations



362,265



421,505



1,451



(422,956
)


362,265Net income from discontinued operations



-



6,571



-



-



6,571Equity in income of subsidiaries



6,571



-



-



(6,571
)


-Net  income


$
368,836


$
428,076


$
1,451


$
(429,527
)

$
368,836   Beazer
    Homes USA, Inc.
    Consolidating Statement of Cash Flow Information
    (in thousands)
  ConsolidatedBeazer Homes


Guarantor


Non-Guarantor


Consolidating


Beazer HomesFiscal Year Ended September 30, 2008


USA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.Net cash provided by/(used in) operating activities


$
51,886


$
264,388


$
(707
)

$
-


$
315,567Cash flows from investing activities:Capital expenditures



-



(10,568
)


2



-



(10,566
)Investments in unconsolidated joint ventures



-



(13,758
)


-



-



(13,758
)Changes in restricted cash



-



4,874



-



-



4,874Distributions from unconsolidated joint ventures



-



1,050



-



-



1,050Net cash (used in) provided by investing activities



-



(18,402
)


2



-



(18,400
)Cash flows from financing activities:Repayment of other secured notes payable



-



(100,740
)


-



-



(100,740
)Repayment of model home financing obligations



(42,885
)


-



-



-



(42,885
)Debt issuance costs



(22,335
)


-



-



-



(22,335
)Common stock redeemed



(52
)


-



-



-



(52
)Tax benefit from stock transactions



(1,158
)


-



-



-



(1,158
)Advances to/from subsidiaries



143,104



(140,140
)


(849
)


(2,115
)


-Net cash provided by (used in) financing activities



76,674



(240,880
)


(849
)


(2,115
)


(167,170
)Increase/(decrease) in cash and cash equivalents



128,560



5,106



(1,554
)


(2,115
)


129,997Cash and cash equivalents at beginning of period



447,296



9,700



1,559



(4,218
)


454,337Cash and cash equivalents at end of period


$
575,856


$
14,806


$
5


$
(6,333
)

$
584,334  106




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##### Table of Contents



Beazer
    Homes USA, Inc.
    Consolidating Statements of Cash Flow Information
    (in thousands)
  ConsolidatedBeazer Homes


Guarantor


Non-Guarantor


Consolidating


Beazer HomesFor the Fiscal Year Ended September 30, 2007


USA, Inc.


Subsidiaries


Subsidiaries


Adjustments


USA, Inc.Net cash (used in)/provided by
    operating activities


$
(329,882
)

$
838,486


$
767


$
-


$
509,371Cash flows from investing activities:Capital expenditures



-



(29,474
)


-



-



(29,474
)Investments in unconsolidated joint ventures



-



(24,505
)


-



-



(24,505
)Changes in restricted cash



-



(298
)


-



-



(298
)Distributions from and proceeds from sale of unconsolidated
    joint ventures



-



2,229



-



-



2,229Net cash used in investing activities



-



(52,048
)


-



-



(52,048
)Cash flows from financing activities:Borrowings under credit facilities and warehouse line



-



169,888



-



-



169,888Repayment of credit facilities and warehouse line



-



(264,769
)


-



-



(264,769
)Repayment of other secured notes payable



-



(31,139
)


-



-



(31,139
)Repurchase of senior notes



(30,413
)


-



-



-



(30,413
)Borrowings under model home financing obligations



5,919



-



-



-



5,919Repayment of model home financing obligations



(8,882
)


-



-



-



(8,882
)Debt issuance costs



(1,935
)


(324
)


-



-



(2,259
)Proceeds from stock option exercises



4,422



-



-



-



4,422Common stock redeemed



(348
)


-



-



-



(348
)Tax benefit from stock transactions



2,635



-



-



-



2,635Dividends paid



(15,610
)


-



-



-



(15,610
)Advances to/from subsidiaries



566,475



(661,058
)


(37
)


94,620



-Net cash provided by (used in) financing activities



522,263



(787,402
)


(37
)


94,620



(170,556
)Increase/(decrease) in cash and cash equivalents



192,381



(964
)


730



94,620



286,767Cash and cash equivalents at beginning of period



254,915



10,664



829



(98,838
)


167,570Cash and cash equivalents at end of period


$
447,296


$
9,700


$
1,559


$
(4,218
)

$
454,337For the fiscal year ended September 30, 2006Net cash (used in) provided by operating activities


$
(95,117
)

$
(284,416
)

$
1,537


$
-


$
(377,996
)Cash flows from investing activities:Capital expenditures



-



(55,086
)


(2
)


-



(55,088
)Investments in unconsolidated joint ventures



(3,093
)


(46,365
)


-



-



(49,458
)Changes in restricted cash



-



(4,873
)


-



-



(4,873
)Distributions from and proceeds from sale of unconsolidated
    joint ventures



-



4,655



-



-



4,655Net cash used in investing activities



(3,093
)


(101,669
)


(2
)


-



(104,764
)Cash flows from financing activities:Borrowings under credit facilities and warehouse line



1,634,100



303,428



-



-



1,937,528Repayment of credit facilities and warehouse line



(1,634,100
)


(208,547
)


-



-



(1,842,647
)Repayment of other secured notes payable



-



(20,934
)


-



-



(20,934
)Borrowings under senior notes



275,000



-



-



-



275,000Borrowings under junior subordinated notes



103,093



-



-



-



103,093Borrowings under model home financing obligations



117,365



-



-



-



117,365Repayment of model home financing obligations



(286
)


-



-



-



(286
)Debt issuance costs



(6,274
)


(932
)


-



-



(7,206
)Proceeds from stock option exercises



7,298



-



-



-



7,298Common stock redeemed



(2,624
)


-



-



-



(2,624
)Treasury stock purchases



(205,416
)


-



-



-



(205,416
)Tax benefit from stock transactions



8,205



-



-



-



8,205Dividends paid



(16,144
)


-



-



-



(16,144
)Advances to/from subsidiaries



(313,515
)


323,504



(1,097
)


(8,892
)


-Net cash (used in)/provided by financing activities



(33,298
)


396,519



(1,097
)


(8,892
)


353,232(Decrease)/increase in cash and cash equivalents



(131,508
)


10,434



438



(8,892
)


(129,528
)Cash and cash equivalents at beginning of period



386,423



230



391



(89,946
)


297,098Cash and cash equivalents at end of period


$
254,915


$
10,664


$
829


$
(98,838
)

$
167,570  107




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM
              Internal ControlIntegrated Framework
      108




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM ON INTERNAL CONTROL
    OVER FINANCIAL REPORTING
      Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
        109




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##### Table of Contents



Quarterly
    Financial Data
  (unaudited)
  Quarter EndedDecember 31


March 31


June 30


September 30Fiscal 2008Total revenue

$
500,654


$
405,417


$
455,578


$
712,649Gross loss (a)


(104,174
)


(161,867
)


(47,416
)


(9,384
)Goodwill impairment (b)


-



48,105



4,365



-Operating loss


(198,314
)


(290,215
)


(141,344
)


(117,905
)Net loss from continuing operations


(137,661
)


(228,723
)


(109,694
)


(475,170
)Basic EPS from continuing operations

$
(3.57
)

$
(5.93
)

$
(2.85
)

$
(12.32
)Diluted EPS from continuing operations

$
(3.57
)

$
(5.93
)

$
(2.85
)

$
(12.32
)Fiscal 2007Total revenue

$
795,988


$
823,604


$
753,456


$
1,093,677Gross (loss) profit (a)


(12,924
)


11,706



(48,277
)


(55,304
)Goodwill impairment (b)


-



-



29,752



23,003Operating loss


(129,762
)


(92,517
)


(182,129
)


(200,096
)Net loss from continuing operations


(81,388
)


(58,071
)


(118,930
)


(151,992
)Basic EPS from continuing operations

$
(2.13
)

$
(1.51
)

$
(3.09
)

$
(3.95
)Diluted EPS from continuing operations

$
(2.13
)

$
(1.51
)

$
(3.09
)

$
(3.95
)   (a)
    Gross (loss) profit in fiscal 2008 and 2007 includes inventory
    impairment and option contract abandonments as follows:  (In thousands)

Fiscal 2008

Fiscal 20071st Quarter

$
168,512


$
140,3672nd Quarter


187,860



105,2453rd Quarter


95,482



154,2444th Quarter


58,774



212,008$
510,628


$
611,864   (b)
    In fiscal 2008, the Company recognized non-cash goodwill
    impairment charges to write off all of the goodwill allocated to
    our Arizona, Colorado, New Jersey, Southern California and
    Virginia reporting units. In fiscal 2007, the Company recognized
    non-cash goodwill impairment charges to write off all of the
    goodwill allocated to certain reporting units in Florida,
    Nevada, Northern California, North Carolina and South Carolina.  (c)
    Net loss from continuing operations for the fourth quarter of
    fiscal 2008 includes the impact of our $398.6 million
    valuation allowance charge for substantially all of our deferred
    tax assets.  Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
   110




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##### Table of Contents



Rules 13a-15(e) 15d-15(e)
  Form 10-K Rule 13a-14
  Managements Report on Internal Control over
    Financial Reporting
   
    Pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with GAAP, and that receipts and expenditures of the
    Company are being made only in accordance with authorizations of
    management and directors of the Company; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.    Changes
    in Internal Control over Financial Reporting
  Background
 Form 10-K and/or and/or 1998-2006
 111




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##### Table of Contents



Form 10-K
    
    We appointed a Compliance Officer in November
    2007.  The Compliance Officer is responsible for
    implementing and overseeing the Companys enhanced
    Compliance Program. The Compliance Officer has oversight
    responsibility for compliance practices across the organization
    and will implement programs designed to foster compliance with
    all laws, rules, and regulations as well as Company policies and
    procedures.
    We revised, adopted, disclosed, and distributed an amended Code
    of Business Conduct and Ethics in March 2008. In addition, a
    comprehensive set of Interpretive Guidelines was
    developed and implemented in conjunction with the amended Code
    of Business Conduct and Ethics. These guidelines are intended to
    assist employees with understanding the requirements of the Code
    of Business Conduct and Ethics by setting out specific examples
    of potential business situations. Both the Code and the
    Guidelines highlight the existence of multiple lines of
    communication for employees to report concerns which include:
    their immediate supervisor, any member of management, any local
    or corporate officer, local or Corporate Human Resources, the
    Compliance Officer, the Head of Audit and Controls, the Legal
    Department, the Chair of the Nominating and Corporate Governance
    Committee of the Board of Directors or through the Ethics
    Hotline.
    We transferred the administration of our Ethics Hotline from
    officers of the Company to an independent third party company in
    March 2008. Complaints are reported directly to the independent
    third party, whether via the toll-free Ethics Hotline or via an
    on-line form. In addition to other things, the transfer of
    administration of the Ethics Hotline is intended to help ensure
    that all employees understand that there is an independent,
    confidential, and if the employee chooses, anonymous method of
    reporting ethics concerns, including those related to
    accounting, financial reporting or other irregularities. An
    Awareness Campaign was launched to introduce all
    employees to the new Ethics Hotline process and to encourage
    reporting of all concerns.
    We launched a comprehensive training program in April 2008 that
    emphasizes adherence to and the vital importance of the
    Companys Code of Business Conduct and Ethics. Every
    employee in the Company completed the training program which was
    developed by an outside company that specializes in ethics and
    other employee training programs.
    We withdrew from the mortgage business and voluntarily
    discontinued accepting mortgage applications in February 2008.
    Prior to our withdrawal from the mortgage business, we
    terminated certain employees from our mortgage subsidiary who we
    concluded violated certain HUD regulations.
    We terminated the Companys former Chief Accounting Officer
    and took appropriate action, including the termination of
    employment, against other business unit employees who violated
    the Companys Code of Business Conduct and Ethics Policy.    
    We hired a new, experienced Chief Accounting Officer in February
    2008. The new Chief Accounting Officer has significant
    experience in the homebuilding industry.
    We reorganized our field operations to concentrate certain
    accounting, accounts payable, billing, and purchasing functions
    into Regional Accounting Centers, and we have and will continue
    to implement new controls and procedures. This centralization is
    designed to create a greater degree of control and consistency
    in financial reporting practices and enable trend analyses
    across business units. 112




---



##### Table of Contents




    We created the position of Regional CFOs within the Regional
    Accounting Center finance function to minimize the lack of
    segregation of duties in our prior structure that placed overly
    concentrated control with the Corporate Chief Accounting
    Officer. The Regional CFOs play a critical role in ensuring the
    integrity of financial information prior to submission to the
    Corporate office and enable these employees to assess data and
    identify trends across multiple markets. The risks of override
    and collusion have also been minimized as these positions have a
    much wider span of control and authority.
    We streamlined the responsibilities of business unit financial
    Controllers to eliminate certain previously held
    responsibilities related to Budgeting & Forecasting
    and Land Management, Controllers are now specifically
    responsible solely for financial reporting, which we believe
    will foster a more thorough and targeted review of financial
    statements.
    We allocated additional resources within our Audit and Controls
    department to the review of financial reporting policies,
    process, controls, and risks. The Audit and Controls department
    has also developed and implemented additional review procedures
    specifically focused on period-end reporting validation.
    We have implemented the following policies and practices related
    to estimates involving significant management judgments:  
    House construction cost accruals are now cleared at consistent
    intervals after the house has closed with the customer.


    Warranty reserves are now consistent across business units
    according to a routine calculation based on historical trends.
    Several system applications were developed during the
    restatement process to identify transactions requiring
    adjustment. These tools were designed so that they can, and are
    being, used prospectively to monitor several of the specific
    areas which required restatement.  
    The Chief Accounting Officer and Regional CFOs have taken the
    following additional actions during the fourth quarter of fiscal
    2008:  
    Conducted reviews of accounting processes to incorporate
    technology improvements to strengthen the design and operation
    of controls;
    Formalized the process, analytics, and documentation around the
    monthly analysis of actual results against budgets and forecasts
    conducted within the accounting and finance departments;
    Improved quality control reviews within the accounting function
    to ensure account analyses and reconciliations are completed
    accurately, timely, and with proper management review;
    Formalized and expanded the documentation of the Companys
    procedures for review and oversight of financial reporting.  
    We developed,
    and/or
    clarified, during the fourth quarter of fiscal 2008 existing
    accounting policies and internal controls related to estimates
    involving significant management judgments, as well as other
    financial reporting areas. The new policies and internal
    controls focus on ensuring appropriate review and approval,
    defining minimum documentation requirements, establishing
    objective guidelines to minimize the degree of judgment in the
    determination of certain accruals, enforcing consistent
    reporting practices, and enabling effective account
    reconciliation, trend analyses, and exception reporting
    capabilities.   113




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##### Table of Contents



Inherent
    Limitations over Internal Controls
    
    Judgments in decision-making can be faulty, and control and
    process breakdowns can occur because of simple errors or
    mistakes.
    Controls can be circumvented by individuals, acting alone or in
    collusion with each other, or by management override.
    The design of any system of controls is based in part on certain
    assumptions about the likelihood of future events, and there can
    be no assurance that any design will succeed in achieving its
    stated goals under all potential future conditions.
    Over time, controls may become inadequate because of changes in
    conditions or deterioration in the degree of compliance with
    associated policies or procedures.
    The design of a control system must reflect the fact that
    resources are constrained, and the benefits of controls must be
    considered relative to their costs.    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Code of
    Ethics
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   114




---



##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Form 10-K.
  (a)     1. Financial Statements
  PagehereinConsolidated Statements of Operations for the years ended
    September 30, 2008, 2007 and 2006.


62Consolidated Balance Sheets as of September 30, 2008 and
    2007.


63Consolidated Statements of Stockholders Equity for the
    years ended September 30, 2008, 2007 and 2006.


64Consolidated Statements of Cash Flows for the years ended
    September 30, 2008, 2007 and 2006.


65Notes to Consolidated Financial Statements.


66   2.
    Financial
    Statement Schedules    3.
    Exhibits  ExhibitNumber



Exhibit Description3.1

--

Amended and Restated Certificate of Incorporation of the Company3.2

--

Third Amended and Restated Bylaws of the Company 
    incorporated herein by reference to Exhibit 3.1 of the
    Companys
    Form 8-K
    filed on July 1, 2008 (File
    No. 001-12822)4.1

--

Indenture dated as of May 21, 2001 among the Company and
    U.S. Bank Trust National Association, as trustee, related
    to the Companys 8 5/8% Senior Notes due
    2011  incorporated herein by reference to
    Exhibit 4.4 of the Companys
    Form 10-K
    for the year ended September 30, 2001 (File
    No. 001-12822)4.2

--

Supplemental Indenture (8 5/8% Notes) dated as of
    May 21, 2001 among the Company, its subsidiaries party
    thereto and U.S. Bank Trust National Association, as
    trustee  incorporated herein by reference to
    Exhibit 4.5 of the Companys
    Form 10-K
    for the year ended September 30, 2001 (File
    No. 001-12822)4.3

--

Form of 8 5/8% Senior Notes due 2011 
    incorporated herein by reference to Exhibit 4.6 of the
    Companys
    Form 10-K
    for the year ended September 30, 2001 (File
    No. 001-12822)4.4

--

Specimen of Common Stock Certificate  incorporated
    herein by reference to Exhibit 4.1 of the Companys
    Registration Statement on
    Form S-1
    initially filed on December 6, 19934.5

--

Indenture dated as of April 17, 2002 among Beazer, the
    Guarantors party thereto and U.S. Bank Trust National
    Association, as trustee, related to the Companys 8
    3/8% Senior Notes due 2012  incorporated herein
    by reference to Exhibit 4.11 of the Companys
    Registration Statement on
    Form S-4
    filed on July 16, 2002 115




---



##### Table of Contents



4.6

--

First Supplemental Indenture dated as of April 17, 2002
    among Beazer, the Guarantors party thereto and U.S. Bank
    Trust National Association, as trustee, related to the
    Companys 8 3/8% Senior Notes due
    2012  incorporated herein by reference to
    Exhibit 4.12 of the Companys Registration Statement
    on
    Form S-4
    filed on July 16, 20024.7

--

Form of 8 3/8% Senior Notes due 2012 
    incorporated herein by reference to Exhibit 4.14 of the
    Companys Registration Statement on
    Form S-4
    filed on July 16, 20024.8

--

Second Supplemental Indenture dated as of November 13, 2003
    among Beazer, the Guarantors party thereto and U.S. Bank
    Trust National Association, as trustee, related to the
    Companys 6 1/2% Senior Notes due 2013 
    incorporated herein by reference to Exhibit 4.11 of the
    Companys
    Form 10-K
    for the year ended September 30, 2003 (File
    No. 001-12822)4.9

--

Form of 6 1/2% Senior Notes due 2013 
    incorporated herein by reference to Exhibit 4.12 of the
    Companys
    Form 10-K
    for the year ended September 30, 2003 (File
    No. 001-12822)4.10

--

Indenture dated as of June 8, 2004 among Beazer, the
    Guarantors party thereto and SunTrust Bank, as trustee, related
    to the 4 5/8% Convertible Senior Notes due 2024 
    incorporated herein by reference to Exhibit 4.1 of the
    Companys
    Form 10-Q
    for the quarter ended June 30, 2004 (File
    No. 001-12822)4.11

--

Form of 4 5/8% Convertible Senior Notes due
    2024  incorporated herein by reference to
    Exhibit 4.2 of the Companys
    Form 10-Q
    for the quarter ended June 30, 2004 (File
    No. 001-12822)4.12

--

Form of 6 7/8% Senior Notes due 2015 
    incorporated herein by reference to Exhibit 4.2 of the
    Companys
    Form 8-K
    filed on June 13, 20054.13

--

Form of Fifth Supplemental Indenture, dated as of June 8,
    2005, by and among Beazer, the Subsidiary Guarantors party
    thereto and U.S. Bank National Association, as
    trustee  incorporated herein by reference to
    Exhibit 4.1 of the Companys
    Form 8-K
    filed on June 13, 20054.14

--

Sixth Supplemental Indenture, dated as of January 9, 2006,
    to the Trust Indenture dated as of May 21,
    2001  incorporated herein by reference to
    Exhibit 99.1 of the Companys
    Form 8-K
    filed on January 17, 2006 (File
    No. 001-12822)4.15

--

Seventh Supplement Indenture, dated as of January 9, 2006,
    to the Trust Indenture dated as of April 17,
    2002  incorporated herein by reference to
    Exhibit 99.2 of the Companys
    Form 8-K
    filed on January 17, 2006 (File
    No. 001-12822)4.16

--

Form of Senior Note due 2016  incorporated herein by
    reference to Exhibit 4.2 of the Companys
    Form 8-K
    filed on June 8, 2006 (File
    No. 001-12822)4.17

--

Form of Eighth Supplemental Indenture, dated June 6, 2006,
    by and among Beazer Homes USA, Inc., the guarantors named
    therein and UBS Securities LLC, Citigroup Global Markets Inc.,
    J.P. Morgan Securities, Inc., Wachovia Capital Markets,
    LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp.
    and Greenwich Capital Markets  incorporated herein by
    reference to Exhibit 4.1 of the Companys
    Form 8-K
    filed on June 8, 2006 (File
    No. 001-12822)4.18

--

Form of Junior Subordinated indenture between Beazer Homes USA,
    Inc., JPMorgan Chase Bank, National Association, dated
    June 15, 2006  incorporated herein by reference
    to Exhibit 4.1 of the Companys
    Form 8-K
    filed on June 21, 2006 (File
    No. 001-12822)4.19

--

Form of the Amended and Restated Trust Agreement among
    Beazer Homes USA, Inc., JPMorgan Chase Bank, National
    Association, Chase Bank USA, National Association and certain
    individuals named therein as Administrative Trustees, dated
    June 15, 2006  incorporated herein by reference
    to Exhibit 4.2 of the Companys
    Form 8-K
    filed on June 21, 2006 (File
    No. 001-12822)4.20

--

Seventh Supplemental Indenture, dated October 26, 2007,
    amending and supplementing the Indenture, dated May 21,
    2001, among the Company, US Bank National Association, as
    trustee, and the subsidiary guarantors party thereto 
    incorporated herein by reference to Exhibit 10.2 of the
    Companys
    Form 8-K
    filed on October 30, 2007 (File
    No. 001-12822) 116




---



##### Table of Contents



4.21

--

Ninth Supplemental Indenture, dated October 26, 2007,
    amending and supplementing the Indenture, dated April 17,
    2002, among the Company, US Bank National Association, as
    trustee, and the subsidiary guarantors party thereto 
    incorporated herein by reference to Exhibit 10.3 of the
    Companys
    Form 8-K
    filed on October 30, 2007 (File
    No. 001-12822)4.22

--

Third Supplemental Indenture, dated October 26, 2007,
    amending and supplementing the Indenture, dated June 8,
    2004, among the Company, SunTrust Bank, as trustee, and the
    subsidiary guarantors party thereto  incorporated
    herein by reference to Exhibit 10.4 of the Companys
    Form 8-K
    filed on October 30, 2007 (File
    No. 001-12822)10.1*

--

Amended and Restated 1994 Stock Incentive Plan 
    incorporated herein by reference to Exhibit 10.1 of the
    Companys
    Form 10-K
    for the year ended September 30, 2005 (File
    No. 001-12822)10.2*

--

Non-Employee Director Stock Option Plan  incorporated
    herein by reference to Exhibit 10.2 of the Companys
    Form 10-K
    for the year ended September 30, 2001 (File
    No. 001-12822)10.3*

--

Amended and Restated 1999 Stock Incentive Plan 
    incorporated herein by reference to Exhibit 10.2 of the
    Companys
    Form 8-K
    filed on August 8, 2008 (File
    No. 001-12822)10.4*

--

2005 Value Created Incentive Plan  incorporated
    herein by reference to Exhibit 10.4 of the Companys
    Form 10-K
    for the year ended September 30, 2004 (File
    No. 001-12822)10.5*

--

Second Amended and Restated Corporate Management Stock Purchase
    Program  incorporated herein by reference to
    Exhibit 10.5 of the Companys
    Form 10-K
    for the year ended September 30, 2007 (File
    No. 001-12822)10.6*

--

Customer Survey Incentive Plan  incorporated herein
    by reference to Exhibit 10.6 of the Companys
    Form 10-K
    for the year ended September 30, 2004 (File
    No. 001-12822)10.7*

--

Director Stock Purchase Program  incorporated herein
    by reference to Exhibit 10.7 of the Companys
    Form 10-K
    for the year ended September 30, 2004 (File
    No. 001-12822)10.8*

--

Form of Stock Option and Restricted Stock Award
    Agreement  incorporated herein by reference to
    Exhibit 10.8 of the Companys
    Form 10-K
    for the year ended September 30, 2004 (File
    No. 001-12822)10.9*

--

Form of Stock Option Award Agreement  incorporated
    herein by reference to Exhibit 10.9 of the Companys
    Form 10-K
    for the year ended September 30, 2004 (File
    No. 001-12822)10.10*

--

Amended and Restated Employment Agreement of Ian J. McCarthy
    dated as of September 1, 2004  incorporated
    herein by reference to Exhibit 10.01 of the Companys
    Form 8-K
    filed on September 1, 2004 (File
    No. 001-12822)10.11*

--

First Amendment to Amended and Restated Employment Agreement of
    Ian J. McCarthy dated as of February 3, 2006 
    incorporated herein by reference to Exhibit 10.11 of the
    Companys
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 001-12822)10.12*

--

Amended and Restated Employment Agreement of Michael H. Furlow
    dated as of September 1, 2004  incorporated
    herein by reference to Exhibit 10.02 of the Companys
    Form 8-K
    filed on September 1, 2004 (File
    No. 001-12822)10.13*

--

First Amendment to Amended and Restated Employment Agreement of
    Michael H. Furlow dated as of February 3, 2006 
    incorporated herein by reference to Exhibit 10.12 of the
    Companys
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 001-12822)10.14*

--

Employment Agreement effective May 1, 2007 for Allan P.
    Merrill  incorporated herein by reference to
    Exhibit 10.01 of the Companys
    Form 8-K
    filed on April 24, 2007 (File
    No. 001-12822)10.15*

--

Amended and Restated Supplemental Employment Agreement of Ian J.
    McCarthy dated as of February 3, 2006
     incorporated herein by reference to
    Exhibit 10.1 of the Companys
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 001-12822)10.16*

--

Amended and Restated Supplemental Employment Agreement of
    Michael H. Furlow dated as of February 3, 2006
     incorporated herein by reference to
    Exhibit 10.2 of the Companys
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 001-12822) 117




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##### Table of Contents



10.17*

--

Change of Control Employment Agreement effective May 1,
    2007 for Allan P. Merrill  incorporated herein by
    reference to Exhibit 10.02 of the Companys
    Form 8-K
    filed on April 24, 2007 (File
    No. 001-12822)10.18*

--

Form of Performance Shares Award Agreement dated as of
    February 2, 2006  incorporated herein by
    reference to Exhibit 10.18 of the Companys
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 001-12822)10.19*

--

Form of Award Agreement dated as of February 2,
    2006  incorporated herein by reference to
    Exhibit 10.19 of the Companys
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 001-12822)10.20*

--

2005 Executive Value Created Incentive Plan 
    incorporated herein by reference to Exhibit 10.1 of the
    Companys
    Form 8-K
    filed on February 9, 2005 (File
    No. 001-12822)10.21*

--

Form of Indemnification Agreement  incorporated
    herein by reference to Exhibit 10.1 of the Companys
    Form 8-K
    filed on July 1, 2008 (File
    No. 001-12822)10.22

--

Credit Agreement dated as of July 25, 2007 between the
    Company, the lenders thereto, and Wachovia Bank, National
    Association, as Agent, BNP Paribas, The Royal Bank of Scotland,
    and Guaranty Bank, as Documentation Agents, Regions Bank, as
    Senior Managing Agent, and JPMorgan Chase Bank, as Managing
    Agent  incorporated herein by reference to
    Exhibit 10.1 of the Companys
    Form 8-K
    filed on July 26, 2007 (File
    No. 001-12822)10.23

--

Waiver and First Amendment, dated as of October 10, 2007,
    to and under the Credit Agreement, dated as of July 25,
    2007, among the Company, the lenders thereto and Wachovia Bank,
    National Association, as Agent  incorporated herein
    by reference to Exhibit 10.1 of the Companys
    Form 8-K
    filed on October 11, 2007 (File
    No. 001-12822)10.24

--

Second Amendment, dated October 26, 2007, to and under the
    Credit Agreement, dated as of July 25, 2007, among the
    Company, the lenders thereto and Wachovia Bank, National
    Association, as Agent  incorporated herein by
    reference to Exhibit 10.1 of the Companys
    Form 8-K
    filed on October 30, 2007 (File
    No. 001-12822)10.25

--

Third Amendment, dated as of August 7, 2008, to and under
    the Credit Agreement, dated as of July 25, 2007, among the
    Company, the lenders thereto and Wachovia Bank, National
    Association, as Agent  incorporated herein by
    reference to Exhibit 10.1 of the Companys
    Form 8-K
    filed on August 8, 2008 (File
    No. 001-12822)10.26*

--

2008 Beazer Homes USA, Inc. Deferred Compensation Plan, adopted
    effective January 1, 2008  incorporated herein
    by reference to Exhibit 10.27 of the Companys
    Form 10-K
    for the fiscal year ended September 30, 2007 (File
    No. 001-12822)10.27*

--

Discretionary Employee Bonus Plan  incorporated
    herein by reference to Exhibit 10.28 of the Companys
    Form 10-K
    for the fiscal year ended September 30, 2007 (File
    No. 001-12822)21

--

Subsidiaries of the Company23

--

Consent of Deloitte & Touche LLP31.1

--

Certification pursuant to 17 CFR 240.13a-14 promulgated
    under Section 302 of the Sarbanes-Oxley Act of 200231.2

--

Certification pursuant to 17 CFR 240.13a-14 promulgated
    under Section 302 of the Sarbanes-Oxley Act of 200232.1

--

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232.2

--

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002* Represents a management contract or compensatory plan or
    arrangement  118




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##### Table of Contents



(c)
    Exhibits    3.1

---

Amended and Restated Certificate of Incorporation of the Company21

---

Subsidiaries of the Company23

--

Consent of Deloitte & Touche LLP31.1

---

Certification pursuant to 17 CFR 240.13a-14 promulgated
    under Section 302 of the Sarbanes-Oxley Act of 200231.2

---

Certification pursuant to 17 CFR 240.13a-14 promulgated
    under Section 302 of the Sarbanes-Oxley Act of 200232.1

---

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232.2

---

Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002   (d)
    Financial
    Statement Schedules   119




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##### Table of Contents



SIGNATURES     Beazer Homes USA, Inc.By:

/s/  Ian
    J. McCarthyName: Ian J. McCarthyTitle: President and ChiefExecutive OfficerDate: December 1,2008     December 1, 2008

By:

/s/ Brian C. BeazerDate



Brian C. Beazer, Director and Non-Executive Chairman of the BoardDecember 1, 2008

By:

/s/ Ian J. McCarthyDate



Ian J. McCarthy, Director, Presidentand Chief Executive Officer(Principal Executive Officer)December 1, 2008

By:

/s/ Laurent AlpertDate



Laurent Alpert, DirectorDecember 1, 2008

By:

/s/ Peter G. LeemputteDate



Peter G. Leemputte, DirectorDecember 1, 2008

By:

/s/ Larry T. SolariDate



Larry T. Solari, DirectorDecember 1, 2008

By:

/s/ Stephen P. ZelnakDate



Stephen P. Zelnak, Jr., DirectorDecember 1, 2008

By:

/s/ Allan P. MerrillDate



Allan P. Merrill, Executive VicePresident and Chief FinancialOfficer (Principal Financial Officer)December 1, 2008

By:

/s/ Robert SalomonDate



Robert Salomon, Senior VicePresident, Chief Accounting Officerand Controller (Principal Accounting Officer)  120