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Mail Stop 7010
March 31, 2006
Via U.S. mail and facsimile
Ian J. McCarthy
President and Chief Executive Officer
Beazer Homes USA, Inc.
1000 Abernathy Road, Suite 1200
Atlanta, GA 30328
RE: Beazer Homes USA, Inc.
Form 10-K for the Fiscal Year Ended September 30, 2005
Forms 10-Q for the Fiscal Quarter Ended December 31, 2005
File No. 1-12822
Dear Mr. McCarthy:
We have reviewed your response letter dated March 28, 2006
and
have the following additional comments. If you disagree, we will
consider your explanation as to why our comments are inapplicable.
In of our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Form 10-K for the Fiscal Year Ended September 30, 2005
Notes to Financial Statements
(1) Summary of Significant Accounting Policies Presentation, page
39
1. We read your response to our prior comment from our letter
dated
March 14, 2006. It is still unclear to us based on the
information
you have provided to us how you determined that each of your 31
homebuilding divisions have similar economic characteristics, thus
making them eligible for aggregation based on the guidance in
paragraph 17 of SFAS 131.
We reviewed the quantitative analysis you provided to us for each
of
the last five fiscal years, the most recent interim period, and
the
budgeting information for each of these operating segments. It
would
be helpful for us to understand the year over year comparisons for
this information. Please modify your analysis to include such
information. In doing so, please include in your response how you
determined that the analytical information you provided on each of
these operating segments supports the notion that their financial
results trend together. Your analysis should include explanations
for any apparent differences in economic characteristics for a
given
operating segment when compared to another operating segment for a
period and why these differences would not be considered an
indication of differences in economic characteristics. Please
ensure
you also include explanations for any difference in trends,
including
your basis for concluding that any trend was temporary. The
explanations provided in your prior response appeared to be keyed
towards explanations for changes in trends within an operating
segment, rather than differences in trends in one operating
segment
compared to another operating segment. We recognize the guidance
in
Interpretation 17-1 of SFAS 131, which indicates that temporary
divergences in otherwise similar economic characteristics would
not
prevent a segment from being aggregated with another in a year
when
their trends differ slightly. However, it does not appear that
this
guidance is applicable to aggregate all of your operating segments
to
create one reportable segment.
Certain economic factors will likely affect each of your operating
segments similarly, including, but not limited to interest rates,
and
the availability of mortgage financing. However, your response
does
not appear to address the significant impact the local economies
have
on each of your operating segments and how the economic
characteristics in each of these local economies are not evidence
which would support the conclusion that not all of your operating
segments have similar economic characteristics. Please tell us
how
you determined that the explanations included in Appendix A, which
describe certain fluctuations in your operating segments` gross
margins are anomalies, rather than key characteristics, which
support
dissimilar economies, as it appears that these explanations
largely
are due to differences in local economies. Please also tell us
how
you determined that the ability to source, acquire, and develop
land,
design and build homes, the strength of the local economy,
including
management, and local weather conditions do not significantly
impact
the economic characteristics in each of your operating segments
creating differences in trends both historically and in the
future.
For example, it is difficult for us to understand how you could
conclude the aforementioned local economic characteristics were
similar historically or could be expected to be similar in the
future
for areas such as Las Vegas and Nashville.
2. We read your response to our prior comment from our letter
dated
March 14, 2006. Your response states that you have 31
homebuilding
divisions which meet the definition of an operating segment based
on
the criteria in paragraph 10 of SFAS 131. You have provided us
with
some analysis concerning the revenue, gross profit, and gross
profit
margins for each of these operating segments. However, without
the
underlying information, it is difficult for us to ascertain an
appropriate and complete understanding of their comparative
operations.
Please provide for us the financial information that is provided
to
the CODM (as a group) which shows the revenue, gross profit, and
gross profit margins for each operating segment for each of the
last
3 years, the most recent interim period, and any future period for
which you have budgeting information for. In addition, please
provide
us with your internal organizational structure and any additional
information you feel is necessary for us to understand your
internal
organizational structure.
* * * *
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a letter that keys your responses to our comments
and
provides any requested supplemental information. Detailed
response
letters greatly facilitate our review. Please file your response
letter on EDGAR. Please understand that we may have additional
comments after reviewing your response to our comment.
If you have any questions regarding this comment, please
direct
them to Meagan Caldwell, Staff Accountant, at (202) 551-3754 or,
in
her absence, to the undersigned at (202) 551-3769.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Ian J. McCarthy
Beazer Homes USA, Inc.
March 31, 2006
Page 1 of 3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE