XML 42 R30.htm IDEA: XBRL DOCUMENT v2.4.0.6
Note 23
 3 Months Ended
Jan. 31, 2013
Condensed Financial Statements Disclosure [Text Block]
23.  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, 2013, had issued and outstanding approximately $992.0 million of senior secured notes ($977.7 million, net of discount), $460.6 million senior notes ($458.9 million, net of discount), $23.1 million senior amortizing notes and $63.9 million senior exchangeable notes (issued as components of our 6.0% Exchangeable Note Units) and $5.2 million senior subordinated amortizing notes (issued as a component of our 7.25% Tangible Equity Units). The senior secured notes, senior notes, senior amortizing notes, senior exchangeable 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 senior secured notes (other than the 2021 Notes), senior notes, senior exchangeable notes, senior amortizing notes and senior subordinated amortizing notes.  The 2021 Notes are guaranteed by the Guarantor Subsidiaries and the members of the Secured Group (see Note 11).

The senior notes, senior amortizing notes, senior exchangeable notes and senior subordinated amortizing notes have been registered under the Securities Act of 1933, as amended. The 2020 Secured Notes (see Note 11) and the 2021 Notes are not, pursuant to the indentures under which such notes were issued, required to be registered.  The Condensed Consolidating Financial Statements presented below are in respect of our registered notes only and not the 2020 Secured Notes or the 2021 Notes (however, the Guarantor Subsidiaries for the 2020 Secured Notes are the same as those represented by the accompanying Condensed Consolidating Financial Statements). In lieu of providing separate financial statements for the Guarantor Subsidiaries of our registered notes, we have included the accompanying Condensed Consolidating 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, 2013

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
ASSETS:
                                   
Homebuilding
 
$
5,838
   
$
243,226
   
$
953,013
   
$
283,438
   
$
   
$
1,485,515
 
Financial services
                   
8,179
     
83,995
           
92,174
 
Income taxes receivable
   
(30,826
)
   
 
     
33,447
                     
2,621
 
Investment in consolidated subsidiaries
   
25
     
15,311
     
87,207
             
(102,543
)
       
Total assets
 
$
(24,963
)
 
$
258,537
   
$
1,081,846
   
$
367,433
   
$
(102,543
)
 
$
1,580,310
 
                                                 
LIABILITIES AND EQUITY:
                                               
Homebuilding
 
$
1,615
   
$
8
   
$
367,470
   
$
62,442
   
$
     
$
431,535
 
Financial services
                   
7,988
     
64,872
             
72,860
 
Notes payable
           
1,556,445
     
3
     
700
             
1,557,148
 
Intercompany
   
454,888
     
(1,162,090
)
   
722,934
     
(15,732
)
           
-
 
Stockholders’ (deficit) equity
   
(481,466
)
   
(135,826
)
   
(16,549
)
   
254,918
     
(102,543
)
   
(481,466
)
Non-controlling interest in consolidated joint ventures
                           
233
             
233
 
Total liabilities and equity
 
$
(24,963
)
 
$
258,537
   
$
1,081,846
   
$
367,433
   
$
(102,543
)
 
$
1,580,310
 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

OCTOBER 31, 2012

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
ASSETS:
                                   
Homebuilding
 
$
6,155
   
$
259,339
   
$
976,836
   
$
277,286
   
$
   
$
1,519,616
 
Financial services
                   
23,669
     
140,965
           
164,634
 
Investments in consolidated subsidiaries
   
25
     
15,311
     
70,067
             
(85,403
) 
   
-
 
Total assets
 
$
6,180
   
$
274,650
   
$
1,070,572
   
$
418,251
   
$
(85,403
) 
 
$
1,684,250
 
                                                 
LIABILITIES AND EQUITY:
                                               
Homebuilding
 
$
1,671
   
$
125
   
$
391,628
   
$
61,800
   
$
     
$
455,224
 
Financial services
                   
23,070
     
122,024
             
145,094
 
Notes payable
           
1,561,635
     
271
     
489
             
1,562,395
 
Income tax payable
   
40,551
             
(33,669
) 
                   
6,882
 
Intercompany
   
449,533
     
(1,930,998
)
   
1,494,224
     
(12,759
) 
           
-
 
Stockholders’ (deficit) equity
   
(485,575
)
   
643,888
     
(804,952
)
   
246,467
     
(85,403
) 
   
(485,575
)
Non-controlling interest in consolidated joint ventures
                           
230
             
230
 
Total liabilities and equity
 
$
6,180
   
$
274,650
   
$
1,070,572
   
$
418,251
   
$
(85,403
) 
 
$
1,684,250
 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JANUARY 31, 2013

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                   
Homebuilding
 
$
2
   
$
(45
)
 
$
299,015
   
$
48,827
   
$
(1,247
)
 
$
346,552
 
Financial services
                   
2,077
     
9,582
             
11,659
 
Intercompany charges
           
20,200
     
(25,321
)
   
(874
)
   
5,995
     
-
 
Total revenues
 
 
2
   
 
20,155
   
 
275,771
   
 
57,535
   
 
4,748
   
 
358,211
 
                                                 
Expenses:
                                               
Homebuilding
   
348
     
29,861
     
297,770
     
43,413
     
2,482
     
373,874
 
Financial services
   
4
             
1,842
     
5,582
             
7,428
 
Total expenses
   
352
     
29,861
     
299,612
     
48,995
     
2,482
     
381,302
 
(Loss) gain on extinguishment of debt
           
(770,009
)
   
770,009
                     
-
 
Income (loss) from unconsolidated joint ventures
                   
2,382
     
(93
)
           
2,289
 
(Loss) income before income taxes
   
(350
)
   
(779,715
)
   
748,550
     
8,447
     
2,266
     
(20,802
)
State and federal income tax (benefit) provision
   
(14,361
)
           
4,867
                     
(9,494
)
Equity in (loss) income of consolidated subsidiaries
   
(25,319
)
                           
25,319
     
-
 
Net (loss) income
 
$
(11,308
)
 
$
(779,715
)
 
$
743,683
   
$
8,447
   
$
27,585
   
$
(11,308
)

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 federal income tax (benefit) provision
   
(4,564
)
           
5,267
                     
703
 
Equity in income (loss) 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 CASH FLOWS

THREE MONTHS ENDED JANUARY 31, 2013

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Cash flows from operating activities:
                                   
Net (loss) income
 
$
(11,308
)
 
$
(779,715
)
 
$
743,683
   
$
8,447
   
$
27,585
   
$
(11,308
)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
   
5,954
     
(1,629
)
   
8,947
     
31,396
     
(27,585
)
   
17,083
 
Net cash (used in) provided by operating activities
   
(5,354
)
   
(781,344
)
   
752,630
     
39,843
     
 
     
5,775
 
Net cash provided by investing activities
   
 
     
259
     
5,722
     
3,734
     
 
     
9,715
 
Net cash (used in) provided by financing activities
   
 
     
(1,200
)
   
9,225
     
(58,594
)
   
 
     
(50,569
)
Intercompany investing and financing activities – net
   
5,354
     
768,909
     
(771,290
)
   
(2,973
)
   
 
     
-
 
Net decrease in cash
   
 
     
(13,376
)
   
(3,713
)
   
(17,990
)
   
 
     
(35,079
)
Cash and cash equivalents balance, beginning of period
   
 
     
197,097
     
(2,017
)
   
78,152
     
 
     
273,232
 
Cash and cash equivalents balance, end of period
 
$
-
   
$
183,721
   
$
(5,730
)
 
$
60,162
   
$
-
   
$
238,153
 

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
)
   
 
     
-
 
N Net (decrease) increase in cash
   
 
     
(28,126
)
   
1,101
     
(54,026
)
   
 
     
(81,051
)
C 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