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Hovnanian Enterprises Reports Fiscal 2016 Results

Reports 28% Growth in Total Revenues for All of Fiscal 2016

Reports Pretax Income for Fourth Quarter and Full Year

RED BANK, N.J., Dec. 08, 2016 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its fiscal fourth quarter and year ended October 31, 2016.

/EIN News/ -- RESULTS FOR THE THREE AND TWELVE MONTH PERIODS ENDED OCTOBER 31, 2016:

  • Total revenues were $805.1 million in the fourth quarter of fiscal 2016, an increase of 16.1% compared with $693.2 million in the fourth quarter of fiscal 2015. For the year ended October 31, 2016, total revenues increased 28.1% to $2.75 billion compared with $2.15 billion in the prior year.
     
  • Total SG&A was $53.7 million, or 6.7% of total revenues, during the fourth quarter of fiscal 2016 compared with $49.4 million, or 7.1% of total revenues, in last year’s fourth quarter. Total SG&A was $253.1 million, or 9.2% of total revenues, for all of fiscal 2016 compared with $250.9 million, or 11.7% of total revenues, in the prior fiscal year.
     
  • Total interest expense as a percentage of total revenues was 6.0% during the fourth quarter of fiscal 2016 compared with 5.9% for the fourth quarter of fiscal 2015. For the twelve months ended October 31, 2016, total interest expense as a percentage of total revenues declined 30 basis points to 6.7% compared with 7.0% during the same period a year ago.
     
  • Homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 17.6% for the fourth quarter ended October 31, 2016 compared with 18.0% for the fourth quarter of fiscal 2015. During all of fiscal 2016, homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 16.9% compared with 17.6% in the same period of the previous year.
     
  • Income before income taxes in the fourth quarter of fiscal 2016 was $32.1 million compared with $37.4 million in the prior year’s fourth quarter. For all twelve months of fiscal 2016, income before income taxes was $2.4 million compared with a loss before income taxes of $21.8 million during all of fiscal 2015.
     
  • Income before income taxes, excluding land-related charges and loss on extinguishment of debt, in the fourth quarter of fiscal 2016 was $45.8 million compared with $41.8 million in the prior year’s fourth quarter. For fiscal 2016, income before income taxes, excluding land-related charges and loss on extinguishment of debt, was $39.0 million compared with a loss before income taxes, excluding land-related charges, of $9.7 million during fiscal 2015.
     
  • Net income was $22.3 million, or $0.14 per common share, for the fourth quarter of fiscal 2016, compared with $25.5 million, or $0.17 per common share, in the fourth quarter of the previous year. For the fiscal year ended October 31, 2016, the net loss was $2.8 million, or $0.02 per common share, compared with a net loss of $16.1 million, or $0.11 per common share, in all of fiscal 2015.
     
  • For the fourth quarter of fiscal 2016, Adjusted EBITDA increased 13.6% to $96.4 million compared with $84.9 million during the fourth quarter of 2015. For all of fiscal 2016, Adjusted EBITDA increased 53.5% to $231.2 million compared with $150.6 million during all of fiscal 2015.
     
  • Adjusted EBITDA to interest incurred was 2.39x for fourth quarter of fiscal 2016 compared with 2.01x for the same quarter last year. For the twelve-month period ended October 31, 2016, Adjusted EBITDA to interest incurred was 1.39x compared with 0.91x for the same period one year ago.
     
  • Consolidated net contracts per active selling community increased 11.4% to 7.8 net contracts per active selling community for the fourth quarter of fiscal 2016 compared with 7.0 net contracts per active selling community in the fourth quarter of fiscal 2015. Net contracts per active selling community, including unconsolidated joint ventures, increased 4.2% to 7.4 net contracts per active selling community for the quarter ended October 31, 2016 compared with 7.1 net contracts, including unconsolidated joint ventures, per active selling community in the fourth quarter of fiscal 2015.
     
  • Consolidated active selling communities decreased 23.7% from 219 communities at the end of the prior year’s fourth quarter to 167 communities as of October 31, 2016, which was impacted by the sale of ten communities in Minneapolis and Raleigh and the conversion of four consolidated communities into unconsolidated joint venture communities. As of the end of the fourth quarter of fiscal 2016, active selling communities, including unconsolidated joint ventures, decreased 17.9% to 188 communities compared with 229 communities at October 31, 2015.
     
  • The dollar value of consolidated net contracts decreased 14.5% to $534.3 million for the three months ended October 31, 2016 compared with $624.9 million during the same quarter a year ago. The dollar value of net contracts, including unconsolidated joint ventures, during the fourth quarter of fiscal 2016 decreased 14.9% to $582.7 million compared with $684.3 million in last year’s fourth quarter.
     
  • The dollar value of consolidated net contracts increased 2.6% to $2.51 billion for all of fiscal 2016 compared with $2.45 billion in the previous fiscal year. The dollar value of net contracts, including unconsolidated joint ventures, for the twelve months ended October 31, 2016 increased 0.9% to $2.67 billion compared with $2.65 billion in fiscal 2015.
     
  • The number of consolidated net contracts, during the fourth quarter of fiscal 2016, decreased 15.4% to 1,299 homes compared with 1,535 homes in the prior year’s fourth quarter. In the fourth quarter of fiscal 2016, the number of net contracts, including unconsolidated joint ventures, decreased 14.7% to 1,389 homes from 1,629 homes during the fourth quarter of fiscal 2015.
     
  • The number of consolidated net contracts, during the twelve-month period ended October 31, 2016, decreased 1.2% to 6,109 homes compared with 6,183 homes in the same period of the previous year. During all of fiscal 2016, the number of net contracts, including unconsolidated joint ventures, was 6,380 homes, a decrease of 2.6% from 6,547 homes during fiscal 2015.
     
  • As of October 31, 2016, the dollar value of contract backlog, including unconsolidated joint ventures, was $1.22 billion, a decrease of 9.4% compared with $1.35 billion as of October 31, 2015. The dollar value of consolidated contract backlog, as of October 31, 2016, decreased 12.1% to $1.07 billion compared with $1.22 billion as of October 31, 2015.
     
  • As of October 31, 2016, the number of homes in contract backlog, including unconsolidated joint ventures, decreased 14.9% to 2,649 homes compared with 3,112 homes as of October 31, 2015. The number of homes in consolidated contract backlog, as of October 31, 2016, decreased 17.5% to 2,398 homes compared with 2,905 homes as of the end of the fourth quarter of fiscal 2015.
     
  • Consolidated deliveries were 1,870 homes in the fourth quarter of fiscal 2016, an 8.3% increase compared with 1,727 homes in the fourth quarter of fiscal 2015. For the three months ended October 31, 2016, deliveries, including unconsolidated joint ventures, increased 10.0% to 1,972 homes compared with 1,792 homes in the fourth quarter of the prior year.
     
  • Consolidated deliveries were 6,464 homes for all of fiscal 2016, a 17.4% increase compared with 5,507 homes in the same period of fiscal 2015. For the twelve months ended October 31, 2016, deliveries, including unconsolidated joint ventures, increased 16.2% to 6,712 homes compared with 5,776 homes in the twelve months of the prior fiscal year.
     
  • The contract cancellation rate, including unconsolidated joint ventures, for the fourth quarter of fiscal 2016 was 21%, compared with 20% in the fourth quarter of fiscal 2015.
     
  • The valuation allowance was $627.9 million as of October 31, 2016. The valuation allowance is a non-cash reserve against the tax assets for GAAP purposes. For tax purposes, the tax deductions associated with the tax assets may be carried forward for 20 years from the date the deductions were incurred.

LIQUIDITY AND INVENTORY AS OF OCTOBER 31,2016:

  • After paying off $320.0 million of debt that matured in October 2015, January 2016 and May 2016, total liquidity at the end of the fourth quarter of fiscal 2016 was $346.6 million.
     
  • During the fourth quarter of fiscal 2016, land and land development spending was $131.4 million compared with $192.1 million in last year’s fourth quarter. For the year ended October 31, 2016, land and land development spending was $567.0 million compared to $656.5 million in the prior fiscal year.
     
  • As of October 31, 2016, the land position, including unconsolidated joint ventures, was 31,281 lots, consisting of 14,165 lots under option and 17,116 owned lots, compared with a total of 37,659 lots as of October 31, 2015.
     
  • During the fourth quarter of fiscal 2016, approximately 2,100 lots, including unconsolidated joint ventures, were put under option or acquired in 37 communities.

COMMENTS FROM MANAGEMENT:

“For fiscal 2016, we grew revenues by 28%, reduced our SG&A ratio by 250 basis points, paid off $260 million of public debt at maturity and returned to profitability. Nonetheless, fiscal 2016 was a very challenging year,” stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. “The debt markets remained closed to companies with our credit ratings and we needed to raise funds to pay off $260 million of maturing public debt. This led to our decision to enhance our liquidity by increasing our use of land bank financings and joint ventures, as well as exiting four underperforming markets. This adversely affected our ability to invest as aggressively in new land parcels as previously planned. However, we ended the year with a liquidity position of $347 million, allowing us to once again actively seek land investment opportunities, which should ultimately result in community count growth and, assuming no change in market conditions, higher levels of profitability in the future,” concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2016 fourth quarter financial results conference call at 11:00 a.m. E.T. on Thursday, December 8, 2016. The webcast can be accessed live through the “Investor Relations” section of Hovnanian Enterprises’ website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the “Past Events” section of the Investor Relations page on the Hovnanian website at http://www.khov.com. The archive will be available for 12 months.

ABOUT HOVNANIAN ENTERPRISES®, INC.:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation’s largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The Company’s homes are marketed and sold under the trade names K. Hovnanian® Homes, Brighton Homes® and Parkwood Builders. As the developer of K. Hovnanian’s® Four Seasons communities, the Company is also one of the nation’s largest builders of active lifestyle communities.

Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company’s 2015 annual report, can be accessed through the “Investor Relations” section of the Hovnanian Enterprises’ website at http://www.khov.com. To be added to Hovnanian's investor e-mail list, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.

NON-GAAP FINANCIAL MEASURES:

Consolidated earnings before interest expense and income taxes (“EBIT”) and before depreciation and amortization (“EBITDA”) and before inventory impairment loss and land option write-offs and loss on extinguishment of debt (“Adjusted EBITDA”) are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net income (loss). The reconciliation for historical periods of EBIT, EBITDA and Adjusted EBITDA to net income (loss) is presented in a table attached to this earnings release.

Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Income (Loss) Before Income Taxes. The reconciliation for historical periods of Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to Income (Loss) Before Income Taxes is presented in a table attached to this earnings release.

Total liquidity is comprised of $339.8 million of cash and cash equivalents, $1.7 million of restricted cash required to collateralize letters of credit and $5.1 million of availability under the unsecured revolving credit facility as of October 31, 2016.

FORWARD-LOOKING STATEMENTS

All statements in this press release that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the Company’s goals and expectations with respect to its financial results for future financial periods. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of the sustained homebuilding downturn; (2) adverse weather and other environmental conditions and natural disasters; (3) levels of indebtedness and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness; (4) the Company's sources of liquidity; (5) changes in credit ratings; (6) changes in market conditions and seasonality of the Company’s business; (7) the availability and cost of suitable land and improved lots; (8) shortages in, and price fluctuations of, raw materials and labor; (9) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (10) fluctuations in interest rates and the availability of mortgage financing; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) operations through joint ventures with third parties; (13) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (14) product liability litigation, warranty claims and claims made by mortgage investors; (15) levels of competition; (16) availability and terms of financing to the Company; (17) successful identification and integration of acquisitions; (18) significant influence of the Company’s controlling stockholders; (19) availability of net operating loss carryforwards; (20) utility shortages and outages or rate fluctuations; (21) geopolitical risks, terrorist acts and other acts of war; (22) increases in cancellations of agreements of sale; (23) loss of key management personnel or failure to attract qualified personnel; (24) information technology failures and data security breaches; (25) legal claims brought against us and not resolved in our favor; and (26) certain risks, uncertainties and other factors described in detail in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

(Financial Tables Follow)

               
Hovnanian Enterprises, Inc.              
October 31, 2016              
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share Data)
        Three Months Ended   Twelve Months Ended
        October 31,   October 31,
          2016       2015       2016       2015  
        (Unaudited)   (Unaudited)
Total Revenues $ 805,069     $ 693,204     $ 2,752,247     $ 2,148,480  
Costs and Expenses (a)   770,609       657,506       2,742,265       2,174,414  
Loss on Extinguishment of Debt     (3,200 )     -       (3,200 )     -  
Income (Loss) from Unconsolidated Joint Ventures   881         1,699       (4,346 )      4,169  
Income (Loss) Before Income Taxes    32,141       37,397        2,436        (21,765 )
Income Tax Provision (Benefit)   9,852       11,878        5,255       (5,665 )
Net Income (Loss) $ 22,289     $ 25,519     $ (2,819 )   $ (16,100 )
                     
Per Share Data:              
Basic:                
  Income (Loss) Per Common Share $ 0.14     $ 0.17     $ (0.02 )   $ (0.11 )
  Weighted Average Number of Common Shares Outstanding (b)     147,521        147,057       147,451       146,899  
Assuming Dilution:              
  Income (Loss) Per Common Share $ 0.14     $ 0.16     $ (0.02 )   $ (0.11 )
  Weighted Average Number of Common Shares Outstanding (b)     160,590        160,299       147,451       146,899  
                     
(a)  Includes inventory impairment loss and land option write-offs.
(b)  For periods with a net loss, basic shares are used in accordance with GAAP rules.
                     
                     
Hovnanian Enterprises, Inc.
October 31, 2016
Reconciliation of Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to Income (Loss) Before Income Taxes
(Dollars in Thousands)
                     
        Three Months Ended   Twelve Months Ended
        October 31,   October 31,
          2016       2015       2016       2015  
        (Unaudited)   (Unaudited)
Income (Loss) Before Income Taxes $ 32,141     $ 37,397     $ 2,436     $ (21,765 )
Inventory Impairment Loss and Land Option Write-Offs    10,438         4,426         33,353         12,044  
Loss on Extinguishment of Debt   3,200       -        3,200       -  
Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt (a) $ 45,779     $ 41,823     $ 38,989     $ (9,721 )
                     
(a) Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt is a non-GAAP Financial measure. The most directly comparable GAAP financial measure is Income (Loss) Before Income Taxes.


Hovnanian Enterprises, Inc.  
October 31, 2016                
Gross Margin                
(Dollars in Thousands)                
    Homebuilding Gross Margin   Homebuilding Gross Margin 
    Three Months Ended   Twelve Months Ended 
    October 31,   October 31, 
      2016       2015       2016       2015  
    (Unaudited)   (Unaudited) 
Sale of Homes   $ 777,472     $ 673,330     $ 2,600,790     $ 2,088,129  
Cost of Sales, Excluding Interest and Land Charges (a)   640,580       552,462       2,162,284       1,721,336  
Homebuilding Gross Margin, Excluding Interest and Land Charges   136,892         120,868       438,506       366,793  
Homebuilding Cost of Sales Interest     25,302        19,959       86,593       59,574  
Homebuilding Gross Margin, Including Interest and Excluding Land Charges $ 111,590     $ 100,909     $ 351,913     $ 307,219  
Gross Margin Percentage, Excluding Interest and Land Charges   17.6 %     18.0 %     16.9 %     17.6 %
Gross Margin Percentage, Including Interest and Excluding Land Charges   14.4 %     15.0 %     13.5 %     14.7 %
                                 
    Land Sales Gross Margin   Land Sales Gross Margin 
    Three Months Ended   Twelve Months Ended 
    October 31,   October 31, 
      2016       2015       2016       2015  
    (Unaudited)   (Unaudited) 
Land and Lot Sales   $ 5,990     $ -     $ 76,041     $ 850  
Cost of Sales, Excluding Interest and Land Charges (a)     5,898       -       68,173       702  
Land and Lot Sales Gross Margin, Excluding Interest and Land Charges   92       -       7,868       148  
Land and Lot Sales Interest       396       -         5,798       39  
Land and Lot Sales Gross Margin, Including Interest and Excluding Land Charges $ (304 )   $ -     $ 2,070     $ 109  
                                 
                                 
(a) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Consolidated Statements of Operations. 


Hovnanian Enterprises, Inc.  
October 31, 2016  
Reconciliation of Adjusted EBITDA to Net Income (Loss)  
(Dollars in Thousands)                
  Three Months Ended   Twelve Months Ended  
  October 31,   October 31,  
    2016       2015       2016       2015    
  (Unaudited)   (Unaudited)  
Net Income (Loss) $ 22,289     $ 25,519     $ (2,819 )   $ (16,100 )  
Income Tax Provision (Benefit)   9,852       11,878       5,255       (5,665 )  
Interest Expense   48,197       41,200       183,358       151,448    
EBIT (a)   80,338       78,597       185,794       129,683    
Depreciation   957       835       3,565       3,388    
Amortization of Debt Costs   1,446       1,008       5,261       5,459    
EBITDA (b)   82,741       80,440       194,620       138,530    
Inventory Impairment Loss and Land Option Write-offs   10,438       4,426       33,353       12,044    
Loss on Extinguishment of Debt   3,200         -       3,200       -    
Adjusted EBITDA (c) $ 96,379     $ 84,866     $ 231,173     $ 150,574    
                 
Interest Incurred $ 40,341     $ 42,157     $ 166,824     $ 166,188    
                 
Adjusted EBITDA to Interest Incurred   2.39       2.01       1.39       0.91    
                 
                 
(a)  EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBIT represents earnings before interest expense and income taxes.
(b)  EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.
(c)  Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs and loss on extinguishment of debt.
                 
                 
                 
Hovnanian Enterprises, Inc.                
October 31, 2016                
Interest Incurred, Expensed and Capitalized  
(Dollars in Thousands)                
  Three Months Ended   Twelve Months Ended  
  October 31,   October 31,  
    2016       2015       2016       2015    
  (Unaudited)   (Unaudited)  
Interest Capitalized at Beginning of Period $ 104,544     $ 122,941     $ 123,898     $ 109,158    
Plus Interest Incurred    40,341        42,157       166,824       166,188    
Less Interest Expensed (a)    48,197       41,200       183,358       151,448    
Less Interest Contributed to Unconsolidated Joint Venture (a)    -         -        10,676       -    
Interest Capitalized at End of Period (b) $ 96,688     $ 123,898     $ 96,688     $ 123,898    
                 
(a) Represents capitalized interest which was included as part of the assets contributed to the joint venture the Company entered into in November 2015. There was no impact to the Consolidated Statement of Operations as a result of this transaction.
(b) Capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest.


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
 
    October 31, 2016   October 31, 2015
    (Unaudited)       (1 )  
ASSETS        
Homebuilding:        
Cash and cash equivalents   $ 339,773     $   245,398    
Restricted cash and cash equivalents     3,914         7,299    
Inventories:        
Sold and unsold homes and lots under development     899,082         1,307,850    
Land and land options held for future development or sale     175,301         214,503    
Consolidated inventory not owned      208,701          122,225    
Total inventories     1,283,084         1,644,578    
Investments in and advances to unconsolidated joint ventures     100,502         61,209    
Receivables, deposits and notes, net     49,726         70,349    
Property, plant and equipment, net     50,332         45,534    
Prepaid expenses and other assets     71,246         77,671    
Total homebuilding     1,898,577         2,152,038    
Financial services:        
Cash and cash equivalents     6,992         8,347    
Restricted cash and cash equivalents     19,034         19,223    
Mortgage loans held for sale at fair value     165,083         130,320    
Other assets     6,121         2,091    
Total financial services     197,230         159,981    
Income taxes receivable – including net deferred tax benefits     283,633         290,279    
Total assets   $ 2,379,440     $   2,602,298    
 
(1) Derived from the audited balance sheet as of October 31, 2015


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)
 
  October 31,
2016
  October 31,
2015
  (Unaudited)     (1
)
LIABILITIES AND EQUITY          
Homebuilding:          
Nonrecourse mortgages secured by inventory $ 83,470     $ 143,863  
Accounts payable and other liabilities   369,228       348,516  
Customers’ deposits   37,429       44,218  
Nonrecourse mortgages secured by operating properties   14,312       15,511  
Liabilities from inventory not owned   153,151       105,856  
Total homebuilding   657,590       657,964  
Financial services:          
Accounts payable and other liabilities   26,857       27,908  
Mortgage warehouse lines of credit   145,588       108,875  
Total financial services   172,445       136,783  
Notes payable:          
Revolving credit agreement   52,000       47,000  
Senior secured term loan   75,000       -  
Senior secured notes, net of discount   1,054,333       981,346  
Senior notes, net of discount   400,000       780,319  
Senior amortizing notes   6,316       12,811  
Senior exchangeable notes   57,841       73,771  
Accrued interest   32,425       40,388  
Total notes payable   1,677,915       1,935,635  
Total liabilities   2,507,950       2,730,382  
Stockholders' equity deficit:          
           
Preferred stock, $0.01 par value - authorized 100,000 shares; issued and outstanding 5,600 shares with a liquidation preference of $140,000 at October 31, 2016 and 2015   135,299       135,299  
Common stock, Class A, $0.01 par value - authorized 400,000,000 shares; issued 143,806,775 shares at October 31, 2016 and 143,292,881 shares at October 31, 2015 (including 11,760,763 shares at October 31, 2016 and 2015 held in Treasury)   1,438       1,433  
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 60,000,000 shares; issued 15,942,809 shares at October 31, 2016 and 15,676,829 shares at October 31, 2015 (including 691,748 shares at October 31, 2016 and 2015 held in Treasury)   159       157  
Paid in capital - common stock   706,137       703,751  
Accumulated deficit   (856,183 )     (853,364 )
Treasury stock - at cost   (115,360 )     (115,360 )
Total stockholders' equity deficit   (128,510 )     (128,084 )
Total liabilities and equity $ 2,379,440     $ 2,602,298  
 
(1) Derived from the audited balance sheet as of October 31, 2015


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
 
  Three Months Ended
October 31,
  Twelve Months Ended
October 31,
    2016       2015       2016       2015  
Revenues:              
Homebuilding:              
Sale of homes $ 777,472     $ 673,330     $ 2,600,790     $ 2,088,129  
Land sales and other revenues   6,694       1,148       78,840       3,686  
Total homebuilding   784,166       674,478       2,679,630       2,091,815  
Financial services   20,903       18,726       72,617       56,665  
Total revenues   805,069       693,204       2,752,247       2,148,480  
               
Expenses:              
Homebuilding:              
Cost of sales, excluding interest   646,478       552,462       2,230,457       1,722,038  
Cost of sales interest   25,698       19,959       92,391       59,613  
Inventory impairment loss and land option write-offs   10,438       4,426       33,353       12,044  
Total cost of sales   682,614       576,847       2,356,201       1,793,695  
Selling, general and administrative   37,378       36,145       192,938       188,403  
Total homebuilding expenses   719,992       612,992       2,549,139       1,982,098  
               
Financial services   10,395       8,903       37,144       31,972  
Corporate general and administrative   16,337       13,231       60,141       62,506  
Other interest   22,499       21,241       90,967       91,835  
Other operations   1,386       1,139         4,874         6,003  
Total expenses   770,609       657,506       2,742,265       2,174,414  
Loss on extinguishment of debt   (3,200 )     -         (3,200 )       -  
Income (loss) from unconsolidated joint ventures   881       1,699       (4,346 )     4,169  
Income (loss) before income taxes   32,141       37,397       2,436       (21,765 )
State and federal income tax provision (benefit):              
State   (2,538 )     576       2,457       4,293  
Federal   12,390       11,302         2,798         (9,958 )
Total income taxes   9,852       11,878       5,255       (5,665 )
Net income (loss) $ 22,289     $ 25,519     $ (2,819 )   $ (16,100 )
               
Per share data:              
Basic:              
Income (loss) per common share $ 0.14     $ 0.17     $ (0.02 )   $ (0.11 )
Weighted-average number of common shares outstanding   147,521       147,057       147,451       146,899  
Assuming dilution:              
Income (loss) per common share $ 0.14     $ 0.16     $ (0.02 )   $ (0.11 )
Weighted-average number of common shares outstanding   160,590       160,299       147,451       146,899  


HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)
(UNAUDITED)         Communities Under Development      
          Three Months - October 31, 2016      
    Net Contracts (1) Deliveries Contract
    Three Months Ended Three Months Ended Backlog
    Oct 31, Oct 31, Oct 31,
      2016     2015   % Change   2016     2015   % Change   2016     2015   % Change
Northeast                     
(NJ, PA) Home   106     143     (25.9 )%   162     136     19.1 %   204     293     (30.4 )%
  Dollars $ 50,179   $ 66,846     (24.9 )% $ 81,467   $ 63,175     29.0 % $ 99,512   $ 147,004     (32.3 )%
  Avg. Price $ 473,383   $ 467,455     1.3 % $ 502,884   $ 464,522     8.3 % $ 487,803   $ 501,719     (2.8 )%
Mid-Atlantic                     
(DE, MD, VA, WV) Home   196     236     (16.9 )%   332     256     29.7 %   430     453     (5.1 )%
  Dollars $ 99,179   $ 114,191     (13.1 )% $ 162,902   $ 127,233     28.0 % $ 248,974   $ 239,099     4.1 %
  Avg. Price $ 506,012   $ 483,860     4.6 % $ 490,668   $ 497,004     (1.3 )% $ 579,009   $ 527,812     9.7 %
Midwest (2)                     
(IL, MN, OH) Home   125     232     (46.1 )%   215     284     (24.3 )%   374     644     (41.9 )%
  Dollars $ 38,339   $ 73,693     (48.0 )% $ 62,193   $ 91,122     (31.7 )% $ 104,527   $ 194,290     (46.2 )%
  Avg. Price $ 306,712   $ 317,640     (3.4 )% $ 289,271   $ 320,852     (9.8 )% $ 279,485   $ 301,692     (7.4 )%
Southeast (3)                     
(FL, GA, NC, SC) Home   141     168     (16.1 )%   164     220     (25.5 )%   332     279     19.0 %
  Dollars $ 53,372   $ 58,382     (8.6 )% $ 67,690   $ 63,074     7.3 % $ 145,171   $ 105,935     37.0 %
  Avg. Price $ 378,522   $ 347,512     8.9 % $ 412,744   $ 286,698     44.0 % $ 437,261   $ 379,699     15.2 %
Southwest                     
(AZ, TX) Home   551     571     (3.5 )%   796     686     16.0 %   763     1,033     (26.1 )%
  Dollars $ 190,426   $ 216,371     (12.0 )% $ 298,689   $ 262,713     13.7 % $ 285,644   $ 422,711     (32.4 )%
  Avg. Price $ 345,601   $ 378,933     (8.8 )% $ 375,237   $ 382,963     (2.0 )% $ 374,370   $ 409,207     (8.5 )%
West                     
(CA) Home   180     185     (2.7 )%   201     145     38.6 %   295     203     45.3 %
  Dollars $ 102,819   $ 95,419     7.8 % $ 104,531   $ 66,013     58.3 % $ 185,274   $ 106,886     73.3 %
  Avg. Price $ 571,218   $ 515,780     10.7 % $ 520,055   $ 455,262     14.2 % $ 628,047   $ 526,531     19.3 %
Consolidated Total                    
  Home   1,299     1,535     (15.4 )%   1,870     1,727     8.3 %   2,398     2,905     (17.5 )%
  Dollars $ 534,314   $ 624,902     (14.5 )% $ 777,472   $ 673,330     15.5 % $ 1,069,102   $ 1,215,925     (12.1 )%
  Avg. Price $ 411,327   $ 407,102     1.0 % $ 415,761   $ 389,884     6.6 % $ 445,831   $ 418,563     6.5 %
Unconsolidated Joint Ventures                    
  Home   90     94     (4.3 )%   102     65     56.9 %   251     207     21.3 %
  Dollars $ 48,394   $ 59,441     (18.6 )% $ 64,099   $ 37,730     69.9 % $ 152,430   $ 132,082     15.4 %
  Avg. Price $ 537,706   $ 632,347     (15.0 )% $ 628,417   $ 580,467     8.3 % $ 607,292   $ 638,077     (4.8 )%
Grand Total                    
  Home   1,389     1,629     (14.7 )%   1,972     1,792     10.0 %   2,649     3,112     (14.9 )%
  Dollars $ 582,708   $ 684,343     (14.9 )% $ 841,571   $ 711,060     18.4 % $ 1,221,532   $ 1,348,007     (9.4 )%
  Avg. Price $ 419,516   $ 420,100     (0.1 )% $ 426,760   $ 396,797     7.6 % $ 461,130   $ 433,164     6.5 %
                     
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
(2) The Midwest net contracts include 54 homes and $23.0 million in 2015 from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN.
(3) The Southeast net contracts include 29 homes and $12.2 million in 2015 from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC.


HOVNANIAN ENTERPRISES, INC.  
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)  
(SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES)  
(UNAUDITED)         Communities Under Development        
          Three Months - October 31, 2016        
    Net Contracts (1) Deliveries Contract  
    Three Months Ended Three Months Ended Backlog  
    Oct 31, Oct 31, Oct 31,  
      2016     2015   % Change   2016     2015   % Change   2016     2015   % Change  
Northeast                       
(includes unconsolidated joint ventures) Home   116     156     (25.6 )%   169     141     19.9 %   231     341     (32.3 )%  
(NJ, PA) Dollars $ 54,173   $ 73,417     (26.2 )% $ 83,790   $ 69,345     20.8 % $ 109,775   $ 168,476     (34.8 )%  
  Avg. Price $ 467,009   $ 470,623     (0.8 )% $ 495,797   $ 491,808     0.8 % $ 475,215   $ 494,065     (3.8 )%  
Mid-Atlantic                       
(includes unconsolidated joint ventures) Home   208     244     (14.8 )%   348     288     20.8 %   470     467     0.6 %  
(DE, MD, VA, WV) Dollars $ 107,998   $ 118,957     (9.2 )% $ 171,133   $ 145,192     17.9 % $ 279,063   $ 246,906     13.0 %  
  Avg. Price $ 519,220   $ 487,533     6.5 % $ 491,759   $ 504,141     (2.5 )% $ 593,751   $ 528,707     12.3 %  
Midwest (2)                       
(includes unconsolidated joint ventures) Home   126     232     (45.7 )%   218     284     (23.2 )%   386     644     (40.1 )%  
(IL, MN, OH) Dollars $ 38,744   $ 73,693     (47.4 )% $ 64,235   $ 91,121     (29.5 )% $ 114,116   $ 194,290     (41.3 )%  
  Avg. Price $ 307,487   $ 317,640     (3.2 )% $ 294,658   $ 320,850     (8.2 )% $ 295,638   $ 301,692     (2.0 )%  
Southeast (3)                       
(includes unconsolidated joint ventures) Home   173     176     (1.7 )%   166     226     (26.5 )%   420     288     45.8 %  
(FL, GA, NC, SC) Dollars $ 67,754   $ 62,941     7.6 % $ 68,347   $ 65,449     4.4 % $ 188,893   $ 110,860     70.4 %  
  Avg. Price $ 391,646   $ 357,617     9.5 % $ 411,729   $ 289,596     42.2 % $ 449,746   $ 384,930     16.8 %  
Southwest                       
(includes unconsolidated joint ventures) Home   558     571     (2.3 )%   796     686     16.0 %   770     1,033     (25.5 )%  
(AZ, TX) Dollars $ 194,903   $ 216,371     (9.9 )% $ 298,688   $ 262,713     13.7 % $ 290,121   $ 422,711     (31.4 )%  
  Avg. Price $ 349,289   $ 378,932     (7.8 )% $ 375,237   $ 382,963     (2.0 )% $ 376,781   $ 409,207     (7.9 )%  
West                       
(includes unconsolidated joint ventures) Home   208     250     (16.8 )%   275     167     64.7 %   372     339     9.7 %  
(CA) Dollars $ 119,136   $ 138,964     (14.3 )% $ 155,378   $ 77,240     101.2 % $ 239,564   $ 204,764     17.0 %  
  Avg. Price $ 572,769   $ 555,857     3.0 % $ 565,010   $ 462,513     22.2 % $ 643,990   $ 604,024     6.6 %  
Grand Total                      
  Home   1,389     1,629     (14.7 )%   1,972     1,792     10.0 %   2,649     3,112     (14.9 )%  
  Dollars $ 582,708   $ 684,343     (14.9 )% $ 841,571   $ 711,060     18.4 % $ 1,221,532   $ 1,348,007     (9.4 )%  
  Avg. Price $ 419,516   $ 420,100     (0.1 )% $ 426,760   $ 396,797     7.6 % $ 461,130   $ 433,164     6.5 %  
Consolidated Total                      
  Home   1,299     1,535     (15.4 )%   1,870     1,727     8.3 %   2,398     2,905     (17.5 )%  
  Dollars $ 534,314   $ 624,902     (14.5 )% $ 777,472   $ 673,330     15.5 % $ 1,069,102   $ 1,215,925     (12.1 )%  
  Avg. Price $ 411,327   $ 407,102     1.0 % $ 415,761   $ 389,884     6.6 % $ 445,831   $ 418,563     6.5 %  
Unconsolidated Joint Ventures                      
  Home   90     94     (4.3 )%   102     65     56.9 %   251     207     21.3 %  
  Dollars $ 48,394   $ 59,441     (18.6 )% $ 64,099   $ 37,730     69.9 % $ 152,430   $ 132,082     15.4 %  
  Avg. Price $ 537,706   $ 632,347     (15.0 )% $ 628,417   $ 580,467     8.3 % $ 607,292   $ 638,077     (4.8 )%  
                       
DELIVERIES INCLUDE EXTRAS  
Notes:
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
(2) The Midwest net contracts include 54 homes and $23.0 million in 2015 from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN.
(3) The Southeast net contracts include 29 homes and $12.2 million in 2015 from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC.


HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)
(UNAUDITED)         Communities Under Development      
          Twelve Months - October 31, 2016      
    Net Contracts (1) Deliveries Contract
    Twelve Months Ended Twelve Months Ended Backlog
    Oct 31, Oct 31, Oct 31,
      2016     2015   % Change   2016     2015   % Change   2016     2015   % Change
Northeast                     
(NJ, PA) Home   468     527     (11.2 )%   557     380     46.6 %   204     293     (30.4 )%
  Dollars $ 226,635   $ 262,726     (13.7 )% $ 274,126   $ 189,049     45.0 % $ 99,512   $ 147,004     (32.3 )%
  Avg. Price $ 484,261   $ 498,531     (2.9 )% $ 492,147   $ 497,497     (1.1 )% $ 487,803   $ 501,719     (2.8 )%
Mid-Atlantic                     
(DE, MD, VA, WV) Home   949     936     1.4 %   960     854     12.4 %   430     453     (5.1 )%
  Dollars $ 467,782   $ 448,307     4.3 % $ 457,906   $ 398,132     15.0 % $ 248,974   $ 239,099     4.1 %
  Avg. Price $ 492,920   $ 478,961     2.9 % $ 476,985   $ 466,197     2.3 % $ 579,009   $ 527,812     9.7 %
Midwest (2)                     
(IL, MN, OH) Home   724     937     (22.7 )%   921     958     (3.9 )%   374     644     (41.9 )%
  Dollars $ 222,835   $ 317,059     (29.7 )% $ 287,469   $ 311,364     (7.7 )% $ 104,527   $ 194,290     (46.2 )%
  Avg. Price $ 307,784   $ 338,376     (9.0 )% $ 312,127   $ 325,015     (4.0 )% $ 279,485   $ 301,692     (7.4 )%
Southeast (3)                     
(FL, GA, NC, SC) Home   701     722     (2.9 )%   581     675     (13.9 )%   332     279     19.0 %
  Dollars $ 287,538   $ 232,272     23.8 % $ 214,585   $ 207,407     3.5 % $ 145,171   $ 105,935     37.0 %
  Avg. Price $ 410,183   $ 321,706     27.5 % $ 369,339   $ 307,269     20.2 % $ 437,261   $ 379,699     15.2 %
Southwest                     
(AZ, TX) Home   2,480     2,526     (1.8 )%   2,750     2,263     21.5 %   763     1,033     (26.1 )%
  Dollars $ 887,341   $ 949,763     (6.6 )% $ 1,024,410   $ 822,371     24.6 % $ 285,644   $ 422,711     (32.4 )%
  Avg. Price $ 357,799   $ 375,995     (4.8 )% $ 372,512   $ 363,399     2.5 % $ 374,370   $ 409,207     (8.5 )%
West                     
(CA) Home   787     535     47.1 %   695     377     84.4 %   295     203     45.3 %
  Dollars $ 420,681   $ 238,080     76.7 % $ 342,294   $ 159,806     114.2 % $ 185,274   $ 106,886     73.3 %
  Avg. Price $ 534,539   $ 445,010     20.1 % $ 492,509   $ 423,889     16.2 % $ 628,047   $ 526,531     19.3 %
Consolidated Total                    
  Home   6,109     6,183     (1.2 )%   6,464     5,507     17.4 %   2,398     2,905     (17.5 )%
  Dollars $ 2,512,812   $ 2,448,207     2.6 % $ 2,600,790   $ 2,088,129     24.6 % $ 1,069,102   $ 1,215,925     (12.1 )%
  Avg. Price $ 411,329   $ 395,958     3.9 % $ 402,350   $ 379,177     6.1 % $ 445,831   $ 418,563     6.5 %
Unconsolidated Joint Ventures                    
  Home   271     364     (25.5 )%   248     269     (7.8 )%   251     207     21.3 %
  Dollars $ 160,924   $ 202,879     (20.7 )% $ 140,576   $ 119,920     17.2 % $ 152,430   $ 132,082     15.4 %
  Avg. Price $ 593,814   $ 557,359     6.5 % $ 566,836   $ 445,799     27.2 % $ 607,292   $ 638,077     (4.8 )%
Grand Total                    
  Home   6,380     6,547     (2.6 )%   6,712     5,776     16.2 %   2,649     3,112     (14.9 )%
  Dollars $ 2,673,736   $ 2,651,086     0.9 % $ 2,741,366   $ 2,208,049     24.2 % $ 1,221,532   $ 1,348,007     (9.4 )%
  Avg. Price $ 419,081   $ 404,931     3.5 % $ 408,427   $ 382,280     6.8 % $ 461,130   $ 433,164     6.5 %
                     
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
(2) The Midwest net contracts include 65 homes and $27.4 million and 246 homes and $98.2 million in 2016 and 2015, respectively, from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN.
(3) The Southeast net contracts include 70 homes and $31.6 million and 128 homes and $42.4 million in 2016 and 2015, respectively, from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC.


HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES)
(UNAUDITED)         Communities Under Development      
          Twelve Months - October 31, 2016      
    Net Contracts (1) Deliveries Contract
    Twelve Months Ended Twelve Months Ended Backlog
    Oct 31, Oct 31, Oct 31,
      2016     2015   % Change   2016     2015   % Change   2016     2015   % Change
Northeast                     
(includes unconsolidated joint ventures) Home   472     577     (18.2 )%   582     402     44.8 %   231     341     (32.3 )%
(NJ, PA) Dollars $ 223,050   $ 286,792     (22.2 )% $ 281,751   $ 199,896     40.9 % $ 109,775   $ 168,476     (34.8 )%
  Avg. Price $ 472,563   $ 497,040     (4.9 )% $ 484,108   $ 497,255     (2.6 )% $ 475,215   $ 494,065     (3.8 )%
Mid-Atlantic                     
(includes unconsolidated joint ventures) Home   1,010     1,006     0.4 %   1,007     945     6.6 %   470     467     0.6 %
(DE, MD, VA, WV) Dollars $ 514,592   $ 485,551     6.0 % $ 482,436   $ 448,605     7.5 % $ 279,063   $ 246,906     13.0 %
  Avg. Price $ 509,496   $ 482,654     5.6 % $ 479,081   $ 474,714     0.9 % $ 593,751   $ 528,707     12.3 %
Midwest (2)                     
(includes unconsolidated joint ventures) Home   730     940     (22.3 )%   924     978     (5.5 )%   386     644     (40.1 )%
(IL, MN, OH) Dollars $ 234,466   $ 317,989     (26.3 )% $ 289,511   $ 316,960     (8.7 )% $ 114,116   $ 194,290     (41.3 )%
  Avg. Price $ 321,186   $ 338,286     (5.1 )% $ 313,324   $ 324,090     (3.3 )% $ 295,638   $ 301,692     (2.0 )%
Southeast (3)                     
(includes unconsolidated joint ventures) Home   783     773     1.3 %   584     746     (21.7 )%   420     288     45.8 %
(FL, GA, NC, SC) Dollars $ 327,378   $ 254,484     28.6 % $ 215,628   $ 236,617     (8.9 )% $ 188,893   $ 110,860     70.4 %
  Avg. Price $ 418,108   $ 329,216     27.0 % $ 369,226   $ 317,181     16.4 % $ 449,746   $ 384,930     16.8 %
Southwest                     
(includes unconsolidated joint ventures) Home   2,487     2,526     (1.5 )%   2,750     2,263     21.5 %   770     1,033     (25.5 )%
(AZ, TX) Dollars $ 891,819   $ 949,763     (6.1 )% $ 1,024,409   $ 822,371     24.6 % $ 290,121   $ 422,711     (31.4 )%
  Avg. Price $ 358,592   $ 375,995     (4.6 )% $ 372,512   $ 363,399     2.5 % $ 376,781   $ 409,207     (7.9 )%
West                     
(includes unconsolidated joint ventures) Home   898     725     23.9 %   865     442     95.7 %   372     339     9.7 %
(CA) Dollars $ 482,431   $ 356,507     35.3 % $ 447,631   $ 183,600     143.8 % $ 239,564   $ 204,764     17.0 %
  Avg. Price $ 537,228   $ 491,734     9.3 % $ 517,493   $ 415,384     24.6 % $ 643,990   $ 604,024     6.6 %
Grand Total                    
  Home   6,380     6,547     (2.6 )%   6,712     5,776     16.2 %   2,649     3,112     (14.9 )%
  Dollars $ 2,673,736   $ 2,651,086     0.9 % $ 2,741,366   $ 2,208,049     24.2 % $ 1,221,532   $ 1,348,007     (9.4 )%
  Avg. Price $ 419,081   $ 404,931     3.5 % $ 408,427   $ 382,280     6.8 % $ 461,130   $ 433,164     6.5 %
Consolidated Total                    
  Home   6,109     6,183     (1.2 )%   6,464     5,507     17.4 %   2,398     2,905     (17.5 )%
  Dollars $ 2,512,812   $ 2,448,207     2.6 % $ 2,600,790   $ 2,088,129     24.6 % $ 1,069,102   $ 1,215,925     (12.1 )%
  Avg. Price $ 411,329   $ 395,958     3.9 % $ 402,350   $ 379,177     6.1 % $ 445,831   $ 418,563     6.5 %
Unconsolidated Joint Ventures                    
  Home   271     364     (25.5 )%   248     269     (7.8 )%   251     207     21.3 %
  Dollars $ 160,924   $ 202,879     (20.7 )% $ 140,576   $ 119,920     17.2 % $ 152,430   $ 132,082     15.4 %
  Avg. Price $ 593,814   $ 557,359     6.5 % $ 566,836   $ 445,799     27.2 % $ 607,292   $ 638,077     (4.8 )%
                                                         
DELIVERIES INCLUDE EXTRAS                               
Notes:
                                                       
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
(2) The Midwest net contracts include 65 homes and $27.4 million and 246 homes and $98.2 million in 2016 and 2015, respectively, from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN.
(3) The Southeast net contracts include 70 homes and $31.6 million and 128 homes and $42.4 million in 2016 and 2015, respectively, from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC.
Contact:	

J. Larry Sorsby
Executive Vice President & CFO
732-747-7800

Jeffrey T. O’Keefe
Vice President, Investor Relations
732-747-7800

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