Basic and diluted earnings per share for the periods presented below were calculated as follows:

Three Months Ended July 31,

Nine Months Ended July 31,

(In thousands, except per share data)

2013

2012

2013

2012

Numerator:

Net earnings (loss) attributable to Hovnanian

$

8,466

$

34,676

$

(1,524

)

$

18,213

Less: undistributed earnings allocated to nonvested shares

(15

)

(76

)

-

(52

)

Numerator for basic earnings per share

8,451

34,600

(1,524

)

18,161

Plus: undistributed earnings allocated to nonvested shares

15

76

-

52

Less: undistributed earnings reallocated to nonvested shares

(15

)

(76

)

-

(52

)

Plus: interest on senior exchangeable notes

893

-

Numerator for diluted earnings per share

$

9,344

$

34,600

$

(1,524

)

$

18,161

Denominator:

Denominator for basic earnings per share

146,056

138,472

144,840

121,357

Effect of dilutive securities:

Share based payments

1,610

80

-

23

Senior exchangeable notes

15,157

-

Denominator for diluted earnings per share – weighted average shares outstanding

162,823

138,552

144,840

121,380

Basic earnings (loss) per share

$

0.06

$

0.25

$

(0.01

)

$

0.15

Diluted earnings (loss) per share

$

0.06

$

0.25

$

(0.01

)

$

0.15