Company Quick10K Filing
Beazer Homes
Price14.83 EPS-3
Shares31 P/E-6
MCap459 P/FCF4
Net Debt-123 EBIT-71
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-30
10-Q 2020-03-31 Filed 2020-04-30
10-Q 2019-12-31 Filed 2020-01-30
10-K 2019-09-30 Filed 2019-11-13
10-Q 2019-06-30 Filed 2019-08-01
10-Q 2019-03-31 Filed 2019-05-02
10-Q 2018-12-31 Filed 2019-02-04
10-K 2018-09-30 Filed 2018-11-13
10-Q 2018-06-30 Filed 2018-07-26
10-Q 2018-03-31 Filed 2018-05-02
10-Q 2017-12-31 Filed 2018-02-06
10-K 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-01
10-Q 2017-03-31 Filed 2017-05-04
10-Q 2016-12-31 Filed 2017-02-09
10-K 2016-09-30 Filed 2016-11-15
10-Q 2016-06-30 Filed 2016-07-28
10-Q 2016-03-31 Filed 2016-04-28
10-Q 2015-12-31 Filed 2016-02-04
10-K 2015-09-30 Filed 2015-11-10
10-Q 2015-06-30 Filed 2015-08-04
10-Q 2015-03-31 Filed 2015-04-30
10-Q 2014-12-31 Filed 2015-01-30
10-K 2014-09-30 Filed 2014-11-13
10-Q 2014-06-30 Filed 2014-07-31
10-Q 2014-03-31 Filed 2014-05-01
10-Q 2013-12-31 Filed 2014-01-31
10-K 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-01
10-Q 2013-03-31 Filed 2013-05-02
10-Q 2012-12-31 Filed 2013-01-28
10-K 2012-09-30 Filed 2012-11-13
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-05-02
10-Q 2011-12-31 Filed 2012-02-02
10-K 2011-09-30 Filed 2011-11-15
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-Q 2010-12-31 Filed 2011-02-08
10-K 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-05
10-Q 2010-03-31 Filed 2010-05-03
10-Q 2009-12-31 Filed 2010-02-05
8-K 2020-07-30 Earnings, Officers, Exhibits
8-K 2020-04-30
8-K 2020-04-06
8-K 2020-02-05
8-K 2020-01-30
8-K 2019-11-13
8-K 2019-09-24
8-K 2019-09-18
8-K 2019-09-09
8-K 2019-08-29
8-K 2019-08-07
8-K 2019-08-01
8-K 2019-05-30
8-K 2019-05-02
8-K 2019-02-06
8-K 2019-02-04
8-K 2018-11-15
8-K 2018-11-13
8-K 2018-10-01
8-K 2018-10-01
8-K 2018-09-25
8-K 2018-09-18
8-K 2018-07-26
8-K 2018-07-13
8-K 2018-07-09
8-K 2018-05-02
8-K 2018-02-26
8-K 2018-02-06
8-K 2018-02-01
8-K 2018-01-08

BZH 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Item 5. Other Information
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-22 bzh-63020ex22.htm
EX-31.1 bzh-63020ex311.htm
EX-31.2 bzh-63020ex312.htm
EX-32.1 bzh-63020ex321.htm
EX-32.2 bzh-63020ex322.htm

Beazer Homes Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin

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For the Quarterly Period Ended June 30, 2020
Commission File Number 001-12822
(Exact name of registrant as specified in its charter)
Delaware 58-2086934
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1000 Abernathy Road, Suite 260, Atlanta, Georgia
(Address of principal executive offices) (Zip Code)
(770) 829-3700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valueBZHNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 the filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES      NO  
Number of shares of common stock outstanding as of July 27, 2020: 31,020,703

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Item 1. Financial Statements

in thousands (except share and per share data)June 30,
September 30,
Cash and cash equivalents$152,266  $106,741  
Restricted cash13,086  16,053  
Accounts receivable (net of allowance of $298 and $304, respectively)
17,846  26,395  
Income tax receivable9,224  4,935  
Owned inventory1,511,560  1,504,248  
Investments in unconsolidated entities4,044  3,962  
Deferred tax assets, net233,986  246,957  
Property and equipment, net24,078  27,421  
Operating lease right-of-use assets14,060    
Goodwill11,376  11,376  
Other assets10,637  9,556  
Total assets$2,002,163  $1,957,644  
Trade accounts payable$131,200  $131,152  
Operating lease liabilities16,292    
Other liabilities110,630  109,429  
Total debt (net of debt issuance costs of $11,450 and $12,470, respectively)
1,179,725  1,178,309  
Total liabilities1,437,847  1,418,890  
Stockholders’ equity:
Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued)
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,020,066 issued and outstanding and 30,933,110 issued and outstanding, respectively)
31  31  
Paid-in capital851,289  854,275  
Accumulated deficit(287,004) (315,552) 
Total stockholders’ equity564,316  538,754  
Total liabilities and stockholders’ equity$2,002,163  $1,957,644  
See accompanying notes to condensed consolidated financial statements.


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Three Months EndedNine Months Ended
 June 30,June 30,
 in thousands (except per share data)2020201920202019
Total revenue$533,112  $482,738  $1,440,329  $1,306,038  
Home construction and land sales expenses441,788  410,974  1,207,023  1,107,681  
Inventory impairments and abandonments2,266    2,266  148,618  
Gross profit89,058  71,764  231,040  49,739  
Commissions20,851  18,230  55,660  49,965  
General and administrative expenses41,276  40,749  121,025  116,763  
Depreciation and amortization3,780  3,242  10,834  8,912  
Operating income (loss)23,151  9,543  43,521  (125,901) 
Equity in income of unconsolidated entities4  299  138  316  
Gain on extinguishment of debt  358    574  
Other expense, net(2,904) (755) (6,030) (1,134) 
Income (loss) from continuing operations before income taxes20,251  9,445  37,629  (126,145) 
Expense (benefit) from income taxes4,981  (2,180) 8,940  (44,260) 
Income (loss) from continuing operations15,270  11,625  28,689  (81,885) 
Loss from discontinued operations, net of tax(82) (23) (141) (64) 
Net income (loss)$15,188  $11,602  $28,548  $(81,949) 
Weighted average number of shares:
Basic29,597  30,250  29,738  30,926  
Diluted29,674  30,489  30,014  30,926  
Basic income (loss) per share:
Continuing operations$0.51  $0.38  $0.96  $(2.65) 
Discontinued operations        
Total$0.51  $0.38  $0.96  $(2.65) 
Diluted income (loss) per share:
Continuing operations$0.51  $0.38  $0.95  $(2.65) 
Discontinued operations        
Total$0.51  $0.38  $0.95  $(2.65) 
See accompanying notes to condensed consolidated financial statements.


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Three Months Ended June 30, 2020
Common StockPaid-in CapitalAccumulated Deficit
in thousandsSharesAmountTotal
Balance as of March 31, 202031,020  $31  $849,643  $(302,192) $547,482  
Net income and comprehensive income—  —  —  15,188  15,188  
Stock-based compensation expense—  —  1,659  —  1,659  
Shares issued under employee stock plans, net7  —  —  —  —  
Forfeiture of restricted stock(6) —  —  —  —  
Common stock redeemed for tax liability(1) —  (13) —  (13) 
Balance as of June 30, 202031,020  $31  $851,289  $(287,004) $564,316  

Nine Months Ended June 30, 2020
Common StockPaid-in CapitalAccumulated Deficit
in thousandsSharesAmountTotal
Balance as of September 30, 201930,933  $31  $854,275  $(315,552) $538,754  
Net income and comprehensive income—  —  —  28,548  28,548  
Stock-based compensation expense—  —  4,869  —  4,869  
Exercises of stock options50  —  204  —  204  
Shares issued under employee stock plans, net588  —  —  —  —  
Forfeiture and other settlements of restricted stock(17) —  (2,058) —  (2,058) 
Common stock redeemed for tax liability(172) —  (2,674) —  (2,674) 
Share repurchases(362) —  (3,327) —  (3,327) 
Balance as of June 30, 202031,020  $31  $851,289  $(287,004) $564,316  
See accompanying notes to condensed consolidated financial statements.

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Three Months Ended June 30, 2019
Common StockPaid-in CapitalAccumulated Deficit
in thousandsSharesAmountTotal
Balance as of March 31, 201932,044  $32  $858,709  $(329,583) $529,158  
Net income and comprehensive income—  —  —  11,602  11,602  
Stock-based compensation expense—  —  3,699  —  3,699  
Shares issued under employee stock plans, net4  —  —  —  —  
Forfeiture of restricted stock(6) —  —  —  —  
Common stock redeemed for tax liability  —  (3) —  (3) 
Share repurchases(994) (1) (10,619) —  (10,620) 
Balance as of June 30, 201931,048  $31  $851,786  $(317,981) $533,836  

Nine Months Ended June 30, 2019
Common StockPaid-in CapitalAccumulated Deficit
in thousandsSharesAmountTotal
Balance as of September 30, 201833,522  $34  $880,025  $(236,032) $644,027  
Net loss and comprehensive loss—  —  —  (81,949) (81,949) 
Stock-based compensation expense—  —  7,993  —  7,993  
Exercises of stock options27  —  278  —  278  
Shares issued under employee stock plans, net914  —  —  —  —  
Forfeiture of restricted stock(36) —  —  —  —  
Common stock redeemed for tax liability(179) —  (1,889) —  (1,889) 
Share repurchases(3,200) (3) (34,621) —  (34,624) 
Balance as of June 30, 201931,048  $31  $851,786  $(317,981) $533,836  
See accompanying notes to condensed consolidated financial statements.


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Nine Months Ended
 June 30,
in thousands20202019
Cash flows from operating activities:
Net income (loss)$28,548  $(81,949) 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization10,834  8,912  
Stock-based compensation expense4,869  7,993  
Inventory impairments and abandonments2,266  148,618  
Deferred and other income tax expense (benefit) 8,900  (44,758) 
Gain on sale of fixed assets(195) (142) 
Change in allowance for doubtful accounts(6) (20) 
Equity in income of unconsolidated entities(138) (315) 
Cash distributions of income from unconsolidated entities56  409  
Loss (gain) on extinguishment of debt, net  (574) 
Changes in operating assets and liabilities:
Decrease in accounts receivable8,555  4,380  
Decrease in income tax receivable315    
Increase in inventory(6,616) (156,472) 
Increase in other assets(1,377) (776) 
Increase in trade accounts payable48  26,009  
Increase (decrease) in other liabilities2,897  (5,520) 
Net cash provided by (used in) operating activities58,956  (94,205) 
Cash flows from investing activities:
Capital expenditures(7,510) (16,365) 
Proceeds from sale of fixed assets214  162  
Acquisition, net of cash acquired  (4,088) 
Net cash used in investing activities(7,296) (20,291) 
Cash flows from financing activities:
Repayment of debt(1,150) (22,333) 
Repayment of borrowings from credit facility(345,000) (235,000) 
Borrowings from credit facility345,000  340,000  
Debt issuance costs(97) (400) 
Repurchase of common stock(3,327) (34,624) 
Tax payments for stock-based compensation awards(2,674) (1,889) 
Stock option exercises and other financing activities(1,854) 278  
Net cash (used in) provided by financing activities(9,102) 46,032  
Net increase (decrease) in cash, cash equivalents, and restricted cash42,558  (68,464) 
Cash, cash equivalents, and restricted cash at beginning of period122,794  153,248  
Cash, cash equivalents, and restricted cash at end of period$165,352  $84,784  
See accompanying notes to condensed consolidated financial statements.

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(1) Description of Business
Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” and the “Company”) is a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States: the West, East, and Southeast.
Our homes are designed to appeal to homeowners at different price points across various demographic segments and are generally offered for sale in advance of their construction. Our objective is to provide our customers with homes that incorporate exceptional value and quality, while seeking to maximize our return on invested capital over the course of a housing cycle.
For an additional description of our business, refer to Item 1 within our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (2019 Annual Report).
(2) Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2019 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of the Company's consolidated operations presented herein for the three and nine months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors, such as the effects of the coronavirus (“COVID-19”) pandemic and its influence on our future results.
Basis of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net income (loss) is equivalent to our comprehensive income (loss), so we have not presented a separate statement of comprehensive income (loss).
In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 16 for a further discussion of our discontinued operations).
Our fiscal year 2020 began on October 1, 2019 and ends on September 30, 2020. Our fiscal year 2019 began on October 1, 2018 and ended on September 30, 2019.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.

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Share Repurchase Program
During the first quarter of fiscal 2019, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. As part of this program, the Company repurchased common stock during fiscal 2019 through open market transactions, 10b5-1 plans, and accelerated share repurchase (ASR) agreements. All shares have been retired upon repurchase during fiscal 2019. The aggregate reduction to stockholders’ equity related to share repurchases during the fiscal year ended September 30, 2019 was $34.6 million.
The Company repurchased 362 thousand shares of its common stock for $3.3 million at an average price per share of $9.20 in the first half of fiscal 2020 through open market transactions and 10b5-1 plans. The Company repurchased 2.2 million shares of its common stock for $24.0 million at an average price per share of $10.89 during the six months ended March 31, 2019. All shares have been retired upon repurchase.
No share repurchases were made during the three months ended June 30, 2020. As of June 30, 2020, the remaining availability of the share repurchase program was $12.0 million. The Company does not intend to make additional share repurchases under the program for the remainder of the current fiscal year in light of the COVID-19 pandemic and because of restrictions placed on share repurchases under the Eighth Amendment to the Facility (see Note 7 for further discussion).
Inventory Valuation
Inventory assets are assessed for recoverability no less than quarterly in accordance with the policies described in Notes 2 and 5 to the audited consolidated financial statements within our 2019 Annual Report. Homebuilding inventories that are accounted for as held for development (projects in progress) include land and home construction assets grouped together as communities. Homebuilding inventories held for development are stated at cost (including direct construction costs, capitalized indirect costs, capitalized interest, and real estate taxes) unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. For communities that have been idled (land held for future development), all applicable interest and real estate taxes are expensed as incurred, and the inventory is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. We record land held for sale at the lower of the carrying value or fair value less costs to sell.
Revenue Recognition
We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the following five-step process specified in Accounting Standards Codification Topic 606.
Identify the contract(s) with a customer
Identify the performance obligations
Determine the transaction price
Allocate the transaction price
Recognize revenue when the performance obligations are met
The following table presents our total revenue disaggregated by revenue stream:
Three Months EndedNine Months Ended
June 30,June 30,
in thousands2020201920202019
Homebuilding revenue$532,465  $482,316  $1,437,850  $1,304,243  
Land sales and other revenue647  422  2,479  1,795  
Total revenue (a)
$533,112  $482,738  $1,440,329  $1,306,038  
(a) Please see Note 15 for total revenue disaggregated by reportable segment.
Homebuilding revenue
Homebuilding revenue is reported net of any discounts and incentives and is generally recognized when title to and possession of the home are transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $16.3 million and $11.5 million as of June 30, 2020 and September 30, 2019, respectively. Of the customer liabilities outstanding as of September 30, 2019, $0.6

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million and $10.6 million were recognized in revenue during the three and nine months ended June 30, 2020, respectively, upon closing of the related homes.
Land sales and other revenue
Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. In some periods, we also have other revenue related to broker fees as well as fees received for general contractor services that we perform on behalf of third parties. Revenue for broker and general contractor services are typically immaterial and are generally recognized as performance obligations are satisfied.
Recent Accounting Pronouncements
Leases. On October 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases (ASU 2016-02) and related amendments, collectively codified in ASC 842, Leases (ASC 842). ASC 842 requires lessees to record most leases on their balance sheets by recognizing a right-of-use asset, representing the right to use the identified asset during the lease term, and a corresponding lease liability, representing the present value of the lease payments over the lease term. Lessor accounting will be largely similar to that under the previous accounting rules. ASC 842 also requires significantly enhanced disclosures around an entity's leases and the related accounting. As part of our adoption of ASC 842, we applied a modified retrospective approach, whereby prior year financial statements were not recast. As a result, our consolidated financial statements as of and for the year ending September 30, 2019 were not restated and continues to be reported under the previous lease standard (ASC 840) and is therefore not comparative. We also elected the package of transition practical expedients, which allowed us to not reassess (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) the initial direct costs for any existing leases. In addition, we elected the practical expedient that allows lessees to account for lease and non-lease components together as a single component for all leases. Upon adoption of ASC 842, we recorded net operating lease right-of-use (ROU) assets of $13.9 million and operating lease liabilities of $16.0 million. Existing prepaid rent and accrued rent were recorded as an offset to the gross operating lease ROU assets. The adoption of ASC 842 did not have any impact on our retained earnings. See Note 8 for additional discussion of our operating leases.
Fair Value Measurements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework (ASU 2018-13). The updated guidance improves the disclosure requirements for fair value measurements. The updated guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted for any removed or modified disclosures. We are currently assessing the impact of adopting the updated provisions.
Internal-Use Software. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance will be effective for public companies for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company early adopted this standard as of April 1, 2020 on a prospective basis. The adoption of this standard had no material impact on our consolidated financial statements and related disclosure.
Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This guidance is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures.

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(3) Supplemental Cash Flow Information
The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:
Nine Months Ended
 June 30,
in thousands20202019
Supplemental disclosure of non-cash activity:
Beginning operating lease right-of-use asset (ASC 842 adoption)$13,895  $—  
Beginning operating lease liability (ASC 842 adoption)16,028  —  
Supplemental disclosure of cash activity:
Interest payments$60,678  $64,648  
Income tax payments2  568  
Tax refunds received315  12  
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents$152,266  $68,491  
Restricted cash13,086  16,293  
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows$165,352  $84,784  

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(4) Investments in Unconsolidated Entities
Unconsolidated Entities
As of June 30, 2020, the Company participated in certain joint ventures and had investments in unconsolidated entities in which it had less than a controlling interest. The following table presents the Company's investment in these unconsolidated entities as well as the total equity and outstanding borrowings of these unconsolidated entities as of June 30, 2020 and September 30, 2019:
in thousandsJune 30, 2020September 30, 2019
Investment in unconsolidated entities$4,044  $3,962  
Total equity of unconsolidated entities5,734  9,969  
Total outstanding borrowings of unconsolidated entities15,556  12,658  
Equity in income from unconsolidated entity activities included in income from continuing operations is as follows for the periods presented:
Three Months EndedNine Months Ended
June 30,June 30,
in thousands2020201920202019
Equity in income of unconsolidated entities$4  $299  $138  $316  
For the three and nine months ended June 30, 2020 and 2019, there were no impairments related to investments in unconsolidated entities.
Historically, the Company's joint ventures typically obtained secured acquisition, development, and construction financing. In addition, the Company and its joint venture partners provided varying levels of guarantees of debt and other debt-related obligations for these unconsolidated entities. However, as of June 30, 2020 and September 30, 2019, the Company had no outstanding guarantees or other debt-related obligations related to our investments in unconsolidated entities.
The Company and its joint venture partners generally provide unsecured environmental indemnities to land development joint venture project lenders. These indemnities obligate the Company to reimburse the project lenders for claims related to environmental matters for which they are held responsible. During the three and nine months ended June 30, 2020 and 2019, the Company was not required to make any payments related to environmental indemnities.
In assessing the need to record a liability for these guarantees, the Company considers its historical experience in being required to perform under the guarantees, the fair value of the collateral underlying these guarantees, and the financial condition of the applicable unconsolidated entities. In addition, the fair value of the collateral of unconsolidated entities is monitored to ensure that the related borrowings do not exceed the specified percentage of the value of the property securing the borrowings. As of June 30, 2020, no liability was recorded for the contingent aspects of any guarantees that were determined to be reasonably possible but not probable.

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(5) Inventory
The components of our owned inventory are as follows as of June 30, 2020 and September 30, 2019:
in thousandsJune 30, 2020September 30, 2019
Homes under construction$607,731  $507,542  
Development projects in progress647,583  738,201  
Land held for future development28,531  28,531  
Land held for sale16,863  12,662  
Capitalized interest132,096  136,565  
Model homes78,756  80,747  
Total owned inventory$1,511,560  $1,504,248  
Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including the cost of the underlying lot. We had 183 (with a cost of $