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Beazer Homes USA Inc. Message Board

  • slamjammer slamjammer Oct 11, 2007 9:40 AM Flag

    $40 million in losses plus $15 million fine

    How many times have I said it....Beazer simply cannot master accounting 101.

    Now they are compelled to REVERSE a total of $40 million in revenue from previous periods, plus INDEMNIFY HUD in an amount up to $15.....PLUS it may be liable for FRAUD and subject to CIVIL ACTION. NO AMOUNT WAS GIVEN FOR THESE POTENTIAL LIABILITIES, but clearly it will be several millions more.

    This stock is worth $5......MAYBE.

    See below:

    Beazer said it may be liable for losses suffered by the mortgage buyer, or HUD, which insured the loans, apparently based on false information. Beazer said it may be liable for fraud and civil action.

    The company intends to negotiate a settlement with regulatory authorities, which it estimates could range from $8 million to $15 million, based on similar past cases.

    Beazer won't be able to detail the amounts of the charges until the audit, which started in April, is complete. The restatement will not change the company's cash position.

    In a separate matter, Beazer said the inquiry uncovered improper accounting for land development costs. The company plans to fix that in the restatements, which will boost pretax earnings by $25 million in periods before 2006, but lower pretax income by $20 million in last year's statement.

    The inquiry also found the company improperly accounted for sale-and-leasback transactions for model homes. The result is that certain revenue was booked too soon, which inflated pretax income in the first six months of 2007 by $20 million.

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