0001437749-22-021901 | 10-Q | XBRL Viewer | Hovnanian Enterprises INC

Inventory impairment loss and land option write-offs

$ 767,593

$ 690,683

$ 2,035,443

$ 1,968,509

1,837

3,267

Total expenses

668,223

633,589

1,824,294

1,865,355

Corporate general and administrative

24,774

17,284

75,893

81,149

Less other interest expensed(2)(3)

^[1],[2]

9,624

19,158

35,442

65,166

Other operations

670

504

1,679

1,233

Loss on extinguishment of debt

(306)

(6,795)

(306)

Income from unconsolidated joint ventures

12,557

5,011

23,919

9,568

Income before income taxes

111,927

61,799

228,273

112,416

Tax provision (benefit)

29,313

14,097

58,416

(442,921)

Net income

82,614

47,702

169,857

555,337

Less: preferred stock dividends

2,669

8,007

Net income available to common stockholders

$ 79,945

$ 47,702

$ 161,850

$ 555,337

Net income per common share (in dollars per share)

$ 10.92

$ 6.85

$ 22.05

$ 80.02

Weighted-average number of common shares outstanding basic (in shares)

6,485

6,315

6,424

6,263

Net income per common share (in dollars per share)

$ 10.82

$ 6.72

$ 21.77

$ 78.51

Weighted-average number of common shares outstanding (in shares)

6,544

6,434

6,507

6,370

State and Local Jurisdiction [Member]

Tax provision (benefit)

$ 6,385

$ 1,476

$ 11,515

$ (89,272)

Domestic Tax Authority [Member]

Tax provision (benefit)

22,928

12,621

46,901

(353,649)

Cost of sales, excluding interest

753,060

670,838

1,991,895

1,907,439

548,576

521,868

1,480,175

1,498,040

Cost of sales interest

22,453

19,240

57,876

58,130

Inventory impairment loss and land option write-offs

1,173

1,309

1,837

3,267

Total cost of sales

572,202

542,417

1,539,888

1,559,437

Selling, general and administrative

50,163

42,988

139,410

125,417

Total expenses

622,365

585,405

1,679,298

1,684,854

Homebuilding [Member] | Sale of Homes [Member]

Homebuilding [Member] | Land Sales and Other Revenues [Member]

736,654

663,279

1,973,843

1,894,159

Financial Services [Member]

16,406

7,559

18,052

13,280

14,533

19,845

43,548

61,070

Total expenses

$ 10,790

$ 11,238

$ 31,982

$ 32,953

[1]

Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest on notes payable, which is calculated as follows: Three Months Ended Nine Months Ended July 31, July 31, (In thousands) 2022 2021 2022 2021 Other interest expensed $ 9,624 $ 19,158 $ 35,442 $ 65,166 Interest paid by our mortgage and finance subsidiaries 404 602 1,234 1,554 Increase in accrued interest (19,194 ) (12,139 ) (19,408 ) (11,897 ) Cash paid for interest, net of capitalized interest $ (9,166 ) $ 7,621 $ 17,268 $ 54,823

[2]

Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $5.0 million and $14.4 million for the three months ended July 31, 2022 and 2021, respectively, and $25.5 million and $48.1 million for the nine months ended July 31, 2022 and 2021, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization and therefore is expensed. This component of other interest was $4.6 million and $4.8 million for the three months ended July 31, 2022 and 2021, respectively, and $9.9 million and $17.1 million for the nine months ended July 31, 2022 and 2021, respectively.

Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands	Common Stock Outstanding [Member] Common Class A [Member]	Common Stock Outstanding [Member] Common Class B [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Noncontrolling Interest [Member]	Total
Balance (in shares) at Oct. 31, 2020	5,519,880	622,217	5,600
Balance at Oct. 31, 2020	$ 60	$ 7	$ 135,299	$ 718,110	$ (1,175,045)	$ (115,360)	$ 835	$ (436,094)
Stock options, amortization and issuances				54				54
Restricted stock amortization, issuances and forfeitures (in shares)	7,207	2,370
Restricted stock amortization, issuances and forfeitures				668				668
Conversion of Class B to Class A common stock (in shares)	45	(45)
Changes in noncontrolling interest in consolidated joint ventures							78	78
Net income					18,959			18,959
Balance (in shares) at Jan. 31, 2021	5,527,132	624,542	5,600
Balance at Jan. 31, 2021	$ 60	$ 7	$ 135,299	718,832	(1,156,086)	(115,360)	913	(416,335)
Stock options, amortization and issuances (in shares)	33,316	5,368
Stock options, amortization and issuances				(255)				(255)
Restricted stock amortization, issuances and forfeitures				770				770
Conversion of Class B to Class A common stock (in shares)	25	(25)
Changes in noncontrolling interest in consolidated joint ventures							(142)	(142)
Net income					488,676			488,676
Balance (in shares) at Apr. 30, 2021	5,560,473	629,885	5,600
Balance at Apr. 30, 2021	$ 60	$ 7	$ 135,299	719,347	(667,410)	(115,360)	771	72,714
Stock options, amortization and issuances (in shares)	6,806
Stock options, amortization and issuances				128				128
Restricted stock amortization, issuances and forfeitures (in shares)	26,357	29,338
Restricted stock amortization, issuances and forfeitures	$ 1			295				296
Conversion of Class B to Class A common stock (in shares)	4	(4)
Changes in noncontrolling interest in consolidated joint ventures							(149)	(149)
Net income					47,702			47,702
Balance (in shares) at Jul. 31, 2021	5,593,640	659,219	5,600
Balance at Jul. 31, 2021	$ 61	$ 7	$ 135,299	719,770	(619,708)	(115,360)	622	120,691
Balance (in shares) at Oct. 31, 2021	5,595,734	659,207	5,600
Balance at Oct. 31, 2021	$ 61	$ 7	$ 135,299	722,118	(567,228)	(115,360)	487	175,384
Stock options, amortization and issuances (in shares)	804
Stock options, amortization and issuances				4				4
Preferred dividend declared ($476.56 per share)					(2,669)			(2,669)
Restricted stock amortization, issuances and forfeitures (in shares)	17,654	17,445
Restricted stock amortization, issuances and forfeitures				(552)				(552)
Conversion of Class B to Class A common stock (in shares)	48	(48)
Changes in noncontrolling interest in consolidated joint ventures							(88)	(88)
Net income					24,808			24,808
Balance (in shares) at Jan. 31, 2022	5,614,240	676,604	5,600
Balance at Jan. 31, 2022	$ 61	$ 7	$ 135,299	721,570	(545,089)	(115,360)	399	196,887
Stock options, amortization and issuances (in shares)	600
Stock options, amortization and issuances				77				77
Preferred dividend declared ($476.56 per share)					(2,669)			(2,669)
Restricted stock amortization, issuances and forfeitures (in shares)	20,483
Restricted stock amortization, issuances and forfeitures				1,672				1,672
Conversion of Class B to Class A common stock (in shares)	58	(58)
Changes in noncontrolling interest in consolidated joint ventures							(3)	(3)
Net income					62,435			62,435
Balance (in shares) at Apr. 30, 2022	5,635,381	676,546	5,600
Balance at Apr. 30, 2022	$ 61	$ 7	$ 135,299	723,319	(485,323)	(115,360)	396	258,399
Stock options, amortization and issuances (in shares)	759
Stock options, amortization and issuances				30				30
Preferred dividend declared ($476.56 per share)					(2,669)			(2,669)
Restricted stock amortization, issuances and forfeitures (in shares)	52,898	29,196
Restricted stock amortization, issuances and forfeitures	$ 1			448				449
Conversion of Class B to Class A common stock (in shares)	16	(16)
Changes in noncontrolling interest in consolidated joint ventures							(76)	(76)
Net income					82,614			82,614
Balance (in shares) at Jul. 31, 2022	5,689,054	705,726	5,600
Balance at Jul. 31, 2022	$ 62	$ 7	$ 135,299	$ 723,797	$ (405,378)	$ (115,360)	$ 320	$ 338,747

Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022
Dividend per share (in dollars per share)	$ 476.56	$ 476.56	$ 476.56

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021
Cash flows from operating activities:
Net income	$ 169,857	$ 555,337
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation	4,009	4,091
Compensation from stock options and awards	6,404	5,309
Amortization of bond discounts, premiums and deferred financing costs	(203)	490
Gain on sale and retirement of property and assets	(37)	(11)
Income from unconsolidated joint ventures	(23,919)	(9,568)
Distributions of earnings from unconsolidated joint venture	4,197	8,933
Loss on extinguishment of debt	6,795	306
Noncontrolling interest in consolidated joint ventures	225	310
Inventory impairment and land option write-offs	1,837	3,267
(Increase) decrease in assets:
Origination of mortgage loans	(882,023)	(1,087,731)
Sale of mortgage loans	945,541	1,060,423
Receivables, prepaids, deposits and other assets	(13,464)	(1,972)
Inventories	(332,858)	(96,576)
Deferred tax assets	49,108	(447,453)
Increase (decrease) in liabilities:
State income tax payable	619	(1,348)
Customers’ deposits	31,226	28,443
Accounts payable, accrued interest and other accrued liabilities	4,089	60,022
Net cash (used in) provided by operating activities	(28,597)	82,272
Cash flows from investing activities:
Proceeds from sale of property and assets	63	30
Purchase of property, equipment, and other fixed assets and acquisitions	(8,606)	(3,889)
Investment in and advances to unconsolidated joint ventures	(169)	(16,337)
Distributions of capital from unconsolidated joint ventures	5,427	27,175
Net cash (used in) provided by investing activities	(3,285)	6,979
Cash flows from financing activities:
Proceeds from mortgages and notes	351,227	160,604
Payments related to mortgages and notes	(287,478)	(178,251)
Proceeds from model sale leaseback financing programs	27,433	5,638
Payments related to model sale leaseback financing programs	(11,295)	(18,233)
Proceeds from land bank financing programs	140,179	27,636
Payments related to land bank financing programs	(39,148)	(77,313)
Proceeds from partner distributions to consolidated joint venture	40	40
Payments for partner distributions to consolidated joint venture	(432)	(563)
Preferred dividends paid	(8,007)	0
Deferred financing costs from land banking financing programs and note issuances	(5,318)	(1,205)
Net cash used in financing activities	(931)	(163,645)
Net decrease in cash and cash equivalents, and restricted cash and cash equivalents	(32,813)	(74,394)
Cash and cash equivalents, and restricted cash and cash equivalents balance, beginning of period	311,396	309,460
Cash and cash equivalents, and restricted cash and cash equivalents balance, end of period	278,583	235,066
Supplemental disclosures of cash flows:
Interest, net of capitalized interest (see Note 3 to the Condensed Consolidated Financial Statements)	17,268	54,823
Income taxes	8,689	5,847
Cash and cash equivalents, and restricted cash and cash equivalents balance, end of period	278,583	235,066
Homebuilding [Member]
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Inventory impairment and land option write-offs	1,837	3,267
Supplemental disclosures of cash flows:
Cash and cash equivalents	225,089	172,748
Restricted cash and cash equivalents	15,505	15,100
Financial Services [Member]
Supplemental disclosures of cash flows:
Cash and cash equivalents	4,849	6,187
Restricted cash and cash equivalents	33,140	41,031
Senior Secured Notes [Member]
Cash flows from financing activities:
Payments related to senior secured notes	(103,875)	(111,214)
Mortgage Warehouse Lines of Credit [Member]
Cash flows from financing activities:
Net (payments) proceeds related to mortgage warehouse lines of credit	$ (64,257)	$ 29,216

Supplemental Disclosure of Noncash Investing and Financing Activities

9 Months Ended

Jul. 31, 2022

Cash Flow, Supplemental Disclosures [Text Block]

Supplemental disclosure of noncash investing and financing activities:

In the third quarter of fiscal 2021, we acquired the remaining assets of one of our unconsolidated joint ventures, resulting in a $24.3 million reduction in our investment in the joint venture and a corresponding increase to inventory.

Note 1 - Basis of Presentation

9 Months Ended

Jul. 31, 2022

Basis of Presentation and Significant Accounting Policies [Text Block]

1.	Basis of Presentation

Hovnanian Enterprises, Inc. (“HEI”) conducts all of its homebuilding and financial services operations through its subsidiaries (references herein to the “Company,” “we,” “us” or “our” refer to HEI and its consolidated subsidiaries and should be understood to reflect the consolidated business of HEI’s subsidiaries). HEI has reportable segments consisting of six Homebuilding segments (Northeast, Mid-Atlantic, Midwest, Southeast, Southwest and West) and the Financial Services segment (see Note 17).

The accompanying unaudited Condensed Consolidated Financial Statements include HEI's accounts and those of all of its consolidated subsidiaries after elimination of all of its significant intercompany balances and transactions. Noncontrolling interest represents the proportionate equity interest in a consolidated joint venture that is not 100% owned by the Company. One of HEI's subsidiaries owns a 99% controlling interest in the consolidated joint venture, and therefore HEI is required to consolidate the joint venture within its Condensed Consolidated Financial Statements. The 1% that the Company does not own is accounted for as noncontrolling interest. Another one of HEI's subsidiaries owns an 80% controlling interest in a consolidated joint venture, and therefore HEI is required to consolidate the joint venture within its Condensed Consolidated Financial Statements. The 20% that the Company does not own is accounted for as noncontrolling interest.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021. In the opinion of management, all adjustments for interim periods presented have been made, which include normal recurring accruals and deferrals necessary for a fair presentation of our condensed consolidated financial position, results of operations and cash flows. The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and these differences could have a significant impact on the Condensed Consolidated Financial Statements. Results for interim periods are not necessarily indicative of the results which might be expected for a full year.

Note 2 - Stock Compensation

9 Months Ended

Jul. 31, 2022

Share-Based Payment Arrangement [Text Block]

2.	Stock Compensation

For the three and nine months ended July 31, 2022, the Company’s total stock-based compensation expense was $3.0 million ($2.2 million net of tax) and $6.4 million ($4.8 million net of tax), respectively. For the three and nine months ended July 31, 2021, the Company’s total stock-based compensation expense was $3.6 million ($2.7 million net of tax) and $5.3 million ($4.1 million net of tax), respectively. Included in total stock-based compensation expense was the vesting of stock options of $30 thousand and $0.1 million for the three and nine months ended July 31, 2022, respectively, and $0.1 million and $0.2 million for the three and nine months ended July 31, 2021, respectively.

Note 3 - Interest

9 Months Ended

Jul. 31, 2022

Home Building Interest [Text Block]

3.	Interest

Interest costs incurred, expensed and capitalized were:

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
(In thousands)	2022		2021		2022		2021
Interest capitalized at beginning of period	$	63,573	$	59,772	$	58,159	$	65,010
Plus interest incurred(1)		32,644		39,181		99,299		122,508
Less cost of sales interest expensed		22,453		19,240		57,876		58,130
Less other interest expensed(2)(3)		9,624		19,158		35,442		65,166
Less interest contributed to unconsolidated joint venture(4)		-		-		-		3,667
Plus interest acquired from unconsolidated joint venture(5)		-		3,118		-		3,118
Interest capitalized at end of period(6)	$	64,140	$	63,673	$	64,140	$	63,673

(1)

Data does not include interest incurred by our mortgage and finance subsidiaries.

(2)

Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $5.0 million and $14.4 million for the three months ended July 31, 2022 and 2021, respectively, and $25.5 million and $48.1 million for the nine months ended July 31, 2022 and 2021, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization and therefore is expensed. This component of other interest was $4.6 million and $4.8 million for the three months ended July 31, 2022 and 2021, respectively, and $9.9 million and $17.1 million for the nine months ended July 31, 2022 and 2021, respectively.

(3)	Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest on notes payable, which is calculated as follows:

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2022			2021			2022			2021
Other interest expensed	$	9,624		$	19,158		$	35,442		$	65,166
Interest paid by our mortgage and finance subsidiaries		404			602			1,234			1,554
Increase in accrued interest		(19,194	)		(12,139	)		(19,408	)		(11,897	)
Cash paid for interest, net of capitalized interest	$	(9,166	)	$	7,621		$	17,268		$	54,823

(4)	Represents capitalized interest which was included as part of the assets contributed to joint ventures, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations as a result of these transactions.
(5)	Represents capitalized interest which was included as part of the assets purchased from joint ventures, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations as a result of these transactions.
(6)	Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.

Note 4 - Reduction of Inventory to Fair Value

9 Months Ended

Jul. 31, 2022

Inventory Impairments and Land Option Cost Write-offs [Text Block]

4.	Reduction of Inventory to Fair Value

During the nine months ended July 31, 2022 and 2021, we evaluated inventories of all 393 and 374 communities under development and held for future development or sale, respectively, for impairment indicators through preparation and review of detailed budgets or other market indicators of impairment. As a result of such analysis, we did not identify any impairment indicators and therefore were not required to perform undiscounted future cash flow analyses during the nine months ended July 31, 2022 for any of the 393 communities. We performed undiscounted future cash flow analyses during the nine months ended July 31, 2021 for three of the 374 communities with an aggregate carrying value of $11.5 million, which had projected operating losses or other impairment indicators. As a result of our undiscounted future cash flow analyses, we performed discounted cash flow analyses and recorded impairment losses of $1.2 million in two communities for the three months ended July 31, 2021 and $2.0 million in three communities for the nine months ended July 31, 2021. In the first three quarters of fiscal 2021, the discount rates used for the impairments recorded ranged from 18.3% to 19.3%. In the first three quarters of fiscal 2022, we did not record any impairment losses. Impairment losses are included in the Condensed Consolidated Statement of Operations on the line entitled “Homebuilding: Inventory impairment loss and land option write-offs” and deducted from inventory.

The Condensed Consolidated Statement of Operations line entitled “Homebuilding: Inventory impairment loss and land option write-offs” also includes write-offs of options and approval, engineering and capitalized interest costs that we record when we redesign communities and/or abandon certain engineering costs and we do not exercise options in various locations because the communities' pro forma profitability is not projected to produce adequate returns on investment commensurate with the risk. Total aggregate write-offs related to these items were $1.1 million and $0.1 million for the three months ended July 31, 2022 and 2021, respectively, and $1.8 million and $1.3 million for the nine months ended July 31, 2022 and 2021, respectively. Occasionally, these write-offs are offset by recovered deposits (sometimes through legal action) that had been written off in a prior period as walk-away costs. Historically, these recoveries have not been significant in comparison to the total costs written off. The number of lots walked away from during the three months ended July 31, 2022 and 2021 were 1,892 and 851, respectively, and 3,025 and 1,420 during the nine months ended July 31, 2022 and 2021, respectively. The walk-aways were located in all segments in the first three quarters of fiscal 2022 and in the Mid-Atlantic, Southeast, Southwest and West segments in the first three quarters of fiscal 2021.

We decide to mothball (or stop development on) certain communities when we determine that the current performance does not justify further investment at the time. When we decide to mothball a community, the inventory is reclassified on our Condensed Consolidated Balance Sheets from “Sold and unsold homes and lots under development” to “Land and land options held for future development or sale.” During the first three quarters of fiscal 2022, we did not mothball any additional communities, nor sell any previously mothballed communities. We re-activated four previously mothballed communities. As of July 31, 2022 and October 31, 2021, the net book value associated with our two and six total mothballed communities was $1.4 million and $4.3 million, respectively, which was net of impairment charges recorded in prior periods of $20.3 million and $57.5 million, respectively.

We sell and lease back certain of our model homes with the right to participate in the potential profit when each home is sold to a third party at the end of the respective lease. As a result of our continued involvement, for accounting purposes in accordance with ASC 606-10-55-68, these sale and leaseback transactions are considered a financing rather than a sale. Therefore, for purposes of our Condensed Consolidated Balance Sheets, at July 31, 2022 and October 31, 2021, inventory of $43.8 million and $32.5 million, respectively, was recorded to “Consolidated inventory not owned,” with a corresponding amount of $47.2 million and $31.5 million (net of debt issuance costs), respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

We have land banking arrangements, whereby we sell our land parcels to the land bankers and they provide us an option to purchase back finished lots on a predetermined schedule. Because of our options to repurchase these parcels, for accounting purposes, in accordance with ASC 606-10-55-70, these transactions are considered a financing rather than a sale. For purposes of our Condensed Consolidated Balance Sheets, at July 31, 2022 and October 31, 2021, inventory of $237.1 million and $66.2 million, respectively, was recorded to “Consolidated inventory not owned,” with a corresponding amount of $131.3 million and $31.3 million (net of debt issuance costs), respectively, recorded to “Liabilities from inventory not owned” for the amount of net cash received from the transactions.

Note 5 - Variable Interest Entities

9 Months Ended

Jul. 31, 2022

Variable Interest Entity Disclosure [Text Block]

5.	Variable Interest Entities

The Company enters into land and lot option purchase contracts to procure land or lots for the construction of homes. Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Under the terms of the option purchase contracts, many of the option deposits are not refundable at the Company's discretion. Under the requirements of ASC 810, certain option purchase contracts may result in the creation of a variable interest in the entity (“VIE”) that owns the land parcel under option.

In compliance with ASC 810, the Company analyzes its option purchase contracts to determine whether the corresponding land sellers are VIEs and, if so, whether the Company is the primary beneficiary. Although the Company does not have legal title to the underlying land, ASC 810 requires the Company to consolidate a VIE if the Company is determined to be the primary beneficiary. In determining whether it is the primary beneficiary, the Company considers, among other things, whether it has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. Such activities would include, among other things, determining or limiting the scope or purpose of the VIE, selling or transferring property owned or controlled by the VIE, or arranging financing for the VIE. The Company also considers whether it has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. As a result of its analyses, the Company determined that, as of July 31, 2022 and October 31, 2021, it was not the primary beneficiary of any VIEs from which it is purchasing land under option purchase contracts.

We will continue to secure land and lots using options, some of which are with VIEs. Including deposits on our unconsolidated VIEs, at July 31, 2022, we had total cash deposits amounting to $173.4 million to purchase land and lots with a total purchase price of $1.8 billion. The maximum exposure to loss with respect to our land and lot options is limited to the deposits plus any pre-development costs invested in the property, although some deposits are refundable at our request or refundable if certain conditions are not met.

Note 6 - Warranty Costs

9 Months Ended

Jul. 31, 2022

Product Warranty Disclosure [Text Block]

6.	Warranty Costs

General liability insurance for homebuilding companies and their suppliers and subcontractors is very difficult to obtain. The availability of general liability insurance is limited due to a decreased number of insurance companies willing to underwrite for the industry. In addition, those few insurers willing to underwrite liability insurance have significantly increased the premium costs. To date, we have been able to obtain general liability insurance but at higher premium costs with higher deductibles. Our subcontractors and suppliers have advised us that they have also had difficulty obtaining insurance that also provides us coverage. As a result, we have an owner controlled insurance program for certain of our subcontractors whereby the subcontractors pay us an insurance premium (through a reduction of amounts we would otherwise owe such subcontractors for their work on our homes) based on the risk type of the trade. We absorb the liability associated with their work on our homes as part of our overall general liability insurance at no additional cost to us because our existing general liability and construction defect insurance policy and related reserves for amounts under our deductible covers construction defects regardless of whether we or our subcontractors are responsible for the defect. For the three and nine months ended July 31, 2022 and 2021, we received $2.4 million and $1.4 million, respectively, and $5.6 million and $4.5 million, respectively, from subcontractors related to the owner-controlled insurance program, which we accounted for as reductions to inventory.

We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. This accrual is expensed as selling, general and administrative costs. For homes to be delivered in fiscal 2022 and previously delivered in 2021, our deductible under our general liability insurance is or was a $25 million and $20 million, respectively, aggregate for construction defect and warranty claims. For bodily injury claims, our deductible per occurrence in fiscal 2022 and 2021 is or was $0.25 million, up to a $5 million limit. Our aggregate retention for construction defect, warranty and bodily injury claims is $25 million for fiscal 2022 and was $20 million for fiscal 2021. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs as part of cost of sales at the time each home is closed and title and possession have been transferred to the homebuyer. Additions and charges in the warranty reserve and general liability reserve for the three and nine months ended July 31, 2022 and 2021 were as follows:

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2022			2021			2022			2021

Balance, beginning of period	$	91,464		$	90,025		$	94,916		$	86,417
Additions – Selling, general and administrative		1,995			2,047			6,337			6,504
Additions – Cost of sales		3,990			6,058			7,083			10,059
Charges incurred during the period		(3,047	)		(3,513	)		(12,984	)		(10,249	)
Changes to pre-existing reserves		(94	)		789			(1,044	)		2,675
Balance, end of period	$	94,308		$	95,406		$	94,308		$	95,406

Warranty accruals are based upon historical experience. We engage a third-party actuary that uses our historical warranty and construction defect data to assist our management in estimating our unpaid claims, claim adjustment expenses and incurred but not reported claims reserves for the risks that we are assuming under the general liability and construction defect programs. The estimates include provisions for inflation, claims handling and legal fees.

Insurance claims paid by our insurance carriers, excluding insurance deductibles paid, were $0.1 million for both the nine months ended July 31, 2022 and 2021 for prior year deliveries.

Note 7 - Commitments and Contingent Liabilities

9 Months Ended

Jul. 31, 2022

Commitments and Contingencies Disclosure [Text Block]

7.	Commitments and Contingent Liabilities

We are involved in litigation arising in the ordinary course of business, none of which is expected to have a material adverse effect on our financial position, results of operations or cash flows, and we are subject to extensive and complex laws and regulations that affect the development of land and home building, sales and customer financing processes, including zoning, density, building standards and mortgage financing. These laws and regulations often provide broad discretion to the administering governmental authorities. This can delay or increase the cost of development or homebuilding. The significant majority of our litigation matters are related to construction defect claims. Our estimated losses from construction defect litigation matters, if any, are included in our construction defect reserves.

We also are subject to a variety of local, state, federal and foreign laws and regulations concerning protection of health and the environment, including those regulating the emission or discharge of materials into the environment, the management of storm water runoff at construction sites, the handling, use, storage and disposal of hazardous substances, impacts to wetlands and other sensitive environments, and the remediation of contamination at properties that we have owned or developed or currently own or are developing (“environmental laws”). The particular environmental laws that apply to a site may vary greatly according to the community site, for example, due to the community, the environmental conditions at or near the site, and the present and former uses of the site. These environmental laws may result in delays, may cause us to incur substantial compliance, remediation and/or other costs, and can prohibit or severely restrict development and homebuilding activity. In addition, noncompliance with these laws and regulations could result in fines and penalties, obligations to remediate or take corrective action, permit revocations or other sanctions; and contamination or other environmental conditions at or in the vicinity of our developments may result in claims against us for personal injury, property damage or other losses.

We anticipate that increasingly stringent requirements will continue to be imposed on developers and homebuilders in the future. In addition, some of these laws and regulations that significantly affect how certain properties may be developed are contentious, attract intense political attention, and may be subject to significant changes over time. For example, regulations governing wetlands permitting under the federal Clean Water Act have been the subject of extensive rulemakings for many years, resulting in several major joint rulemakings by the EPA and the U.S. Army Corps of Engineers that have expanded and contracted the scope of wetlands subject to regulation; and such rulemakings have been the subject of many legal challenges, some of which remain pending. It is unclear how these and related developments, including at the state or local level, ultimately may affect the scope of regulated wetlands where we operate. Although we cannot reliably predict the extent of any effect these developments regarding wetlands, or any other requirements that may take effect, may have on us, they could result in time-consuming and expensive compliance programs and in substantial expenditures, which could cause delays and increase our cost of operations. In addition, our ability to obtain or renew permits or approvals and the continued effectiveness of permits already granted or approvals already obtained is dependent upon many factors, some of which are beyond our control, such as changes in policies, rules and regulations and their interpretations and application.

In March 2013, we received a letter from the Environmental Protection Agency (“EPA”) requesting information about our involvement in a housing redevelopment project in Newark, New Jersey that a Company entity undertook during the 1990s. We understand that the development is in the vicinity of a former lead smelter and that tests on soil samples from properties within the development conducted by the EPA showed elevated levels of lead. We also understand that the smelter ceased operations many years before the Company entity involved acquired the properties in the area and carried out the re-development project. We responded to the EPA’s request. In August 2013, we were notified that the EPA considers us a potentially responsible party (or “PRP”) with respect to the site, that the EPA will clean up the site, and that the EPA is proposing that we fund and/or contribute towards the cleanup of the contamination at the site. We began preliminary discussions with the EPA concerning a possible resolution. The EPA requested additional information in April 2014 and again in March 2017 and the Company responded to the information requests. On May 2, 2018 the EPA sent a letter to the Company entity demanding reimbursement for 100% of the EPA’s costs to clean-up the site in the amount of $2.7 million. The Company responded to the EPA’s demand letter on June 15, 2018 setting forth the Company’s defenses and expressing its willingness to enter into settlement negotiations. Two other PRPs identified by the EPA began negotiations with the EPA and preliminary negotiations with the Company regarding the site. The EPA then requested that the three PRPs present a joint settlement offer to the EPA. In June 2022, the Company and one of the other PRPs reached an agreement with the EPA for a total settlement of $1.5 million (plus accrued interest), with the Company contributing $0.8 million to the settlement, which was slightly below the amount we had previously accrued. The consent decree entered into by the settling parties was submitted to the United States District Court for the District of New Jersey (where the EPA has filed a complaint seeking reimbursement of response costs) on June 14, 2022 and was signed and filed by such Court on August 9, 2022.

In 2015, the condominium association of the Four Seasons at Great Notch condominium community (the “Great Notch Plaintiff”) filed a lawsuit in the Superior Court of New Jersey, Law Division, Passaic County (the “Court”) alleging various construction defects, design defects, and geotechnical issues relating to the community. The operative complaint (“Complaint”) asserts claims against Hovnanian Enterprises, Inc. and several of its affiliates, including K. Hovnanian at Great Notch, LLC, K. Hovnanian Construction Management, Inc., and K. Hovnanian Companies, LLC. The Complaint also asserts claims against various other design professionals and contractors. The Great Notch Plaintiff has also filed a motion, which remains pending, to permit it to pursue a claim to pierce the corporate veil of K. Hovnanian at Great Notch, LLC to hold its alleged parent entities liable for any damages awarded against it. To date, the Hovnanian-affiliated defendants have reached a partial settlement with the Great Notch Plaintiff as to a portion of the Great Notch Plaintiff’s claims against them for an amount immaterial to the Company. On its remaining claims against the Hovnanian-affiliated defendants, the Great Notch Plaintiff has asserted damages of approximately $119.5 million, which amount is potentially subject to treble damages pursuant to the Great Notch Plaintiff’s claim under the New Jersey Consumer Fraud Act. The trial is currently scheduled for January 23, 2023. The Hovnanian-affiliated defendants intend to defend these claims vigorously.

In December 2020, the NJDEP and the Administrator of the New Jersey Spill Compensation Fund (the “Spill Fund”) filed a lawsuit in the Superior Court of New Jersey, Law Division, Union County against Hovnanian Enterprises, Inc. in addition to other unrelated parties, in connection with contamination at Hickory Manor, a residential condominium development. Alleged predecessors of certain defendants had used the Hickory Manor property for decades for manufacturing purposes. In 1998, NJDEP confirmed that groundwater at this site was impacted from an off-site source. The site was later remediated, resulting in the NJDEP issuing an unconditional site-wide No Further Action determination letter and Covenant Not to Sue in 1999. Subsequently, one of our affiliates was involved in redeveloping the property as a residential community. The complaint asserts claims under the New Jersey Spill Act and other state law claims and alleges that the NJDEP and the Spill Fund have incurred over $5.3 million since 2009 to investigate vapor intrusion at the development and to install vapor mitigation systems. Among other things, the complaint seeks recovery of the costs incurred, an order that defendants perform additional required remediation and disgorgement of profits on our affiliate’s sales of the units in the development. Discovery has commenced. Hovnanian Enterprises, Inc. intends to defend these claims vigorously.

Note 8 - Cash and Cash Equivalents, Restricted Cash and Cash Equivalents and Customer's Deposits

9 Months Ended

Jul. 31, 2022

Cash and Cash Equivalents Disclosure [Text Block]

8.	Cash and Cash Equivalents, Restricted Cash and Cash Equivalents and Customer's Deposits

Cash represents cash deposited in checking accounts. Cash equivalents include certificates of deposit, Treasury bills and government money–market funds with maturities of 90 days or less when purchased. Our cash balances are held at a few financial institutions and may, at times, exceed insurable amounts. We believe we help to mitigate this risk by depositing our cash in major financial institutions. At July 31, 2022 and October 31, 2021, $13.7 million and $15.7 million, respectively, of the total cash and cash equivalents was in cash equivalents and restricted cash equivalents, the book value of which approximates fair value.

Homebuilding - Restricted cash and cash equivalents on the Condensed Consolidated Balance Sheets totaled $15.5 million and $16.1 million as of July 31, 2022 and October 31, 2021, respectively, the majority of which represents cash collateralizing our letter of credit agreements and facilities as discussed in Note 12.

Financial services restricted cash and cash equivalents, which are included in Financial services assets on the Condensed Consolidated Balance Sheets, totaled $33.1 million and $43.5 million as of July 31, 2022 and October 31, 2021, respectively. Included in these balances were (1) financial services customers’ deposits of $31.1 million at July 31, 2022 and $40.7 million as of October 31, 2021, which are subject to restrictions on our use, and (2) $2.0 million at July 31, 2022 and $2.8 million as of October 31, 2021 of restricted cash under the terms of our mortgage warehouse lines of credit.

Total Homebuilding Customers’ deposits are shown as a liability on the Condensed Consolidated Balance Sheets. These liabilities are significantly more than the applicable periods’ restricted cash balances because, in some states, the deposits are not restricted from use and, in other states, we are able to release the majority of these customer deposits to cash by pledging letters of credit and surety bonds.

Note 9 - Leases

9 Months Ended

Jul. 31, 2022

Lessee, Operating Leases [Text Block]

9.	Leases

We lease certain office space for use in our operations. We assess each of these contracts to determine whether the arrangement contains a lease as defined by ASC 842 “Leases” ("ASC 842"). In order to meet the definition of a lease under ASC 842, the contractual arrangement must convey to us the right to control the use of an identifiable asset for a period of time in exchange for consideration. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Our office lease terms are generally from three to five years and generally contain renewal options. In accordance with ASC 842, our lease terms include those renewals only to the extent that they are reasonably certain to be exercised. The exercise of these lease renewal options is generally at our discretion. In accordance with ASC 842, the lease liability is equal to the present value of the remaining lease payments while the right of use (“ROU”) asset is based on the lease liability, subject to adjustment, such as for lease incentives. Our leases do not provide a readily determinable implicit interest rate and therefore, we must estimate our incremental borrowing rate. In determining the incremental borrowing rate, we consider the lease period and our collateralized borrowing rates.

Our lease population at July 31, 2022 is comprised of operating leases where we are the lessee, and these leases are primarily real estate for office space for our corporate office, division offices and design centers. As allowed by ASC 842, we adopted an accounting policy election to not record leases with lease terms of twelve months or less on our Condensed Consolidated Balance Sheets.

Lease cost included in our Condensed Consolidated Statements of Operations in Selling, general and administrative expenses and payments on our lease liabilities are presented in the table below. Our short-term lease costs and sublease income are de minimis.

	*Three Months Ended*				*Nine Months Ended*
(In thousands)	*July 31, 2022*		*July 31, 2021*		*July 31, 2022*		*July 31, 2021*
Operating lease cost	$	2,528	$	2,760	$	7,793	$	7,970
Cash payments on lease liabilities	$	2,432	$	2,483	$	7,086	$	7,171

ROU assets are classified within Prepaids and other assets on our Condensed Consolidated Balance Sheets, while lease liabilities are classified within Accounts payable and other liabilities on our Condensed Consolidated Balance Sheets. During the three and nine months ended July 31, 2022, the Company recorded an additional $1.4 million and $9.8 million, respectively, to both its ROU assets and lease liabilities as a result of new leases and lease renewals that commenced during the period. The following table contains additional information about our leases:

(In thousands)	*At July 31, 2022*			*At October 31, 2021*
ROU assets	$	18,898		$	17,844
Lease liabilities	$	19,940		$	18,952
Weighted-average remaining lease term (in years)		3.5			3.1
Weighted-average discount rate (incremental borrowing rate)		9.5	%		9.4	%

Maturities of our operating lease liabilities as of July 31, 2022 are as follows:

Year ending October 31,	*(in thousands)*
2022 (excluding the nine months ended July 31, 2022)	$	2,417
2023		8,146
2024		5,494
2025		4,404
2026		2,758
2027		1,396
Total payments		24,615
Less: imputed interest		(4,675	)
Present value of lease liabilities	$	19,940

Note 10 - Mortgage Loans Held for Sale

9 Months Ended

Jul. 31, 2022

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

10.

Mortgage Loans Held for Sale

Our wholly owned mortgage banking subsidiary, K. Hovnanian American Mortgage, LLC (“K. Hovnanian Mortgage”), originates mortgage loans, primarily from the sale of our homes. Such mortgage loans are sold in the secondary mortgage market within a short period of time of origination. Mortgage loans held for sale consist primarily of single-family residential loans collateralized by the underlying property. We have elected the fair value option to record loans held for sale, and therefore these loans are recorded at fair value with the changes in the value recognized in the Condensed Consolidated Statements of Operations in “Revenues: Financial services.” We currently use forward sales of mortgage-backed securities (“MBS”), interest rate commitments from borrowers and mandatory and/or best efforts forward commitments to sell loans to third-party purchasers to protect us from interest rate fluctuations. These short-term instruments, which do not require any payments to be made to the counterparty or purchaser in connection with the execution of the commitments, are recorded at fair value. Gains and losses on changes in the fair value are recognized in the Condensed Consolidated Statements of Operations in “Revenues: Financial services.”

At July 31, 2022 and October 31, 2021, $71.9 million and $136.5 million, respectively, of mortgages held for sale were pledged against our mortgage warehouse lines of credit (see Note 11). We may incur losses with respect to mortgages that were previously sold that are delinquent and which had underwriting defects, but only to the extent the losses are not covered by mortgage insurance or resale value of the home. The reserves for these estimated losses are included in the “Financial services” balances on the Condensed Consolidated Balance Sheets. As of July 31, 2022 and 2021, we had reserves specifically for 13 and 16 identified mortgage loans, respectively, as well as reserves for an estimate for future losses on mortgages sold but not yet identified to us.

The activity in our loan origination reserves during the three and nine months ended July 31, 2022 and 2021 was as follows:

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
(In thousands)	2022		2021		2022			2021

Loan origination reserves, beginning of period	$	1,714	$	1,524	$	1,632		$	1,458
Provisions for losses during the period		43		58		133			167
Adjustments to pre-existing provisions for losses from changes in estimates		-		-		(8	)		(43	)
Loan origination reserves, end of period	$	1,757	$	1,582	$	1,757		$	1,582

Note 11 - Mortgages

9 Months Ended

Jul. 31, 2022

Line of Credit [Text Block]

11.

Mortgages

Nonrecourse. We have nonrecourse mortgage loans for certain communities totaling $187.8 million and $125.1 million (net of debt issuance costs) at July 31, 2022 and October 31, 2021, respectively, which are secured by the related real property, including any improvements, with an aggregate book value of $527.6 million and $448.5 million, respectively. The weighted-average interest rate on these obligations was 6.1% and 4.4% at July 31, 2022 and October 31, 2021, respectively, and the mortgage loan payments on each community primarily correspond to home deliveries.

Mortgage Loans. K. Hovnanian Mortgage originates mortgage loans primarily from the sale of our homes. Such mortgage loans and related servicing rights are sold in the secondary mortgage market within a short period of time. In certain instances, we retain the servicing rights for a small amount of loans. K. Hovnanian Mortgage finances the origination of mortgage loans through various master repurchase agreements, which are recorded in "Financial services" liabilities on the Condensed Consolidated Balance Sheets.

Our secured Master Repurchase Agreement with JPMorgan Chase Bank, N.A. (“Chase Master Repurchase Agreement”), which was amended on July 29, 2022 to extend the maturity date to July 31, 2023, is a short-term borrowing facility that provides up to $50.0 million through its maturity. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable monthly on outstanding advances at an adjusted Secured Overnight Financing Rate ("SOFR"), which was 2.33% at July 31, 2022, plus the applicable margin of 2.25% to 2.375%. As of July 31, 2022 and October 31, 2021, the aggregate principal amount of all borrowings outstanding under the Chase Master Repurchase Agreement was $25.5 million and $45.7 million, respectively.

K. Hovnanian Mortgage has another secured Master Repurchase Agreement with Customers Bank (“Customers Master Repurchase Agreement”) which is a short-term borrowing facility that provides up to $50.0 million through its maturity on March 8, 2023. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable daily or as loans are sold to permanent investors on outstanding advances at the current Bloomberg Short Term Bank Yield Index ("BSBY") rate, plus the applicable margin ranging from 2.125% to 4.5% based on the type of loan and the number of days outstanding on the warehouse line. As of July 31, 2022 and October 31, 2021, the aggregate principal amount of all borrowings outstanding under the Customers Master Repurchase Agreement was $21.2 million and $40.5 million, respectively.

K. Hovnanian Mortgage also has a secured Master Repurchase Agreement with Comerica Bank (“Comerica Master Repurchase Agreement”) which is a short-term borrowing facility that matures on January 9, 2023. The Comerica Master Repurchase Agreement provides up to $60.0 million on the 15th day of the last month of the Company's fiscal quarters, and reverts back to up to $50.0 million 30 days thereafter. The loan is secured by the mortgages held for sale and is repaid when we sell the underlying mortgage loans to permanent investors. Interest is payable monthly at the daily adjusting BSBY rate, subject to a floor of 0.50%, plus the applicable margin of 1.875% or 3.25% based upon the type of loan. As of July 31, 2022 and October 31, 2021, the aggregate principal amount of all borrowings outstanding under the Comerica Master Repurchase Agreement was $24.0 million and $48.7 million, respectively.

The Chase Master Repurchase Agreement, Customers Master Repurchase Agreement and Comerica Master Repurchase Agreement (together, the “Master Repurchase Agreements”) require K. Hovnanian Mortgage to satisfy and maintain specified financial ratios and other financial condition tests. Because of the extremely short period of time mortgages are held by K. Hovnanian Mortgage before the mortgages are sold to investors (generally a period of a few weeks), the immateriality to us on a consolidated basis of the size of the Master Repurchase Agreements, the levels required by these financial covenants, our ability based on our immediately available resources to contribute sufficient capital to cure any default, were such conditions to occur, and our right to cure any conditions of default based on the terms of the applicable agreement, we do not consider any of these covenants to be substantive or material. As of July 31, 2022, we believe we were in compliance with the covenants under the Master Repurchase Agreements.

Note 12 - Senior Notes and Credit Facilities

9 Months Ended

Jul. 31, 2022

Long-Term Debt [Text Block]

12.

Senior Notes and Credit Facilities

Senior notes and credit facilities balances as of July 31, 2022 and October 31, 2021, were as follows:

	*July 31,*			*October 31,*
(In thousands)	*2022*			*2021*
Senior Secured Notes:
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025	$	158,502		$	158,502
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		250,000			350,000
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		282,322			282,322
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		162,269			162,269
Total Senior Secured Notes	$	853,093		$	953,093
Senior Notes:
8.0% Senior Notes due November 1, 2027 (1)	$	-		$	-
13.5% Senior Notes due February 1, 2026		90,590			90,590
5.0% Senior Notes due February 1, 2040		90,120			90,120
Total Senior Notes	$	180,710		$	180,710
Senior Unsecured Term Loan Credit Facility due February 1, 2027	$	39,551		$	39,551
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028	$	81,498		$	81,498
Senior Secured Revolving Credit Facility (2)	$	-		$	-
Subtotal notes payable	$	1,154,852		$	1,254,852
Net (discounts) premiums	$	6,266		$	10,769
Net debt issuance costs	$	(13,246	)	$	(17,248	)
Total notes payable, net of discounts, premiums and debt issuance costs	$	1,147,872		$	1,248,373

(1) $26.0 million of 8.0% Senior Notes due 2027 (the "8.0% 2027 Notes") are owned by a wholly-owned consolidated subsidiary of HEI. Therefore, in accordance with GAAP, such notes are not reflected on the Condensed Consolidated Balance Sheets of HEI.

(2) At July 31, 2022, provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans. On August 19, 2022, the maturity of the Senior Secured Revolving Credit Facility was extended from December 28, 2022 to June 30, 2024 and the fixed interest rate was replaced with a floating interest rate in each case, effective upon the satisfaction of customary conditions in respect of the collateral securing the borrowings thereunder. See Note 22.

General

Except for K. Hovnanian, the issuer of the notes and borrower under the Credit Facilities (as defined below), our home mortgage subsidiaries, certain of our title insurance subsidiaries, joint ventures and subsidiaries holding interests in our joint ventures, we and each of our subsidiaries are guarantors of the Credit Facilities, the senior secured notes and senior notes outstanding (except for the 8.0% 2027 Notes which are not guaranteed by K. Hovnanian at Sunrise Trail III, LLC, a wholly-owned subsidiary of the Company) at July 31, 2022 (collectively, the “Notes Guarantors”).

The credit agreements governing the Credit Facilities and the indentures governing the senior secured and senior notes (together, the “Debt Instruments”) outstanding at July 31, 2022 do not contain any financial maintenance covenants, but do contain restrictive covenants that limit, among other things, the ability of HEI and certain of its subsidiaries, including K. Hovnanian, to incur additional indebtedness, pay dividends and make distributions on common and preferred stock, repay/repurchase certain indebtedness prior to its respective stated maturity, repurchase (including through exchanges) common and preferred stock, make other restricted payments (including investments), sell certain assets (including in certain land banking transactions), incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets and enter into certain transactions with affiliates. The Debt Instruments also contain customary events of default which would permit the lenders or holders thereof to exercise remedies with respect to the collateral (as applicable), declare the loans made under the Unsecured Term Loan Facility (defined below) (the “Unsecured Term Loans”), loans made under the Secured Term Loan Facility (defined below) (the “Secured Term Loans”) and loans made under the Secured Credit Agreement (as defined below) (the “Secured Revolving Loans”) or notes to be immediately due and payable if not cured within applicable grace periods, including the failure to make timely payments on the Unsecured Term Loans, Secured Term Loans, Secured Revolving Loans or notes or other material indebtedness, cross default to other material indebtedness, the failure to comply with agreements and covenants and specified events of bankruptcy and insolvency, with respect to the Unsecured Term Loans, Secured Term Loans and Secured Revolving Loans, material inaccuracy of representations and warranties and with respect to the Unsecured Term Loans, Secured Term Loans and Secured Revolving Loans, a change of control, and, with respect to the Secured Term Loans, Secured Revolving Loans and senior secured notes, the failure of the documents granting security for the obligations under the secured Debt Instruments to be in full force and effect, and the failure of the liens on any material portion of the collateral securing the obligations under the secured Debt Instruments to be valid and perfected. As of July 31, 2022, we believe we were in compliance with the covenants of the Debt Instruments.

If our consolidated fixed charge coverage ratio is less than 2.0 to 1.0, as defined in the applicable Debt Instrument, we are restricted from making certain payments, including dividends (in each such case, our secured debt leverage ratio must also be less than 4.0 to 1.0), and from incurring indebtedness other than certain permitted indebtedness and nonrecourse indebtedness. Beginning as of October 31, 2021, as a result of our improved operating results, our fixed coverage ratio was above 2.0 to 1.0 and our secured debt leverage ratio was below 4.0 to 1.0, therefore we were no longer restricted from paying dividends. As such, we made dividend payments of $2.7 million to preferred shareholders in each of the first, second and third quarters of fiscal 2022.

Under the terms of our Debt Instruments, we have the right to make certain redemptions and prepayments and, depending on market conditions, our strategic priorities and covenant restrictions, may do so from time to time. We also continue to actively analyze and evaluate our capital structure and explore transactions to simplify our capital structure and to strengthen our balance sheet, including those that reduce leverage, interest rates and/or extend maturities, and will seek to do so with the right opportunity. We may also continue to make debt purchases and/or exchanges for debt or equity from time to time through tender offers, exchange offers, redemptions, open market purchases, private transactions, or otherwise, or seek to raise additional debt or equity capital, depending on market conditions and covenant restrictions.

Fiscal 2022

On April 29, 2022, K. Hovnanian redeemed $100.0 million aggregate principal amount of its 7.75% Senior Secured 1.125 Lien Notes due 2026 (the "1.125 Lien Notes"). The aggregate purchase price for this redemption was $105.5 million, which included accrued and unpaid interest and which was funded with cash on hand. This redemption resulted in a loss on extinguishment of debt of $6.8 million for the nine months ended July 31, 2022, including the write-off of unamortized financing costs and fees. The loss from the redemption is included in the Condensed Consolidated Statement of Operations as "Loss on extinguishment of debt".

On August 19, 2022, the Company, K. Hovnanian, and other subsidiaries of the Company as guarantors entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement, dated as of October 31, 2019, as amended by the First Amendment, dated as of November 27, 2019, by and among K. Hovnanian, the Company, the other guarantors party thereto, Wilmington Trust, National Association, as administrative agent, and the lenders party thereto, which provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans (the “Revolving Credit Facility”). Upon effectiveness, the Second Amendment will (i) extend the final scheduled maturity of the Revolving Credit Facility from December 28, 2022 to June 30, 2024, (ii) replace the 7.75% fixed interest rate with a floating interest rate based on the SOFR and (iii) provide for certain technical and clarifying amendments. Borrowings under the Revolving Credit Facility will bear interest, at K. Hovnanian’s option, at either (i) a term SOFR rate (subject to a floor of 1.00%) plus an applicable margin of 4.50% or (ii) an alternate base rate plus an applicable margin of 3.50%. In addition, K. Hovnanian will pay an unused commitment fee on the undrawn revolving commitments at a rate of 1.00% per annum. The foregoing amendments will take effect upon the satisfaction of customary conditions in respect of the collateral securing the borrowings under the Revolving Credit Facility.

Fiscal 2021

On July 30, 2021, K. Hovnanian redeemed in full all of the $111.2 million aggregate principal amount of 10.0% Senior Secured Notes due 2022 (the "10.0% 2022 Notes"). The aggregate purchase price for this redemption was $111.7 million, which included accrued and unpaid interest and which was funded with cash on hand. This redemption resulted in a loss on extinguishment of debt of $0.3 million for the three months ended July 31, 2021, net of the write-off of unamortized financing costs and fees. The loss from the redemption is included in the Condensed Consolidated Statement of Operations as "Loss on extinguishment of debt".

On August 2, 2021, K. Hovnanian redeemed in full all of the $69.7 million aggregate principal amount of 10.5% Senior Secured Notes due 2024 (the "10.5% 2024 Notes"). The aggregate purchase price for this redemption was $71.9 million, which included accrued and unpaid interest and which was funded with cash on hand.

Secured Obligations

On October 31, 2019, K. Hovnanian, HEI, the Notes Guarantors, Wilmington Trust, National Association, as administrative agent, and affiliates of certain investment managers (the “Investors”), as lenders, entered into a credit agreement (the “Secured Credit Agreement” and, together with the Unsecured Term Loan Facility (defined below) and the Secured Term Loan Facility, the “Credit Facilities”) providing for up to $125.0 million in aggregate amount of Secured Revolving Loans to be used for general corporate purposes, upon the terms and subject to the conditions set forth therein. Secured Revolving Loans are to be borrowed by K. Hovnanian and guaranteed by the Notes Guarantors. On August 19, 2022, the maturity of the Secured Credit Agreement was extended from December 28, 2022 to June 30, 2024 and the fixed interest rate was replaced with a floating interest rate in each case, effective upon the satisfaction of customary conditions in respect of the collateral securing the borrowings thereunder. See Note 22.

The 1.125 Lien Notes have a maturity of February 15, 2026 and bear interest at a rate of 7.75% per annum payable semi-annually on February 15 and August 15 of each year, to holders of record at the close of business on February 1 and August 1, as the case may be, immediately preceding such interest payment dates. K. Hovnanian may also redeem some or all of the 1.125 Lien Notes at 103.875% of principal commencing February 15, 2022, at 101.937% of principal commencing February 15, 2023 and at 100.0% of principal commencing February 15, 2024.

The 10.5% Senior Secured 1.25 Lien Notes due 2026 (the "1.25 Lien Notes") have a maturity of February 15, 2026 and bear interest at a rate of 10.5% per annum payable semi-annually on February 15 and August 15 of each year to holders of record at the close of business on February 1 and August 1, as the case may be, immediately preceding such interest payment dates. K. Hovnanian may also redeem some or all of the 1.25 Lien Notes at 105.25% of principal commencing February 15, 2022, at 102.625% of principal commencing February 15, 2023 and at 100.0% of principal commencing February 15, 2024.

The 11.25% Senior Secured 1.5 Lien Notes due 2026 (the "1.5 Lien Notes") have a maturity of February 15, 2026 and bear interest at a rate of 11.25% per annum payable semi-annually on February 15 and August 15 of each year to holders of record at the close of business on February 1 and August 1, as the case may be, immediately preceding such interest payment dates. The 1.5 Lien Notes are redeemable in whole or in part at our option at any time prior to February 15, 2026 at 100.0% of their principal amount.

The 10.0% 1.75 Lien Notes due 2025 (the "1.75 Lien Notes") have a maturity of November 15, 2025 and bear interest at a rate of 10.0% per annum payable semi-annually on May 15 and November 15 of each year to holders of record at the close of business on May 1 or November 1, as the case may be, immediately preceding each such interest payment date. At any time and from time to time prior to November 15, 2022, K. Hovnanian may redeem some or all of the 1.75 Lien Notes at a redemption price equal to 105.00% of their principal amount, at any time and from time to time after November 15, 2022 and prior to November 15, 2023, K. Hovnanian may redeem some or all of the 1.75 Lien Notes at a redemption price equal to 102.50% of their principal amount and at any time and from time to time after November 15, 2023, K. Hovnanian may redeem some or all of the 1.75 Lien Notes at a redemption price equal to 100.0% of their principal amount.

On December 10, 2019, K. Hovnanian entered into a Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028 (the “Secured Term Loan Facility”). The secured term loans under the Secured Term Loan Facility (the “Secured Term Loans”) bear interest at a rate equal to 10.0% per annum and will mature on January 31, 2028, with interest payable in arrears on the last business day of each fiscal quarter. At any time and from time to time prior to November 15, 2022, K. Hovnanian may voluntarily prepay some or all of the Secured Term Loans at a prepayment price equal to 105.00% of their principal amount, at any time and from time to time after November 15, 2022 and prior to November 15, 2023, K. Hovnanian may voluntarily prepay some or all of the Secured Term Loans at a prepayment price equal to 102.50% of their principal amount and at any time and from time to time after November 15, 2023, K. Hovnanian may voluntarily prepay some or all of the Secured Term Loans at a prepayment price equal to 100.0% of their principal amount.

Each series of secured notes and the guarantees thereof, the Secured Term Loans and the guarantees thereof and the Secured Credit Agreement and the guarantees thereof are secured by the same assets. Among the secured debt, the liens securing the Secured Credit Agreement are senior to the liens securing all of K. Hovnanian’s other secured notes and the Secured Term Loan. The liens securing the 1.125 Lien Notes are senior to the liens securing the 1.25 Lien Notes, 1.5 Lien Notes, the 1.75 Lien Notes, the Secured Term Loans and any other future secured obligations that are junior in priority with respect to the assets securing the 1.125 Lien Notes, the liens securing the 1.25 Lien Notes are senior to the liens securing the 1.5 Lien Notes, the 1.75 Lien Notes, the Secured Term Loans and any other future secured obligations that are junior in priority with respect to the assets securing the 1.25 Lien Notes, the liens securing the 1.5 Lien Notes are senior to the liens securing the 1.75 Lien Notes, the Secured Term Loans and any other future secured obligations that are junior in priority with respect to the assets securing the 1.5 Lien Notes, the liens securing the 1.75 Lien Notes and the Secured Term Loans (which are secured on a pari passu basis with each other) are senior to any other future secured obligations that are junior in priority with respect to the assets securing the 1.75 Lien Notes and the Secured Term Loans, in each case, with respect to the assets securing such debt.

As of July 31, 2022, the collateral securing the Secured Credit Agreement, the Secured Term Loan Facility and the secured notes included (1) $220.9 million of cash and cash equivalents, which included $7.3 million of restricted cash collateralizing certain letters of credit (subsequent to such date, fluctuations as a result of cash uses include general business operations and real estate and other investments along with cash inflow primarily from deliveries); (2) $430.3 million aggregate book value of real property, which does not include the impact of inventory investments, home deliveries or impairments thereafter and which may differ from the value if it were appraised; and (3) equity interests in joint venture holding companies with an aggregate book value of $102.6 million.

Unsecured Obligations

The 13.5% Senior Notes due 2026 (the “13.5% 2026 Notes”) bear interest at 13.5% per annum and mature on February 1, 2026. Interest on the 13.5% 2026 Notes is payable semi-annually on February 1 and August 1 of each year to holders of record at the close of business on January 15 or July 15, as the case may be, immediately preceding each such interest payment date. The 13.5% 2026 Notes are redeemable in whole or in part at K. Hovnanian’s option at any time prior to February 1, 2025 at a redemption price equal to 100% of their principal amount plus an applicable “Make Whole Amount”. At any time and from time to time on or after February 1, 2025, K. Hovnanian may also redeem some or all of the 13.5% 2026 Notes at a redemption price equal to 100.0% of their principal amount.

The 5.0% Senior Notes due 2040 (the “5.0% 2040 Notes”) bear interest at 5.0% per annum and mature on February 1, 2040. Interest on the 5.0% 2040 Notes is payable semi-annually on February 1 and August 1 of each year to holders of record at the close of business on January 15 or July 15, as the case may be, immediately preceding each such interest payment date. At any time and from time to time, K. Hovnanian may redeem some or all of the 2040 Notes at a redemption price equal to 100.0% of their principal amount.

The Unsecured Term Loans bear interest at a rate equal to 5.0% per annum and interest is payable in arrears, on the last business day of each fiscal quarter. The Unsecured Term Loans will mature on February 1, 2027.

Other

We have certain stand-alone cash collateralized letter of credit agreements and facilities under which there was a total of $7.1 million and $9.3 million letters of credit outstanding at July 31, 2022 and October 31, 2021, respectively. These agreements and facilities require us to maintain specified amounts of cash as collateral in segregated accounts to support the letters of credit issued thereunder, which will affect the amount of cash we have available for other uses. At July 31, 2022 and October 31, 2021, the amount of cash collateral in these segregated accounts was $7.3 million and $9.9 million, respectively, which is reflected in “Restricted cash and cash equivalents” on the Condensed Consolidated Balance Sheets.

Note 13 - Per Share Calculation

9 Months Ended

Jul. 31, 2022

Earnings Per Share [Text Block]

13.

Per Share Calculation

Basic earnings per share is computed by dividing net income (the “numerator”) by the weighted-average number of common shares outstanding, adjusted for nonvested shares of restricted stock (the “denominator”) for the period. 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. 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:

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands, except per share data)	2022			2021			2022			2021

Numerator:
Net earnings attributable to Hovnanian	$	82,614		$	47,702		$	169,857		$	555,337
Less: preferred stock dividends	$	(2,669	)				$	(8,007	)
Less: undistributed earnings allocated to nonvested shares		(9,139	)		(4,426	)		(20,201	)		(54,165	)
Numerator for basic earnings per share	$	70,806		$	43,276		$	141,649		$	501,172
Plus: undistributed earnings allocated to nonvested shares		9,139			4,426			20,202			54,165
Less: undistributed earnings reallocated to nonvested shares		(9,141	)		(4,436	)		(20,214	)		(55,259	)
Numerator for diluted earnings per share	$	70,804		$	43,266		$	141,637		$	500,078
Denominator:
Denominator for basic earnings per share – weighted average shares outstanding		6,485			6,315			6,424			6,263
Effect of dilutive securities:
Share based payments		59			119			83			107
Denominator for diluted earnings per share – weighted average shares outstanding		6,544			6,434			6,507			6,370
Basic earnings per share	$	10.92		$	6.85		$	22.05		$	80.02
Diluted earnings per share	$	10.82		$	6.72		$	21.77		$	78.51

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 80 thousand and 24 thousand for the three and nine months ended July 31, 2022, respectively, and 25 thousand for both the three and nine months ended July 31, 2021 because to do so would have been anti-dilutive for the periods presented.

Note 14 - Preferred Stock

9 Months Ended

Jul. 31, 2022

Preferred Stock [Text Block]

14.

Preferred Stock

On July 12, 2005, we issued 5,600 shares of 7.625% Series A Preferred Stock, with a liquidation preference of $25,000 per share. Dividends on the Series A Preferred Stock are not cumulative and are payable at an annual rate of 7.625%. The Series A Preferred Stock is not convertible into the Company’s common stock and is redeemable in whole or in part at our option at the liquidation preference of the shares. The Series A Preferred Stock is traded as depositary shares, with each depositary share representing 1/1000th of a share of Series A Preferred Stock. The depositary shares are listed on The NASDAQ Stock Market LLC under the symbol “HOVNP.” During the three and nine months ended July 31, 2022 we paid dividends of $2.7 million and $8.0 million on the Series A Preferred Stock, respectively. During the three and nine months ended July 31, 2021, we did not pay any dividends on the Series A Preferred Stock due to covenant restrictions in our debt instruments.

Note 15 - Common Stock

9 Months Ended

Jul. 31, 2022

Stockholders' Equity Note Disclosure [Text Block]

15.

Common Stock

Each share of Class A Common Stock entitles its holder to one vote per share, and each share of Class B Common Stock generally entitles its holder to ten votes per share. The amount of any regular cash dividend payable on a share of Class A Common Stock will be an amount equal to 110% of the corresponding regular cash dividend payable on a share of Class B Common Stock. If a shareholder desires to sell shares of Class B Common Stock, such stock must be converted into shares of Class A Common Stock at a one to one conversion rate.

On August 4, 2008, our Board of Directors adopted a shareholder rights plan (the “Rights Plan”), which was amended on January 11, 2018 and January 18, 2021, designed to preserve shareholder value and the value of certain tax assets primarily associated with net operating loss (NOL) carryforwards and built-in losses under Section 382 of the Internal Revenue Code. Our ability to use NOLs and built-in losses would be limited if there was an “ownership change” under Section 382. This would occur if shareholders owning (or deemed under Section 382 to own) 5% or more of our stock increase their collective ownership of the aggregate amount of our outstanding shares by more than 50 percentage points over a defined period of time. The Rights Plan was adopted to reduce the likelihood of an “ownership change” occurring as defined by Section 382. Under the Rights Plan, one right was distributed for each share of Class A Common Stock and Class B Common Stock outstanding as of the close of business on August 15, 2008. Effective August 15, 2008, if any person or group acquires 4.9% or more of the outstanding shares of Class A Common Stock without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the voting power of such person or group. However, existing stockholders who owned, at the time of the Rights Plan’s initial adoption on August 4, 2008, 4.9% or more of the outstanding shares of Class A Common Stock will trigger a dilutive event only if they acquire additional shares. The approval of the Board of Directors’ decision to adopt the Rights Plan may be terminated by the Board of Directors at any time, prior to the Rights being triggered. The Rights Plan will continue in effect until August 14, 2024, unless it expires earlier in accordance with its terms. The approval of the Board of Directors’ decision to initially adopt the Rights Plan and the amendments thereto were approved by shareholders. Our stockholders also approved an amendment to our Certificate of Incorporation to restrict certain transfers of Class A Common Stock in order to preserve the tax treatment of our NOLs and built-in losses under Section 382 of the Internal Revenue Code. Subject to certain exceptions pertaining to pre-existing 5% stockholders and Class B stockholders, the transfer restrictions in our Restated Certificate of Incorporation generally restrict any direct or indirect transfer (such as transfers of our stock that result from the transfer of interests in other entities that own our stock) if the effect would be to (i) increase the direct or indirect ownership of our stock by any person (or public group) from less than 5% to 5% or more of our common stock; (ii) increase the percentage of our common stock owned directly or indirectly by a person (or public group) owning or deemed to own 5% or more of our common stock; or (iii) create a new “public group” (as defined in the applicable United States Treasury regulations). Transfers included under the transfer restrictions include sales to persons (or public groups) whose resulting percentage ownership (direct or indirect) of common stock would exceed the 5% thresholds discussed above, or to persons whose direct or indirect ownership of common stock would by attribution cause another person (or public group) to exceed such threshold.

On July 3, 2001, our Board of Directors authorized a stock repurchase program to purchase up to 0.2 million shares of Class A Common Stock (the "Prior Program"). There were no shares purchased during the three and nine months ended July 31, 2022. As of July 31, 2022, the maximum number of shares of Class A Common Stock that may yet be purchased under this program is 22 thousand. In September 2022, our Board of Directors terminated the Prior Program and adopted a new program. See Note 22.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Note 16 - Income Taxes

9 Months Ended

Jul. 31, 2022

Income Tax Disclosure [Text Block]

16.

Income Taxes

The total income tax expense for the three and nine months ended July 31, 2022 was $29.3 million and $58.4 million, respectively. The expense was primarily due to federal and state tax expense recorded as a result of our pretax income. The federal tax expense is not paid in cash as it is offset by the use of our existing NOL carryforwards.

The total income tax expense for the three months ended July 31, 2021 was $14.1 million. The federal tax expense was primarily related to pretax income generated during the quarter and state tax expense from income generated in states where we do not have net operating loss carryforwards to offset the current year income. The total tax benefit for the nine months ended July 31, 2021 was $442.9 million. The benefit was primarily due to the reversal of a substantial portion of our valuation allowance previously recorded against our deferred tax assets.

Our federal net operating losses of $1.0 billion expire between 2029 and 2038, and $15.7 million have an indefinite carryforward period. Of our $2.4 billion of state NOLs, $229.8 million expire between 2022 through 2026; $1.5 billion expire between 2027 through 2031; $396.5 million expire between 2032 through 2036; $170.4 million expire between 2037 through 2041; and $53.9 million have an indefinite carryforward period.

On August 16, 2022, the Inflation Reduction Act (IRA) was enacted and signed into U.S. law to provide additional economic relief in response to the high cost of prescription drugs, healthcare availability, climate change and inflation. We are currently evaluating the impact of the IRA on the Company's consolidated financial statements but do not expect there will be a material impact. We will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and various state agencies.

The Company recognizes deferred income taxes for deferred tax benefits arising from NOL carryforwards and temporary differences between book and tax income which will be recognized in future years as an offset against future taxable income. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character. Sources of taxable income include future reversals of existing taxable temporary differences, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies. Management has determined that it is more likely than not that sufficient taxable income will be generated in the future to realize its deferred tax assets except for a portion related to state deferred tax assets. The Company’s deferred tax assets as of July 31, 2022 were $376.6 million.

As of October 31, 2020, we had a valuation allowance of $396.5 million of federal deferred tax assets related to NOLs, as well as other matters, all of which was reversed during the year ended October 31, 2021. We also had a valuation allowance of $181.0 million of deferred tax assets related to state NOLs as of October 31, 2020, of which $78.1 million was reversed in the second quarter of fiscal 2021 and $101.6 million remained at October 31, 2021.

As of July 31, 2022, we considered all available positive and negative evidence to determine whether, based on the weight of that evidence, our valuation allowance for our deferred state income tax assets ("DTAs") was appropriate in accordance with ASC 740. Overall the positive evidence, both objective and subjective, outweighed the negative evidence. The significant positive improvement in our operations in the last 36 months, coupled with our contract backlog of $1.8 billion as of July 31, 2022 provided positive evidence to support the conclusion that a full valuation allowance is not necessary for all of our DTAs. As such, we used our go forward projections to estimate our usage of our existing federal and state DTAs. From that review, we concluded that a valuation allowance for our federal DTAs was not needed. However, with respect to our state DTAs, we concluded that a valuation allowance of $80.6 million was still necessary related to states that have shorter carryforward periods or from states where we have significantly reduced or eliminated our operations and thus are not able to project that we will fully utilize those DTAs.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Note 17 - Operating and Reporting Segments

9 Months Ended

Jul. 31, 2022

Segment Reporting Disclosure [Text Block]

17.

Operating and Reporting Segments

HEI’s operating segments are components of the Company’s business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance and make operating decisions. Based on this criteria, each of the Company's communities qualifies as an operating segment, and therefore, it is impractical to provide segment disclosures for this many segments. As such, HEI has aggregated the homebuilding operating segments into six reportable segments.

HEI’s homebuilding operating segments are aggregated into reportable segments based primarily upon geographic proximity, similar regulatory environments, land acquisition characteristics and similar methods used to construct and sell homes. HEI’s reportable segments consist of the following six homebuilding segments and a financial services segment noted below.

Homebuilding:

	(1)	Northeast (New Jersey and Pennsylvania)
	(2)	Mid-Atlantic (Delaware, Maryland, Virginia, Washington D.C. and West Virginia)
	(3)	Midwest (Illinois and Ohio)
	(4)	Southeast (Florida, Georgia and South Carolina)
	(5)	Southwest (Arizona and Texas)
	(6)	West (California)

Financial Services

Operations of the Homebuilding segments primarily include the sale and construction of single-family attached and detached homes, attached townhomes and condominiums, urban infill and active lifestyle homes in planned residential developments. In addition, from time to time, operations of the homebuilding segments include sales of land. Operations of the Financial Services segment include mortgage banking and title services provided to the homebuilding operations’ customers. Our financial services subsidiaries do not typically retain or service mortgages that we originate but rather sell the mortgages and related servicing rights to investors.

Corporate and unallocated primarily represents operations at our headquarters in New Jersey. This includes our executive offices, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, construction services, and administration of insurance, quality and safety. It also includes interest income and interest expense resulting from interest incurred that cannot be capitalized in inventory in the Homebuilding segments, as well as the gains or losses on extinguishment of debt from any debt repurchases or exchanges.

Evaluation of segment performance is based primarily on operating earnings from continuing operations before provision or benefit for income taxes (“Income before income taxes”). Income before income taxes for the Homebuilding segments consist of revenues generated from the sales of homes and land, income from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and interest expense. Income before income taxes for the Financial Services segment consist of revenues generated from mortgage financing, title insurance and closing services, less the cost of such services and selling, general and administrative expenses incurred by the Financial Services segment.

Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent stand-alone entity during the periods presented.

Financial information relating to HEI’s segment operations was as follows:

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2022			2021			2022			2021

Revenues:
Northeast	$	76,032		$	35,255		$	151,517		$	97,488
Mid-Atlantic		168,135			106,419			396,750			311,564
Midwest		61,410			60,659			173,175			183,895
Southeast		71,542			68,854			200,359			195,545
Southwest		266,374			213,127			692,766			620,848
West		109,410			186,519			377,151			498,084
Total homebuilding		752,903			670,833			1,991,718			1,907,424
Financial services		14,533			19,845			43,548			61,070
Corporate and unallocated		157			5			177			15
Total revenues	$	767,593		$	690,683		$	2,035,443		$	1,968,509

Income before income taxes:
Northeast	$	20,179		$	6,765		$	31,052		$	16,427
Mid-Atlantic		37,756			15,907			82,441			38,618
Midwest		2,023			3,358			4,303			11,070
Southeast		15,263			2,682			36,185			9,540
Southwest		42,725			28,523			99,370			78,848
West		19,223			27,189			70,002			58,729
Total homebuilding		137,169			84,424			323,353			213,232
Financial services		3,743			8,607			11,566			28,117
Corporate and unallocated (1)		(28,985	)		(31,232	)		(106,646	)		(128,933	)
Income before income taxes	$	111,927		$	61,799		$	228,273		$	112,416

(1)

Corporate and unallocated for the three months ended July 31, 2022 included corporate general and administrative costs of $24.8 million, interest expense of $5.0 million (a component of Other interest on our Condensed Consolidated Statements of Operations), and $(0.8) million of other income and expenses primarily related to interest income and stock compensation. Corporate and unallocated for the nine months ended July 31, 2022 included corporate general and administrative costs of $75.9 million, interest expense of $25.5 million (a component of Other interest on our Condensed Consolidated Statements of Operations), loss on extinguishment of debt of $6.8 million, and $(1.6) million of other income and expenses primarily related to interest income and stock compensation. Corporate and unallocated for the three months ended July 31, 2021 included corporate general and administrative costs of $17.3 million, interest expense of $14.4 million (a component of Other interest on our Condensed Consolidated Statements of Operations), $0.3 million of loss on extinguishment of debt and $0.8 million of other income and expenses primarily related to interest income and stock compensation. Corporate and unallocated for the nine months ended July 31, 2021 included corporate general and administrative costs of $81.1 million, interest expense of $48.1 million (a component of Other interest on our Condensed Consolidated Statements of Operations), $0.3 million of loss on extinguishment of debt and $0.6 million of other income and expenses.

	July 31,		October 31,
(In thousands)	2022		2021

Assets:
Northeast	$	170,420	$	133,390
Mid-Atlantic		342,870		273,073
Midwest		75,690		85,044
Southeast		352,012		257,044
Southwest		526,788		413,532
West		272,992		229,810
Total homebuilding		1,740,772		1,391,893
Financial services (1)		127,651		202,758
Corporate and unallocated		669,081		725,857
Total assets	$	2,537,504	$	2,320,508

(1) Deferred tax assets for the Financial services segment are included in the Deferred tax assets, net line on the Condensed Consolidated Balance Sheets.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Note 18 - Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

9 Months Ended

Jul. 31, 2022

Equity Method Investments and Joint Ventures Disclosure [Text Block]

18.

Investments in Unconsolidated Homebuilding and Land Development Joint Ventures

We enter into homebuilding and land development joint ventures from time to time as a means of accessing lot positions, expanding our market opportunities, establishing strategic alliances, managing our risk profile, leveraging our capital base and enhancing returns on capital. Our homebuilding joint ventures are generally entered into with third-party investors to develop land and construct homes that are sold directly to third-party home buyers. Our land development joint ventures include those entered into with developers and other homebuilders as well as financial investors to develop finished lots for sale to the joint venture’s members or other third parties.

During the third quarter of fiscal 2021, we purchased the remaining equity interest in one of our unconsolidated joint ventures for $6.3 million of net cash. As a result of this transaction, we took control of four communities, including three active communities. The unconsolidated joint venture was subsequently dissolved.

During the second quarter of fiscal 2021, we contributed six communities we owned, including three active communities, to two new joint ventures for $21.2 million of net cash

The tables set forth below summarize the combined financial information related to our unconsolidated homebuilding and land development joint ventures that are accounted for under the equity method.

(Dollars in thousands)	July 31, 2022
				Land
	Homebuilding			Development			Total
Assets:
Cash and cash equivalents	$	142,058		$	1,104		$	143,162
Inventories		459,356			-			459,356
Other assets		28,809			-			28,809
Total assets	$	630,223		$	1,104		$	631,327

Liabilities and equity:
Accounts payable and accrued liabilities	$	465,579		$	884			466,463
Notes payable		44,380			-			44,380
Total liabilities		509,959			884			510,843
Equity of:
Hovnanian Enterprises, Inc.		72,737			211			72,948
Others		47,527			9			47,536
Total equity		120,264			220			120,484
Total liabilities and equity	$	630,223		$	1,104		$	631,327
Debt to capitalization ratio		27	%		0	%		27	%

(Dollars in thousands)	October 31, 2021
				Land
	Homebuilding			Development			Total
Assets:
Cash and cash equivalents	$	132,963		$	1,972		$	134,935
Inventories		442,347			-			442,347
Other assets		34,551			-			34,551
Total assets	$	609,861		$	1,972		$	611,833

Liabilities and equity:
Accounts payable and accrued liabilities	$	386,117		$	1,681		$	387,798
Notes payable		73,994			-			73,994
Total liabilities		460,111			1,681			461,792
Equity of:
Hovnanian Enterprises, Inc.		58,460			254			58,714
Others		91,290			37			91,327
Total equity		149,750			291			150,041
Total liabilities and equity	$	609,861		$	1,972		$	611,833
Debt to capitalization ratio		33	%		0	%		33	%

As of July 31, 2022 and October 31, 2021, we had advances outstanding of $1.8 million and $2.2 million, respectively, to these unconsolidated joint ventures. These amounts were included in the “Accounts payable and accrued liabilities” balances in the tables above. On our Condensed Consolidated Balance Sheets, our “Investments in and advances to unconsolidated joint ventures” amounted to $74.7 million and $60.9 million at July 31, 2022 and October 31, 2021, respectively. In some cases, our net investment in these unconsolidated joint ventures is less than our proportionate share of the equity reflected in the table above because of the differences between asset impairments recorded against our unconsolidated joint venture investments and any impairments recorded in the applicable unconsolidated joint venture. Impairments of unconsolidated joint venture investments are assessed for recoverability, and if it is determined that a loss in value of the investment below its carrying amount is other than temporary, we write down the investment to its fair value. During the nine months ended July 31, 2022 and 2021, we did not write-down any of our unconsolidated joint venture investments.

	Three Months Ended July 31, 2022
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	80,745		$	-		$	80,745
Cost of sales and expenses		(74,303	)		(3	)		(74,306	)
Joint venture net income (loss)	$	6,442		$	(3	)	$	6,439
Our share of net income (loss)	$	12,570		$	(13	)	$	12,557

	Three Months Ended July 31, 2021
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	102,576		$	-		$	102,576
Cost of sales and expenses		(96,622	)		(31	)		(96,653	)
Joint venture net income (loss)	$	5,954		$	(31	)	$	5,923
Our share of net income	$	5,012		$	-		$	5,012

	Nine Months Ended July 31, 2022
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	237,732		$	113		$	237,845
Cost of sales and expenses		(218,171	)		(34	)		(218,205	)
Joint venture net income	$	19,561		$	79		$	19,640
Our share of net income	$	23,887		$	32		$	23,919

	Nine Months Ended July 31, 2021
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	265,566		$	691		$	266,257
Cost of sales and expenses		(255,591	)		(208	)		(255,799	)
Joint venture net income	$	9,975		$	483		$	10,458
Our share of net income	$	9,560		$	208		$	9,768

“Income from unconsolidated joint ventures” is reflected as a separate line in the accompanying Condensed Consolidated Statements of Operations and reflects our proportionate share of the income or loss from these unconsolidated homebuilding and land development joint ventures.

The reason “Our share of net income” is higher or lower than the “Joint venture net income” shown in the tables above for both the three and nine months ended July 31, 2022 and 2021, respectively, is because we have varying ownership percentages, ranging from 20% to over 50%, in our 8 and 12 unconsolidated joint ventures for both periods, respectively. Therefore, depending on mix, if the unconsolidated joint ventures in which we have higher sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a higher overall percentage of income in the aggregate than would occur if all joint ventures had the same sharing percentage; conversely, if the unconsolidated joint ventures in which we have lower sharing percentages are more profitable than our other unconsolidated joint ventures, that results in us having a lower overall percentage of income in the aggregate than would occur if all joint ventures had the same sharing percentage. For the three months ended July 31, 2022, "Our share of net income (loss)" was higher than the "Joint venture net income (loss)" due to the recognition of income in excess of our current sharing percentage based on the joint venture agreement as a result of a management analysis conducted which determined it is more likely than not that the Company will achieve its return on investment. For the nine months ended July 31, 2022, "Our share of net income" was higher than the "Joint venture net income" due to distributions we received during the nine months ended July 31, 2022 that we recognized entirely as income by the Company since our investment balance is zero, as well as the aforementioned management analysis which resulted in the recognition of income in excess of our current sharing percentage based on the joint venture agreement. In addition, we had previously written off our investment in one of our unconsolidated joint ventures that was generating losses for the nine months ended July 31, 2022 and therefore we currently do not recognize those losses. Had we not fully written off our investment, our share of the net loss in this unconsolidated joint venture would have been approximately 50%, which would have reduced our overall share of net income across all of our unconsolidated joint ventures. As a result, this unconsolidated joint venture loss significantly reduced the profit when looking at all of our 8 unconsolidated joint ventures, in the aggregate, without having any impact on our share of net income or loss recorded in the applicable period.

For the three months ended July 31, 2021, "Our share of net income" is lower than the "Joint venture net income" due to increased income on one of our newer unconsolidated joint ventures during the quarter for which we currently recognize no percentage of the profit based on the joint venture agreement, and a second unconsolidated joint venture for which we recognize a lower profit sharing percentage which had higher profit in the current period. In addition, for the nine months ended July 31, 2021 we had written off our investment in two of our unconsolidated joint ventures that are generating losses and therefore we currently do not recognize those losses. Had we not fully written off our investment, our share of the net loss in these unconsolidated joint ventures would have been approximately 50%, which would have reduced our overall share of net income across all of our unconsolidated joint ventures. As a result, these unconsolidated joint ventures losses significantly reduce the profit when looking at all of our 12 unconsolidated joint ventures, in the aggregate, without having any impact on our share of net income or loss recorded in the applicable period.

To compensate us for the administrative services we provide as the manager of certain unconsolidated joint ventures, we receive a management fee based on a percentage of the applicable unconsolidated joint venture’s revenues. These management fees, which totaled $2.9 million and $3.2 million for the three months ended July 31, 2022 and 2021, respectively, and $8.5 million for the nine months ended July 31, 2022 and 2021 are recorded in “Homebuilding: Selling, general and administrative” on the Condensed Consolidated Statements of Operations.

Typically, our unconsolidated joint ventures obtain separate project specific mortgage financing. For some of our unconsolidated joint ventures, obtaining financing was challenging; therefore, some of our unconsolidated joint ventures are capitalized only with equity. The total debt to capitalization ratio of all our unconsolidated joint ventures was 27% as of July 31, 2022. Any unconsolidated joint venture financing is on a nonrecourse basis, with guarantees from us limited only to performance and completion of development, environmental warranties and indemnification, standard indemnification for fraud, misrepresentation and other similar actions, including a voluntary bankruptcy filing. In some instances, the unconsolidated joint venture entity is considered a VIE under ASC 810-10 “Consolidation – Overall” due to the returns being capped to the equity holders; however, in these instances, we have determined that we are not the primary beneficiary, and therefore we do not consolidate these entities.

Note 19 - Recent Accounting Pronouncements

9 Months Ended

Jul. 31, 2022

Accounting Standards Update and Change in Accounting Principle [Text Block]

19.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with reference rate reform on financial reporting. This guidance became effective for the Company beginning on March 12, 2020, and we may elect to apply the amendments prospectively from now through December 31, 2022. The Company is currently evaluating the potential impact, but does not expect the adoption of this guidance to have a material impact on our Condensed Consolidated Financial Statements.

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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Note 20 - Fair Value of Financial Instruments

9 Months Ended

Jul. 31, 2022

Fair Value Disclosures [Text Block]

20.

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurements and Disclosures,” provides a framework for measuring fair value, expands disclosures about fair-value measurements and establishes a fair-value hierarchy which prioritizes the inputs used in measuring fair value summarized as follows:

Level 1:

Fair value determined based on quoted prices in active markets for identical assets.

Level 2:

Fair value determined using significant other observable inputs.

Level 3:

Fair value determined using significant unobservable inputs.

Our financial instruments measured at fair value on a recurring basis are summarized below:

		Fair Value at			Fair Value at
	Fair Value	July 31,			October 31,
(In thousands)	Hierarchy	2022			2021

Mortgage loans held for sale (1)	Level 2	$	87,795		$	151,059
Forward contracts	Level 2		(287	)		(107	)
Total		$	87,508		$	150,952
Interest rate lock commitments	Level 3		78			152
Total		$	87,586		$	151,104

(1) The aggregate unpaid principal balance was $86.2 million and $146.5 million at July 31, 2022 and October 31, 2021, respectively.

We elected the fair value option for our loans held for sale in accordance with ASC 825, “Financial Instruments,” which permits us to measure financial instruments at fair value on a contract-by-contract basis. Management believes that the election of the fair value option for loans held for sale improves financial reporting by mitigating volatility in reported earnings caused by measuring the fair value of the loans and the derivative instruments used to economically hedge them without having to apply complex hedge accounting provisions. Fair value of loans held for sale is based on independent quoted market prices, where available, or the prices for other mortgage loans with similar characteristics.

The Financial Services segment had a pipeline of loan applications in process of $836.4 million at July 31, 2022. Loans in process for which interest rates were committed to the borrowers totaled $165.8 million as of July 31, 2022. Substantially all of these commitments were for periods of 60 days or less. Since a portion of these commitments is expected to expire without being exercised by the borrowers, the total commitments do not necessarily represent future cash requirements.

The Financial Services segment uses investor commitments and forward sales of mandatory MBS to hedge its mortgage-related interest rate exposure. These instruments involve, to varying degrees, elements of credit and interest rate risk. Credit risk is managed by entering into MBS forward commitments, option contracts with investment banks, federally regulated bank affiliates and loan sales transactions with permanent investors meeting the segment’s credit standards. The segment’s risk, in the event of default by the purchaser, is the difference between the contract price and fair value of the MBS forward commitments and option contracts. At July 31, 2022, the segment had open commitments amounting to $4.0 million to sell MBS with varying settlement dates through September 14, 2022.

The assets accounted for using the fair value option are initially measured at fair value. Gains and losses from initial measurement and subsequent changes in fair value are recognized in the Condensed Consolidated Financial Statements in “Revenues: Financial services.” The changes in fair values that are included in income are shown, by financial instrument and financial statement line item, below:

Three Months Ended July 31, 2022

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

364

(781

)

Three Months Ended July 31, 2021

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

227

192

Nine Months Ended July 31, 2022

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

1,602

(287

)

Nine Months Ended July 31, 2021

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

4,484

631

(374

)

The Company's assets measured at fair value on a nonrecurring basis are those assets for which the Company has recorded valuation adjustments and write-offs during the three and nine months ended July 31, 2021. The Company did not have any assets measured at fair value on a nonrecurring basis during the three and nine months ended July 31, 2022. The assets measured at fair value on a nonrecurring basis are all within the Company's Homebuilding operations and are summarized below:

Nonfinancial Assets

		Three Months Ended
		July 31, 2021
		Pre-
	Fair Value	Impairment
(In thousands)	Hierarchy	Amount		Total Losses			Fair Value

Sold and unsold homes and lots under development	Level 3	$	9,236	$	(1,166	)	$	8,070
Land and land options held for future development or sale	Level 3	$	-	$	-		$	-

		Nine Months Ended
		July 31, 2021
		Pre-
	Fair Value	Impairment
(In thousands)	Hierarchy	Amount		Total Losses			Fair Value

Sold and unsold homes and lots under development	Level 3	$	11,522	$	(2,009	)	$	9,513
Land and land options held for future development or sale	Level 3	$	-	$	-		$	-

We record impairment losses on inventories related to communities under development and held for future development when events and circumstances indicate that they may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their related carrying amounts. If the expected undiscounted cash flows are less than the carrying amount, then the community is written down to its fair value. We estimate the fair value of each impaired community by determining the present value of its estimated future cash flows at a discount rate commensurate with the risk of the respective community. Should the estimates or expectations used in determining cash flows or fair value decrease or differ from current estimates in the future, we may be required to recognize additional impairments. We recorded inventory impairments, which are included in the Condensed Consolidated Statements of Operations as “Inventory impairment loss and land option write-offs” and deducted from inventory, of $1.2 million and $2.0 million for the three and nine months ended July 31, 2021. The Company did not record any inventory impairments for the three and nine months ended July 31, 2022. See Note 4 for further detail of the communities evaluated for impairment.

The fair value of our cash equivalents, restricted cash and cash equivalents and customers' deposits approximates their carrying amount, based on Level 1 inputs.

The fair value of each series of our Notes and Credit Facilities are listed below. Level 2 measurements are estimated based on recent trades or quoted market prices for the same issues or based on recent trades or quoted market prices for our debt of similar security and maturity to achieve comparable yields. Level 3 measurements are estimated based on third-party broker quotes or management’s estimate of the fair value based on available trades for similar debt instruments. As shown in the table below, our 5.0% 2040 Notes were a Level 2 measurement at July 31, 2022 due to recent trades on such notes (whereas such notes were a Level 3 measurement at October 31, 2021).

Fair Value as of July 31, 2022

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		-		-		167,410		167,410
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		243,675		243,675
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		277,292		277,292
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		164,865		164,865
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		-		96,600		96,600
5.0% Senior Notes due February 1, 2040		-		48,214		-		48,214
Senior Credit Facilities:
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		32,131		32,131
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		86,062		86,062
Total fair value	$	-	$	48,214	$	1,068,035	$	1,116,249

Fair Value as of October 31, 2021

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		-		-		167,348		167,348
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		366,426		366,426
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		300,913		300,913
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		162,548		162,548
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		-		92,331		92,331
5.0% Senior Notes due February 1, 2040		-		-		63,084		63,084
Senior Credit Facilities:
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		28,196		28,196
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		86,046		86,046
Total fair value	$	-	$	-	$	1,266,892	$	1,266,892

The Senior Secured Revolving Credit Facility is not included in the above tables because there were no borrowings outstanding thereunder as of July 31, 2022 and October 31, 2021.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 21 - Transactions With Related Parties

9 Months Ended

Jul. 31, 2022

21.

Transactions with Related Parties

From time to time, an engineering firm owned by Tavit Najarian, a relative of Ara K. Hovnanian, our Chairman of the Board of Directors and our Chief Executive Officer, provides services to the Company. During both the three months ended July 31, 2022 and 2021, the services provided by such engineering firm to the Company totaled $0.2 million. During the nine months ended July 31, 2022 and 2021, the services provided by such engineering firm to the Company totaled $0.7 million and $0.4 million, respectively. Neither the Company nor Mr. Hovnanian has a financial interest in the relative’s company from whom the services were provided.

Note 22 - Subsequent Events

9 Months Ended

Jul. 31, 2022

Subsequent Events [Text Block]

22.

Subsequent Events

On September 1, 2022, our Board of Directors terminated our Prior Program and authorized a new program for the repurchase of up to $50.0 million of our Class A common stock. Under the new repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual dollar amounts repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date.

Note 3 - Interest (Tables)

9 Months Ended

Jul. 31, 2022

Schedule of Real Estate Inventory, Capitalized Interest Costs [Table Text Block]

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
(In thousands)	2022		2021		2022		2021
Interest capitalized at beginning of period	$	63,573	$	59,772	$	58,159	$	65,010
Plus interest incurred(1)		32,644		39,181		99,299		122,508
Less cost of sales interest expensed		22,453		19,240		57,876		58,130
Less other interest expensed(2)(3)		9,624		19,158		35,442		65,166
Less interest contributed to unconsolidated joint venture(4)		-		-		-		3,667
Plus interest acquired from unconsolidated joint venture(5)		-		3,118		-		3,118
Interest capitalized at end of period(6)	$	64,140	$	63,673	$	64,140	$	63,673

Cash Paid for Interest Net of Capitalized Interest [Table Text Block]

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2022			2021			2022			2021
Other interest expensed	$	9,624		$	19,158		$	35,442		$	65,166
Interest paid by our mortgage and finance subsidiaries		404			602			1,234			1,554
Increase in accrued interest		(19,194	)		(12,139	)		(19,408	)		(11,897	)
Cash paid for interest, net of capitalized interest	$	(9,166	)	$	7,621		$	17,268		$	54,823

Note 6 - Warranty Costs (Tables)

9 Months Ended

Jul. 31, 2022

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2022			2021			2022			2021

Balance, beginning of period	$	91,464		$	90,025		$	94,916		$	86,417
Additions – Selling, general and administrative		1,995			2,047			6,337			6,504
Additions – Cost of sales		3,990			6,058			7,083			10,059
Charges incurred during the period		(3,047	)		(3,513	)		(12,984	)		(10,249	)
Changes to pre-existing reserves		(94	)		789			(1,044	)		2,675
Balance, end of period	$	94,308		$	95,406		$	94,308		$	95,406

Note 9 - Leases (Tables)

9 Months Ended

Jul. 31, 2022

Lease, Cost [Table Text Block]

	*Three Months Ended*				*Nine Months Ended*
(In thousands)	*July 31, 2022*		*July 31, 2021*		*July 31, 2022*		*July 31, 2021*
Operating lease cost	$	2,528	$	2,760	$	7,793	$	7,970
Cash payments on lease liabilities	$	2,432	$	2,483	$	7,086	$	7,171

(In thousands)	*At July 31, 2022*			*At October 31, 2021*
ROU assets	$	18,898		$	17,844
Lease liabilities	$	19,940		$	18,952
Weighted-average remaining lease term (in years)		3.5			3.1
Weighted-average discount rate (incremental borrowing rate)		9.5	%		9.4	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year ending October 31,	*(in thousands)*
2022 (excluding the nine months ended July 31, 2022)	$	2,417
2023		8,146
2024		5,494
2025		4,404
2026		2,758
2027		1,396
Total payments		24,615
Less: imputed interest		(4,675	)
Present value of lease liabilities	$	19,940

Note 10 - Mortgage Loans Held for Sale (Tables)

9 Months Ended

Jul. 31, 2022

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	Three Months Ended				Nine Months Ended
	July 31,				July 31,
(In thousands)	2022		2021		2022			2021

Loan origination reserves, beginning of period	$	1,714	$	1,524	$	1,632		$	1,458
Provisions for losses during the period		43		58		133			167
Adjustments to pre-existing provisions for losses from changes in estimates		-		-		(8	)		(43	)
Loan origination reserves, end of period	$	1,757	$	1,582	$	1,757		$	1,582

Note 12 - Senior Notes and Credit Facilities (Tables)

9 Months Ended

Jul. 31, 2022

Schedule of Long-Term Debt Instruments [Table Text Block]

	*July 31,*			*October 31,*
(In thousands)	*2022*			*2021*
Senior Secured Notes:
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025	$	158,502		$	158,502
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		250,000			350,000
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		282,322			282,322
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		162,269			162,269
Total Senior Secured Notes	$	853,093		$	953,093
Senior Notes:
8.0% Senior Notes due November 1, 2027 (1)	$	-		$	-
13.5% Senior Notes due February 1, 2026		90,590			90,590
5.0% Senior Notes due February 1, 2040		90,120			90,120
Total Senior Notes	$	180,710		$	180,710
Senior Unsecured Term Loan Credit Facility due February 1, 2027	$	39,551		$	39,551
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028	$	81,498		$	81,498
Senior Secured Revolving Credit Facility (2)	$	-		$	-
Subtotal notes payable	$	1,154,852		$	1,254,852
Net (discounts) premiums	$	6,266		$	10,769
Net debt issuance costs	$	(13,246	)	$	(17,248	)
Total notes payable, net of discounts, premiums and debt issuance costs	$	1,147,872		$	1,248,373

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

Note 13 - Per Share Calculation (Tables)

9 Months Ended

Jul. 31, 2022

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands, except per share data)	2022			2021			2022			2021

Numerator:
Net earnings attributable to Hovnanian	$	82,614		$	47,702		$	169,857		$	555,337
Less: preferred stock dividends	$	(2,669	)				$	(8,007	)
Less: undistributed earnings allocated to nonvested shares		(9,139	)		(4,426	)		(20,201	)		(54,165	)
Numerator for basic earnings per share	$	70,806		$	43,276		$	141,649		$	501,172
Plus: undistributed earnings allocated to nonvested shares		9,139			4,426			20,202			54,165
Less: undistributed earnings reallocated to nonvested shares		(9,141	)		(4,436	)		(20,214	)		(55,259	)
Numerator for diluted earnings per share	$	70,804		$	43,266		$	141,637		$	500,078
Denominator:
Denominator for basic earnings per share – weighted average shares outstanding		6,485			6,315			6,424			6,263
Effect of dilutive securities:
Share based payments		59			119			83			107
Denominator for diluted earnings per share – weighted average shares outstanding		6,544			6,434			6,507			6,370
Basic earnings per share	$	10.92		$	6.85		$	22.05		$	80.02
Diluted earnings per share	$	10.82		$	6.72		$	21.77		$	78.51

Note 17 - Operating and Reporting Segments (Tables)

9 Months Ended

Jul. 31, 2022

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	July 31,		October 31,
(In thousands)	2022		2021

Assets:
Northeast	$	170,420	$	133,390
Mid-Atlantic		342,870		273,073
Midwest		75,690		85,044
Southeast		352,012		257,044
Southwest		526,788		413,532
West		272,992		229,810
Total homebuilding		1,740,772		1,391,893
Financial services (1)		127,651		202,758
Corporate and unallocated		669,081		725,857
Total assets	$	2,537,504	$	2,320,508

Operating Segments [Member]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
(In thousands)	2022			2021			2022			2021

Revenues:
Northeast	$	76,032		$	35,255		$	151,517		$	97,488
Mid-Atlantic		168,135			106,419			396,750			311,564
Midwest		61,410			60,659			173,175			183,895
Southeast		71,542			68,854			200,359			195,545
Southwest		266,374			213,127			692,766			620,848
West		109,410			186,519			377,151			498,084
Total homebuilding		752,903			670,833			1,991,718			1,907,424
Financial services		14,533			19,845			43,548			61,070
Corporate and unallocated		157			5			177			15
Total revenues	$	767,593		$	690,683		$	2,035,443		$	1,968,509

Income before income taxes:
Northeast	$	20,179		$	6,765		$	31,052		$	16,427
Mid-Atlantic		37,756			15,907			82,441			38,618
Midwest		2,023			3,358			4,303			11,070
Southeast		15,263			2,682			36,185			9,540
Southwest		42,725			28,523			99,370			78,848
West		19,223			27,189			70,002			58,729
Total homebuilding		137,169			84,424			323,353			213,232
Financial services		3,743			8,607			11,566			28,117
Corporate and unallocated (1)		(28,985	)		(31,232	)		(106,646	)		(128,933	)
Income before income taxes	$	111,927		$	61,799		$	228,273		$	112,416

Note 18 - Investments in Unconsolidated Homebuilding and Land Development Joint Ventures (Tables)

9 Months Ended

Jul. 31, 2022

Equity Method Investments [Table Text Block]

(Dollars in thousands)	July 31, 2022
				Land
	Homebuilding			Development			Total
Assets:
Cash and cash equivalents	$	142,058		$	1,104		$	143,162
Inventories		459,356			-			459,356
Other assets		28,809			-			28,809
Total assets	$	630,223		$	1,104		$	631,327

Liabilities and equity:
Accounts payable and accrued liabilities	$	465,579		$	884			466,463
Notes payable		44,380			-			44,380
Total liabilities		509,959			884			510,843
Equity of:
Hovnanian Enterprises, Inc.		72,737			211			72,948
Others		47,527			9			47,536
Total equity		120,264			220			120,484
Total liabilities and equity	$	630,223		$	1,104		$	631,327
Debt to capitalization ratio		27	%		0	%		27	%

(Dollars in thousands)	October 31, 2021
				Land
	Homebuilding			Development			Total
Assets:
Cash and cash equivalents	$	132,963		$	1,972		$	134,935
Inventories		442,347			-			442,347
Other assets		34,551			-			34,551
Total assets	$	609,861		$	1,972		$	611,833

Liabilities and equity:
Accounts payable and accrued liabilities	$	386,117		$	1,681		$	387,798
Notes payable		73,994			-			73,994
Total liabilities		460,111			1,681			461,792
Equity of:
Hovnanian Enterprises, Inc.		58,460			254			58,714
Others		91,290			37			91,327
Total equity		149,750			291			150,041
Total liabilities and equity	$	609,861		$	1,972		$	611,833
Debt to capitalization ratio		33	%		0	%		33	%

	Three Months Ended July 31, 2022
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	80,745		$	-		$	80,745
Cost of sales and expenses		(74,303	)		(3	)		(74,306	)
Joint venture net income (loss)	$	6,442		$	(3	)	$	6,439
Our share of net income (loss)	$	12,570		$	(13	)	$	12,557

	Three Months Ended July 31, 2021
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	102,576		$	-		$	102,576
Cost of sales and expenses		(96,622	)		(31	)		(96,653	)
Joint venture net income (loss)	$	5,954		$	(31	)	$	5,923
Our share of net income	$	5,012		$	-		$	5,012

	Nine Months Ended July 31, 2022
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	237,732		$	113		$	237,845
Cost of sales and expenses		(218,171	)		(34	)		(218,205	)
Joint venture net income	$	19,561		$	79		$	19,640
Our share of net income	$	23,887		$	32		$	23,919

	Nine Months Ended July 31, 2021
(In thousands)				Land
	Homebuilding			Development			Total

Revenues	$	265,566		$	691		$	266,257
Cost of sales and expenses		(255,591	)		(208	)		(255,799	)
Joint venture net income	$	9,975		$	483		$	10,458
Our share of net income	$	9,560		$	208		$	9,768

Note 20 - Fair Value of Financial Instruments (Tables)

9 Months Ended

Jul. 31, 2022

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

		Fair Value at			Fair Value at
	Fair Value	July 31,			October 31,
(In thousands)	Hierarchy	2022			2021

Mortgage loans held for sale (1)	Level 2	$	87,795		$	151,059
Forward contracts	Level 2		(287	)		(107	)
Total		$	87,508		$	150,952
Interest rate lock commitments	Level 3		78			152
Total		$	87,586		$	151,104

Fair Value Option, Disclosures [Table Text Block]

Three Months Ended July 31, 2022

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

364

(781

)

Three Months Ended July 31, 2021

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

227

192

Nine Months Ended July 31, 2022

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

1,602

(287

)

Nine Months Ended July 31, 2021

Mortgage

Interest Rate

Loans Held

Lock

Forward

(In thousands)

For Sale

Commitments

Contracts

Fair value included in net income all reflected in financial services revenues

4,484

631

(374

)

Fair Value Measurements, Nonrecurring [Table Text Block]

		Three Months Ended
		July 31, 2021
		Pre-
	Fair Value	Impairment
(In thousands)	Hierarchy	Amount		Total Losses			Fair Value

Sold and unsold homes and lots under development	Level 3	$	9,236	$	(1,166	)	$	8,070
Land and land options held for future development or sale	Level 3	$	-	$	-		$	-

		Nine Months Ended
		July 31, 2021
		Pre-
	Fair Value	Impairment
(In thousands)	Hierarchy	Amount		Total Losses			Fair Value

Sold and unsold homes and lots under development	Level 3	$	11,522	$	(2,009	)	$	9,513
Land and land options held for future development or sale	Level 3	$	-	$	-		$	-

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis 2 [Table Text Block]

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		-		-		167,410		167,410
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		243,675		243,675
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		277,292		277,292
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		164,865		164,865
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		-		96,600		96,600
5.0% Senior Notes due February 1, 2040		-		48,214		-		48,214
Senior Credit Facilities:
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		32,131		32,131
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		86,062		86,062
Total fair value	$	-	$	48,214	$	1,068,035	$	1,116,249

(In thousands)	*Level 1*		*Level 2*		*Level 3*		*Total*
Senior Secured Notes:
10.0% Senior Secured 1.75 Lien Notes due November 15, 2025		-		-		167,348		167,348
7.75% Senior Secured 1.125 Lien Notes due February 15, 2026		-		-		366,426		366,426
10.5% Senior Secured 1.25 Lien Notes due February 15, 2026		-		-		300,913		300,913
11.25% Senior Secured 1.5 Lien Notes due February 15, 2026		-		-		162,548		162,548
Senior Notes:
13.5% Senior Notes due February 1, 2026		-		-		92,331		92,331
5.0% Senior Notes due February 1, 2040		-		-		63,084		63,084
Senior Credit Facilities:
Senior Unsecured Term Loan Credit Facility due February 1, 2027		-		-		28,196		28,196
Senior Secured 1.75 Lien Term Loan Credit Facility due January 31, 2028		-		-		86,046		86,046
Total fair value	$	-	$	-	$	1,266,892	$	1,266,892

Supplemental Disclosure of Noncash Investing and Financing Activities (Details Textual) $ in Millions	9 Months Ended
	Jul. 31, 2021 USD ($)
Acquisition of Remaining Assets of One of Joint Ventures [Member]
Reduction in Investment from Purchase of Remining Interest in Joint Venture	$ 24.3

Note 1 - Basis of Presentation (Details Textual)	3 Months Ended	9 Months Ended
Note 1 - Basis of Presentation (Details Textual)	Jul. 31, 2022	Jul. 31, 2022
Consolidated Joint Venture [Member]
Noncontrolling Interest, Ownership Percentage by Parent	99.00%	99.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	1.00%	1.00%
Consolidated Joint Venture [Member] \| Subsidiaries [Member]
Noncontrolling Interest, Ownership Percentage by Parent	80.00%	80.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	20.00%	20.00%
Homebuilding [Member]
Number of Reportable Segments	6	6

Note 2 - Stock Compensation (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Share-Based Payment Arrangement, Expense	$ 3,000	$ 3,600	$ 6,400	$ 5,300
Share-Based Payment Arrangement, Expense, after Tax	2,200	2,700	4,800	4,100
Share-Based Payment Arrangement, Option [Member]
Share-Based Payment Arrangement, Expense	$ 30	$ 100	$ 100	$ 200

Note 3 - Interest (Details Textual) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Jul. 31, 2022

Jul. 31, 2021

Jul. 31, 2022

Jul. 31, 2021

Real Estate Inventory Expense Not Eligible for Capitalization

^[1],[2]

$ 9,624

$ 19,158

$ 35,442

$ 65,166

Qualifying Assets Not Exceeding Debt [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

5,000

14,400

25,500

48,100

Completed Homes, Land in Planning and Fully Developed Lots without Homes under Construction [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

$ 4,600

$ 4,800

$ 9,900

$ 17,100

[1]

[2]

Note 3 - Interest - Interest Costs Incurred, Expensed and Capitalized (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Jul. 31, 2022

Jul. 31, 2021

Jul. 31, 2022

Jul. 31, 2021

Interest capitalized at beginning of period

$ 63,573

$ 59,772

$ 58,159

$ 65,010

Plus interest incurred(1)

^[1]

32,644

39,181

99,299

122,508

Less cost of sales interest expensed

22,453

19,240

57,876

58,130

Less other interest expensed(2)(3)

^[2],[3]

9,624

19,158

35,442

65,166

Less interest contributed to unconsolidated joint venture(4)

^[4]

3,667

Plus interest acquired from unconsolidated joint venture(5)

^[5]

3,118

Interest capitalized at end of period(6)

^[5]

$ 64,140

$ 63,673

$ 64,140

$ 63,673

[1]	Data does not include interest incurred by our mortgage and finance subsidiaries.
[2]	Cash paid for interest, net of capitalized interest, is the sum of other interest expensed, as defined above, and interest paid by our mortgage and finance subsidiaries adjusted for the change in accrued interest on notes payable, which is calculated as follows: Three Months Ended Nine Months Ended July 31, July 31, (In thousands) 2022 2021 2022 2021 Other interest expensed $ 9,624 $ 19,158 $ 35,442 $ 65,166 Interest paid by our mortgage and finance subsidiaries 404 602 1,234 1,554 Increase in accrued interest (19,194 ) (12,139 ) (19,408 ) (11,897 ) Cash paid for interest, net of capitalized interest $ (9,166 ) $ 7,621 $ 17,268 $ 54,823
[3]	Other interest expensed includes interest that does not qualify for interest capitalization because our assets that qualify for interest capitalization (inventory under development) do not exceed our debt, which amounted to $5.0 million and $14.4 million for the three months ended July 31, 2022 and 2021, respectively, and $25.5 million and $48.1 million for the nine months ended July 31, 2022 and 2021, respectively. Other interest also includes interest on completed homes, land in planning and fully developed lots without homes under construction, which does not qualify for capitalization and therefore is expensed. This component of other interest was $4.6 million and $4.8 million for the three months ended July 31, 2022 and 2021, respectively, and $9.9 million and $17.1 million for the nine months ended July 31, 2022 and 2021, respectively.
[4]	Represents capitalized interest which was included as part of the assets contributed to joint ventures, as discussed in Note 18. There was no impact to the Condensed Consolidated Statement of Operations as a result of these transactions.
[5]	Capitalized interest amounts are shown gross before allocating any portion of impairments, if any, to capitalized interest.

Note 3 - Interest - Cash Paid for Interest, Net of Capitalized Interest (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Jul. 31, 2022

Jul. 31, 2021

Jul. 31, 2022

Jul. 31, 2021

Less other interest expensed(2)(3)

^[1],[2]

$ 9,624

$ 19,158

$ 35,442

$ 65,166

Interest paid by our mortgage and finance subsidiaries

404

602

1,234

1,554

Increase in accrued interest

(19,194)

(12,139)

(19,408)

(11,897)

Cash paid for interest, net of capitalized interest

$ (9,166)

$ (7,621)

$ (17,268)

$ (54,823)

[1]

[2]

Note 4 - Reduction of Inventory to Fair Value (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022 USD ($)	Jul. 31, 2021 USD ($)	Jul. 31, 2022 USD ($)	Jul. 31, 2021 USD ($)	Oct. 31, 2021 USD ($)
Number of Communities Evaluated for Impairment			393	374
Impairment of Real Estate	$ 0	$ 1,200	$ 0	$ 2,000
Number of Walk Away Lots	1,892	851	3,025	1,420
Number of Previously Mothballed Community Re-activated	4		4
Homebuilding [Member]
Impairment of Real Estate		$ 1,200	$ 0	$ 2,000
Number of Communities Performed Detailed Impairment Calculations				3
Carrying Value of Communities Tested for Impairment				$ 11,500
Number of Communities Impaired		2		3
Land Option Write Offs	$ 1,100	$ 100	$ 1,800	$ 1,300
Number of Communities Mothballed	2		2		6
Inventory Real Estate Mothballed Communities	$ 1,400		$ 1,400		$ 4,300
Inventory Real Estate Mothballed Communities Accumulated Impairment Charges	20,300		20,300		57,500
Liabilities from Inventory Real Estate Not Owned	178,454		178,454		62,762
Homebuilding [Member] \| Model Sale Leaseback Financing Arrangements [Member]
Inventory Real Estate, Other Options	43,800		43,800		32,500
Liabilities from Inventory Real Estate Not Owned	47,200		47,200		31,500
Homebuilding [Member] \| Land Banking Arrangement [Member]
Inventory Real Estate, Other Options	237,100		237,100		66,200
Liabilities from Inventory Real Estate Not Owned	$ 131,300		$ 131,300		$ 31,300
Homebuilding [Member] \| Measurement Input, Discount Rate [Member] \| Minimum [Member]
Inventory, Measurement Input				0.183
Homebuilding [Member] \| Measurement Input, Discount Rate [Member] \| Maximum [Member]
Inventory, Measurement Input				0.193

Note 5 - Variable Interest Entities (Details Textual) $ in Millions	Jul. 31, 2022 USD ($)
Deposits Associated with Land and Lot Options of Unconsolidated Variable Interest Entities	$ 173.4
Purchase Price Associated with Land and Lot Options of Unconsolidated Variable Interest Entities	$ 1,800.0

Note 6 - Warranty Costs (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021
Cash Received from Subcontractors for Owner Controlled Insurance Program	$ 2,400	$ 1,400	$ 5,600	$ 4,500
General Liability Insurance Deductible	25,000		25,000		$ 20,000
Bodily Injury Insurance Deductible	250		250		250
Bodily Injury Insurance Limit	5,000		5,000		5,000
Aggregate Retention for Construction Defects Warranty and Bodily Injury Claims	$ 25,000		25,000		$ 20,000
Payments by Insurance Companies for Claims			$ 100	$ 100

Note 6 - Warranty Costs - Warranty and General Liability Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Balance, beginning of period	$ 91,464	$ 90,025	$ 94,916	$ 86,417
Charges incurred during the period	(3,047)	(3,513)	(12,984)	(10,249)
Changes to pre-existing reserves	(94)	789	(1,044)	2,675
Balance, end of period	94,308	95,406	94,308	95,406
Selling, General and Administrative Expenses [Member]
Additions	1,995	2,047	6,337	6,504
Cost of Sales [Member]
Additions	$ 3,990	$ 6,058	$ 7,083	$ 10,059

Note 7 - Commitments and Contingent Liabilities (Details Textual) - USD ($) $ in Millions		1 Months Ended	9 Months Ended
	May 02, 2018	Jun. 30, 2022	Jul. 31, 2022
EPA Case Involving a Housing Redevelopment Project in Newark, New Jersey [Member]
Loss Contingency, Percentage of Plaintiff's Costs for Which Reimbursement is Demanded	100.00%
Loss Contingency, Damages Sought, Value	$ 2.7
Litigation Settlement, Amount Awarded to Other Party		$ 1.5
Litigation Settlement, Expense		$ 0.8
Great Notch Condominium Claims[Member]
Loss Contingency, Damages Sought, Value			$ 119.5
Spill Fund Lawsuit [Member]
Loss Contingency, Damages Sought, Value			$ 5.3

Note 8 - Cash and Cash Equivalents, Restricted Cash and Cash Equivalents and Customer's Deposits (Details Textual) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021	Jul. 31, 2021
Cash Equivalents, at Carrying Value, Total	$ 13,700	$ 15,700
Homebuilding [Member]
Restricted Cash and Cash Equivalents, Total	15,505	16,089	$ 15,100
Financial Services [Member]
Restricted Cash and Cash Equivalents, Total	33,140		$ 41,031
Financial Services [Member] \| Customer Deposits [Member]
Restricted Cash and Cash Equivalents, Total	31,100	40,700
Financial Services [Member] \| Mortgage Warehouse Lines of Credit [Member]
Restricted Cash and Cash Equivalents, Total	2,000	2,800
Financial Services [Member] \| Other Assets [Member]
Restricted Cash and Cash Equivalents, Total	$ 33,100	$ 43,500

Note 9 - Leases (Details Textual) $ in Millions	3 Months Ended	9 Months Ended
Note 9 - Leases (Details Textual) $ in Millions	Jul. 31, 2022 USD ($)	Jul. 31, 2022 USD ($)
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 1.4	$ 9.8
Minimum [Member] \| Office Leases [Member]
Lessee, Operating Lease, Term of Contract (Year)	3 years	3 years
Maximum [Member] \| Office Leases [Member]
Lessee, Operating Lease, Term of Contract (Year)	5 years	5 years

Note 9 - Leases - Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021
Operating lease cost	$ 2,528	$ 2,760	$ 7,793	$ 7,970
Cash payments on lease liabilities	$ 2,432	$ 2,483	$ 7,086	$ 7,171
Weighted-average remaining lease term (in years) (Year)	3 years 6 months		3 years 6 months		3 years 1 month 6 days
Weighted-average discount rate (incremental borrowing rate)	9.50%		9.50%		9.40%
Prepaid Expenses and Other Current Assets [Member]
ROU assets	$ 18,898		$ 18,898		$ 17,844
Accounts Payable and Accrued Liabilities [Member]
Lease liabilities	$ 19,940		$ 19,940		$ 18,952

Note 9 - Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Jul. 31, 2022	Oct. 31, 2021
2022 (excluding the nine months ended July 31, 2022)	$ 2,417
2023	8,146
2024	5,494
2025	4,404
2026	2,758
2027	1,396
Total payments	24,615
Less: imputed interest	(4,675)
Accounts Payable and Accrued Liabilities [Member]
Present value of lease liabilities	$ 19,940	$ 18,952

Note 10 - Mortgage Loans Held for Sale (Details Textual) $ in Millions	Jul. 31, 2022 USD ($)	Oct. 31, 2021 USD ($)	Jul. 31, 2021
Number of Loans Reserved For	13		16
Asset Pledged as Collateral without Right [Member]
Financing Receivable, before Allowance for Credit Loss, Total	$ 71.9	$ 136.5

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 7A
-URI https://asc.fasb.org/extlink&oid=123577603&loc=SL6953401-111524

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 79
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922352-210448

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(b))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919253-210447

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 45
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=124255206&loc=SL82895884-210446

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919230-210447

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 80
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922355-210448

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (1)

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (2)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1404
-Paragraph (a)

Note 10 - Mortgage Loans Held for Sale - Loan Origination Reserves (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Loan origination reserves, beginning of period	$ 1,714	$ 1,524	$ 1,632	$ 1,458
Provisions for losses during the period	43	58	133	167
Adjustments to pre-existing provisions for losses from changes in estimates	0	0	(8)	(43)
Loan origination reserves, end of period	$ 1,757	$ 1,582	$ 1,757	$ 1,582

Note 11 - Mortgages (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jul. 31, 2022	Jul. 31, 2022	Oct. 31, 2021
JP Morgan Chase Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000	$ 50,000
Warehouse Agreement Borrowings	$ 25,500	$ 25,500	$ 45,700
JP Morgan Chase Bank [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument Variable Rate Basis Adjusted Secured Overnight Financing Rate SOFR	2.33%	2.33%
JP Morgan Chase Bank [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.25%	2.25%
JP Morgan Chase Bank [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.375%	2.375%
Customers Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 50,000	$ 50,000
Warehouse Agreement Borrowings	$ 21,200	$ 21,200	40,500
Customers Bank [Member] \| Bloomberg Short-term Bank Yield Index (BSBY) [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.125%	2.125%
Customers Bank [Member] \| Bloomberg Short-term Bank Yield Index (BSBY) [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	4.50%	4.50%
Nonrecourse Mortgages Secured By Inventory [Member] \| Mortgages [Member] \| Homebuilding [Member]
Secured Debt, Total	$ 187,754	$ 187,754	125,089
Debt Instrument, Collateral Amount	$ 527,600	$ 527,600	$ 448,500
Debt, Weighted Average Interest Rate	6.10%	6.10%	4.40%
Comerica Master Repurchase Agreement [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 60,000	$ 60,000
Warehouse Agreement Borrowings	24,000	24,000	$ 48,700
Line of Credit Facility, Maximum Borrowing Capacity Reversion After Initial Period	$ 50,000	$ 50,000
Comerica Master Repurchase Agreement [Member] \| Bloomberg Short-term Bank Yield Index (BSBY) [Member]
Debt Instrument Variable Rate Basis Floor Rate	0.50%	0.50%
Comerica Master Repurchase Agreement [Member] \| Bloomberg Short-term Bank Yield Index (BSBY) [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	1.875%	1.875%
Comerica Master Repurchase Agreement [Member] \| Bloomberg Short-term Bank Yield Index (BSBY) [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	3.25%	3.25%

Note 12 - Senior Notes and Credit Facilities (Details Textual) - USD ($) $ in Thousands				3 Months Ended				9 Months Ended		12 Months Ended
	Aug. 19, 2022	Apr. 29, 2022	Jul. 30, 2021	Jul. 31, 2022	Apr. 30, 2022	Jan. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021	Aug. 02, 2021
Debt Covenant Fixed Charge Coverage Ratio Minimum				2.0				2.0
Secured Debt Leverage Ratio				4.0				4.0
Gain (Loss) on Extinguishment of Debt, Total				$ 0			$ (306)	$ (6,795)	$ (306)
Dividends, Preferred Stock, Total				2,669	$ 2,669	$ 2,669
Senior Secured Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity				125,000				125,000
Stand-alone Cash Collateralized Letter of Credit Agreements and Facilities [Member]
Letters of Credit Outstanding, Amount				7,100				7,100		$ 9,300
Stand-alone Cash Collateralized Letter of Credit Agreements and Facilities [Member] \| Restricted Cash [Member]
Debt Instrument, Collateral Amount				7,300				7,300		$ 9,900
Senior Secured Revolving Credit Facility [Member] \| Subsequent Event [Member]
Line of Credit Facility, Unused Commitment Fee Rate	1.00%
Senior Secured Revolving Credit Facility [Member] \| Subsequent Event [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Line of Credit Facility, Variable Rate Floor	1.00%
Line of Credit Facility, Applicable Margin	4.50%
Senior Secured Revolving Credit Facility [Member] \| Subsequent Event [Member] \| Base Rate [Member]
Line of Credit Facility, Applicable Margin	3.50%
The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] \| Cash and Cash Equivalents Collateral [Member]
Debt Instrument, Collateral Amount				220,900				220,900
The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] \| Restricted Cash [Member]
Debt Instrument, Collateral Amount				7,300				7,300
The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] \| Real Property [Member]
Debt Instrument, Collateral Amount				430,300				430,300
The Secured Credit Facility, the New Secured Notes, and the Second Lien Notes [Member] \| Equity Interests in Joint Venture Holding Companies Collateral [Member]
Debt Instrument, Collateral Amount				102,600				102,600
The 8.0% Senior Notes Due 2027 [Member] \| Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]
Debt Instrument, Face Amount				$ 26,000				$ 26,000
Debt Instrument, Interest Rate, Stated Percentage				8.00%				8.00%		8.00%
The 7.75% 2026 Notes [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage		7.75%
Debt Instrument, Redeemed, Face Amount		$ 100,000
Repayments of Secured Debt		$ 105,500
Gain (Loss) on Extinguishment of Debt, Total								$ (6,800)
Senior Secured Revolving Credit Facility [Member] \| Subsequent Event [Member]
Debt Instrument, Interest Rate, Stated Percentage	7.75%
Line of Credit Facility, Maximum Borrowing Capacity	$ 125,000
Line of Credit Facility, Interest Rate During Period	7.75%
Line of Credit Facility, Unused Commitment Fee Rate	1.00%
Senior Secured Revolving Credit Facility [Member] \| Subsequent Event [Member] \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Line of Credit Facility, Variable Rate Floor	1.00%
Line of Credit Facility, Applicable Margin	4.50%
Senior Secured Revolving Credit Facility [Member] \| Subsequent Event [Member] \| Base Rate [Member]
Line of Credit Facility, Applicable Margin	3.50%
The 10.0% 2022 Notes [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			10.00%
Debt Instrument, Redeemed, Face Amount			$ 111,200
Repayments of Secured Debt			$ 111,700
Gain (Loss) on Extinguishment of Debt, Total							$ (300)
The 10.5% 2024 Notes [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage											10.50%
Debt Instrument, Redeemed, Face Amount											$ 69,700
Repayments of Secured Debt										$ 71,900
The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage		7.75%		7.75%				7.75%		7.75%
The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member] \| Debt Instrument, Redemption, Period Two [Member] \| Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]
Debt Instrument, Redemption Price, Percentage								103.875%
The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member] \| Debt Instrument, Redemption, Period Three [Member] \| Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]
Debt Instrument, Redemption Price, Percentage								101.937%
The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member] \| Debt Instrument, Redemption, Period Four [Member] \| Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]
Debt Instrument, Redemption Price, Percentage								100.00%
The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage				10.50%				10.50%		10.50%
The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member] \| Debt Instrument, Redemption, Period Two [Member] \| Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]
Debt Instrument, Redemption Price, Percentage								105.25%
The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member] \| Debt Instrument, Redemption, Period Three [Member] \| Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]
Debt Instrument, Redemption Price, Percentage								102.625%
The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member] \| Debt Instrument, Redemption, Period Four [Member] \| Redemption with Net Cash Proceeds from Certain Equity Offerings [Member]
Debt Instrument, Redemption Price, Percentage								100.00%
The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage				11.25%				11.25%		11.25%
Debt Instrument, Redemption Price, Percentage								100.00%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Debt Instrument, Redemption, Period Two [Member]
Debt Instrument, Redemption Price, Percentage								102.50%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Debt Instrument, Redemption, Period Three [Member]
Debt Instrument, Redemption Price, Percentage								100.00%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Debt Instrument, Redemption, Period Four [Member]
Debt Instrument, Redemption Price, Percentage								105.00%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Debt Instrument, Redemption, Period One [Member]
Debt Instrument, Redemption Price, Percentage								105.00%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Debt Instrument, Redemption, Period Five [Member]
Debt Instrument, Redemption Price, Percentage								102.50%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Debt Instrument, Redemption, Period Six [Member]
Debt Instrument, Redemption Price, Percentage								100.00%
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage				10.00%				10.00%		10.00%
The 13.5% Senior Notes Due 2026 [Member] \| Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage				13.50%				13.50%		13.50%
The 13.5% Senior Notes Due 2026 [Member] \| Unsecured Senior Notes [Member] \| Debt Instrument, Redemption, Period Two [Member]
Debt Instrument, Redemption Price, Percentage								100.00%
The 13.5% Senior Notes Due 2026 [Member] \| Unsecured Senior Notes [Member] \| Debt Instrument, Redemption, Period One [Member]
Debt Instrument, Redemption Price, Percentage								100.00%
The 5.0% Senior Notes due 2040 [Member] \| Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage				5.00%				5.00%		5.00%
The 5.0% Senior Notes due 2040 [Member] \| Unsecured Senior Notes [Member] \| Debt Instrument, Redemption, Period One [Member]
Debt Instrument, Redemption Price, Percentage								100.00%

Note 12 - Senior Notes and Credit Facilities - Senior Notes and Credit Facilities Balances (Details) - USD ($)
$ in Thousands

Jul. 31, 2022

Oct. 31, 2021

Total notes payable, net of discounts, premiums and debt issuance costs

$ 1,154,852

$ 1,254,852

Net (discounts) premiums

6,266

10,769

Net debt issuance costs

(13,246)

(17,248)

1,147,872

1,248,373

Senior Secured Notes [Member]

Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

853,093

953,093

Senior Unsecured Term Loan Credit Facility Due 2027 [Member]

180,710

Senior Secured Revolving Credit Facility [Member]

39,551

The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] | Senior Secured Notes [Member]

^[1]

The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

158,502

The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

250,000

350,000

The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] | Senior Secured Notes [Member]

282,322

The 8.0% Senior Notes Due 2027 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

162,269

The 13.5% Senior Notes Due 2026 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

^[2]

The 5.0% Senior Notes due 2040 [Member] | Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]

90,590

The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] | Senior Secured Term Loan [Member]

90,120

Real Estate Inventory Expense Not Eligible for Capitalization

$ 81,498

[1]	At July 31, 2022, provides for up to $125.0 million in aggregate amount of senior secured first lien revolving loans. Availability thereunder will terminate on December 28, 2022. [NTD: update to June 30, 2024 or add wording on new amendment?]
[2]	$26.0 million of 8.0% Senior Notes due 2027 (the "8.0% 2027 Notes") are owned by a wholly-owned consolidated subsidiary of HEI. Therefore, in accordance with GAAP, such notes are not reflected on the Condensed Consolidated Balance Sheets of HEI.

Note 12 - Senior Notes and Credit Facilities - Senior Notes and Credit Facilities Balances (Details) (Parentheticals)	9 Months Ended	12 Months Ended
	Jul. 31, 2022	Oct. 31, 2021	Apr. 29, 2022
Senior Unsecured Term Loan Credit Facility Due 2027 [Member]
Debt Instrument, Maturity Date	Feb. 01, 2027	Feb. 01, 2027
The 10.0% Senior Secured 1.75 Lien Notes due 2025 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	10.00%	10.00%
Debt Instrument, Maturity Date	Nov. 15, 2025	Nov. 15, 2025
The 7.75% Senior Secured 1.125 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	7.75%	7.75%	7.75%
Debt Instrument, Maturity Date	Feb. 15, 2026	Feb. 15, 2026
The 10.5% Senior Secured 1.25 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	10.50%	10.50%
Debt Instrument, Maturity Date	Feb. 15, 2026	Feb. 15, 2026
The 11.25% Senior Secured 1.5 Lien Notes due February 15, 2026 [Member] \| Senior Secured Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	11.25%	11.25%
Debt Instrument, Maturity Date	Feb. 15, 2026	Feb. 15, 2026
The 8.0% Senior Notes Due 2027 [Member] \| Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	8.00%	8.00%
Debt Instrument, Maturity Date	Nov. 01, 2027	Nov. 01, 2027
The 13.5% Senior Notes Due 2026 [Member] \| Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	13.50%	13.50%
Debt Instrument, Maturity Date	Feb. 01, 2026	Feb. 01, 2026
The 5.0% Senior Notes due 2040 [Member] \| Unsecured Senior Notes Excluding Senior Amortizing Notes and Senior Exchangeable Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage	5.00%	5.00%
Debt Instrument, Maturity Date	Feb. 01, 2040	Feb. 01, 2040
The 10.0% Senior Secured 1.75 Lien Term Loans Due 2028 [Member] \| Senior Secured Term Loan [Member]
Debt Instrument, Maturity Date	Jan. 31, 2028	Jan. 31, 2028

Note 13 - Per Share Calculation (Details Textual) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Out of the Money Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	80	25	24	25

Note 13 - Per Share Calculation - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021
Net income	$ 82,614	$ 47,702	$ 169,857	$ 555,337
Less: preferred stock dividends	(2,669)	0	(8,007)	0
Less: undistributed earnings allocated to nonvested shares	(9,139)	(4,426)	(20,201)	(54,165)
Numerator for basic earnings per share	70,806	43,276	141,649	501,172
Plus: undistributed earnings allocated to nonvested shares	9,139	4,426	20,202	54,165
Less: undistributed earnings reallocated to nonvested shares	(9,141)	(4,436)	(20,214)	(55,259)
Numerator for diluted earnings per share	$ 70,804	$ 43,266	$ 141,637	$ 500,078
Denominator for basic earnings per share – weighted average shares outstanding (in shares)	6,485	6,315	6,424	6,263
Share based payments (in shares)	59	119	83	107
Denominator for diluted earnings per share – weighted average shares outstanding (in shares)	6,544	6,434	6,507	6,370
Net income per common share (in dollars per share)	$ 10.92	$ 6.85	$ 22.05	$ 80.02
Diluted earnings per share (in dollars per share)	$ 10.82	$ 6.72	$ 21.77	$ 78.51

Note 14 - Preferred Stock (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 12, 2005	Jul. 31, 2022	Jul. 31, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021
Preferred Stock, Shares Issued, Total (in shares)		5,600		5,600		5,600
Payments of Dividends, Total				$ 8,007	$ (0)
Preferred Class A [Member]
Preferred Stock, Shares Issued, Total (in shares)	5,600
Preferred Stock, Dividend Rate, Percentage	7.625%
Preferred Stock, Liquidation Preference Per Share (in dollars per share)	$ 25,000
Preferred Stock, Depositary Shares, Number of Shares of Preferred Stock in Each Depositary Share (in shares)	0.001
Payments of Dividends, Total		$ 2,700	$ 0	$ 8,000	$ 0

Note 15 - Common Stock (Details Textual) shares in Thousands	3 Months Ended	9 Months Ended
	Jul. 31, 2022 shares	Jul. 31, 2022 shares	Jan. 11, 2018	Aug. 15, 2008	Jul. 03, 2001 shares
Common Stock Dividends Percent of Increase from Class A to Class B	110.00%	110.00%
Conversion of Stock From Class B to Class A Conversion Ratio		1
Shareholder Ownership Percentage of Increase			50.00%
Minimum [Member]
Shareholder Ownership Percentage			5.00%
Common Class A [Member]
Common Stock Voting Rights Votes per Share Number		1
Shareholder Ownership Percentage				4.90%
Number of Rights				1
Shareholders Pre Existing Ownership Percentage			5.00%
Shareholders Current Ownership Percentage			5.00%
Shareholders Ownership Percentage on Transfers			5.00%
Shareholders Ownership Percentage Threshold			5.00%
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares)					200
Stock Repurchased During Period, Shares (in shares)	0	0
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased (in shares)	22	22
Common Class B [Member]
Common Stock Voting Rights Votes per Share Number		10

Note 16 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Jul. 31, 2022	Jul. 31, 2021	Apr. 30, 2021	Jul. 31, 2022	Jul. 31, 2021	Oct. 31, 2021	Oct. 31, 2020
Income Tax Expense (Benefit), Total	$ 29,313	$ 14,097		$ 58,416	$ (442,921)
Deferred Tax Assets, Net, Total	376,600			376,600
Deferred Tax Assets, Valuation Allowance, Total	80,600			80,600
Contract Backlog	1,800			1,800
Federal Deferred Tax Assets Related to NOLs and Other Matters [Member]
Deferred Tax Assets, Valuation Allowance, Total							$ 396,500
Deferred Tax Assets Related to State NOLs [Member]
Deferred Tax Assets, Valuation Allowance, Total						$ 101,600	$ 181,000
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount			$ (78,100)
Domestic Tax Authority [Member]
Income Tax Expense (Benefit), Total	22,928	12,621		46,901	(353,649)
Domestic Tax Authority [Member] \| Between 2029 and 2038 [Member]
Operating Loss Carryforwards	1,000,000			1,000,000
Domestic Tax Authority [Member] \| Indefinite Tax Period [Member]
Operating Loss Carryforwards	15,700			15,700
State and Local Jurisdiction [Member]
Income Tax Expense (Benefit), Total	6,385	$ 1,476		11,515	$ (89,272)
Operating Loss Carryforwards	2,400,000			2,400,000
State and Local Jurisdiction [Member] \| Indefinite Tax Period [Member]
Operating Loss Carryforwards	53,900			53,900
State and Local Jurisdiction [Member] \| Between 2022 and 2026 [Member]
Operating Loss Carryforwards	229,800			229,800
State and Local Jurisdiction [Member] \| Between 2027 and 2031 [Member]
Operating Loss Carryforwards	1,500,000			1,500,000
State and Local Jurisdiction [Member] \| Between 2032 and 2036 [Member]
Operating Loss Carryforwards	396,500			396,500
State and Local Jurisdiction [Member] \| Between 2037 and 2041 [Member]
Operating Loss Carryforwards	$ 170,400			$ 170,400

Note 17 - Operating and Reporting Segments (Details Textual)
$ in Thousands

3 Months Ended

9 Months Ended

Jul. 31, 2022

USD ($)

Jul. 31, 2021

USD ($)

Jul. 31, 2022

USD ($)

Jul. 31, 2021

USD ($)

^[1],[2]

$ 9,624

$ 19,158

$ 35,442

$ 65,166

Gain (Loss) on Extinguishment of Debt, Total

(306)

(6,795)

(306)

Qualifying Assets Not Exceeding Debt [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

5,000

14,400

25,500

48,100

Corporate, Non-Segment [Member]

General and Administrative Expense, Total

24,800

17,300

75,900

81,100

Other Nonoperating Income (Expense), Total

(800)

800

(1,600)

600

Gain (Loss) on Extinguishment of Debt, Total

(300)

(6,800)

(300)

Corporate, Non-Segment [Member] | Qualifying Assets Not Exceeding Debt [Member]

Real Estate Inventory Expense Not Eligible for Capitalization

$ 5,000

$ 14,400

$ 25,500

$ 48,100

Number of Reportable Segments

[1]

[2]

Note 17 - Operating and Reporting Segments - Financial Information Relating to Segment Operations (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Jul. 31, 2022

Jul. 31, 2021

Jul. 31, 2022

Jul. 31, 2021

$ 767,593

$ 690,683

$ 2,035,443

$ 1,968,509

Corporate, Non-Segment [Member]

111,927

61,799

228,273

112,416

157

177

^[1]

(28,985)

(31,232)

(106,646)

(128,933)

Homebuilding [Member] | Operating Segments [Member]

753,060

670,838

1,991,895

1,907,439

752,903

670,833

1,991,718

1,907,424

Homebuilding [Member] | Northeast [Member] | Operating Segments [Member]

137,169

84,424

323,353

213,232

76,032

35,255

151,517

97,488

Homebuilding [Member] | Mid-Atlantic [Member] | Operating Segments [Member]

20,179

6,765

31,052

16,427

168,135

106,419

396,750

311,564

Homebuilding [Member] | Midwest [Member] | Operating Segments [Member]

37,756

15,907

82,441

38,618

61,410

60,659

173,175

183,895

Homebuilding [Member] | Southeast [Member] | Operating Segments [Member]

2,023

3,358

4,303

11,070

71,542

68,854

200,359

195,545

Homebuilding [Member] | Southwest [Member] | Operating Segments [Member]

15,263

2,682

36,185

9,540

266,374

213,127

692,766

620,848

Homebuilding [Member] | West [Member] | Operating Segments [Member]

42,725

28,523

99,370

78,848

109,410

186,519

377,151

498,084

Financial Services [Member]

19,223

27,189

70,002

58,729

Financial Services [Member] | Operating Segments [Member]

14,533

19,845

43,548

61,070

14,533

19,845

43,548

61,070

$ 3,743

$ 8,607

$ 11,566

$ 28,117

[1]

Corporate and unallocated for the three months ended July 31, 2022 included corporate general and administrative costs of $24.8 million, interest expense of $5.0 million (a component of Other interest on our Condensed Consolidated Statements of Operations), and $(0.8) million of other income and expenses primarily related to interest income and stock compensation. Corporate and unallocated for the nine months ended July 31, 2022 included corporate general and administrative costs of $75.9 million, interest expense of $25.5 million (a component of Other interest on our Condensed Consolidated Statements of Operations), loss on extinguishment of debt of $6.8 million, and $(1.6) million of other income and expenses primarily related to interest income and stock compensation. Corporate and unallocated for the three months ended July 31, 2021 included corporate general and administrative costs of $17.3 million, interest expense of $14.4 million (a component of Other interest on our Condensed Consolidated Statements of Operations), $0.3 million of loss on extinguishment of debt and $0.8 million of other income and expenses primarily related to interest income and stock compensation. Corporate and unallocated for the nine months ended July 31, 2021 included corporate general and administrative costs of $81.1 million, interest expense of $48.1 million (a component of Other interest on our Condensed Consolidated Statements of Operations), $0.3 million of loss on extinguishment of debt and $0.6 million of other income and expenses.

Note 17 - Operating and Reporting Segments - Financial Information Relating to Segment Financial Position (Details) - USD ($)
$ in Thousands

Jul. 31, 2022

Oct. 31, 2021

Corporate, Non-Segment [Member]

$ 2,537,504

$ 2,320,508

669,081

725,857

Homebuilding [Member] | Operating Segments [Member]

2,033,283

1,692,072

Homebuilding [Member] | Northeast [Member] | Operating Segments [Member]

1,740,772

1,391,893

Homebuilding [Member] | Mid-Atlantic [Member] | Operating Segments [Member]

170,420

133,390

Homebuilding [Member] | Midwest [Member] | Operating Segments [Member]

342,870

273,073

Homebuilding [Member] | Southeast [Member] | Operating Segments [Member]

75,690

85,044

Homebuilding [Member] | Southwest [Member] | Operating Segments [Member]

352,012

257,044

Homebuilding [Member] | West [Member] | Operating Segments [Member]

526,788

413,532

Financial Services [Member]

272,992

229,810

Financial Services [Member] | Operating Segments [Member]

127,651

202,758