UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Mark One)

Commission file number 1-8551

Hovnanian Enterprises, Inc.

(Exact Name of Registrant as Specified in Its Charter)

732-747-7800

(Registrant’s Telephone Number, Including Area Code)

Same

(Former Name, Former Address and Former Fiscal Year, if Changed

Since Last Report)

     Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during the preceding l2 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý    No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes ý    No o

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  46,535,042 shares of Class A Common Stock and 14,683,358 shares of Class B Common Stock were outstanding as of March 1, 2005.

Explanatory Note

This Quarterly Report on Form 10-Q/A of Hovnanian Enterprises, Inc. amends Hovnanian Enterprises, Inc.’s Quarterly Report on Form 10-Q filed on March 11, 2005.  This Amendment is being filed solely to remedy formatting problems of tables within the initial 10-Q filing.  There are no changes other than these formatting changes to the initial 10-Q filing and all content and information contained in this Amendment remains the same as that which was contained in the initial 10-Q filing.  This Amendment supersedes in its entirety the initial 10-Q filing.

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HOVNANIAN ENTERPRISES, INC.

FORM 10-Q

INDEX

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

See notes to condensed consolidated financial statements (unaudited).

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See notes to condensed consolidated financial statements (unaudited).

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Data)

(Unaudited)

See notes to condensed consolidated financial statements (unaudited).

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Dollars In Thousands)

(Unaudited)

See notes to condensed consolidated financial statements (unaudited).

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands - unaudited)

See notes to condensed consolidated financial statements (unaudited).

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

             1.  The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  In the opinion of management, all adjustments for interim periods presented have been made, which include only normal recurring accruals and deferrals necessary for a fair presentation of our consolidated financial position, results of operations, and changes in cash flows.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements.  Results for the interim periods are not necessarily indicative of the results which might be expected for a full year.  The balance sheet at October 31, 2004 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

             In March 2004, our Board of Directors authorized a 2-for-1 stock split in the form of a 100% stock dividend of Class A and Class B Common Stock payable to stockholders of record on March 19, 2004.  The additional shares were distributed on March 26, 2004.  All share and per share amounts (except par value) have been retroactively adjusted to reflect the stock split.  There was no net effect on total stockholders’ equity as a result of the stock split.

             Certain prior year amounts have been reclassified to conform to the current year presentation.

2.  Stock-Based Compensation Plans — SFAS No. 123 “Accounting for Stock-Based Compensation” (“SFAS 123”) established a fair value based method of accounting for stock-based compensation plans, including stock options and non-vested stock. Under SFAS 123, registrants may elect to continue accounting for stock-based compensation plans under APB Opinion No. 25 “Accounting for Stock Issued to Employees” (“APB 25”), but are required to provide pro forma net income and earnings per share information “as if” the fair value approach had been adopted. We continue to account for our stock-based compensation plans under APB 25. Under APB 25, no compensation expense is recognized when the exercise price of our employee stock options equals the market price of the underlying stock on the date of grant.  However, for non-vested stock, compensation expense equal to the market price of the stock on the grant date is recognized ratably over the vesting period.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS 148”).  SFAS 148 amends SFAS 123 to provide alternative methods of transition for an entity that voluntarily adopts the

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fair value recognition method of recording stock-based compensation expense.  SFAS 148 also amends the disclosure provisions of SFAS 123 and APB Opinion No. 28, “Interim Financial Reporting” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based compensation on reported net income and earnings per share in annual and interim financial statements.

             For purposes of pro forma disclosures, the estimated fair value of the options using Black-Scholes is amortized to expense over the options’ vesting period.  Our pro forma information follows (dollars in thousands except for earnings per share information):

Pro forma information regarding net income and earnings per share is calculated as if we had accounted for our stock-based compensation under the fair value method of SFAS 123.  The fair value for options is established at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for January 31, 2005 and 2004:  risk-free interest rate of 4.2% for both periods; dividend yield of zero; volatility factor of the expected market price of our common stock of 0.43 for both periods; and a weighted average expected life of the option of 5.2 and 5.0 years, respectively.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable.  In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility.  Because our employee stock options have characteristics significantly different from traded options, and changes in the subjective input assumptions can materially affect the fair value

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estimate, management believes the existing models do not necessarily provide a reliable measure of the fair value of its employee stock options.

In December 2004, the FASB issued SFAS No. 123 (Revised 2004) “Share Based Payment” (“SFAS 123R”), which is a revision of SFAS 123 and supersedes APB 25 and SFAS 148.  This statement requires that the cost resulting from all share-based payment transactions be recognized in an entity’s financial statements.  This statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair value based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans.

SFAS 123R applies to all awards granted after the required effective date (the beginning of the first interim or annual reporting period that begins after June 15, 2005) and to awards modified, repurchased, or cancelled after that date.  As of the required effective date, all public entities that used the fair value based method for either recognition or disclosure under Statement 123 will apply SFAS 123R using a modified version of prospective application.  Under that transition method, compensation cost is recognized on or after the required effective date for the portion of outstanding awards for which the requisite service has not yet been rendered, based on the grant-date fair value of those awards calculated under Statement 123 for either recognition or pro forma disclosures.  For periods before the required effective date, those entities may elect to apply a modified version of the retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods by Statement 123.  As a result, beginning in our fiscal fourth quarter of 2005, we will adopt SFAS 123R and begin reflecting the stock option expense determined under fair value based methods in our income statement rather than as pro forma disclosure in the notes to the financial statements. We expect the impact of the adoption of SFAS 123R to be a reduction of fourth quarter fiscal 2005 net income of approximately $1.6 million assuming modified prospective application.

             3.  Interest costs incurred, expensed and capitalized were:

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

(2)                                  Includes interest on borrowings for construction, land and land development costs which are charged to interest expense when homes are delivered or when land is not under active development.

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4.  Accumulated depreciation at January 31, 2005 and October 31, 2004 amounted to $33.0 million and $31.7 million, respectively, for our homebuilding and senior rental residential assets.

5.  In accordance with Financial Accounting Standards No. 144 (“SFAS 144”) “Accounting for the Impairment of or Disposal of Long Lived Assets”, we record impairment losses on inventories related to communities under 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 carrying amounts.  In addition, from time to time, we will write off certain residential land options including approval, engineering and capitalized interest costs for land management decided not to purchase.  We wrote off such costs in the amount of $0.5 million and $0.1 million during the three months ended January 31, 2005 and 2004, respectively.  Residential inventory impairment losses and option write-offs are reported in the Condensed Consolidated Statements of Income as “Homebuilding-Inventory Impairment Loss.”

6.  We provide a warranty accrual for repair costs over $1,000 to homes, community amenities, and land development infrastructure.  We accrue for 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.  In addition, we accrue warranty costs under our $5 million per occurrence general liability insurance deductible for 2005 (deductible was $150 thousand per occurrence for 2004) as part of selling, general and administrative costs.  Warranty accruals are based upon historical experience.  Additions and charges incurred in the warranty accrual and general liability accrual for the three months ended January 31, 2005 and 2004 are as follows:

7.  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 or results of operations.

8.  As of January 31, 2005 and October 31, 2004, respectively, we are obligated under various performance letters of credit amounting to $213.4 million and $180.6 million.

9.  Our amended and restated unsecured Revolving Credit Agreement (“Agreement”) with a group of banks provides a revolving credit line of $900 million through July 2008.  The facility contains an accordion feature under which the aggregate commitment can be increased to $1.0 billion

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subject to the availability of additional commitments.  Interest is payable monthly at various rates of either the prime rate or a spread over LIBOR ranging from 1.10% to 2.00% per annum, depending on our Consolidated Leverage Ratio, as defined in the Agreement.  In addition, we pay a fee ranging from 0.20% to 0.40% per annum, depending on our Consolidated Leverage Ratio and the weighted average unused portion of the revolving credit line.  Each of our significant subsidiaries, except for our financial services subsidiaries and joint ventures, is a guarantor under the Agreement.  As of January 31, 2005 and October 31, 2004, the outstanding balances under the Agreement were zero and $115 million, respectively.

Our amended secured mortgage loan warehouse agreement with a group of banks, which is a short-term borrowing, provides up to $250 million through July 2005.  Interest is payable monthly at the Eurodollar Rate plus 1.25%.  The loan is repaid when the underlying mortgage loans are sold to permanent investors by us.  As of January 31, 2005 and October 31, 2004, borrowings under this agreement were $131.2 million and $188.4 million, respectively.

10. On November 30, 2004, we issued $200 million of 6 1/4% Senior Notes due 2015 and $100 million of 6% Senior Subordinated Notes due 2010.  The net proceeds of the issuance were used to repay the outstanding balance on our revolving credit facility as of November 30, 2004 and for general corporate purposes.

At January 31, 2005, we had $805.3 million of outstanding senior notes ($802.9 million, net of discount), comprised of $140.3 million 10 1/2% Senior Notes due 2007, $100 million 8% Senior Notes due 2012, $215 million 6 1/2% Senior Notes due 2014, $150 million 6 3/8% Senior Notes due 2014, and $200 million 6 1/4% Senior Notes due 2015.  At January 31, 2005, we had $400 million of outstanding senior subordinated notes, comprised of $150 million 8 7/8% Senior Subordinated Notes due 2012, $150 million 7 3/4% Senior Subordinated Notes due 2013, and $100 million 6% Senior Subordinated Notes due 2010.

Under the terms of the indentures governing our debt securities, we have the right to make certain redemptions and depending on market conditions, may do so from time to time.

11.  Per Share Calculations  - Basic earnings per common share is computed using the weighted average number of shares outstanding.  Diluted earnings per common share is computed using the weighted average number of shares outstanding adjusted for the incremental shares attributed to non-vested stock and outstanding options to purchase common stock, of approximately 3.2 million and 4.0 million for the three months ended January 31, 2005 and 2004, respectively.

12.  Variable Interest Entities - In January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”).  A Variable Interest Entity (“VIE”) is created when (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or (ii) equity holders either (a) lack direct or indirect ability to make decisions about the entity, (b) are not obligated to absorb expected losses of the entity or (c) do not have the right to receive expected residual returns of the entity if they occur.  If an entity is deemed to be a VIE, pursuant to FIN

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46, an enterprise that absorbs a majority of the expected losses of the VIE is considered the primary beneficiary and must consolidate the VIE.  FIN 46 was effective immediately for VIEs created after January 31, 2003.  Pursuant to FASB revision to FIN 46 (“FIN 46R”), issued in December 2003, our Company was not required to apply the provisions of FIN 46 to an interest held in a variable interest entity or potential variable interest entity until our quarter ended April 30, 2004 for VIEs created before February 1, 2003.  In accordance with FIN 46R, we have fully implemented FIN 46 as of April 30, 2004.

             Based on the provisions of FIN 46, we have concluded that whenever we option land or lots from an entity and pay a non-refundable deposit, a VIE is created under condition (ii) (b) and (c) of the previous paragraph.  We are deemed to have provided subordinated financial support, which refers to variable interests that will absorb some or all of an entity’s expected theoretical losses if they occur.  For each VIE created with a significant nonrefundable option fee, we compute expected losses and residual returns based on the probability of future cash flows as outlined in FIN 46.  If we are deemed to be the primary beneficiary of the VIE we consolidate it on our balance sheet.  The fair value of the VIEs inventory is reported as “Consolidated Inventory Not Owned — Variable Interest Entities”.

Management believes FIN 46 was not clearly thought out for application in the homebuilding industry for land and lot options.  Under FIN 46, we can have an option and put down a small deposit as a percentage of the purchase price and still have to consolidate the entity.  Our exposure to loss as a result of our involvement with the VIE is only the deposit, not it’s total assets consolidated on the balance sheet.  In certain cases, we will have to place inventory the VIE has optioned to other developers on our balance sheet. In addition, if the VIE has creditors, its debt will be placed on our balance sheet even though the creditors have no recourse against our Company.  Based on these observations we believe consolidating VIEs based on land and lot option deposits does not reflect the economic realities or risks of owning and developing land.

             At January 31, 2005, all VIEs we were required to consolidate were a result of our options to purchase land or lots from the selling entities.  We paid cash or issued letters of credit deposits to these twenty-three VIEs totaling $22.8 million.  Our option deposits represent our maximum exposure to loss.  The fair value of the property owned by these VIEs was $165.8 million.  Because we could not get the remainder of the selling entities to provide us with any financial information, the fair value of the optioned property less our cash deposits and liabilities from inventory not owned, which totaled $122.2 million, was reported on the balance sheet as “Minority interest from inventory not owned”.  Creditors of these VIEs have no recourse against our Company.

             We will continue to control land and lots using options.  Not all our deposits are with VIEs.  Including the deposits with the twenty-three VIEs above, at January 31, 2005, we have total cash and letters of credit deposits amounting to approximately $198.9 million to purchase land lots with a total purchase price of $3.6 billion.  The maximum exposure to loss is limited to the deposits although some deposits are refundable at our request or refundable if certain conditions are not met.

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13.  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 and leveraging our capital base.  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 homebuyers.  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.  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.

Our share of equity related to these unconsolidated joint ventures, included in prepaids and other assets in our Consolidated Balance Sheets, was approximately $47.0 million and $40.8 million at January 31, 2005 and October 31, 2004, respectively.  Additionally, as of January 31, 2005 and October 31, 2004, we had advances outstanding of approximately $14.6 and $12.7 million to these unconsolidated joint ventures, which were included in the accounts payable and accrued liabilities balances in the table above.

Income (loss) from unconsolidated joint ventures are included in other revenue in the accompanying Consolidated Financial Statements and reflects our proportionate share of the income of these unconsolidated homebuilding and land development joint ventures.  Our ownership interests in the joint

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ventures vary but are generally less than or equal to 50 percent.  In some instances, the joint venture entity is considered a variable interest entity (VIE) under FIN 46 due to the returns being capped to the equity holders;  however, in these instances, we are not the primary beneficiary, therefore we do not consolidate these entities.

14.  Recent Accounting Pronouncements — In December 2004, the FASB issued SFAS No. 123 (Revised 2004) “Share Based Payment” (“SFAS 123R”), which is a revision of SFAS 123 and supersedes APB 25 and SFAS 148.  This statement requires that the cost resulting from all share-based payment transactions be recognized in an entity’s financial statements.  This statement establishes fair value as the measurement objective in accounting for share-based payment arrangements and requires all entities to apply a fair value based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans.  See Note 2 for a further description of SFAS 123R and its expected impact on our fourth quarter fiscal 2005 net income.

In December 2004, the FASB issued Staff Position 109-1 (“FSP 109-1”), Application of FASB Statement No. 109 (“FASB No. 109”), “Accounting for Income Taxes”, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004.  FSP 109-1 clarifies guidance that applies to the new deduction for qualified domestic production activities.  When fully phased-in, the deduction will be up to 9% of the lesser of “qualified production activities income” or taxable income.  FSP 109-1 clarifies that the deduction should be accounted for as a special deduction under FASB No. 109 and will reduce tax expense in the period or periods that the amounts are deductible on the tax return.  Any tax benefits resulting from the new deduction will be effective for our fiscal year ending October 31, 2006.  We are in the process of assessing the impact, if any, the new deduction will have on our financial statements.

15.  Intangible Assets — Except for goodwill, the intangible assets recorded on our balance sheet are definite life intangibles, which include tradenames, architectural designs, distribution processes, and contractual agreements.  We no longer amortize goodwill, but instead assess it periodically for impairment.  We are amortizing the definite life intangibles over their expected useful life, ranging from three to seven years.

16.  Hovnanian Enterprises, Inc., the parent company (the “Parent”), is the issuer of publicly traded common stock.  One of its wholly owned subsidiaries, K. Hovnanian Enterprises, Inc. (the “Subsidiary Issuer”), acts as a finance entity that as of January 31, 2005 had issued and outstanding approximately $400 million of Senior Subordinated Notes, $805.3 million face value of Senior Notes, and zero drawn on a Revolving Credit Agreement. The Senior Subordinated Notes, Senior Notes and the Revolving Credit Agreement are fully and unconditionally guaranteed by the Parent.

In addition to the Parent, each of the wholly owned subsidiaries of the Parent other than the Subsidiary Issuer (collectively, the “Guarantor Subsidiaries”), with the exception of various subsidiaries formerly engaged in the issuance of collateralized mortgage obligations, our mortgage lending subsidiaries, a subsidiary engaged in homebuilding activity in Poland, our Title Insurance subsidiaries, and joint ventures (collectively,

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the “Non-guarantor Subsidiaries”), have guaranteed fully and unconditionally, on a joint and several basis, the obligation of the Subsidiary Issuer to pay principal and interest under the Senior Notes, Senior Subordinated Notes, and the Revolving Credit Agreement.

             In lieu of providing separate audited financial statements for the Guarantor Subsidiaries we have included the accompanying condensed consolidating financial statements.  Management does not believe that separate financial statements of the Guarantor Subsidiaries are material to investors.  Therefore, separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented.

             The following condensed consolidating financial information presents the results of operations, financial position, and cash flows of (i) the Parent, (ii) the Subsidiary Issuer, (iii) the Guarantor Subsidiaries, (iv) the Non-guarantor Subsidiaries, and (v) the eliminations to arrive at the information for Hovnanian Enterprises, Inc. on a consolidated basis.

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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

CONDENSED CONSOLIDATING BALANCE SHEET

JANUARY 31, 2005

(Dollars in Thousands)

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

OCTOBER 31, 2004

(Dollars in Thousands)