among other measures , we implemented appropriate health and safety protocols so that our community construction and sales activities , wherever authorized , could continue operations . during the second quarter of fiscal 2020 and the initial impact of covid-19 , we experienced adverse business conditions , including a slowdown in customer traffic and sales pace and an increase in cancellations . to mitigate the adverse impacts , we implemented initiatives to maximize positive cash flow , retain a strong liquidity position and optimize our organization , which included focusing on closing homes in backlog and limiting cash expenditures , reducing or delaying certain land purchases and land development activity and beginning work on unsold homes and electing to draw in full the $ 125.0 million available under its secured credit agreement ( which was repaid in the third quarter of fiscal 2020 ) . further , in may 2020 , we announced certain operational optimization measures including streamlining the organizational structure by : ( 1 ) transitioning from three homebuilding operational groups to two ; ( 2 ) consolidating several business units , resulting in the reduction of three divisional offices ; and ( 3 ) gradually phasing out of the chicago market as it sells through its existing communities . in addition , we took measures to reduce overhead expenses through a combination of furloughs , layoffs and other cost reduction measures , the implementation of which was completed in early fiscal 2021. we incurred costs of $ 2.9 million for severance and other related expenses in the third quarter of fiscal 2020 as a result of this restructuring . we expect the measures described above to reduce our annualized overhead expense by approximately $ 20 million beginning in fiscal 2021. however , the recent improved conditions in the homebuilding market have led to increases in other selling , general and administrative costs , including for example , stock compensation and bonuses based on profitability , which we expect will more than offset these annualized savings . 23 while the broader economic recovery following the nationwide covid-19 related shutdown is ongoing and there continues to be uncertainty surrounding the virus and various re-opening strategies , the homebuilding industry generally was only impacted from mid-march through april of 2020. towards the end of april , economic conditions in our markets started to improve , and this improvement continued throughout our fiscal third and fourth quarters , due to what we believe is a combination of factors including low interest rates , low inventory levels of existing homes and a general desire for more indoor and outdoor space . during the third quarter and continuing through the fourth quarter of fiscal 2020 , we returned to our normal activities with respect to land purchases , land development and resuming the construction of unsold homes . as a result , our operating metrics improved significantly as compared to fiscal 2019 , as described below . although many of our key metrics have improved since the end of the second quarter of fiscal 2020 , the full magnitude and duration of the covid-19 pandemic is unknown . we may experience material declines in our net contracts , deliveries , revenues , cash flow and or profitability during fiscal 2021 and beyond , compared to the corresponding prior-year periods , and compared to our expectations at the beginning of our 2020 fiscal year . in addition , if conditions in the overall housing market or in a specific market worsen in the future beyond our current expectations , if future changes in our business strategy significantly affect any key assumptions used in our projections of future cash flows , or if there are material changes in any of the other items we consider in assessing recoverability , we may recognize charges in future periods for inventory impairments related to our current inventory assets or other reorganization activities . any such charges could be material to our consolidated financial statements . operating results we experienced overall positive operating results for the year ended october 31 , 2020 as follows : our cash position allowed us to spend $ 624.2 million on land purchases and land development during fiscal 2020 , and still have total liquidity of $ 399.1 million , including $ 262.5 million of homebuilding cash and cash equivalents as of october 31 , 2020 and $ 125.0 million of borrowing capacity under our senior secured revolving credit facility . additional results for the year ended october 31 , 2020 were as follows : ● for the year ended october 31 , 2020 , sale of homes revenues increased 15.5 % as compared to the prior year , as a result of a 15.0 % increase in deliveries , primarily due to our increased community count that occurred during fiscal 2019 and our 39.2 % increase in sales absorption pace in fiscal 2020 as compared to fiscal 2019 . ● gross margin percentage increased from 14.2 % for the year ended october 31 , 2019 to 14.7 % for the year ended october 31 , 2020 , and gross margin percentage , before cost of sales interest expense and land charges , increased from 18.1 % for the year ended october 31 , 2019 to 18.4 % for the year ended october 31 , 2020. the increases were primarily due to the mix of communities delivering compared to the prior year , along with increases in home prices in virtually all of our markets during the last half of fiscal 2020 . story_separator_special_tag warranty costs and construction defect reserves - 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 delivered in fiscal 2020 and 2019 , our deductible under our general liability insurance was a $ 20 million aggregate for construction defect and warranty claims . for bodily injury claims , our deductible per occurrence in fiscal 2020 and 2019 was $ 0.25 million , up to a $ 5 million limit . our aggregate retention for construction defect , warranty and bodily injury claims was $ 20 million for fiscal 2020 and 2019. we do not have a deductible on our worker 's compensation insurance . reserves for estimated losses for construction defects , warranty and bodily injury claims have been established using the assistance of a third-party actuary . 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 . these estimates are subject to a high degree of variability due to uncertainties such as trends in construction defect claims relative to our markets and the types of products we build , claim settlement patterns , insurance industry practices and legal interpretations , among others . because of the high degree of judgment required in determining these estimated liability amounts , actual future costs could differ significantly from our currently estimated amounts . 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 . see note 16 to the consolidated financial statements for additional information on the amount of warranty costs recognized in cost of goods sold and administrative expenses . 27 recent accounting pronouncements see note 3 to the consolidated financial statements included elsewhere in this annual report on form 10-k. story_separator_special_tag guarantors ” ) . 29 the credit agreements governing the credit facilities and the indentures governing the senior secured and senior notes ( together , the “ debt instruments ” ) outstanding at october 31 , 2020 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 ( other than non-recourse indebtedness , certain permitted indebtedness and refinancing indebtedness ) , pay dividends and make distributions on common and preferred stock , repay certain indebtedness prior to its respective stated maturity , repurchase 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 october 31 , 2020 , 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 , and from incurring indebtedness other than certain permitted indebtedness , refinancing indebtedness and nonrecourse indebtedness . as a result of this ratio restriction , we are currently restricted from paying dividends ( in the case of the payment of dividends on preferred stock , our secured debt leverage ratio must also be less than 4.0 to 1.0 ) , which are not cumulative , on our 7.625 % series a preferred stock . we anticipate that we will continue to be restricted from paying dividends for the foreseeable future . our inability to pay dividends is in

capital resources and liquidity our operations consist primarily of residential housing development and sales in the northeast ( new jersey and pennsylvania ) , the mid-atlantic ( delaware , maryland , virginia , washington d.c. and west virginia ) , the midwest ( illinois and ohio ) , the southeast ( florida , georgia and south carolina ) , the southwest ( arizona and texas ) and the west ( california ) . in addition , we provide certain financial services to our homebuilding customers . we have historically funded our homebuilding and financial services operations with cash flows from operating activities , borrowings under our credit facilities , the issuance of new debt and equity securities and other financing activities . due to covenant restrictions in our debt instruments , we are currently limited in the amount of debt we can incur that does not qualify as refinancing indebtedness ( a limitation that we expect to continue for the foreseeable future ) , even if market conditions would otherwise be favorable , which could also impact our ability to grow our business . operating , investing and financing activities – overview our total liquidity at october 31 , 2020 was $ 399.1 million , including $ 262.5 million in homebuilding cash and cash equivalents and $ 125.0 million of borrowing capacity under our senior secured revolving credit facility . this was above our target liquidity range of $ 170.0 to $ 245.0 million . the unprecedented public health and governmental efforts to contain the covid-19 pandemic have created significant uncertainty as to general economic and housing market conditions for fiscal 2021 and beyond . we believe that these sources of cash together with available borrowings on our senior secured revolving credit facility will be sufficient through fiscal 2021 to finance our working capital requirements .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```capital resources and liquidity our operations consist primarily of residential housing development and sales in the northeast ( new jersey and pennsylvania ) , the mid-atlantic ( delaware , maryland , virginia , washington d.c. and west virginia ) , the midwest ( illinois and ohio ) , the southeast ( florida , georgia and south carolina ) , the southwest ( arizona and texas ) and the west ( california ) . in addition , we provide certain financial services to our homebuilding customers . we have historically funded our homebuilding and financial services operations with cash flows from operating activities , borrowings under our credit facilities , the issuance of new debt and equity securities and other financing activities . due to covenant restrictions in our debt instruments , we are currently limited in the amount of debt we can incur that does not qualify as refinancing indebtedness ( a limitation that we expect to continue for the foreseeable future ) , even if market conditions would otherwise be favorable , which could also impact our ability to grow our business . operating , investing and financing activities – overview our total liquidity at october 31 , 2020 was $ 399.1 million , including $ 262.5 million in homebuilding cash and cash equivalents and $ 125.0 million of borrowing capacity under our senior secured revolving credit facility . this was above our target liquidity range of $ 170.0 to $ 245.0 million . the unprecedented public health and governmental efforts to contain the covid-19 pandemic have created significant uncertainty as to general economic and housing market conditions for fiscal 2021 and beyond . we believe that these sources of cash together with available borrowings on our senior secured revolving credit facility will be sufficient through fiscal 2021 to finance our working capital requirements .
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 Suspicious Activity Report : among other measures , we implemented appropriate health and safety protocols so that our community construction and sales activities , wherever authorized , could continue operations . during the second quarter of fiscal 2020 and the initial impact of covid-19 , we experienced adverse business conditions , including a slowdown in customer traffic and sales pace and an increase in cancellations . to mitigate the adverse impacts , we implemented initiatives to maximize positive cash flow , retain a strong liquidity position and optimize our organization , which included focusing on closing homes in backlog and limiting cash expenditures , reducing or delaying certain land purchases and land development activity and beginning work on unsold homes and electing to draw in full the $ 125.0 million available under its secured credit agreement ( which was repaid in the third quarter of fiscal 2020 ) . further , in may 2020 , we announced certain operational optimization measures including streamlining the organizational structure by : ( 1 ) transitioning from three homebuilding operational groups to two ; ( 2 ) consolidating several business units , resulting in the reduction of three divisional offices ; and ( 3 ) gradually phasing out of the chicago market as it sells through its existing communities . in addition , we took measures to reduce overhead expenses through a combination of furloughs , layoffs and other cost reduction measures , the implementation of which was completed in early fiscal 2021. we incurred costs of $ 2.9 million for severance and other related expenses in the third quarter of fiscal 2020 as a result of this restructuring . we expect the measures described above to reduce our annualized overhead expense by approximately $ 20 million beginning in fiscal 2021. however , the recent improved conditions in the homebuilding market have led to increases in other selling , general and administrative costs , including for example , stock compensation and bonuses based on profitability , which we expect will more than offset these annualized savings . 23 while the broader economic recovery following the nationwide covid-19 related shutdown is ongoing and there continues to be uncertainty surrounding the virus and various re-opening strategies , the homebuilding industry generally was only impacted from mid-march through april of 2020. towards the end of april , economic conditions in our markets started to improve , and this improvement continued throughout our fiscal third and fourth quarters , due to what we believe is a combination of factors including low interest rates , low inventory levels of existing homes and a general desire for more indoor and outdoor space . during the third quarter and continuing through the fourth quarter of fiscal 2020 , we returned to our normal activities with respect to land purchases , land development and resuming the construction of unsold homes . as a result , our operating metrics improved significantly as compared to fiscal 2019 , as described below . although many of our key metrics have improved since the end of the second quarter of fiscal 2020 , the full magnitude and duration of the covid-19 pandemic is unknown . we may experience material declines in our net contracts , deliveries , revenues , cash flow and or profitability during fiscal 2021 and beyond , compared to the corresponding prior-year periods , and compared to our expectations at the beginning of our 2020 fiscal year . in addition , if conditions in the overall housing market or in a specific market worsen in the future beyond our current expectations , if future changes in our business strategy significantly affect any key assumptions used in our projections of future cash flows , or if there are material changes in any of the other items we consider in assessing recoverability , we may recognize charges in future periods for inventory impairments related to our current inventory assets or other reorganization activities . any such charges could be material to our consolidated financial statements . operating results we experienced overall positive operating results for the year ended october 31 , 2020 as follows : our cash position allowed us to spend $ 624.2 million on land purchases and land development during fiscal 2020 , and still have total liquidity of $ 399.1 million , including $ 262.5 million of homebuilding cash and cash equivalents as of october 31 , 2020 and $ 125.0 million of borrowing capacity under our senior secured revolving credit facility . additional results for the year ended october 31 , 2020 were as follows : ● for the year ended october 31 , 2020 , sale of homes revenues increased 15.5 % as compared to the prior year , as a result of a 15.0 % increase in deliveries , primarily due to our increased community count that occurred during fiscal 2019 and our 39.2 % increase in sales absorption pace in fiscal 2020 as compared to fiscal 2019 . ● gross margin percentage increased from 14.2 % for the year ended october 31 , 2019 to 14.7 % for the year ended october 31 , 2020 , and gross margin percentage , before cost of sales interest expense and land charges , increased from 18.1 % for the year ended october 31 , 2019 to 18.4 % for the year ended october 31 , 2020. the increases were primarily due to the mix of communities delivering compared to the prior year , along with increases in home prices in virtually all of our markets during the last half of fiscal 2020 . story_separator_special_tag warranty costs and construction defect reserves - 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 delivered in fiscal 2020 and 2019 , our deductible under our general liability insurance was a $ 20 million aggregate for construction defect and warranty claims . for bodily injury claims , our deductible per occurrence in fiscal 2020 and 2019 was $ 0.25 million , up to a $ 5 million limit . our aggregate retention for construction defect , warranty and bodily injury claims was $ 20 million for fiscal 2020 and 2019. we do not have a deductible on our worker 's compensation insurance . reserves for estimated losses for construction defects , warranty and bodily injury claims have been established using the assistance of a third-party actuary . 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 . these estimates are subject to a high degree of variability due to uncertainties such as trends in construction defect claims relative to our markets and the types of products we build , claim settlement patterns , insurance industry practices and legal interpretations , among others . because of the high degree of judgment required in determining these estimated liability amounts , actual future costs could differ significantly from our currently estimated amounts . 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 . see note 16 to the consolidated financial statements for additional information on the amount of warranty costs recognized in cost of goods sold and administrative expenses . 27 recent accounting pronouncements see note 3 to the consolidated financial statements included elsewhere in this annual report on form 10-k. story_separator_special_tag guarantors ” ) . 29 the credit agreements governing the credit facilities and the indentures governing the senior secured and senior notes ( together , the “ debt instruments ” ) outstanding at october 31 , 2020 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 ( other than non-recourse indebtedness , certain permitted indebtedness and refinancing indebtedness ) , pay dividends and make distributions on common and preferred stock , repay certain indebtedness prior to its respective stated maturity , repurchase 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 october 31 , 2020 , 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 , and from incurring indebtedness other than certain permitted indebtedness , refinancing indebtedness and nonrecourse indebtedness . as a result of this ratio restriction , we are currently restricted from paying dividends ( in the case of the payment of dividends on preferred stock , our secured debt leverage ratio must also be less than 4.0 to 1.0 ) , which are not cumulative , on our 7.625 % series a preferred stock . we anticipate that we will continue to be restricted from paying dividends for the foreseeable future . our inability to pay dividends is in

