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Note 14 - Per Share Calculations
 6 Months Ended
Apr. 30, 2014
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]

14.

Per Share Calculation


Basic earnings per share is computed by dividing net income (loss) (the “numerator”) by the weighted-average number of common shares outstanding, adjusted for nonvested shares of restricted stock (the “denominator”) for the period. The basic weighted–average number of shares for the three and six months ended April 30, 2014 included 6.1 million shares related to Purchase Contracts (issued as part of our 7.25% Tangible Equity Units) which, as discussed in Note 12, were all issued upon settlement of the Purchase Contracts in February 2014. Computing diluted earnings per share is similar to computing basic earnings per share, except that the denominator is increased to include the dilutive effects of options and nonvested shares of restricted stock, as well as common shares issuable upon exchange of our Senior Exchangeable Notes issued as part of our 6.0% Exchangeable Note Units. Any options that have an exercise price greater than the average market price are considered to be anti-dilutive and are excluded from the diluted earnings per share calculation.  


All outstanding nonvested shares that contain nonforfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and participation rights in undistributed earnings. The Company’s restricted common stock (“nonvested shares”) are considered participating securities.


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


   

Three Months Ended

April 30,

   

Six Months Ended

April 30,

 

(In thousands, except per share data)

 

2014

   

2013

   

2014

   

2013

 
                         

Numerator:

                       

Net (loss) earnings attributable to Hovnanian

  $(7,902 )   $1,318     $(32,425 )   $(9,990 )

Less: undistributed earnings allocated to nonvested shares

        (2 )            

Numerator for basic earnings per share

  (7,902 )   1,316     (32,425 )   (9,990 )

Plus: undistributed earnings allocated to nonvested shares

        2              

Less: undistributed earnings reallocated to nonvested shares

        (2 )            

Numerator for diluted earnings per share

  (7,902 )   1,316     (32,425 )   (9,990 )

Denominator:

                       

Denominator for basic earnings per share

  146,325     145,948     146,151     144,373  

Effect of dilutive securities:

                       

Share based payments

        1,283              

Denominator for diluted earnings per share – weighted average shares outstanding

  146,325     147,231     146,151     144,373  

Basic earnings per share

  $(0.05 )   $0.01     $(0.22 )   $(0.07 )

Diluted earnings per share

  $(0.05 )   $0.01     $(0.22 )   $(0.07 )

Incremental shares attributed to nonvested stock and outstanding options to purchase common stock of 0.9 million and 1.0 million for the three and six months ended April 30, 2014, respectively, and 1.4 million for the six months ended April 30, 2013, were excluded from the computation of diluted earnings per share because we had a net loss for the period, and any incremental shares would not be dilutive. Also, 15.2 million shares for both the three and six months ended April 30, 2014 and 16.5 million shares for the six months ended April 30, 2013 of common stock issuable upon the exchange of our Senior Exchangeable Notes were excluded from the computation of diluted earnings per share because we had a net loss for the period.


In addition, shares related to out-of-the-money stock options that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share were 2.2 million for the three and six months ended April 30, 2014 and 1.3 million for the three and six months ended April 30, 2013, because to do so would have been anti-dilutive for the periods presented.