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Note 13 - Per Share Calculations

12 Months Ended

Oct. 31, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

13. Per Share Calculations

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 year ended October 31, 2014 included 6.1 million shares related to Purchase Contracts (issued as part of our then outstanding 7.25% Tangible Equity Units) which shares were 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 in periods when we have net income. 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:

		Year Ended October 31,
(In thousands, except per share data)		2015			2014			2013

Numerator:
Net (loss) earnings attributable to Hovnanian		$(16,100	)		$307,144			$31,295
Less: undistributed earnings allocated to nonvested shares		-			(7,107	)		(58	)
Numerator for basic earnings per share		$(16,100	)		$300,037			$31,237
Plus: undistributed earnings allocated to nonvested shares		-			7,107			58
Less: undistributed earnings reallocated to nonvested shares		-			(7,127	)		(59	)
Plus: interest on senior exchangeable notes		-			3,487			3,720
Numerator for diluted earnings per share		$(16,100	)		$303,504			$34,956
Denominator:
Denominator for basic earnings per share		146,899			146,271			145,087
Effect of dilutive securities:
Share-based payments		-			1,013			1,396
Senior exchangeable notes		-			15,157			15,846
Denominator for diluted earnings per share – weighted-average shares outstanding		146,899			162,441			162,329
Basic (loss) earnings per share		$(0.11	)		$2.05			$0.22
Diluted (loss) earnings per share		$(0.11	)		$1.87			$0.22

Incremental shares attributed to nonvested stock and outstanding options to purchase common stock of 0.2 million for the year ended October 31, 2015, 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, for the year ended October 31, 2015, 15.2 million shares of common stock issuable upon the exchange of our senior exchangeable notes (which were issued in fiscal 2012) 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 3.0 million, 2.0 million and 2.2 million for the years ended October 31, 2015, 2014 and 2013, respectively, because to do so would have been anti-dilutive for the periods presented.