XML 46 R30.htm IDEA: XBRL DOCUMENT v2.4.0.8
Note 23 - Financial Information of Subsidiary Issuer and Subsidiary Guarantors
 3 Months Ended
Jan. 31, 2014
Disclosure Text Block Supplement [Abstract]  
Condensed Financial Statements [Text Block]

23.   Financial Information of Subsidiary Issuer and Subsidiary Guarantors


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, 2014, had issued and outstanding approximately $992.0 million of senior secured notes ($978.9 million, net of discount), $612.6 million senior notes ($611.4 million, net of discount), $19.0 million senior amortizing notes and $67.5 million senior exchangeable notes (issued as components of our 6.0% Exchangeable Note Units) and $1.1 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 (except for the 2019 Notes), senior amortizing notes, senior exchangeable notes and senior subordinated amortizing notes have been registered under the Securities Act of 1933, as amended. The 2019 Notes, 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 2019 Notes, 2020 Secured Notes or the 2021 Notes (however, the Guarantor Subsidiaries for the 2019 Notes and 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, 2014


(In Thousands)


   

Parent

   

Subsidiary Issuer

   

Guarantor Subsidiaries

   

Nonguarantor Subsidiaries

   

Eliminations

   

Consolidated

 

ASSETS:

                                               

Homebuilding

  $        $ 251,445     $ 1,155,062     $ 320,665     $ (18,910

)

  $ 1,708,262  

Financial services

                    8,870       70,129               78,999  

Intercompany receivable

            1,256,322               11,491       (1,267,813

)

    -  

Investments in and amounts due to and from consolidated subsidiaries

    (86,426

)

    (9,804

)

    301,584               (205,354

)

    -  

Total assets

  $ (86,426

)

  $ 1,497,963     $ 1,465,516     $ 402,285     $ (1,492,077

)

  $ 1,787,261  
                                                 

LIABILITIES AND EQUITY:

                                               

Homebuilding

  $ 1,737     $ 37     $ 424,713     $ 52,891     $        $ 479,378  

Financial services

                    8,446       47,173               55,619  

Notes payable

            1,701,709       2,961       190               1,704,860  

Intercompany payable

    329,767               982,693               (1,312,460

)

    -  

Income taxes payable (receivable)

    38,641               (35,113

)

                    3,528  

Stockholders’ (deficit) equity

    (456,571

)

    (203,783

)

    81,816       301,584       (179,617

)

    (456,571

)

Noncontrolling interest in consolidated joint ventures

                            447               447  

Total liabilities and equity

  $ (86,426

)

  $ 1,497,963     $ 1,465,516     $ 402,285     $ (1,492,077

)

  $ 1,787,261  

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


CONDENSED CONSOLIDATING BALANCE SHEET


OCTOBER 31, 2013


(In Thousands)


   

Parent

   

Subsidiary Issuer

   

Guarantor Subsidiaries

   

Nonguarantor Subsidiaries

   

Eliminations

   

Consolidated

 

ASSETS:

                                               

Homebuilding

  $        $ 277,800     $ 1,020,435     $ 312,042     $        $ 1,610,277  

Financial services

                    14,570       134,283               148,853  

Intercompany receivable

            1,093,906               14,489       (1,108,395

)

    -  

Investments in and amounts due to and from consolidated subsidiaries

    (62,298

)

    2,275       286,216               (226,193

)

    -  

Total assets

  $ (62,298

)

  $ 1,373,981     $ 1,321,221     $ 460,814     $ (1,334,588

)

  $ 1,759,130  
                                                 

LIABILITIES AND EQUITY:

                                               

Homebuilding

  $ 3,798     $ 491     $ 437,767     $ 64,329     $        $ 506,385  

Financial services

                    14,789       109,748               124,537  

Notes payable

            1,555,336       2,276       94               1,557,706  

Intercompany payable

    326,262               805,774               (1,132,036

)

    -  

Income taxes payable (receivable)

    40,868               (37,567

)

                    3,301  

Stockholders’ (deficit) equity

    (433,226

)

    (181,846

)

    98,182       286,216       (202,552

)

    (433,226

)

Noncontrolling interest in consolidated joint ventures

                            427               427  

Total liabilities and equity

  $ (62,298

)

  $ 1,373,981     $ 1,321,221     $ 460,814     $ (1,334,588

)

  $ 1,759,130  

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS


THREE MONTHS ENDED JANUARY 31, 2014


(In Thousands)


   

Parent

   

Subsidiary Issuer

   

Guarantor Subsidiaries

   

Nonguarantor Subsidiaries

   

Eliminations

   

Consolidated

 

Revenues:

                                               

Homebuilding

  $        $ (46

)

  $ 283,038     $ 72,962     $        $ 355,954  

Financial services

                    1,835       6,259               8,094  

Intercompany charges

            21,367       (21,262

)

    (249

)

    144       -  

Total revenues

            21,321       263,611       78,972       144       364,048  
                                                 

Expenses:

                                               

Homebuilding

    3,983       31,179       289,618       61,009       (1,952

)

    383,837  

Financial services

    4               1,525       5,143               6,672  

Total expenses

    3,987       31,179       291,143       66,152       (1,952

)

    390,509  

Income from unconsolidated joint ventures

                    23       2,548               2,571  

(Loss) income before income taxes

    (3,987

)

    (9,858

)

    (27,509

)

    15,368       2,096       (23,890

)

State and federal income tax (benefit) provision

    (3,592

)

            4,225                       633  

Equity in (loss) income of consolidated subsidiaries

    (24,128

)

    (12,079

)

    15,368               20,839       -  

Net (loss) income

  $ (24,523

)

  $ (21,937

)

  $ (16,366

)

  $ 15,368     $ 22,935     $ (24,523

)


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

)

    (11,118

)

    8,447               27,990       -  

Net (loss) income

  $ (11,308

)

  $ (790,833

)

  $ 752,130     $ 8,447     $ 30,256     $ (11,308

)


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


THREE MONTHS ENDED JANUARY 31, 2014


(In Thousands)


   

Parent

   

Subsidiary Issuer

   

Guarantor Subsidiaries

   

Nonguarantor Subsidiaries

   

Eliminations

   

Consolidated

 

Cash flows from operating activities:

                                               

Net (loss) income

  $ (24,523

)

  $ (21,937

)

  $ (16,366

)

  $ 15,368     $ 22,935     $ (24,523

)

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

    (3,110 )      1,280

 

    (114,750

)

    32,986       (22,935

)

    (106,529

)

Net cash (used in) provided by operating activities

    (27,633 )     (20,657

)

    (131,116

)

    48,354               (131,052

)

Net cash provided by (used in) investing activities

            215       (363

)

    152               4  

Net cash provided by (used in) financing activities

            144,328       10,772       (64,371

)

            90,729  

Intercompany investing and financing activities – net

    27,633

 

    (150,337

)

    119,706       2,998               -  

Net decrease in cash

            (26,451

)

    (1,001

)

    (12,867

)

            (40,319

)

Cash and cash equivalents balance, beginning of period

            243,470       (6,479

)

    92,213               329,204  

Cash and cash equivalents balance, end of period

  $ -     $ 217,019     $ (7,480

)

  $ 79,346     $ -     $ 288,885  

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

)

  $ (790,833

)

  $ 752,130     $ 8,447     $ 30,256     $ (11,308

)

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities

    5,954       768,380

 

    (761,062 )      31,396       (27,585

)

    17,083  

Net cash (used in) provided by operating activities

    (5,354

)

    (22,453

)

    (8,932 )      39,843       2,671       5,775  

Net cash used in 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       10,018       (9,728

)

    (2,973

)

    (2,671

)

    -  

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