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Note 22
 9 Months Ended
Jul. 31, 2012
Condensed Financial Statements Disclosure [Text Block]
22.  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, 2012, had issued and outstanding approximately $992.0 million of senior secured notes ($967.9 million, net of discount), $460.6 million senior notes ($458.6 million, net of discount), and $7.0 million senior subordinated amortizing notes (issued as a component of our 7.25% Tangible Equity Units). The senior secured notes, senior 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, senior notes, and senior subordinated amortizing notes other than the 2021 Notes.  The 2021 Notes are guaranteed by the Guarantor Subsidiaries and the members of the Secured Group (see Note 11).

All of the senior secured notes, senior notes and senior subordinated amortizing notes have been registered under the Securities Act of 1933, as amended, except the 2021 notes, which are not, pursuant to the indenture under which they were issued, required to be registered.  The Condensed Consolidating Financial Statements presented below are in respect of our registered notes only and not the 2021 Notes. In lieu of providing separate financial statements for the Guarantor Subsidiaries of our registered senior secured, senior and senior subordinated amortizing notes, we have included the accompanying Condensed Consolidating Financial Statements. Management does not believe that separate financial statements of the Guarantor Subsidiaries of our registered notes are material to users of our Condensed Consolidated 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, 2012

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
ASSETS:
                                   
Homebuilding
  $ 10,793     $ 183,869     $ 1,076,088     $ 236,465     $ -     $ 1,507,215  
Financial services
                    9,496       108,132               117,628  
Investments in and amounts due to and from consolidated subsidiaries
    (371,004 )     2,027,698       (2,420,053 )     9,570       753,789       -  
Total assets
  $ (360,211 )   $ 2,211,567     $ (1,334,469 )   $ 354,167     $ 753,789     $ 1,624,843  
                                                 
LIABILITIES AND EQUITY:
                                               
Homebuilding
  $ 4,329     $ (361 )   $ 416,675     $ 36,918     $ -     $ 457,561  
Financial services
                    9,341       90,563               99,904  
Notes payable
            1,464,809       78                       1,464,887  
Income taxes payable
    39,923               (33,231 )                     6,692  
Stockholders’ (deficit) equity
    (404,463 )     747,119       (1,727,332 )     226,424       753,789       (404,463 )
Non-controlling interest in consolidated joint ventures
                            262               262  
Total liabilities and equity
  $ (360,211 )   $ 2,211,567     $ (1,334,469 )   $ 354,167     $ 753,789     $ 1,624,843  

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

OCTOBER 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
ASSETS:
                                   
Homebuilding
 
$
12,756
   
$
200,281
   
$
1,096,594
   
$
207,443
   
$
-
 
 
$
1,517,074
 
Financial services
                   
4,537
     
80,569
             
85,106
 
Investments in and amounts due to and from consolidated subsidiaries
   
(467,562
)
   
2,140,349
     
(2,435,348
)
   
(9,364
)
   
771,925
     
-
 
Total assets
 
$
(454,806
)
 
$
2,340,630
   
$
(1,334,217
)
 
$
278,648
   
$
771,925
   
$
1,602,180
 
                                                 
LIABILITIES AND EQUITY:
                                               
Homebuilding
 
$
2,172
   
$
(33
)
 
$
355,191
   
$
11,276
   
$
-
   
$
368,606
 
Financial services
                   
4,231
     
60,015
             
64,246
 
Notes payable
           
1,623,957
     
144
                     
1,624,101
 
Income tax payable
   
39,716
             
2,113
                     
41,829
 
Stockholders’ (deficit) equity
   
(496,694
)
   
716,706
     
(1,695,896
)
   
207,265
     
771,925
     
(496,694
)
Non-controlling interest in consolidated joint ventures
                           
92
             
92
 
Total liabilities and equity
 
$
(454,806
)
 
$
2,340,630
   
$
(1,334,217
)
 
$
278,648
   
$
771,925
   
$
1,602,180
 

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                               (32,074 )     -  
Net income (loss)
  $ 34,676     $ (29,102 )   $ 22,515     $ 10,588     $ (4,001 )   $ 34,676  

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JULY 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                               
Homebuilding
 
$
17
   
$
(25
)
 
$
277,591
   
$
1,425
   
$
(1,240
)
 
$
277,768
 
Financial services
                   
1,409
     
6,441
             
7,850
 
Intercompany charges
           
28,679
     
(31,769
)
   
(71
)
   
3,161
     
-
 
Total revenues
   
17
     
28,654
     
247,231
     
7,795
     
1,921
     
285,618
 
                                                 
Expenses:
                                               
Homebuilding
   
1,159
     
40,672
     
291,688
     
(525
)
   
(994
)
   
332,000
 
Financial services
   
76
             
1,241
     
4,230
             
5,547
 
Total expenses
   
1,235
     
40,672
     
292,929
     
3,705
     
(994
)
   
337,547
 
Loss on extinguishment of debt
           
(1,391
)
                           
(1,391
)
Loss from unconsolidated joint ventures
                   
(100
)
   
(2,155
)
           
(2,255
)
(Loss) income before income taxes
   
(1,218
)
   
(13,409
)
   
(45,798
)
   
1,935
     
2,915
     
(55,575
)
State and federal income tax (benefit)
   
(4,631
)
           
(14
)
                   
(4,645
)
Equity in (loss) income of consolidated subsidiaries
   
(54,343
)
                           
54,343
     
-
 
Net (loss) income
 
$
(50,930
)
 
$
(13,409
)
 
$
(45,784
)
 
$
1,935
   
$
57,258
   
$
(50,930
)

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

NINE MONTHS ENDED JULY 31, 2012

(In Thousands)

   
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
 
(L(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
                             
(11,194
)
   
-
 
Net income (loss)
 
$
18,213
   
$
22,402
   
$
(41,877
)
 
$
19,050
   
$
425
   
$
18,213
 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

NINE MONTHS ENDED JULY 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                               
Homebuilding
 
$
24
   
$
(223
)
 
$
773,299
   
$
3,652
   
$
(3,719
)
 
$
773,033
 
Financial services
                   
3,951
     
16,298
             
20,249
 
Intercompany charges
           
85,294
     
(98,066
)
   
(428
)
   
13,200
     
-
 
Total revenues
 
$
24
   
$
85,071
   
$
679,184
   
$
19,522
   
$
9,481
   
$
793,282
 
                                                 
Expenses:
                                               
Homebuilding
   
4,261
     
119,657
     
838,298
     
330
     
(1,152
)
   
961,394
 
Financial services
   
246
             
3,717
     
12,234
     
(3
)
   
16,194
 
Total expenses
   
4,507
     
119,657
     
842,015
     
12,564
     
(1,155
)
   
977,588
 
Loss on extinguishment of debt
           
(3,035
)
                           
(3,035
)
Loss from unconsolidated joint ventures
                   
(801
)
   
(5,678
)
           
(6,479
)
(Loss) income before income taxes
   
(4,483
)
   
(37,621
)
   
(163,632
)
   
1,280
     
10,636
     
(193,820
)
State and federal income tax (benefit) provision
   
(15,599
)
           
9,518
     
 
             
(6,081
)
Equity in (loss) income of consolidated subsidiaries
   
(198,855
)
                           
198,855
     
-
 
Net (loss) income
 
$
(187,739
)
 
$
(37,621
)
 
$
(173,150
)
 
$
1,280
   
$
209,491
   
$
(187,739
)

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
   
$
22,402
   
$
(41,877
)
 
$
19,050
   
$
425
   
$
18,213
 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
   
31,198
     
(28,260
)
   
(4,336
)
   
(78,465
)
   
(425
)
   
(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
 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JULY 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Guarantor Subsidiaries
   
Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Cash flows from operating activities:
                                   
Net (loss) income
 
$
(187,739
) 
 
$
(37,621
) 
 
$
(173,150
)
 
$
1,280
   
$
209,491
   
$
(187,739
)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities
   
85,787
     
(15,216
) 
   
148,195
     
(777
) 
   
(209,491
) 
   
8,498
 
Net cash (used in) provided by operating activities
   
(101,952
)
   
(52,837
) 
   
(24,955
) 
   
503
     
-
     
(179,241
)
Net cash provided by (used in) investing activities
                   
577
     
(659
)
           
(82
)
Net cash provided by (used in) financing activities
   
54,899
     
71,552
     
61
     
(31,984
)
           
94,528
 
Intercompany investing and financing activities – net
   
47,043
     
(82,916
) 
   
31,484
     
4,389
             
-
 
Net (decrease) increase in cash
   
(10
) 
   
(64,201
) 
   
7,167
     
(27,751
)
   
-
     
(84,795
)
Cash and cash equivalents balance, beginning of period
   
10
     
212,370
     
(12,812
)
   
167,612
     
  -
     
367,180
 
Cash and cash equivalents balance, end of period
 
$
-
   
$
148,169
   
$
(5,645
)
 
$
139,861
   
$
-
   
$
282,385
 

In connection with a proposed issuance of units (the "Proposed Units") by the Subsidiary Issuer, it is anticipated that certain of the Parent’s wholly owned subsidiaries (collectively "Units Guarantor Subsidiaries") will fully and unconditionally guarantee, on a joint and several basis, the components of  such Proposed Units. Each Units Guarantor Subsidiaries is 100% owned by the Parent. The following Condensed Consolidating Financial Statements presents the results of operations, financial position and cash flows of (i) the Parent, (ii) the Subsidiary Issuer, (iii) the Units Guarantor Subsidiaries, (iv) the Parent's subsidiaries that do not guarantee the components of the Proposed Units and (v) the elimination 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, 2012

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
ASSETS:
                                   
Homebuilding
  $ 10,793     $ 183,869     $ 1,025,979     $ 286,574     $ -     $ 1,507,215  
Financial services
                    9,496       108,132               117,628  
Investments in and amounts due to and from consolidated subsidiaries
    (371,004 )     2,027,698       (2,425,600 )     15,117       753,789       -  
Total assets
  $ (360,211 )   $ 2,211,567     $ (1,390,125 )   $ 409,823     $ 753,789     $ 1,624,843  
                                                 
LIABILITIES AND EQUITY:
                                               
Homebuilding
  $ 4,329     $ (361 )   $ 379,412     $ 74,181     $ -     $ 457,561  
Financial services
                    9,341       90,563               99,904  
Notes payable
            1,464,809       78                       1,464,887  
Income taxes payable
    39,923               (33,231 )                     6,692  
Stockholders’ (deficit) equity
    (404,463 )     747,119       (1,745,725 )     244,817       753,789       (404,463 )
Non-controlling interest in consolidated joint ventures
                            262               262  
Total liabilities and equity
  $ (360,211 )   $ 2,211,567     $ (1,390,125 )   $ 409,823     $ 753,789     $ 1,624,843  

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

OCTOBER 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
ASSETS:
                                   
Homebuilding
 
$
12,756
   
$
200,281
   
$
1,091,511
   
$
212,526
   
$
-
 
 
$
1,517,074
 
Financial services
                   
4,537
     
80,569
             
85,106
 
Investments in and amounts due to and from consolidated subsidiaries
   
(467,562
)
   
2,140,349
     
(2,430,491
)
   
(14,221
)
   
771,925
     
-
 
Total assets
 
$
(454,806
)
 
$
2,340,630
   
$
(1,334,443
)
 
$
278,874
   
$
771,925
   
$
1,602,180
 
                                                 
LIABILITIES AND EQUITY:
                                               
Homebuilding
 
$
2,172
   
$
(33
)
 
$
354,528
   
$
11,939
   
$
-
   
$
368,606
 
Financial services
                   
4,231
     
60,015
             
64,246
 
Notes payable
           
1,623,957
     
144
                     
1,624,101
 
Income tax payable
   
39,716
             
2,113
                     
41,829
 
Stockholders’ (deficit) equity
   
(496,694
)
   
716,706
     
(1,695,459
)
   
206,828
     
771,925
     
(496,694
)
Non-controlling interest in consolidated joint ventures
                           
92
             
92
 
Total liabilities and equity
 
$
(454,806
)
 
$
2,340,630
   
$
(1,334,443
)
 
$
278,874
   
$
771,925
   
$
1,602,180
 

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
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                   
Homebuilding
  $ 4     $ (92 )   $ 345,957     $ 31,606     $ (1,251 )   $ 376,224  
Financial services
                    2,237       8,550               10,787  
Intercompany charges
            53,026       (14,924 )     (417 )     (37,685 )     -  
Total revenues
  $ 4     $ 52,934     $ 333,270     $ 39,739     $ (38,936 )   $ 387,011  
                                                 
Expenses:
                                               
Homebuilding
    1,640       88,266       342,291       24,613       (67,011 )     389,799  
Financial services
    23               1,407       4,679       2       6,111  
Total expenses
    1,663       88,266       343,698       29,292       (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 )     (10,398 )     11,269       28,073       (1,817 ) 
State and federal income tax (benefit)
    (4,261 )             (32,016 )     (216 )             (36,493 ) 
Equity in income (loss) of consolidated subsidiaries
    32,074                               (32,074 )     -  
Net income (loss)
  $ 34,676     $ (29,102 )   $ 21,618     $ 11,485     $ (4,001 )   $ 34,676  

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED JULY 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                               
Homebuilding
 
$
17
   
$
(25
)
 
$
277,591
   
$
1,425
   
$
(1,240
)
 
$
277,768
 
Financial services
                   
1,409
     
6,441
             
7,850
 
Intercompany charges
           
28,679
     
(31,754
)
   
(86
)
   
3,161
     
-
 
Total revenues
   
17
     
28,654
     
247,246
     
7,780
     
1,921
     
285,618
 
                                                 
Expenses:
                                               
Homebuilding
   
1,159
     
40,672
     
291,579
     
(416
)
   
(994
)
   
332,000
 
Financial services
   
76
             
1,241
     
4,230
             
5,547
 
Total expenses
   
1,235
     
40,672
     
292,820
     
3,814
     
(994
)
   
337,547
 
Loss on extinguishment of debt
           
(1,391
)
                           
(1,391
)
Loss from unconsolidated joint ventures
                   
(100
)
   
(2,155
)
           
(2,255
)
(Loss) income before income taxes
   
(1,218
)
   
(13,409
)
   
(45,674
)
   
1,811
     
2,915
     
(55,575
)
State and federal income tax (benefit)
   
(4,631
)
           
(14
)
                   
(4,645
)
Equity in (loss) income of consolidated subsidiaries
   
(54,343
)
                           
54,343
     
-
 
Net (loss) income
 
$
(50,930
)
 
$
(13,409
)
 
$
(45,660
)
 
$
1,811
   
$
57,258
   
$
(50,930
)

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

NINE MONTHS ENDED JULY 31, 2012

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                   
Homebuilding
 
$
8
   
$
(197
)
 
$
922,078
   
$
54,159
   
$
(3,729
)
 
$
972,319
 
Financial services
                   
5,232
     
20,758
             
25,990
 
Intercompany charges
           
76,975
     
(45,952
)
   
(3,968
)
   
(27,055
)
   
-
 
Total revenues
 
$
8
   
$
76,778
   
$
881,358
   
$
70,949
   
$
(30,784
)
 
$
998,309
 
                                                 
Expenses:
                                               
Homebuilding
   
5,815
     
112,342
     
942,758
     
40,466
     
(42,392
)
   
1,058,989
 
Financial services
   
103
             
3,967
     
12,592
     
(11
)
   
16,651
 
Total expenses
   
5,918
     
112,342
     
946,725
     
53,058
     
(42,403
)
   
1,075,640
 
Gain on extinguishment of debt
           
57,966
                             
57,966
 
Income from unconsolidated joint ventures
                   
521
     
1,803
             
2,324
 
(L(Loss) income before income taxes
   
(5,910
)
   
22,402
     
(64,846
)
   
19,694
     
11,619
     
(17,041
)
State and federal income tax benefit
   
12,929
             
22,109
      216              
35,254
 
Equity in income (loss) of consolidated subsidiaries
   
11,194
                             
(11,194
)
   
-
 
Net income (loss)
 
$
18,213
   
$
22,402
   
$
(42,737
)
 
$
19,910
   
$
425
   
$
18,213
 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

NINE MONTHS ENDED JULY 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Revenues:
                                               
Homebuilding
 
$
24
   
$
(223
)
 
$
773,299
   
$
3,652
   
$
(3,719
)
 
$
773,033
 
Financial services
                   
3,951
     
16,298
             
20,249
 
Intercompany charges
           
85,294
     
(98,026
)
   
(468
)
   
13,200
     
-
 
Total revenues
 
$
24
   
$
85,071
   
$
679,224
   
$
19,482
   
$
9,481
   
$
793,282
 
                                                 
Expenses:
                                               
Homebuilding
   
4,261
     
119,657
     
838,169
     
459
     
(1,152
)
   
961,394
 
Financial services
   
246
             
3,717
     
12,234
     
(3
)
   
16,194
 
Total expenses
   
4,507
     
119,657
     
841,886
     
12,693
     
(1,155
)
   
977,588
 
Loss on extinguishment of debt
           
(3,035
)
                           
(3,035
)
Loss from unconsolidated joint ventures
                   
(801
)
   
(5,678
)
           
(6,479
)
(Loss) income before income taxes
   
(4,483
)
   
(37,621
)
   
(163,463
)
   
1,111
     
10,636
     
(193,820
)
State and federal income tax (benefit) provision
   
(15,599
)
           
9,518
     
 
             
(6,081
)
Equity in (loss) income of consolidated subsidiaries
   
(198,855
)
                           
198,855
     
-
 
Net (loss) income
 
$
(187,739
)
 
$
(37,621
)
 
$
(172,981
)
 
$
1,111
   
$
209,491
   
$
(187,739
)

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
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Cash flows from operating activities:
                                   
Net income (loss)
 
$
18,213
   
$
22,402
   
$
(42,737
)
 
$
19,910
   
$
425
   
$
18,213
 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
   
31,198
     
(28,260
)
   
(680
)
   
(82,121
)
   
(425
)
   
(80,288
)
Net cash provided by (used in) operating activities
   
49,411
     
(5,858
)
   
(43,417
)
   
(62,211
)
   
-
     
(62,075
)
Net cash provided by (used in) investing activities
           
26
     
735
     
(2,671
)            
(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
     
(2,868
)     
(13,225
)
           
-
 
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
 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JULY 31, 2011

(In Thousands)

   
Parent
   
Subsidiary Issuer
   
Units Guarantor Subsidiaries
   
Units Nonguarantor Subsidiaries
   
Eliminations
   
Consolidated
 
Cash flows from operating activities:
                                   
Net (loss) income
 
$
(187,739
) 
 
$
(37,621
) 
 
$
(172,981
)
 
$
1,111
   
$
209,491
   
$
(187,739
)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities
   
85,787
     
(15,216
) 
   
152,122
     
(4,704
) 
   
(209,491
) 
   
8,498
 
Net cash (used in) provided by operating activities
   
(101,952
)
   
(52,837
) 
   
(20,859
) 
   
(3,593
)     
-
     
(179,241
)
Net cash provided by (used in) investing activities
                   
577
     
(659
)
           
(82
)
Net cash provided by (used in) financing activities
   
54,899
     
71,552
     
61
     
(31,984
)
           
94,528
 
Intercompany investing and financing activities – net
   
47,043
     
(82,916
) 
   
27,388
     
8,485
             
-
 
Net (decrease) increase in cash
   
(10
) 
   
(64,201
) 
   
7,167
     
(27,751
)
   
-
     
(84,795
)
Cash and cash equivalents balance, beginning of period
   
10
     
212,370
     
(12,812
)
   
167,612
     
  -
     
367,180
 
Cash and cash equivalents balance, end of period
 
$
-
   
$
148,169
   
$
(5,645
)
 
$
139,861
   
$
-
   
$
282,385