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Note 22

3 Months Ended

Jan. 31, 2012

Condensed Financial Statements Disclosure [Text Block]

22.  Hovnanian Enterprises, Inc., the parent company (the “Parent”), is the issuer of publicly traded common stock, preferred stock, which is represented by depository shares, and 7.25% Tangible Equity Units. One of its wholly owned subsidiaries, K. Hovnanian Enterprises, Inc. (the “Subsidiary Issuer”), acts as a finance entity that as of January 31, 2012, had issued and outstanding approximately $992.0 million of senior secured notes ($966.4 million, net of discount), $568.2 million senior notes ($565.7 million, net of discount), and $12.2 million senior subordinated amortizing notes (issued as a component of our 7.25% Tangible Equity Units). The senior secured notes, senior notes, and senior subordinated amortizing notes are fully and unconditionally guaranteed by the Parent.

In addition to the Parent, each of the wholly owned subsidiaries of the Parent other than the Subsidiary Issuer (collectively, “Guarantor Subsidiaries”), with the exception of our home mortgage subsidiaries, certain of our title insurance subsidiaries, joint ventures, subsidiaries holding interests in our joint ventures and our foreign subsidiary (collectively, the “Nonguarantor Subsidiaries”), have guaranteed fully and unconditionally, on a joint and several basis, the obligations of the Subsidiary Issuer to pay principal and interest under the registered senior secured notes, senior notes, and senior subordinated amortizing notes.  The 2021 Notes are guaranteed by the Guarantor Subsidiaries and the Secured Group (see Note 11).

All of the senior secured notes, senior notes and senior subordinated amortizing notes have been registered under the Securities Act of 1933, as amended, except the 2021 notes, which are not required to be registered.  The Condensed Consolidating Financial Statements presented below are in respect of our registered notes only and not the 2021 Notes. In lieu of providing separate financial statements for the Guarantor Subsidiaries of our registered senior secured, senior and senior subordinated amortizing rates, we have included the accompanying Condensed Consolidating Financial Statements. Management does not believe that separate financial statements of the Guarantor Subsidiaries of our registered notes are material to users of our Condensed Consolidated Financial Statements. Therefore, separate financial statements and other disclosures concerning such Guarantor Subsidiaries are not presented.

The following Condensed Consolidating Financial Statements present the results of operations, financial position and cash flows of (i) the Parent, (ii) the Subsidiary Issuer, (iii) the Guarantor Subsidiaries, (iv) the Nonguarantor Subsidiaries and (v) the eliminations to arrive at the information for Hovnanian Enterprises, Inc. on a consolidated basis.

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

JANUARY 31, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
ASSETS:
Homebuilding		$	11,133			$	149,320			$	1,060,299			$	204,467			$				$	1,425,219
Financial services											3,942				72,562								76,504
Investments in and amounts due to and from consolidated subsidiaries			(482,732	)			2,153,773				(2,470,750	)			6,742				792,967				-
Total assets		$	(471,599	)		$	2,303,093			$	(1,406,509	)		$	283,771			$	792,967			$	1,501,723
LIABILITIES AND EQUITY:
Homebuilding		$	2,576			$	(158	)		$	316,929			$	13,840			$				$	333,187
Financial services											3,530				59,580								63,110
Notes payable							1,576,498				109				86								1,576,693
Income taxes payable			39,785				-				2,735				-								42,520
Stockholders’ (deficit) equity			(513,960	)			726,753				(1,729,812	)			210,092				792,967				(513,960	)
Non-controlling interest in consolidated joint ventures															173								173
Total liabilities and equity		$	(471,599	)		$	2,303,093			$	(1,406,509	)		$	283,771			$	792,967			$	1,501,723

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

OCTOBER 31, 2011

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
ASSETS:
Homebuilding		$	12,756			$	200,281			$	1,096,594			$	207,443			$				$	1,517,074
Financial services											4,537				80,569								85,106
Investments in and amounts due to and from consolidated subsidiaries			(467,562	)			2,140,349				(2,435,348	)			(9,364	)			771,925				-
Total assets		$	(454,806	)		$	2,340,630			$	(1,334,217	)		$	(278,648	)		$	771,925			$	1,602,180
LIABILITIES AND EQUITY:
Homebuilding		$	2,172			$	(33	)		$	355,191			$	11,276			$				$	368,606
Financial services											4,231				60,015								64,246
Notes payable							1,623,957				144												1,624,101
Income tax payable			39,716								2,113												41,829
Stockholders’ (deficit) equity			(496,694	)			716,706				(1,695,896	)			207,265				771,925				(496,694	)
Non-controlling interest in consolidated joint ventures															92								92
Total liabilities and equity		$	(454,806	)		$	2,340,630			$	(1,334,217	)		$	278,648			$	771,925			$	1,602,180

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JANUARY 31, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	4			$	(30	)		$	263,306			$	869			$	(1,240	)		$	262,909
Financial services											1,299				5,391								6,690
Intercompany charges											(12,352	)			(999	)			13,351				-
Total revenues		$	4			$	(30	)		$	252,253			$	5,261			$	12,111			$	269,599
Expenses:
Homebuilding			1,740				14,621				285,337				(1,335	)			6,296				306,659
Financial services			51								1,226				3,915				(15	)			5,177
Total expenses			1,791				14,621				286,563				2,580				6,281				311,836
Gain on extinguishment of debt							24,698																24,698
Income (loss) from unconsolidated joint ventures											28				(51	)							(23	)
(Loss) income before income taxes			(1,787	)			10,047				(34,282	)			2,630				5,830				(17,562	)
State and federalincome tax (benefit) provision			(4,564	)							5,267												703
Equity in (loss) income of consolidated subsidiaries			15,488																(15,488	)			-
Net income (loss)		$	18,265			$	10,047			$	(39,549	)		$	2,630			$	(9,658	)		$	(18,265	)

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JANUARY 31, 2011

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	4			$	(95	)		$	245,908			$	895			$	(1,239	)		$	245,473
Financial services											1,332				5,762								7,094
Intercompany charges							28,316				(35,458	)			(147	)			7,289				-
Total revenues			4				28,221				211,782				6,510				6,050				252,567
Expenses:
Homebuilding			1,544				38,390				268,974				450				1,310				310,668
Financial services			88								1,242				4,140								5,470
Total expenses			1,632				38,390				270,216				4,590				1,310				316,138
Gain on extinguishment of debt																							-
Loss from unconsolidated joint ventures											(250	)			(742	)							(992	)
(Loss) income before income taxes			(1,628	)			(10,169	)			(58,684	)			1,178				4,740				(64,563	)
State and federal income tax (benefit) provision			(5,881	)							5,460												(421	)
Equity in (loss) income of consolidated subsidiaries			(68,395	)															68,395				-
Net (loss) income		$	(64,142	)		$	(10,169	)		$	(64,144	)		$	1,178			$	73,135			$	(64,142	)

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED JANUARY 31, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities:
Net income (loss)		$	18,265			$	10,047			$	(39,549	)		$	2,630			$	(9,658	)		$	(18,265	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities			(33,435	)			14,424				23,191				(38,695	)			9,658				(24,857	)
Net cash (used in) provided by operating activities			(15,170	)			24,471				(16,358	)			(36,065	)			-				(43,122	)
Net cash (used in) investing activities			-				-				(102	)			(1,170	)			-				(1,272	)
Net cash (used in) provided by financing activities			-				(39,173	)			3,201				(685	)			-				(36,657	)
Intercompany investing and financing activities – net			15,170				(13,424	)			14,360				(16,106	)			-				-
Net (decrease) increase in cash			-				(28,126	)			1,101				(54,026	)			-				(81,051	)
Cash and cash equivalents balance, beginning of period			-				112,122				(4,989	)			143,607				-				250,740
Cash and cash equivalents balance, end of period		$	-			$	83,996			$	(3,888	)		$	89,581			$	-			$	169,689

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED JANUARY 31, 2011

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities:
Net (loss) income		$	(64,142	)		$	(10,169	)		$	(64,144	)		$	1,178			$	73,135			$	(64,142	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities			15,725				14,051				91,484				18,494				(73,135	)			66,619
Net cash (used in) provided by operating activities			(48,417	)			3,882				27,340				19,672				-				2,477
Net cash (used in) investing activities											(233	)			(1,355	)							(1,588	)
Net cash (used in) provided by financing activities											(2,122	)			(49,571	)							(51,693	)
Intercompany investing and financing activities – net			48,417				(38,227	)			(23,904	)			13,714								-
Net (decrease) increase in cash			-				(34,345	)			1,081				(17,540	)			-				(50,804	)
Cash and cash equivalents balance, beginning of period			10				212,370				(12,812	)			167,612				-				367,180
Cash and cash equivalents balance, end of period		$	10			$	178,025			$	(11,731	)		$	150,072			$	-			$	316,376

X

- Definition

Text block that encapsulates the detailed table comprising the condensed financial statements (balance sheet, income statement and statement of cash flows), normally using the registrant (parent) as the sole domain member. If condensed consolidating financial statements are being presented, other domain members (in addition to parent) such as guarantor subsidiaries, non-guarantor subsidiaries, and the consolidation eliminations, will be included in order that the respective monetary amounts for each of the domains will aggregate to the respective amounts on the consolidated financial statements. The line items are the various captions used to compile the condensed financial statements. Using extensions, most, if not all, of the elements representing condensed financial statement captions will be the same as those used for the consolidated financial statements captions.

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No definition available.

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