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Note 23

6 Months Ended

Apr. 30, 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 April 30, 2013, had issued and outstanding approximately $992.0 million of senior secured notes ($978.0 million, net of discount), $460.6 million senior notes ($459.0 million, net of discount), $23.1 million senior amortizing notes and $64.9 million senior exchangeable notes (issued as components of our 6.0% Exchangeable Note Units) and $4.2 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 Guarantor Subsidiaries are directly or indirectly 100% owned subsidiaries of the Parent. 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 and the 2021 Notes (see Note 11) 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

APRIL 30, 2013

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
ASSETS:
Homebuilding		$				$	241,996			$	968,307			$	294,301			$				$	1,504,604
Financial services											13,646				99,154								112,800
Income taxes (payable) receivable			(31,795	)							33,278												1,483
Investments in and amounts due to and from consolidated subsidiaries			(104,989	)			(8,930	)			268,438								(154,519	)			-
Total assets		$	(136,784	)		$	233,066			$	1,283,669			$	393,455			$	(154,519	)		$	1,618,887
LIABILITIES AND EQUITY:
Homebuilding		$	1,931			$	123			$	379,450			$	63,022			$				$	444,526
Financial services											13,588				80,080								93,668
Notes payable							1,558,066				819				328								1,559,213
Intercompany			340,125				(1,155,371	)			855,327				(18,733	)			(21,348	)			-
Stockholders’ (deficit) equity			(478,840	)			(169,752	)			34,485				268,438				(133,171	)			(478,840	)
Non-controlling interest in consolidated joint ventures															320								320
Total liabilities and equity		$	(136,784	)		$	233,066			$	1,283,669			$	393,455			$	(154,519	)		$	1,618,887

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			(80,674	)			13,790				246,467								(179,583	)			-
Total assets		$	(74,519	)		$	273,129			$	1,246,972			$	418,251			$	(179,583	)		$	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 taxes payable (receivable)			40,551								(33,669	)											6,882
Intercompany			368,834				(1,930,998	)			1,589,502				(12,759	)			(14,579	)			-
Stockholders’ (deficit) equity			(485,575	)			642,367				(723,830	)			246,467				(165,004	)			(485,575	)
Non-controlling interest in consolidated joint ventures															230								230
Total liabilities and equity		$	(74,519	)		$	273,129			$	1,246,972			$	418,251			$	(179,583	)		$	1,684,250

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED APRIL 30, 2013

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	1			$	(54	)		$	362,496			$	51,121			$	(1,248	)		$	412,316
Financial services											2,586				8,096								10,682
Intercompany charges							20,207				(25,013	)			(877	)			5,683				-
Total revenues			1				20,153				340,069				58,340				4,435				422,998
Expenses:
Homebuilding			2,396				29,838				345,306				40,482				(69	)			417,953
Financial services			5								1,848				5,284								7,137
Total expenses			2,401				29,838				347,154				45,766				(69	)			425,090
(Loss) income from unconsolidated joint ventures											(123	)			950								827
(Loss) income before income taxes			(2,400	)			(9,685	)			(7,208	)			13,524				4,504				(1,265	)
State and federal income tax (benefit) provision			(2,714	)							131												(2,583	)
Equity in income (loss) of consolidated subsidiaries			1,004				(11,601	)			13,524								(2,927	)			-
Net income (loss)		$	1,318			$	(21,286	)		$	6,185			$	13,524			$	1,577			$	1,318

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED APRIL 30, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$				$	(75	)		$	314,161			$	20,337			$	(1,238	)		$	333,185
Financial services											1,696				6,817								8,513
Intercompany charges							23,949				(18,779	)			(2,449	)			(2,721	)			-
Total revenues			-				23,874				297,078				24,705				(3,959	)			341,698
Expenses:
Homebuilding			2,435				9,456				316,409				15,910				18,321				362,531
Financial services			29								1,335				3,995				4				5,363
Total expenses			2,464				9,456				317,744				19,905				18,325				367,894
Gain on extinguishment of debt							27,039																27,039
Income from unconsolidated joint ventures											462				1,033								1,495
(Loss) income before income taxes			(2,464	)			41,457				(20,204	)			5,833				(22,284	)			2,338
State and federal income tax (benefit) provision			(4,104	)							4,640												536
Equity in income (loss) of consolidated subsidiaries			162				33,834				5,833								(39,829	)			-
Net income (loss)		$	1,802			$	75,291			$	(19,011	)		$	5,833			$	(62,113	)		$	1,802

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	3			$	(99	)		$	661,511			$	99,948			$	(2,495	)		$	758,868
Financial services											4,663				17,678								22,341
Intercompany charges							40,407				(50,334	)			(1,751	)			11,678				-
Total revenues			3				40,308				615,840				115,875				9,183				781,209
Expenses:
Homebuilding			2,744				59,699				643,076				83,895				2,413				791,827
Financial services			9								3,690				10,866								14,565
Total expenses			2,753				59,699				646,766				94,761				2,413				806,392
(Loss) gain on extinguishment of debt							(770,009	)			770,009												-
Income from unconsolidated joint ventures											2,259				857								3,116
(Loss) income before income taxes			(2,750	)			(789,400	)			741,342				21,971				6,770				(22,067	)
State and federal income tax (benefit) provision			(17,075	)							4,998												(12,077	)
Equity in (loss) income of consolidated subsidiaries			(24,315	)			(22,719	)			21,971								25,063				-
Net (loss) income		$	(9,990	)		$	(812,119	)		$	758,315			$	21,971			$	31,833			$	(9,990	)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	4			$	(105	)		$	577,467			$	21,206			$	(2,478	)		$	596,094
Financial services											2,995				12,208								15,203
Intercompany charges							23,949				(31,131	)			(3,448	)			10,630				-
Total revenues			4				23,844				549,331				29,966				8,152				611,297
Expenses:
Homebuilding			4,175				24,077				601,746				14,575				24,618				669,191
Financial services			80								2,561				7,911				(12	)			10,540
Total expenses			4,255				24,077				604,307				22,486				24,606				679,731
Gain on extinguishment of debt							51,737																51,737
Income from unconsolidated joint ventures											491				982								1,473
(Loss) income before income taxes			(4,251	)			51,504				(54,485	)			8,462				(16,454	)			(15,224	)
State and federal income tax (benefit) provision			(8,668	)							9,907												1,239
Equity in (loss) income of consolidated subsidiaries			(20,880	)			22,172				8,462								(9,754	)			-
Net (loss) income		$	(16,463	)		$	73,676			$	(55,930	)		$	8,462			$	(26,208	)		$	(16,463	)

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED APRIL 30, 2013

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities:
Net (loss) income		$	(9,990	)		$	(812,119	)		$	758,315			$	21,971			$	31,833			$	(9,990	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities			14,384				773,776				(773,952	)			11,695				(31,833	)			(5,930	)
Net cash provided by (used in) operating activities			4,394				(38,343	)			(15,637	)			33,666				-				(15,920	)
Net cash provided by investing activities							242				12,033				5,399								17,674
Net cash (used in) provided by financing activities							(2,169	)			20,087				(48,042	)							(30,124	)
Intercompany investing and financing activities – net			(4,394	)			28,338				(17,970	)			(5,974	)							-
Net (decrease) in cash			-				(11,932	)			(1,487	)			(14,951	)			-				(28,370	)
Cash and cash equivalents balance, beginning of period							197,097				(2,017	)			78,152								273,232
Cash and cash equivalents balance, end of period		$	-			$	185,165			$	(3,504	)		$	63,201			$	-			$	244,862

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED APRIL 30, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities:
Net (loss) income		$	(16,463	)		$	73,676			$	(55,930	)		$	8,462			$	(26,208	)		$	(16,463	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities			14,463				(46,947	)			28,283				(45,410	)			26,208				(23,403	)
Net cash (used in) provided by operating activities			(2,000	)			26,729				(27,647	)			(36,948	)			-				(39,866	)
Net cash (used in) provided by investing activities							(1,121	)			(1,011	)			28								(2,104	)
Net cash provided by (used in) financing activities			47,147				(91,885	)			25,585				17,400								(1,753	)
Intercompany investing and financing activities – net			(45,147	)			52,388				5,352				(12,593	)							-
Net (decrease) increase in cash			-				(13,889	)			2,279				(32,113	)			-				(43,723	)
Cash and cash equivalents balance, beginning of period							112,122				(4,989	)			143,607								250,740
Cash and cash equivalents balance, end of period		$	-			$	98,233			$	(2,710	)		$	111,494			$	-			$	207,017

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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