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Note 23

9 Months Ended

Jul. 31, 2013

Condensed Financial Statements Disclosure [Abstract]

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 July 31, 2013, had issued and outstanding approximately $992.0 million of senior secured notes ($978.3 million, net of discount), $460.6 million senior notes ($459.1 million, net of discount), $20.9 million senior amortizing notes and $65.8 million senior exchangeable notes (issued as components of our 6.0% Exchangeable Note Units) and $3.2 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 unsecured 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

JULY 31, 2013

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
ASSETS:
Homebuilding						$	191,928			$	1,023,999			$	343,441							$	1,559,368
Financial services											9,880				94,878								104,758
Intercompany receivable							1,188,191								1,278				(1,189,469	)			-
Investments in and amounts due to and from consolidated subsidiaries			(95,575	)			(19,816	)			294,247								(178,856	)			-
Total assets		$	(95,575	)		$	1,360,303			$	1,328,126			$	439,597			$	(1,368,325	)		$	1,664,126
LIABILITIES AND EQUITY:
Homebuilding		$	2,404			$	98			$	419,016			$	73,670							$	495,188
Financial services											10,076				71,066								81,142
Notes payable							1,550,549				1,512				191								1,552,252
Intercompany payable			335,039								876,600								(1,211,639	)			-
Income taxes payable (receivable)			34,609								(31,861	)											2,748
Stockholders’ (deficit) equity			(467,627	)			(190,344	)			52,783				294,247				(156,686	)			(467,627	)
Non-controlling interest in consolidated joint ventures															423								423
Total liabilities and equity		$	(95,575	)		$	1,360,303			$	1,328,126			$	439,597			$	(1,368,325	)		$	1,664,126

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 JULY 31, 2013

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding						$	(76	)		$	372,416			$	94,385			$	(1,246	)		$	465,479
Financial services											3,080				9,798								12,878
Intercompany charges							20,760				(24,931	)			(37	)			4,208				-
Total revenues			-				20,684				350,565				104,146				2,962				478,357
Expenses:
Homebuilding			3,177				30,389				351,903				77,409				2,141				465,019
Financial services			4								2,052				4,584								6,640
Total expenses			3,181				30,389				353,955				81,993				2,141				471,659
Gain (loss) on extinguishment of debt																							-
Income from unconsolidated joint ventures											34				3,656								3,690
(Loss) income before income taxes			(3,181	)			(9,705	)			(3,356	)			25,809				821				10,388
State and federal income tax (benefit) provision			(2,233	)							4,155												1,922
Equity in income (loss) from subsidiaries			9,414				(10,887	)			25,809								(24,336	)			-
Net income (loss)		$	8,466			$	(20,592	)		$	18,298			$	25,809			$	(23,515	)		$	8,466

 HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JULY 31, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	4			$	(92	)		$	356,862			$	20,701			$	(1,251	)		$	376,224
Financial services											2,237				8,550								10,787
Intercompany charges							53,026				(15,107	)			(234	)			(37,685	)			-
Total revenues			4				52,934				343,992				29,017				(38,936	)			387,011
Expenses:
Homebuilding			1,640				88,266				352,332				14,572				(67,011	)			389,799
Financial services			23								1,407				4,679				2				6,111
Total expenses			1,663				88,266				353,739				19,251				(67,009	)			395,910
Gain on extinguishment of debt							6,230																6,230
Income from unconsolidated joint ventures											30				822								852
(Loss) income before income taxes			(1,659	)			(29,102	)			(9,717	)			10,588				28,073				(1,817	)
State and federal income tax (benefit)			(4,261	)							(32,232	)											(36,493	)
Equity in income (loss) of consolidated subsidiaries			32,074				(10,375	)			10,588								(32,287	)			-
Net income (loss)		$	34,676			$	(39,477	)		$	33,103			$	10,588			$	(4,214	)		$	34,676

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	3			$	(175	)		$	1,033,927			$	194,333			$	(3,741	)		$	1,224,347
Financial services											7,743				27,476								35,219
Intercompany charges							61,167				(75,265	)			(1,788	)			15,886				-
Total revenues			3				60,992				966,405				220,021				12,145				1,259,566
Expenses:
Homebuilding			5,921				90,088				994,979				161,304				4,554				1,256,846
Financial services			13								5,742				15,450								21,205
Total expenses			5,934				90,088				1,000,721				176,754				4,554				1,278,051
(Loss) gain on extinguishment of debt							(770,009	)			770,009												-
Income from unconsolidated joint ventures											2,293				4,513								6,806
(Loss) income before income taxes			(5,931	)			(799,105	)			737,986				47,780				7,591				(11,679	)
State and federal income tax (benefit) provision			(19,308	)							9,153												(10,155	)
Equity in (loss) income of consolidated subsidiaries			(14,901	)			(33,606	)			47,780								727				-
Net (loss) income		$	(1,524	)		$	(832,711	)		$	776,613			$	47,780			$	8,318			$	(1,524	)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Revenues:
Homebuilding		$	8			$	(197	)		$	934,330			$	41,907			$	(3,729	)		$	972,319
Financial services											5,232				20,758								25,990
Intercompany charges							76,975				(46,238	)			(3,682	)			(27,055	)			-
Total revenues			8				76,778				893,324				58,983				(30,784	)			998,309
Expenses:
Homebuilding			5,815				112,342				954,080				29,144				(42,392	)			1,058,989
Financial services			103								3,967				12,592				(11	)			16,651
Total expenses			5,918				112,342				958,047				41,736				(42,403	)			1,075,640
Gain on extinguishment of debt							57,966																57,966
Income from unconsolidated joint ventures											521				1,803								2,324
(Loss) income before income taxes			(5,910	)			22,402				(64,202	)			19,050				11,619				(17,041	)
State and federal income tax (benefit)			(12,929	)							(22,325	)											(35,254	)
Equity in income (loss) of consolidated subsidiaries			11,194				(32,546	)			19,050								2,302				-
Net income (loss)		$	18,213			$	(10,144	)		$	(22,827	)		$	19,050			$	13,921			$	18,213

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JULY 31, 2013

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities:
Net (loss) income		$	(1,524	)		$	(832,711	)		$	776,613			$	47,780			$	8,318			$	(1,524	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities			20,418				789,831				(842,439	)			(5,365	)			(8,318	)			(45,873	)
Net cash provided by (used in) operating activities			18,894				(42,880	)			(65,826	)			42,415				-				(47,397	)
Net cash provided by investing activities							298				12,357				6,121								18,776
Net cash (used in) provided by financing activities							(5,460	)			48,090				(59,983	)							(17,353	)
Intercompany investing and financing activities – net			(18,894	)			6,404				1,009				11,481								-
Net (decrease) increase in cash			-				(41,638	)			(4,370	)			34				-				(45,974	)
Cash and cash equivalents balance, beginning of period							197,097				(2,017	)			78,152								273,232
Cash and cash equivalents balance, end of period		$	-			$	155,459			$	(6,387	)		$	78,186			$	-			$	227,258

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JULY 31, 2012

(In Thousands)

		Parent				Subsidiary Issuer				Guarantor Subsidiaries				Nonguarantor Subsidiaries				Eliminations				Consolidated
Cash flows from operating activities:
Net income (loss)		$	18,213			$	(10,144	)		$	(22,827	)		$	19,050			$	13,921			$	18,213
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities			31,198				4,286				(23,386	)			(78,465	)			(13,921	)			(80,288	)
Net cash provided by (used in) operating activities			49,411				(5,858	)			(46,213	)			(59,415	)			-				(62,075	)
Net cash provided by (used in) investing activities							26				(2,178	)			242								(1,910	)
Net cash provided by (used in) financing activities			47,147				(94,309	)			50,954				43,423								47,215
Intercompany investing and financing activities – net			(96,558	)			112,651				2,841				(18,934	)							-
Net increase (decrease) in cash			-				12,510				5,404				(34,684	)			-				(16,770	)
Cash and cash equivalents balance, beginning of period							112,122				(4,989	)			143,607								250,740
Cash and cash equivalents balance, end of period		$	-			$	124,632			$	415			$	108,923			$	-			$	233,970

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- 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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