8-K


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported event): November 10, 2015
 
 
BEAZER HOMES USA, INC.
(Exact name of registrant as specified in its charter)
  
 
 
 
 
 
 
DELAWARE
 
001-12822
 
54-2086934
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1000 Abernathy Road, Suite 260
Atlanta Georgia 30328
(Address of Principal Executive Offices)
(770) 829-3700
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02.
Results of Operations and Financial Condition
On November 10, 2015, Beazer Homes USA, Inc. issued a press release and held a conference call announcing results of operations for the fiscal year ended September 30, 2015. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01.
Financial Statements and Exhibits
(d) Exhibits
99.1
Earnings Press Release dated November 10, 2015





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BEAZER HOMES USA, INC.
 
 
 
 
Date: November 10, 2015
 
 
 
By:
 
/s/ Kenneth F. Khoury
 
 
 
 
 
 
 
 
Kenneth F. Khoury
Executive Vice President, Chief Administrative Officer and General Counsel


Exhibit


Exhibit 99.1

PRESS RELEASE

Beazer Homes Reports Fiscal 2015 Results

ATLANTA, November 10, 2015 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter and fiscal year ended September 30, 2015.
The Company reported income from continuing operations of $346.6 million for its full year fiscal 2015, including a $324.6 million tax benefit that reflects the reversal of a substantial portion of the valuation allowance against its deferred tax assets. Adjusted EBITDA, excluding unexpected warranty costs and a litigation settlement in discontinued operations, was $144.1 million for the year, up $10.9 million from fiscal 2014.
New home orders increased 12.8% for the full year, with an average active community count that was 13.4% higher than a year ago. Absorption rates remained strong at 2.8 sales per community per month for the year, while the Company's average sales price (“ASP”) increased to $313.5 thousand, the highest ASP for any year in its history. Finally, the Company's backlog value at September 30, 2015 was $667.7 million, up nearly 30% from the prior year, with units up 20.6% and pricing in backlog up 7.3% to $327.6 thousand.
Additionally, the Company announced that it increased the capacity of its secured revolving credit facility to $145 million from $130 million and extended the maturity date to January 15, 2018.
“After returning to profitability last year, 2015 represented a meaningful step forward in achieving our “2B-10” goals, with growth in both revenue and Adjusted EBITDA arising from higher community count, additional closings and an increase in average sales prices. This was accomplished while maintaining our operating margins, as the benefit from improving leverage and higher prices offset the impact from rising costs,” said Allan Merrill, CEO of Beazer Homes.
“Looking ahead to fiscal 2016 and beyond,” Mr. Merrill continued, “we expect significant EBITDA growth, as we benefit from more closings, further increases in average sales prices and additional fixed cost leverage, enabling us to achieve our “2B-10” goals in fiscal 2017, in line with our previous guidance. At the same time, we expect to take steps this year to reduce our leverage, reflecting our view that doing so in an improving market will create long-term shareholder value.”








Summary results for the three and twelve months ended September 30, 2015 are as follows:
Q4 Results from Continuing Operations (unless otherwise specified)
 
 
Quarter Ended September 30,
 
 
2015
 
2014
 
Change
New Home Orders
 
1,170

 
1,173

 
(0.3
)%
Orders per month per community
 
2.4

 
2.6

 
(7.7
)%
Actual community count at quarter-end
 
166

 
155

 
7.1
 %
Average active community count
 
164

 
149

 
10.1
 %
Cancellation rates
 
24.2
%
 
23.4
%
 
80 bps

 
 
 
 
 
 
 
Total Home Closings
 
1,896

 
1,695

 
11.9
 %
Average sales price from closings (in thousands)
 
$
322.6

 
$
295.4

 
9.2
 %
Homebuilding revenue (in millions)
 
$
611.7

 
$
500.6

 
22.2
 %
Homebuilding gross margin, excluding impairments and abandonments (I&A)
 
17.5
%
 
18.2
%
 
-70 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales
 
21.3
%
 
21.3
%
 
0 bps

Homebuilding gross margin, excluding I&A, interest amortized to cost of sales and unexpected warranty costs
 
21.3
%
 
22.3
%
 
-100 bps

 
 
 
 
 
 
 
Income from continuing operations before income taxes (in millions)
 
$
30.7

 
$
20.3

 
$
10.4

Benefit from income taxes (in millions)
 
$
323.8

 
$
40.0

 
$
283.8

Net income from continuing operations (in millions)
 
$
354.5

 
$
60.3

 
$
294.2

Basic Income Per Share
 
$
11.42

 
$
2.28

 
$
9.14

Diluted Income Per Share
 
$
11.16

 
$
1.90

 
$
9.26

 
 
 
 
 
 
 
Total Company land and land development spending (in millions)
 
$
99.8

 
$
169.7

 
$
(69.9
)
Total Company Adjusted EBITDA (in millions)
 
$
71.1

 
$
56.5

 
$
14.6

Total Company Adjusted EBITDA, excluding unexpected warranty costs (in millions)
 
$
71.1

 
$
61.4

 
$
9.7


































Fiscal Year Results from Continuing Operations (unless otherwise specified)
 
 
Year Ended September 30,
 
 
2015
 
2014
 
Change
New Home Orders
 
5,358

 
4,748

 
12.8
%
Orders per month per community
 
2.8

 
2.8

 
%
Cancellation rates
 
20.1
%
 
21.3
%
 
-120 bps

 
 
 
 
 
 
 
Total Home Closings
 
5,010

 
4,951

 
1.2
%
Average sales price from closings (in thousands)
 
$
313.5

 
$
284.8

 
10.1
%
Homebuilding revenue (in millions)
 
$
1,570.6

 
$
1,409.9

 
11.4
%
Homebuilding gross margin, excluding impairments and abandonments (I&A)
 
17.1
%
 
19.1
%
 
-200 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales
 
20.6
%
 
21.9
%
 
-130 bps

Homebuilding gross margin, excluding I&A, interest amortized to cost of sales and unexpected warranty costs
 
21.5
%
 
22.2
%
 
-70 bps

 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes (in millions)
 
$
22.0

 
$
(6.9
)
 
$
28.9

Benefit from income taxes (in millions)
 
$
324.6

 
$
41.8

 
$
282.8

Net income from continuing operations (in millions)
 
$
346.6

 
$
34.9

 
$
311.7

Loss on debt extinguishment (in millions)
 
$
(0.1
)
 
$
(19.9
)
 
$
19.8

Inventory impairments and lot option abandonments (in millions)
 
$
(3.1
)
 
$
(8.3
)
 
$
5.2

Net income from continuing operations excluding loss on debt extinguishment, inventory impairments and lot option abandonments (in millions)
 
$
349.8

 
$
63.1

 
$
286.7

Basic Income Per Share
 
$
12.54

 
$
1.35

 
$
11.19

Diluted Income Per Share
 
$
10.91

 
$
1.10

 
$
9.81

 
 
 
 
 
 
 
Total Company land and land development spending (in millions)
 
$
453.3

 
$
551.2

 
$
(97.9
)
Total Company Adjusted EBITDA (in millions)
 
$
126.8

 
$
128.3

 
$
(1.5
)
Total Company Adjusted EBITDA, excluding unexpected warranty costs and a litigation settlement in discontinued operations (in millions)
 
$
144.1

 
$
133.2

 
$
10.9


 
 
As of September 30,
 
 
2015
 
2014
 
Change
Backlog
 
2,038

 
1,690

 
20.6
 %
Dollar value of backlog at end of period (in millions)
 
$
667.7

 
$
515.9

 
29.4
 %
ASP in backlog (in thousands)
 
$
327.6

 
$
305.3

 
7.3
 %
Land and lots controlled
 
25,720

 
28,187

 
(8.8
)%







Conference Call

The Company will hold a conference call on November 10, 2015 at 11:00 a.m. ET to discuss these results. Interested parties may listen to the conference call and view the Companys slide presentation over the Internet by visiting the “Investor Relations” section of the Companys website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-619-8639 (for international callers, dial 312-470-7002). To be admitted to the call, verbally supply the passcode “BZH.” A replay of the call will be available shortly after the conclusion of the live call. To directly access the replay, dial 866-448-5643 or 203-369-1188 and enter the passcode “3740” (available until 11:59 p.m. ET on November 17, 2015), or visit www.beazer.com. A replay of the webcast will be available at www.beazer.com for at least 30 days.

Headquartered in Atlanta, Beazer Homes is a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States. The Company's homes meet or exceed the benchmark for energy efficient home construction as established by ENERGY STAR® and are designed with Choice PlansTM to meet the personal preferences and lifestyles of its buyers. In addition, the Company is committed to providing a range of preferred lender choices to facilitate transparent competition between lenders and enhanced customer service. The Company's active operations are in the following states: Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol “BZH.” For more info visit Beazer.com, or check out Beazer on Facebook and Twitter.

This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things: (i) continuing severe weather conditions or other related events could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas; (ii) the availability and cost of land and the risks associated with the future value of our inventory such as additional asset impairment charges or writedowns; (iii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decreases in the price of new homes and resale homes in the market; (iv) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (v) 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; (vi) shortages of or increased prices for labor, land or raw materials used in housing production and the level of quality and craftsmanship provided by our subcontractors; (vii) our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any downgrades of our credit ratings or reductions in our tangible net worth or liquidity levels; (viii) our ability to reduce our outstanding indebtedness and to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (ix) a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing, a change in tax laws regarding the deductibility of mortgage interest for tax purposes, or an increased number of foreclosures; (x) increased competition or delays in reacting to changing consumer preference in home design; (xi) factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xii) estimates related to the potential recoverability of our deferred tax assets; (xiii) 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, including these related to the environment; (xiv) the results of litigation or government proceedings and fulfillment of the obligations in the consent orders with governmental authorities and other settlement agreements; (xv) the impact of construction defect and home warranty claims, including water intrusion issues in Florida and New Jersey; (xvi) the cost and availability of insurance and surety bonds; (xvii) the performance of our unconsolidated entities and our unconsolidated entity partners; (xviii) the impact of information technology failures or data security breaches; (xix) terrorist acts, acts of war or other factors over which the Company has little or no control; or (xx) the impact on homebuilding in key markets of governmental regulations limiting the availability of water.






Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time and it is not possible for management to predict all such factors.

CONTACT: Beazer Homes USA, Inc.

David I. Goldberg
Vice President of Treasury and Investor Relations
770-829-3700
investor.relations@beazer.com
-Tables Follow-






 BEAZER HOMES USA, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 
Three Months Ended
 
Fiscal Year Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Total revenue
$
632,852

 
$
545,905

 
$
1,627,413

 
$
1,463,767

Home construction and land sales expenses
522,787

 
452,706

 
1,351,860

 
1,192,001

Inventory impairments and option contract abandonments
2,860

 
5,386

 
3,109

 
8,307

Gross profit
107,205

 
87,813

 
272,444

 
263,459

Commissions
24,882

 
20,789

 
65,023

 
58,028

General and administrative expenses
40,659

 
39,431

 
142,496

 
136,463

Depreciation and amortization
4,719

 
4,141

 
13,338

 
13,279

Operating income
36,945

 
23,452

 
51,587

 
55,689

Equity in income of unconsolidated entities
159

 
6,324

 
536

 
6,545

Loss on extinguishment of debt
(80
)
 

 
(80
)
 
(19,917
)
Other expense, net
(6,343
)
 
(9,502
)
 
(30,013
)
 
(49,191
)
Income (loss) from continuing operations before income taxes
30,681

 
20,274

 
22,030

 
(6,874
)
Benefit from income taxes
(323,843
)
 
(40,014
)
 
(324,569
)
 
(41,797
)
Income from continuing operations
354,524

 
60,288

 
346,599

 
34,923

Income (loss) from discontinued operations, net of tax
1,731

 
(441
)
 
(2,505
)
 
(540
)
Net income
$
356,255

 
$
59,847

 
$
344,094

 
$
34,383

Weighted average number of shares:
 
 
 
 
 
 
 
Basic
31,055

 
26,425

 
27,628

 
25,795

Diluted
31,773

 
31,782

 
31,772

 
31,795

Basic income (loss) per share:
 
 
 
 
 
 
 
Continuing operations
$
11.42

 
$
2.28

 
$
12.54

 
$
1.35

Discontinued operations
$
0.05

 
$
(0.02
)
 
$
(0.09
)
 
$
(0.02
)
Total
$
11.47

 
$
2.26

 
$
12.45

 
$
1.33

Diluted income (loss) per share:
 
 
 
 
 
 
 
Continuing operations
$
11.16

 
$
1.90

 
$
10.91

 
$
1.10

Discontinued operations
$
0.05

 
$
(0.02
)

$
(0.08
)
 
$
(0.02
)
Total
$
11.21

 
$
1.88

 
$
10.83

 
$
1.08


 
 
Three Months Ended
 
Fiscal Year Ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Capitalized interest in inventory, beginning of period
$
123,657

 
$
84,083

 
$
87,619

 
$
52,562

Interest incurred
30,465

 
30,329

 
121,754

 
126,906

Capitalized interest impaired

 
(245
)
 

 
(245
)
Interest expense not qualified for capitalization and included as other expense
(6,356
)
 
(9,672
)
 
(29,752
)
 
(50,784
)
Capitalized interest amortized to house construction and land sales expenses
(24,309
)
 
(16,876
)
 
(56,164
)
 
(40,820
)
Capitalized interest in inventory, end of period
$
123,457

 
$
87,619

 
$
123,457

 
$
87,619







BEAZER HOMES USA, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 
 
September 30, 2015
 
September 30, 2014
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
251,583

 
$
324,154

Restricted cash
 
38,901

 
62,941

Accounts receivable (net of allowance of $1,052 and $1,245, respectively)
 
52,379

 
34,429

Income tax receivable
 
419

 
46

Inventory:
 
 
 
 
Owned inventory
 
1,697,590

 
1,557,496

Land not owned under option agreements
 

 
3,857

Total inventory
 
1,697,590

 
1,561,353

Investments in unconsolidated entities and marketable securities
 
13,734

 
38,341

Deferred tax assets, net
 
325,373

 
2,823

Property and equipment, net
 
22,230

 
18,673

Other assets
 
18,994

 
23,460

Total assets
 
$
2,421,203

 
$
2,066,220

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Trade accounts payable
 
$
113,539

 
$
106,237

Other liabilities
 
148,966

 
142,516

Obligations related to land not owned under option agreements
 

 
2,916

Total debt (net of discounts of $3,639 and $4,399, respectively)
 
1,528,275

 
1,535,433

Total liabilities
 
$
1,790,780

 
$
1,787,102

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

 
$

Common stock (par value $0.001 per share, 63,000,000 shares authorized, 32,660,583 issued and outstanding and 27,173,421 issued and outstanding, respectively)
 
33

 
27

Paid-in capital
 
857,553

 
851,624

Accumulated deficit
 
(227,163
)
 
(571,257
)
Accumulated other comprehensive loss
 

 
(1,276
)
Total stockholders’ equity
 
630,423

 
279,118

Total liabilities and stockholders’ equity
 
$
2,421,203

 
$
2,066,220

 
 
 
 
 
Inventory Breakdown
 
 
 
 
Homes under construction
 
$
377,281

 
$
282,095

Development projects in progress
 
809,900

 
786,768

Land held for future development
 
270,990

 
301,048

Land held for sale
 
44,555

 
51,672

Capitalized interest
 
123,457

 
87,619

Model homes
 
71,407

 
48,294

Land not owned under option agreements
 

 
3,857

Total inventory
 
$
1,697,590

 
$
1,561,353




 





BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 
 
Quarter Ended September 30,
 
Fiscal Year Ended September 30,
SELECTED OPERATING DATA
 
2015
 
2014
 
2015
 
2014
Closings:
 
 
 
 
 
 
 
 
West region
 
779

 
594

 
1,954

 
1,996

East region
 
560

 
622

 
1,546

 
1,600

Southeast region
 
557

 
479

 
1,510

 
1,355

Total closings
 
1,896

 
1,695

 
5,010

 
4,951

 
 
 
 
 
 
 
 
 
New orders, net of cancellations:
 
 
 
 
 
 
 
 
West region
 
541

 
428

 
2,352

 
1,815

East region
 
269

 
389

 
1,433

 
1,539

Southeast region
 
360

 
356

 
1,573

 
1,394

Total new orders, net of cancellations
 
1,170

 
1,173

 
5,358

 
4,748

 
 
 
 
 
 
 
 
 
Backlog units at end of period:
 
 
 
 
 
 
 
 
West region
 
955

 
557

 
955

 
557

East region
 
487

 
600

 
487

 
600

Southeast region
 
596

 
533

 
596

 
533

Total backlog units at end of period
 
2,038

 
1,690

 
2,038

 
1,690

 
 
 
 
 
 
 
 
 
Dollar value of backlog at end of period (in millions)
 
$
667.7

 
$
515.9

 
$
667.7

 
$
515.9

 
 
 
 
 
 
 
 
 
Homebuilding Revenue (in thousands):
 
 
 
 
 
 
 
 
West region
 
$
245,790

 
$
161,118

 
$
584,202

 
$
537,149

East region
 
201,996

 
209,047

 
549,484

 
525,439

Southeast region
 
163,888

 
130,467

 
436,941

 
347,292

Total homebuilding revenue
 
$
611,674

 
$
500,632

 
$
1,570,627

 
$
1,409,880







 
 






BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
(In thousands)
 
 
Quarter Ended September 30,
 
Fiscal Year Ended September 30,
SUPPLEMENTAL FINANCIAL DATA
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
 
Homebuilding
 
$
611,674

 
$
500,632

 
$
1,570,627

 
$
1,409,880

Land sales and other
 
21,178

 
45,273

 
56,786

 
53,887

Total
 
$
632,852

 
$
545,905

 
$
1,627,413

 
$
1,463,767

 
 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
 
Homebuilding
 
$
105,392

 
$
85,969

 
$
267,269

 
$
260,746

Land sales and other
 
1,813

 
1,844

 
5,175

 
2,713

Total
 
$
107,205

 
$
87,813

 
$
272,444

 
$
263,459

Reconciliation of homebuilding gross profit before impairments and abandonments and interest amortized to cost of sales and the related gross margins to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt.
In addition, given the unusual size and nature of certain unexpected warranty charges during the periods presented, homebuilding gross profit is also shown excluding these charges. Management believes that this representation best reflects the operating characteristics of the Company.
 
Quarter Ended September 30,
 
Fiscal Year Ended September 30,
 
2015
 
2014
 
2015
 
2014
Homebuilding gross profit
$
105,392

17.2
%
 
$
85,969

17.2
%
 
$
267,269

17.0
%
 
$
260,746

18.5
%
Inventory impairments and lot option abandonments (I&A)
1,676

 
 
5,386

 
 
1,676

 
 
8,307

 
Homebuilding gross profit before I&A
107,068

17.5
%
 
91,355

18.2
%
 
268,945

17.1
%
 
269,053

19.1
%
Interest amortized to cost of sales
23,482

 
 
15,311

 
 
55,006

 
 
39,255

 
Homebuilding gross profit before I&A and interest amortized to cost of sales
130,550

21.3
%
 
106,666

21.3
%
 
323,951

20.6
%
 
308,308

21.9
%
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries)

 
 
4,290

 
 
13,582

 
 
4,290

 
Unexpected warranty costs related to water intrusion issue in New Jersey

 
 
648

 
 

 
 
648

 
Homebuilding gross profit before I&A, interest amortized cost of sales and unexpected warranty costs
$
130,550

21.3
%
 
$
111,604

22.3
%
 
$
337,533

21.5
%
 
$
313,246

22.2
%





Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, debt extinguishment, impairments and abandonments) to total Company net loss, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position and level of impairments.
In addition, given the unusual size and nature of certain charges recorded during the periods presented, Adjusted EBITDA is also shown excluding these charges. Management believes that this representation best reflects the operating characteristics of the Company.
 
 
 
Quarter Ended September 30,
 
Fiscal Year Ended September 30,
 
 
2015
 
2014
 
2015
 
2014
Net income
 
$
356,255

 
$
59,847

 
$
344,094

 
$
34,383

Benefit from income taxes
 
(325,196
)
 
(40,137
)
 
(325,927
)
 
(41,802
)
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization
 
30,790

 
26,793

 
85,986

 
91,849

Depreciation and amortization and stock compensation amortization
 
6,307

 
4,849

 
19,473

 
15,866

Inventory impairments and option contract abandonments
 
2,860

 
5,141

 
3,109

 
8,062

Loss on debt extinguishment
 
80

 

 
80

 
19,917

Adjusted EBITDA
 
$
71,096

 
$
56,493

 
$
126,815

 
$
128,275

Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries)
 

 
4,290

 
13,582

 
4,290

Unexpected warranty costs related to water intrusion issue in New Jersey
 

 
648

 

 
648

Litigation settlement in discontinued operations
 

 

 
3,660

 

Adjusted EBITDA excluding unexpected warranty costs and a litigation settlement in discontinued operations
 
$
71,096

 
$
61,431

 
$
144,057

 
$
133,213