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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 1934

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998

/ / 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.
(Exact name of Registrant as specified in its charter)

DELAWARE 58-2086934
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)

5775 PEACHTREE DUNWOODY ROAD, SUITE 200, ATLANTA, GEORGIA 30342
(Address of principal executive offices) (Zip code)

(Registrant's telephone number including area code) (404) 250-3420

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

TITLE OF SECURITIES EXCHANGES ON WHICH REGISTERED
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Common Stock, $.01 par value per share New York Stock Exchange
Series A Cumulative Convertible Exchangeable Preferred Stock, $.01 par value per share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

The aggregate market value of the registrant's Common Stock held by
non-affiliates of the registrant (5,743,672 shares) as of December 7, 1998,
based on the closing sale price per share as reported by the New York Stock
Exchange on such date, was $118,463,235. The number of shares outstanding of the
registrant's Common Stock as of December 7, 1998 was 6,267,423.

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DOCUMENTS INCORPORATED BY REFERENCE

PART OF 10-K
WHERE INCORPORATED
-------------------

Portions of the registrant's 1998 Annual Report to Shareholders for the fiscal year ended September 30,
1998........................................................................................................ II
Portions of the registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on February 4,
1999........................................................................................................ I, III

BEAZER HOMES USA, INC.
FORM 10-K
INDEX

PAGE
NUMBER
-----------

PART I.
Item 1. Business...................................................................................... 3
Item 2. Properties.................................................................................... 11
Item 3. Legal Proceedings............................................................................. 11
Item 4. Submission of Matters to a Vote of Security Holders........................................... 12

PART II.
Item 5. Market for the Company's Common Equity and Related Stockholder Matters........................ 13
Item 6. Selected Financial Data....................................................................... 13
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations......... 13
Item 8. Financial Statements and Supplementary Data................................................... 13
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.......... 13

PART III.
Item 10. Directors and Executive Officers of the Registrant........................................... 13
Item 11. Executive Compensation....................................................................... 13
Item 12. Security Ownership of Certain Beneficial Owners and Management............................... 13
Item 13. Certain Relationships and Related Transactions............................................... 13

PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.............................. 13

SIGNATURES.............................................................................................. 18

ITEM 1. BUSINESS

Beazer Homes USA, Inc. ("Beazer" or the "Company") designs, builds and sells
single family homes in the following locations within the United States:

REGION/STATE MARKET(S)/YEAR ENTERED
- -------------------------------- --------------------------------------------------------------------------------

SOUTHEAST REGION:
Florida....................... Jacksonville (1993), Treasure Coast (1995), Fort Myers/Naples (1996), Tampa/St.
Petersburg (1996), Orlando (1997)
Georgia....................... Atlanta (1985)
North Carolina................ Charlotte (1987), Raleigh (1992)
South Carolina................ Charleston (1987), Columbia (1993), Myrtle Beach (1996), Greenville (1998)
Tennessee..................... Nashville (1987), Knoxville (1995)

SOUTHWEST REGION:
Arizona....................... Phoenix (1993)
California.................... San Diego County (1992), Los Angeles County (1993), Orange County (1993),
Riverside & San Bernadino Counties (1993), Ventura County (1993), Sacramento
(1993)
Nevada........................ Las Vegas (1993), Reno/Sparks (1996)

CENTRAL REGION:
Texas......................... Dallas (1995), Houston (1995)

MID-ATLANTIC REGION (1):
Maryland...................... Baltimore (1998), Metro-Washington D.C. (1998)
New Jersey/Pennsylvania....... Central and Southern New Jersey (1998), Bucks County, PA (1998)
Virginia...................... Fairfax County (1998), Loudoun County (1998), Prince William County (1998)

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(1) Entered in December 1998 via the acquisition of certain assets of Trafalgar
House Property, Inc. See "Recent Business Developments."

We design our homes to appeal primarily to entry-level and first move-up
home buyers. Our objective is to provide our customers with homes that
incorporate quality and value while seeking to maximize our return on invested
capital. To achieve this objective, we have developed a business strategy which
focuses on the following elements:

GEOGRAPHIC DIVERSITY AND GROWTH MARKETS. We compete in a large number
of geographically diverse markets in an attempt to reduce our exposure to
any particular regional economy. Virtually all of the markets in which we
operate have experienced significant population growth in recent years.
Within these markets, we build homes in a variety of projects, typically
with fewer than 150 homesites.

QUALITY HOMES FOR ENTRY-LEVEL AND FIRST MOVE-UP HOME BUYERS. We seek to
maximize customer satisfaction by offering homes that incorporate quality
materials, distinctive design features, convenient locations and competitive
prices. We focus on entry-level and first move-up home buyers because we
believe they represent the largest segment of the homebuilding market.
During Fiscal Year 1998, the average sales price of our homes closed was
approximately $156,400.

ADDITIONAL PRODUCTS AND SERVICES FOR HOMEBUYERS. In order to maximize
our profitability and provide our home buyers with the additional products
and services they desire, we have incorporated design centers and mortgage
origination operations into our business. Recognizing that home buyers want
to choose certain components of their new home, we offer limited
customization through the use of design centers in most of our markets.
These design centers allow the homebuyer to select certain

non-structural customizations for their homes such as cabinetry, flooring,
fixtures, appliances and wallcoverings. Additionally, recognizing the
homebuyer's desire to simplify the financing process, we originate mortgages
on behalf of our customers through Beazer Mortgage Corp. ("Beazer
Mortgage").

DECENTRALIZED OPERATIONS WITH EXPERIENCED MANAGEMENT. We believe our
in-depth knowledge of our local markets enables us to better serve our
customers. Our local managers, who have significant experience in both the
homebuilding industry and the markets they serve, are responsible for
operating decisions regarding design, construction and marketing. We combine
these decentralized operations with a centralized corporate-level management
that controls decisions regarding overall strategy, land acquisitions and
financial matters.

CONSERVATIVE LAND POLICIES. We seek to maximize our return on capital
employed by limiting our investment in land and by focusing on inventory
turnover. To implement this strategy and to reduce the risks associated with
investments in land, we use options to control land whenever possible. In
addition, we do not speculate in unentitled land.

COMPANY HISTORY--In March 1994, we completed a concurrent initial public
offering of common stock and issuance of 9% Senior Notes (the "IPO"). Prior to
the IPO, the Company was an indirect wholly-owned subsidiary of Hanson PLC
("Hanson"), a company registered in the United Kingdom. As a result of the IPO,
Hanson's ownership interest in the Company was reduced to approximately 30%.
During 1995, the Company repurchased Hanson's remaining 30% interest, which had
been transferred to a former affiliate of Hanson.

RECENT BUSINESS DEVELOPMENTS

ACQUISITIONS: Subsequent to the end of Fiscal Year 1998, we completed two
acquisitions. In October 1998, we acquired the assets of Snow Construction, Inc.
in Orlando, Florida for approximately $1.8 million. In December 1998, we
acquired certain assets of the homebuilding operations of Trafalgar House
Property, Inc. for a purchase price of approximately $90.0 million.

JOINT VENTURE: In Fiscal Year 1998, we entered into a joint venture
agreement with Corporacion GEO S.A. de C.V. ("Corporacion GEO"), the largest
builder of affordable homes in Mexico. The joint venture ("Premier Communities")
will focus exclusively on the development, construction and sale of affordable
housing throughout the United States, initially priced from under $40,000 to
$55,000 per home. The joint venture is owned 60% by Corporacion GEO and 40% by
Beazer. As of December 1998, Premier Communities had begun development of its
first project in El Paso, Texas.

MARKETS AND PRODUCT DESCRIPTION

We evaluate a number of factors in determining which geographic markets to
enter or in which to concentrate our homebuilding activities. We attempt to
anticipate swings in economic and real estate conditions by evaluating such
statistical information as

(i) the historical and projected growth of the population;
(ii) the number of new jobs created or projected to be created;
(iii) the number of housing starts in previous periods;
(iv) building lot availability and price;
(v) housing inventory;
(vi) level of competition; and
(vii) home sales absorption rates.

We generally seek to avoid direct competition in a particular market with
respect to product type. We maintain the flexibility to alter our product mix
within a given market depending on market conditions and, in determining our
product mix, consider demographic trends, demand for a particular type of
product, margins, timing and the economic strength of such market. While
remaining responsive to market opportunities within the industry, in recent
years we have focused, and intend to continue to focus, primarily on entry-level
and first move-up housing in the form of single family detached homes and
townhouses. Entry-level homes generally are those homes priced at the lower end
of the market and target first time home buyers, while first move-up homes
generally are priced in the mid-to-upper price range and target a wide variety
of home buyers as they progress in income and family size. Although some of our
move-up homes are priced at the upper end of the market and we offer a selection
of amenities, we generally do not build "custom homes," and our prices of first
move-up homes are generally well below the prices of custom homes in most areas.
We attempt to maximize efficiency by using standardized design plans whenever
possible.

The following table summarizes information regarding our markets as of and
for the year ended September 30, 1998 (DOLLARS IN THOUSANDS).

DOLLAR VALUE
AVERAGE UNITS IN OF BACKLOG NUMBER OF NUMBER OF
CLOSING BACKLOG AT AT ACTIVE HOMES
STATE PRICE YEAR END YEAR END SUBDIVISIONS CLOSED
- --------------------------------------------------- --------- ----------- ------------ --------------- -----------

Arizona............................................ $ 127.6 478 $ 66,642 32 1,336
California......................................... $ 173.4 182 39,817 18 1,154
Florida............................................ $ 178.0 342 66,150 41 677
Georgia............................................ $ 170.2 92 18,370 8 166
Nevada............................................. $ 161.3 83 15,886 9 491
North Carolina..................................... $ 141.8 226 31,586 25 777
South Carolina..................................... $ 121.7 182 24,078 16 445
Tennessee.......................................... $ 196.0 154 29,077 23 428
Texas.............................................. $ 171.1 318 55,698 31 639
----- ------------ --- -----
Total Company...................................... $ 156.4 2,057 $ 347,304 203 6,113
----- ------------ --- -----
----- ------------ --- -----

Our homebuilding and marketing activities are conducted under the name of
Beazer Homes in each of our markets except as follows:

MARKET DOING BUSINESS AS
- ---------------------------------------------- ----------------------------------------------

Ft. Myers/Naples.............................. GulfCoast Homes
Jacksonville.................................. Panitz Homes
Tennessee..................................... Phillips Builders
North Carolina................................ Squires Homes
South Carolina................................ Squires Homes
Maryland...................................... Trafalgar House
New Jersey.................................... Trafalgar House
Virginia...................................... Trafalgar House

CORPORATE OPERATIONS

We perform the following functions at a centralized level:

(i) evaluate and select geographic markets;

(ii) allocate capital resources to particular markets, including with
respect to land and acquisitions;

(iii) maintain the Company's relations with its lenders to regulate the
flow of financial resources and develop consistent relationships with
such lenders;

(iv) maintain centralized information systems; and

(v) monitor the decentralized operations of the Company's subsidiaries
and divisions.

We allocate the capital resources necessary for new projects consistent with
our overall operating strategy. We utilize value created (a variation of the
economic value financial concept) return on capital employed and profit margin
as criteria for this allocation. This allocation varies based on market
conditions, results of operations and other factors. Capital commitments are
determined through consultation among selected executive and operational
personnel, who play an important role in ensuring that new projects are
consistent with our strategy. Centralized financial controls are also maintained
through the standardization of accounting and financial policies and procedures,
which are applied uniformly throughout the Company.

Structurally, we operate through separate divisions, which are generally
located within the areas in which they operate. Each division is managed by
executives with substantial experience in the division's market. In addition,
each division is equipped with the skills to complete the functions of land
acquisition, map processing, land development, construction, marketing, sales
and product service.

LAND ACQUISITION AND DEVELOPMENT

Substantially all of the land we acquire is purchased only after necessary
entitlements have been obtained so that we have certain rights to begin
development or construction as market conditions dictate. In certain situations
we will purchase unentitled property where we perceive an opportunity to build
on such property in a manner consistent with our strategy. The term
"entitlements" refers to development agreements, tentative maps or recorded
plats, depending on the jurisdiction within which the land is located.
Entitlements generally give a developer the right to obtain building permits
upon compliance with conditions that are usually within the developer's control.
Although entitlements are ordinarily obtained prior to our purchase of land, we
are still required to obtain a variety of other governmental approvals and
permits during the development process.

We select our land for development based upon a variety of factors,
including

(i) internal and external demographic and marketing studies;

(ii) suitability for projects comprised of generally less than 150
homesites;

(iii) suitability for development during the time period of one to
five years from the beginning of the development process to the
last closing;

(iv) financial review as to the feasibility of the proposed project,
including projected value created, profit margins and returns
on capital employed;

(v) the ability to secure governmental approvals and entitlements;

(vi) environmental and legal due diligence;

(vii) competition;

(viii) proximity to local traffic corridors and amenities; and

(ix) management's judgment as to the real estate market, economic
trends and our experience in a particular market.

We generally purchase land or obtain an option to purchase land which, in
either case, requires certain site improvements prior to construction. Where
required, we then undertake or, in the case of land under option, the grantor of
the option then undertakes, the development activities (through contractual
arrangements with local developers) that include site planning and engineering,
as well as constructing road, sewer, water, utilities, drainage and recreational
facilities and other amenities. When available in certain markets, we also buy
finished lots that are ready for construction.

The Company strives to develop a design and marketing concept for each of
its projects, which includes determination of size, style and price range of the
homes, layout of streets, layout of individual lots and overall community
design. The product line offered in a particular project depends upon many
factors, including the housing generally available in the area, the needs of a
particular market and our cost of lots in the project. We are, however, often
able to use standardized design plans.

The development and construction of each project are managed by our
operating divisions, each of which is led by a president who, in turn, reports
to the Company's Chief Operating Officer and the Company's Chief Executive
Officer. At the development stage, a manager (who may be assigned to several
projects and reports to the president of the division) supervises development of
buildable lots. In addition, a field superintendent is located at each project
site to supervise actual construction, and each division has one or more
customer service and marketing representatives assigned to projects operated by
that division.

The following table sets forth, by state, the Company's land inventory as of
September 30, 1998.

LAND UNDER
LAND OWNED CONTRACT(III)
-------------------------- --------------------------

FINISHED UNDEVELOPED FINISHED UNDEVELOPED
LOTS(I) LOTS(II) LOTS LOTS(II) TOTAL
----------- ------------- ----------- ------------- ---------
SOUTHEAST REGION:
Georgia...................................... 226 29 138 -- 393
North Carolina............................... 408 306 537 662 1,913
South Carolina............................... 248 51 163 1,781 2,243
Tennessee.................................... 538 369 771 733 2,411
Florida...................................... 902 120 459 182 1,663

SOUTHWEST REGION:
Arizona...................................... 1,215 -- 2,944 -- 4,159
California................................... 490 885 174 921 2,470
Nevada....................................... 720 -- 307 -- 1,027

CENTRAL REGION:
Texas........................................ 741 879 255 469 2,344
----- ----- ----- ----- ---------
Total...................................... 5,488 2,639 5,748 4,748 18,623
----- ----- ----- ----- ---------
----- ----- ----- ----- ---------

FISCAL YEAR 1998
HOMES CLOSED
-----------------
SOUTHEAST REGION:
Georgia...................................... 166
North Carolina............................... 777
South Carolina............................... 445
Tennessee.................................... 428
Florida...................................... 677
SOUTHWEST REGION:
Arizona...................................... 1,336
California................................... 1,154
Nevada....................................... 491
CENTRAL REGION:
Texas........................................ 639
-----
Total...................................... 6,113
-----
-----

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(i) The category "Land Owned--Finished Lots" includes lots on which construction
of a home has commenced.

(ii) Undeveloped lots consist of raw land and land under development that is
expected to be developed into the respective number of lots reflected in
this table.

(iii) The classification within Land Under Contract for this schedule is based
upon level of completion at delivery as stated in the option contract.

OPTION CONTRACTS: We acquire certain lots by means of option contracts.
Option contracts generally require the payment of a cash deposit or issuance of
a letter of credit for the right to acquire lots during a specified period of
time at a certain price. Under option contracts without specific performance
obligations, our liability is limited to forfeiture of the non-refundable
deposits, which aggregated approximately $10.6 million at September 30, 1998.
Under option contracts with specific performance obligations, we generally are
required to purchase specific numbers of lots on fixed dates pursuant to a
contractually established schedule. Under such option contracts with specific
performance obligations, the party granting the option is required to maintain
and/or develop the property pursuant to certain standards specified in the
contract and to deliver lots which are free of any liens and are appropriate for
residential building pursuant to a specified schedule. If we fail to purchase
the required number of lots on the date fixed for purchase pursuant to such
option contracts and the party granting the option has fulfilled all of its
obligations under the contract, the party granting the option to us generally
has the right to either terminate the option granted pursuant to the option
contract in its entirety or to require us to purchase the

remaining lots. If the party granting the option fails to meet its obligations
under such option contracts, we generally may, at our option, either not make
the lot purchase or require the party granting the option to cure the
deficiency. Under such option contracts, if we purchase a lot and subsequently
discover that the lot did not meet all of the conditions specified by the option
contract, we generally may require the party granting the option to repurchase
the lot or cure the deficiency. At September 30, 1998, committed amounts under
option contracts with specific performance obligations aggregated approximately
$39.0 million, while option contracts without specific performance obligations
aggregated $204.1 million. The Company's option contracts have expiration
periods ranging from one to 60 months.

CONSTRUCTION

We act as the general contractor for the construction of our projects. Our
project development operations are controlled by our subsidiaries and divisions,
whose employees supervise the construction of each project, coordinate the
activities of subcontractors and suppliers, subject their work to quality and
cost controls and assure compliance with zoning and building codes. We specify
that quality, durable materials be used in the construction of our homes. Our
subcontractors follow design plans prepared by architects and engineers who are
retained by us and whose designs are geared to the local market. Subcontractors
typically are retained on a project-by-project basis to complete construction at
a fixed price. Agreements with our subcontractors and materials' suppliers are
generally entered into after competitive bidding, and we do not have any
long-term contractual commitments with any of our subcontractors or suppliers.
In connection with such competitive bid process, we obtain information from
prospective subcontractors and vendors with respect to their financial condition
and ability to perform their agreements with us. We do not maintain significant
inventories of construction materials except for materials being utilized for
homes under construction. We have numerous suppliers of raw materials and
services used in our business, and such materials and services have been and
continue to be available. Material prices may fluctuate, however, due to various
factors, including demand or supply shortages which may be beyond the control of
our vendors. From time to time we enter into regional and national supply
contracts with certain of our vendors. For instance, during 1996 we entered into
a three-year agreement with General Electric to be our exclusive supplier of
appliances. We believe that our relationships with our suppliers and
subcontractors are good.

Construction time for our homes depends on the availability of labor,
materials and supplies, product type and location. Homes are designed to promote
efficient use of space and materials, and to minimize construction costs and
time. In all of our markets except California, construction of a home
historically has been completed within three to five months following
commencement of construction. In California, construction of a home historically
has been completed within four to eight months following commencement of
construction. At September 30, 1998, the Company had 447 finished homes, of
which 239 were sold and included in backlog at such date.

WARRANTY PROGRAM

We have established a risk retention group, United Home Insurance Corp.
("UHIC"), to self insure our structural warranty obligations and replace our
warranty program with Home Buyers Warranty Corporation ("HBW"). During Fiscal
Year 1997, UHIC was licensed by the State of Vermont as a captive insurance risk
retention group. UHIC provided insurance to Beazer homebuyers during Fiscal Year
1998. We believe this will result in cost savings as well as increased control
over the warranty process. The first year of Beazer's warranty covers defects in
plumbing, electrical, heating, cooling and ventilation systems, and major
structural defects; the second year of such warranty covers major structural
defects and certain defects in plumbing, electrical, heating, cooling and
ventilation systems of the home (exclusive of defects in appliances, fixtures
and equipment); and the final eight years of protection cover only major
structural defects. An allowance of approximately 0.5% to 1.0% of the sale price
of a home is established to cover

warranty expenses, although this allowance is subject to adjustment in special
circumstances. Our historical experience is that such warranty expenses
generally fall within the amount established for such allowance.

We provide a one-year limited warranty of workmanship and materials with
each of our homes, which generally includes home inspection visits with the
customer during the first year following the purchase of a home. We subcontract
our homebuilding work to subcontractors who generally provide us with an
indemnity and a certificate of insurance prior to receiving payments for their
work and, therefore, claims relating to workmanship and materials are generally
the primary responsibility of our subcontractors.

For homes closed prior to January 1, 1998, we provided a 10-year homeowners'
warranty through a single national agreement with HBW. The terms of the warranty
are materially consistent with those currently provided through UHIC.

We do not currently have any material litigation or claims regarding
warranties or latent defects with respect to the construction of our homes. We
believe that claims and litigation will be substantially covered by our warranty
accrual or insurance.

MARKETING AND SALES

We make extensive use of advertising and other promotional activities,
including newspaper advertisements, brochures, direct mail and the placement of
strategically located sign boards in the immediate areas of its developments.

We normally build, decorate, furnish and landscape between one to five model
homes for each project and maintain on-site sales offices. At September 30,
1998, we maintained 267 model homes, of which 169 were owned and 98 were leased
from third parties pursuant to sale and leaseback agreements. We believe that
model homes play a particularly important role in our marketing efforts.
Consequently, we expend significant effort creating an attractive atmosphere at
our model homes. Interior decorations are undertaken by both in-house and third
party local design specialists, and vary among our models based upon the
lifestyles of targeted home buyers. The purchase of furniture, fixtures and
fittings is coordinated to ensure that manufacturers' bulk discounts are
utilized to the maximum extent. Structural changes in design from the model
homes are not generally permitted, but home buyers may select various optional
amenities. We also use a cross-referral program that encourages our personnel to
direct customers to other Company subdivisions based on the customers' needs.

We generally sell our homes through commissioned employees (who typically
work from the sales offices located at the model homes used in each division) as
well as through independent brokers. Our personnel are available to assist
prospective home buyers by providing them with floor plans, price information
and tours of model homes and in connection with the selection of options. Our
selection of interior features is a principal component of our marketing and
sales efforts. Sales personnel are trained by us and attend periodic meetings to
be updated on sales techniques, competitive products in the area, the
availability of financing, construction schedules, marketing and advertising
plans, which management believes result in a sales force with extensive
knowledge of our operating policies and housing products. Our policy also
provides that sales personnel be licensed real estate agents where required by
law. We typically also build a number of homes for which no signed sales
contract exists at the time of commencement of construction. The use of an
inventory of such homes is necessary to satisfy the requirements of relocated
personnel and of independent brokers, who often represent customers requiring a
completed home within 60 days. At September 30, 1998, excluding models, we had
781 homes either finished or at various stages of completion for which we had
not received a sales contract.

We also use various sales incentives (such as landscaping and certain
interior home options and upgrades) in order to attract home buyers. The use of
incentives depends largely on prevailing economic and competitive market
conditions.

CUSTOMER FINANCING

We provide customer financing through branch offices of Beazer Mortgage.
Beazer Mortgage provides mortgage originations only, and does not retain or
service the mortgages that it originates. Such mortgages are generally funded by
one of a network of mortgage lenders arranged for us by Homebuilders Financial
Network, an independent consultant of the Company. Beazer Mortgage can provide
qualified home buyers numerous financing options, including a wide variety of
conventional, FHA and VA financing programs. In certain situations we seek to
assist our home buyers in obtaining financing from outside mortgage lenders and
in certain limited circumstances, we attempt to minimize potential risks
relating to the availability of customer financing by purchasing mortgage
financing commitments that lock in the availability of funds and interest rates
at specified levels for a certain period of time. Since substantially all home
buyers utilize long-term mortgage financing to purchase a home, adverse economic
conditions, increases in unemployment and high mortgage interest rates may deter
and eliminate a substantial number of potential home buyers from our markets in
the future.

COMPETITION AND MARKET FACTORS

The development and sale of residential properties is highly competitive and
fragmented. We compete for residential sales on the basis of a number of
interrelated factors, including location, reputation, amenities, design, quality
and price, with numerous large and small homebuilders, including some
homebuilders with nationwide operations and greater financial resources and/or
lower costs than us. We also compete for residential sales with individual
resales of existing homes, available rental housing and, to a lesser extent,
resales of condominiums. We believe that our Company compares favorably to other
builders in the markets in which we operate, due primarily to

(i)our experience within our geographic markets and breadth of
product line, which allow us to vary our regional product
offerings to reflect changing market conditions;

(ii)our responsiveness to market conditions, enabling us to
capitalize on the opportunities for advantageous land
acquisitions in desirable locations; and

(iii)our reputation for quality design, construction and service.

The housing industry is cyclical and affected by consumer confidence levels,
prevailing economic conditions generally, and interest rate levels in
particular. A variety of other factors affect the housing industry and demand
for new homes, including the availability of labor and materials and increases
in the costs thereof, changes in costs associated with home ownership such as
increases in property taxes and energy costs, changes in consumer preferences,
demographic trends and the availability of and changes in mortgage financing
programs.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

Substantially all of our land is purchased with entitlements, giving us the
right to obtain building permits upon compliance with specified conditions,
which generally are within our control. Upon compliance with such conditions, we
must seek building permits. The length of time necessary to obtain such permits
and approvals affects the carrying costs of unimproved property acquired for the
purpose of development and construction. In addition, the continued
effectiveness of permits already granted is subject to factors such as changes
in policies, rules and regulations and their interpretation and application.
Several governmental authorities in California have imposed impact fees as a
means of defraying the cost of providing certain governmental services to
developing areas. To date, the governmental approval processes discussed above
have not had a material adverse effect on our development activities, and indeed
all homebuilders in a given market face the same fees and restrictions. There
can be no assurance, however, that these and other restrictions will not
adversely affect us in the future.

We may also be subject to periodic delays or may be precluded entirely from
developing communities due to building moratoriums or "slow-growth" or
"no-growth" initiatives or building permit allocation

ordinances which could be implemented in the future in the states and markets in
which we operate. Substantially all of our land is entitled and, therefore, the
moratoriums generally would only adversely affect us if they arose from health,
safety and welfare issues such as insufficient water or sewage facilities. Local
and state governments also have broad discretion regarding the imposition of
development fees for projects in their jurisdiction. These are normally
established, however, when we receive recorded final maps and building permits.
We are also subject to a variety of local, state and federal statutes,
ordinances, rules and regulations concerning the protection of health and the
environment. These laws may result in delays, cause us to incur substantial
compliance and other costs, and prohibit or severely restrict development in
certain environmentally sensitive regions or areas.

BONDS AND OTHER OBLIGATIONS

We are frequently required, in connection with the development of its
projects, to obtain letters of credit and performance, maintenance and other
bonds in support of our related obligations with respect to such developments.
The amount of such obligations outstanding at any time varies in accordance with
our pending development activities. In the event any such bonds or letters of
credit are drawn upon, we would be obligated to reimburse the issuer of such
bonds or letters of credit. At September 30, 1998, there were approximately
$10.9 million and $68.6 million of outstanding letters of credit and performance
bonds, respectively, for such purposes. We do not believe that any such bonds or
letters of credit are likely to be drawn upon.

EMPLOYEES AND SUBCONTRACTORS

At September 30, 1998, we employed 1,261 persons, of whom 271 were sales and
marketing personnel, 440 were executive, management and administrative
personnel, 465 were involved in construction, 58 were personnel of Beazer
Mortgage and 27 were employed at the Nashville, Tennessee manufacturing
facility. Although none of our employees are covered by collective bargaining
agreements, certain of the subcontractors engaged by us are represented by labor
unions or are subject to collective bargaining arrangements. We believe that our
relations with our employees and subcontractors are good.

ITEM 2. PROPERTIES

We lease approximately 8,900 square feet of office space in Atlanta, Georgia
to house our corporate headquarters. We also lease an aggregate of approximately
182,000 square feet of office space for its operating divisions at various
locations. We own approximately 18,500 square feet of manufacturing space and
6,800 square feet of office space in Nashville, Tennessee.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various legal proceedings, all of which have arisen in
the ordinary course of business and some of which are covered by insurance. In
the opinion of management, none of the claims relating to such proceedings will
have a material adverse effect on the financial condition or results of
operations of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitaion of
proxies or otherwise.

SEPARATE ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT

Unless otherwise indicated, the following executive officers have served in
their current capacity with the Company since 1994, the year of the Company's
initial public offering.

NAME AGE POSITION
- --------------------------------------- --- ------------------------------------------------------------------

Ian J. McCarthy...................... 45 President, Chief Executive Officer and Director
Michael H. Furlow (i)................ 48 Executive Vice President, Chief Operating Officer
David S. Weiss....................... 38 Executive Vice President, Chief Financial Officer and Director
John Skelton......................... 49 Senior Vice President
Peter H. Simons...................... 39 Senior Vice President, Corporate Development

(i) Since October 1997

All officers are elected by the Board of Directors.

There are no family relationships nor arrangements or understandings
pursuant to which any of the officers listed were elected. See pages 16 to 17 of
the Company's Proxy Statement for the Annual Meeting of Shareholders to be held
on February 4, 1999 for a description of employment arrangements with certain
executive officers of the Company.

BUSINESS EXPERIENCE

Refer to pages 4 and 5 of the company's Proxy Statement for the Annual
Meeting of Shareholders to be held on February 4, 1999 for the business
experience of Messrs. Ian J. McCarthy, and David S. Weiss.

MICHAEL H. FURLOW. Mr. Furlow joined the Company in October 1997 as the
Executive Vice President for Operations and since October 1998 has been the
Chief Operating Officer. In this capacity the operating division presidents
report to Mr. Furlow and he is responsible for the performance of those
operating divisions. During the preceding 12 years Mr. Furlow was with Pulte
Home Corporation in various field and corporate roles, most recently as a
Regional President. Mr. Furlow received a Bachelor of Arts degree with honors in
accounting from the University of West Florida and initially worked as a CPA for
Arthur Young & Company.

JOHN SKELTON. Mr. Skelton has served as the Company's Senior Vice President
("SVP"), Operations since March 1994. Mr. Skelton served as Vice President and
Chief Financial Officer of Beazer Homes, Inc. since 1985 and Vice President and
Chief Financial Officer of Beazer Homes Holdings, Inc. since April 1993. During
the period 1977 to 1985, Mr. Skelton served as Finance Director of Leech Homes,
a subsidiary of Leech PLC which was acquired by Beazer PLC in 1985. After
graduating with a Bachelor's degree from Durham University in the United
Kingdom, he was employed by Deloitte & Touche and is a Fellow of the Institute
of Chartered Accountants in England and Wales.

PETER H. SIMONS. Mr. Simons has served as Vice President of Corporate
Development (since October 1998 SVP) since September 1994. The preceding year,
he was Director of Operations for Lokelani Homes in Hawaii. From 1989 to 1993,
Mr. Simons was a Senior Project Manager for Castle & Cooke Properties in Hawaii.
Mr. Simons earned a Bachelor of Arts degree from Yale University and a Masters
in Public and Private Management from the Yale School of Management.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference to the
information set forth under the captions "Quarterly Stock Price Information" and
"Trading Information" located on page 44 and 49, respectively, of the Company's
Annual Report to Shareholders for the year ended September 30, 1998.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is incorporated by reference from page
19 of the Company's Annual Report to Shareholders for the year ended September
30, 1998.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

The information required by this item is incorporated by reference from
pages 20 to 29 of the Company's Annual Report to Shareholders for the year ended
September 30, 1998.

ITEM 7(A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not materially affected by any market risk sensitive
instruments.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated by reference from
pages 31 to 44 of the Company's Annual Report to Shareholders for the year ended
September 30, 1998.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There have been no disagreements between the Company and its accountants on
accounting and financial disclosure matters during the fiscal years ended
September 30, 1998 and 1997.

PART III.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Director information is incorporated by reference from pages 4 to 5 of the
Company's Proxy Statement for the Annual Meeting of Shareholders to be held
February 4, 1999. Information regarding the Company's executive officers is set
forth herein under Part I as a separate item.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference from page
15 of the Company's Proxy Statement for the Annual Meeting of Shareholders to be
held February 4, 1999.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this is incorporated by reference from page 10
of the Company's Proxy Statement for the Annual Meeting of Shareholders to be
held February 4, 1999.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. Financial Statements

The Independent Auditors' Report and the following consolidated financial
statements are incorporated by reference from the Company's Annual Report to
Shareholders for the fiscal year ended September 30, 1998 in Part II, Item 8 of
this report:

Consolidated Statements of Operations for the years ended September 30,
1998, 1997 and 1996.

Consolidated Balance Sheets as of September 30, 1998 and 1997.

Consolidated Statement of Stockholders' Equity for the years ended
September 30, 1998, 1997 and 1996.

Consolidated Statements of Cash Flows for the years ended September 30,
1998, 1997 and 1996

Notes to Consolidated Financial Statements.

2. Financial Statement Schedules

None required

3. Exhibits

PAGE HEREIN OR
EXHIBIT INCORPORATED BY
NUMBER EXHIBIT DESCRIPTION REFERENCE FROM
-------- ----------------------------------------------------------------------------- ----------------

3.1.............. Amended and Restated Certificate of Incorporation of Company. (7)

3.2.............. Amended and Restated Bylaws of the Company (7)

4.1.............. Indenture dated as of March 2, 1994 among the Company, its subsidiaries party (1)
thereto, and U.S. Bank Trust National Association (f/k/a Continental Bank,
National Association), as trustee, relating to the Company's 9% Senior Notes
due 2004 (the "9% Notes").

4.2.............. First Supplemental Indenture (9% Notes) dated June 13, 1995 (13)

4.3.............. Second Supplemental Indenture (9% Notes) dated February 1, 1996 (13)

4.4.............. Third Supplemental Indenture (9% Notes) dated March 18, 1998 (13)

4.5.............. Fourth Supplemental Indenture (9% Notes) dated July 20, 1998 Filed herewith

4.6.............. Form of 9% Senior Note due 2004. (2)

Indenture dated as of March 25, 1998 among the Company, its subsidiaries (13)
party thereto, and US Bank Trust National Association, as trustee, relating
to the Company's 8 7/8% Senior Notes due 2008.

4.7.............. Form of 8 7/8% enior Note due 2008 Note (13)

4.8.............. First Supplemental Indenture (8 7/8% Notes) dated July 20, 1998 Filed herewith

4.9.............. Specimen of Common Stock Certificate. (6)

4.10............. Form of Certificate of Designations for Series A Cumulative Convertible (4)
Exchangeable Preferred Stock, $.01 par value per share (the "Preferred
Stock")

4.11............. Form of Certificate representing shares of the Preferred Stock (4)

4.12............. Form of Indenture between the Company and the First National Bank of Boston, (4)
as trustee, relating to the 8% Convertible Subordinated Debentures due 2005.

PAGE HEREIN OR
EXHIBIT INCORPORATED BY
NUMBER EXHIBIT DESCRIPTION REFERENCE FROM
-------- ----------------------------------------------------------------------------- ----------------

4.13............. Form of 8% Convertible Subordinated Debenture due 2005 (4)

4.14............. Retirement Savings and Investment Plan (the "RSIP"). (5)

4.15............. RSIP Summary Plan Description. (5)

4.16............. Rights Agreement, dated as of June 21, 1996, between the Company and First (8)
Chicago Trust Company of New York, as Rights Agent.

10.1............. Amended 1994 Stock Incentive Plan. (3)

10.2............. Non-Employee Director Stock Option Plan. (3)

10.3............. Asset Purchase Agreement dated as of October 26, 1998 between Beazer Homes (12)
Corp., and Trafalgar House Property, Inc.

10.4-7........... Amended and Restated Employment Agreements dated as of March 31, 1995:

10.4............. Ian J. McCarthy. (9)

10.5............. David S. Weiss. (9)

10.6............. John Skelton. (9)

10.7............. Employment Agreement dated as of January 13, 1998--Michael H. Furlow (13)

10.8-11 Supplemental Employment Agreements dated as of July 17, 1996:

10.8............. Ian J. McCarthy. (10)

10.9............. David S. Weiss. (10)

10.10............ John Skelton. (10)

10.11............ Peter H. Simons. (10)

10.12............ Amended and Restated Credit Agreement dated as of November 3, 1998 between Filed herewith
the Company and First National Bank of Chicago, as Agent, and Comerica Bank
and Guaranty Federal Bank, F.S.B. as Managing Agents

11............... Earnings Per Share Calculations Filed herewith

13............... Annual Report to Shareholders for the year ended September 30, 1998 Filed herewith

21............... Subsidiaries of the Company (13)

23.1............. Consent of Deloitte & Touche LLP, Independent Auditors Filed herewith

27............... Financial Data Schedule Filed herewith

- ------------------------

(1) Incorporated herein by reference to the exhibits to the Company's report on
Form 10-Q for the quarterly period ended March 31, 1994.

(2) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-1 (Registration No. 33-72982) initially
filed on December 15, 1993.

(3) Incorporated herein by reference to the exhibits to the Company's report on
Form 10-K for the year ended September 30, 1994.

(4) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-3 (Registration No. 33-92892) initially
filed on June 15, 1995.

(5) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-8 (Registration No. 33-91904) filed on May
4, 1995.

(6) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-1 (Registration No. 33-72576) initially
filed on December 6, 1993.

(7) Incorporated herein by reference to the exhibits to the Company's report on
Form 8-K filed on May 30, 1996.

(8) Incorporated herein by reference to the exhibits to the Company's report on
Form 8-K filed on June 21, 1996

(9) Incorporated herein by reference to the exhibits to the Company's report on
Form 10-Q for the quarterly period ended March 31, 1995.

(10) Incorporated herein by reference to the exhibits to the Company's report on
Form 10-K for the year ended September 30, 1996.

(11) Incorporated herein by reference to the exhibits to the Company's report on
Form 10-Q for the quarterly period ended June 30, 1997.

(12) Incorporated herein by reference to the exhibits to the Company's report on
Form 8-K/A filed on December 18, 1998.

(13) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-4 (Registration No. 333-51087) filed on
April 27, 1998.

(B) REPORTS ON FORM 8-K

The Company did not file any reports on Form 8-K during the fourth quarter
of the fiscal year ended September 30, 1998.

Reference is made to Item 14(a)3 above. The following is a list of exhibits,
included in Item 14(a)3 above, that are filed concurrently with this report.

4.5......... Fourth Supplemental Indenture (9% Notes) dated July 20, 1998
4.8......... First Supplemental Indenture (8 7/8% Notes) dated July 20, 1998
10.12....... Amended and Restated Credit Agreement dated November 3, 1998 between the
Company and First National Bank of Chicago, as Agent, and Comerica Bank and
Guaranty Federal Bank, F.S.B. as Managing Agents
11.......... Earnings Per Share Calculations
13.......... The Company's Annual Report to Shareholders for the fiscal year ended
September 30, 1998. Except as expressly incorporated by reference in this
report on Form 10-K, such Annual Report is furnished only for the information
of the Securities and Exchange Commission and is not deemed "filed" as part of
this report. The following portions of such Annual Report are incorporated by
reference in the indicated items of this report.

PORTIONS OF THE ANNUAL REPORT FOR THE FISCAL YEAR ENDED ITEM OF THIS
SEPTEMBER 30, 1998 REPORT
-------------------------------------------------------------- --------------
"Trading Information" and "Quarterly Stock Price Information" 5

Selected Financial Data 6
Management's Discussion and Analysis of Financial Condition 7
and
Results of Operations
Consolidated Financial Statements 8

23.1........ Consent of Deloitte & Touche LLP, Independent Auditors.
27.......... Financial Data Schedule

(D) FINANCIAL STATEMENT SCHEDULES

Reference is made to Item 14(a)2 above.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

BEAZER HOMES USA, INC.

By: /s/ IAN J. MCCARTHY
-----------------------------------------
Name: Ian J. McCarthy
Title: President and Chief Executive
Officer
Date: December 23, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

12/23/98 By: /s/ BRIAN C. BEAZER
- ------- -------------------------------------------------------------
Date Brian C. Beazer, Director and Non-Executive Chairman of the
Board

12/23/98 By: /s/ IAN J. MCCARTHY
- ------- -------------------------------------------------------------
Date Ian J. McCarthy, Director, President and Chief Executive
Officer (Principal Executive Officer)

12/23/98 By: /s/ DAVID S. WEISS
- ------- -------------------------------------------------------------
Date David S. Weiss, Director, Executive Vice President and Chief
Financial Officer (Principal Financial Officer)

12/23/98 By: /s/ THOMAS B. HOWARD, JR.
- ------- -------------------------------------------------------------
Date Thomas B. Howard, Jr., Director

12/23/98 By: /s/ GEORGE W. MEFFERD
- ------- -------------------------------------------------------------
Date George W. Mefferd, Director

12/23/98 By: /s/ D.E. MUNDELL
- ------- -------------------------------------------------------------
Date D.E. Mundell, Director

12/23/98 By: /s/ LARRY T. SOLARI
- ------- -------------------------------------------------------------
Date Larry T. Solari, Director

12/23/98 By: /s/ MICHAEL T. RAND
- ------- -------------------------------------------------------------
Date Michael T. Rand, Vice President and Controller
(Principal Accounting Officer)