UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
[ X ]  Quarterly report pursuant to Section 13 or 15(d) of the
       Securities Exchange Act of 1934

       For quarterly period ended APRIL 30, 2004 or

[   ]  Transition report pursuant to Section 13 or 15(d) of the
       Securities Exchange Act of 1934

Commission file number 1-8551

Hovnanian Enterprises, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Delaware                                        22-1851059
(State or Other Jurisdiction of                 (I.R.S. Employer
Incorporation or Organization)                  Identification No.)

l0 Highway 35, P.O. Box 500, Red Bank, NJ  07701
(Address of Principal Executive Offices)   (Zip Code)

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 [ X ]    No [  ]

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

     Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.  46,438,670 Class
A Common Shares and 14,691,794 Class B Common Shares were outstanding as of
June 1, 2004.


                          HOVNANIAN ENTERPRISES, INC.

                                   FORM 10-Q

                                     INDEX

                                                              PAGE NUMBER

PART I.   Financial Information
     Item l.  Financial Statements:

              Condensed Consolidated Balance Sheets at April 30,
                2004 (unaudited) and October 31, 2003                 3

              Condensed Consolidated Statements of Income for the
                three and six months ended April 30, 2004 and
                2003 (unaudited)                                      5

              Condensed Consolidated Statement of Stockholders'
                Equity for the six months ended April 30, 2004
                (unaudited)                                           6

              Condensed Consolidated Statements of Cash Flows for
                the six months ended April 30, 2004
                and 2003 (unaudited)                                  7

              Notes to Consolidated Financial
                Statements (unaudited)                                9

     Item 2.  Management's Discussion and Analysis
                of Financial Condition and Results
                of Operations                                        20

     Item 3.  Quantitative and Qualitative Disclosures
                About Market Risk                                    35

     Item 4.  Controls and Procedures                                37

PART II.  Other Information
     Item 2.     Change in Securities, Use of Proceeds and
                 Issuer Purchases of Equity Securities.
     Item 4.     Submission of Matters to a Vote of Security
                 Holders.
     Item 6.     Exhibits and Reports on Form 8-K.                   38

Signatures                                                           42




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

                                                  April 30,     October 31,
          ASSETS                                     2004           2003
                                                 -----------    -----------
                                                 (unaudited)
                                                         
Homebuilding:
  Cash and cash equivalents..................... $  122,856    $   121,913
                                                 -----------    -----------
  Inventories - At the lower of cost or fair
      value:
    Sold and unsold homes and lots under
      development...............................  1,537,880      1,184,907
                                                 -----------    -----------
    Land and land options held for future
      development or sale.......................    308,310        270,502
                                                 -----------    -----------
    Consolidated Inventory Not Owned:
      Specific performance options..............     33,978         56,082
      Variable interest entities................    260,329        100,327
      Other options.............................     36,368         48,226
                                                 -----------    -----------
       Total Consolidated Inventory Not Owned...    330,675        204,635
                                                 -----------    -----------
      Total Inventories.........................  2,176,865      1,660,044
                                                 -----------    -----------

  Receivables, deposits, and notes .............     53,149         42,506
                                                 -----------    -----------

  Property, plant, and equipment - net..........     32,614         26,263
                                                 -----------    -----------

  Prepaid expenses and other assets.............    127,129        106,525
                                                 -----------    -----------

  Goodwill and indefinite life intangibles......     82,658         82,658
                                                 -----------    -----------

  Definite life intangibles.....................     81,269         56,978
                                                 -----------    -----------
      Total Homebuilding........................  2,676,540      2,096,887
                                                 -----------    -----------

Financial Services:
  Cash and cash equivalents.....................      9,459          6,308
  Mortgage loans held for sale..................    115,231        224,052
  Other assets..................................      5,030          3,945
                                                 -----------    -----------
      Total Financial Services..................    129,720        234,305
                                                 -----------    -----------

Income Taxes Receivable - Including deferred
  tax benefits..................................     29,044          1,179
                                                 -----------    -----------
Total Assets.................................... $2,835,304     $2,332,371
                                                 ===========    ===========

See notes to condensed consolidated financial statements (unaudited).


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

                                                      April 30,  October 31,
LIABILITIES AND STOCKHOLDERS' EQUITY                    2004         2003
                                                    -----------  -----------
                                                    (unaudited)
                                                           
Homebuilding:
  Nonrecourse land mortgages....................... $   34,139   $   43,795
  Accounts payable and other liabilities...........    251,549      230,696
  Customers' deposits..............................     85,042       58,376
  Liabilities from inventory not owned.............     61,568       94,780
                                                    -----------  -----------
      Total Homebuilding...........................    432,298      427,647
                                                    -----------  -----------
Financial Services:
  Accounts payable and other liabilities...........      4,467        5,917
  Mortgage warehouse line of credit................    107,167      166,711
                                                    -----------  -----------
      Total Financial Services.....................    111,634      172,628
                                                    -----------  -----------
Notes Payable:
  Term loan........................................                 115,000
  Senior notes.....................................    752,444      387,166
  Senior subordinated notes........................    300,000      300,000
  Accrued interest.................................     22,197       15,675
                                                    -----------  -----------
      Total Notes Payable..........................  1,074,641      817,841
                                                    -----------  -----------
      Total Liabilities............................  1,618,573    1,418,116
                                                    -----------  -----------

Minority interest from inventory not owned.........    238,827       90,252
                                                    -----------  -----------

Minority interest from consolidated joint ventures.      7,719        4,291
                                                    -----------  -----------

Stockholders' Equity:
  Preferred Stock,$.01 par value-authorized 100,000
    shares; none issued.............................
  Common Stock,Class A,$.01 par value-authorized
    200,000,000 shares; issued 56,727,469 shares at
    April 30, 2004 and 56,036,116 shares at October 31,
    2003 (including 10,293,302 shares at April 30, 2004
    and 10,780,436 shares at October 31, 2003 held
    in Treasury)....................................       567          560
  Common Stock,Class B,$.01 par value (convertible to
    Class A at time of sale) authorized 30,000,000
    shares; issued 15,386,367 shares at April 30, 2004
    and 15,537,016 shares at October 31, 2003 (including
    691,748 shares at April 30, 2004 and October 31,
    2003 held in Treasury)..............                   154          155
  Paid in Capital...................................   183,220      163,355
  Retained Earnings.................................   833,365      705,182
  Treasury Stock - at cost..........................   (47,121)     (49,540)
                                                    -----------  -----------
      Total Stockholders' Equity....................   970,185      819,712
                                                    -----------  -----------
Total Liabilities and Stockholders' Equity..........$2,835,304   $2,332,371
                                                    ===========  ===========

See notes to condensed consolidated financial statements (unaudited).




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
(Unaudited)

                                        Three Months Ended      Six Months Ended
                                             April 30,              April 30,
                                        -------------------  -----------------------
                                           2004      2003        2004       2003
                                        --------- ---------  -----------  ----------
                                                              
Revenues:
  Homebuilding:
    Sale of homes......................$ 900,943  $666,553   $1,658,216   $1,274,054
    Land sales and other revenues......    4,395     2,365        7,564       12,004
                                        --------- ---------  -----------  ----------
      Total Homebuilding...............  905,338   668,918    1,665,780    1,286,058
  Financial Services...................   13,470    10,899       28,243       21,394
                                        --------- ---------  -----------  ----------
      Total Revenues...................  918,808   679,817    1,694,023    1,307,452
                                        --------- ---------  -----------  ----------
Expenses:
  Homebuilding:
    Cost of sales......................  674,106   497,219    1,238,041      960,397
    Selling, general and administrative   80,512    59,598      152,305      113,899
    Inventory impairment loss..........      734     1,326          792        1,484
                                        --------- ---------  -----------  ----------
      Total Homebuilding...............  755,352   558,143    1,391,138    1,075,780

  Financial Services...................    8,670     6,173       16,697       11,994

  Corporate General and Administrative.   14,694    13,464       29,218       28,048

  Interest.............................   19,096    13,425       36,039       27,104

  Other Operations.....................    4,248     2,378        6,680        6,656

  Intangible Amortization..............    4,591     1,806        9,399        2,306
                                        --------- ---------  -----------  ----------
      Total Expenses...................  806,651   595,389    1,489,171    1,151,888
                                        --------- ---------  -----------  ----------
Income Before Income Taxes.............  112,157    84,428      204,852      155,564
                                        --------- ---------  -----------  ----------
State and Federal Income Taxes:
  State................................    6,416     3,335       12,656        6,435
  Federal..............................   35,269    28,525       64,013       51,800
                                        --------- ---------  -----------  ----------
    Total Taxes........................   41,685    31,860       76,669       58,235
                                        --------- ---------  -----------  ----------
Net Income............................. $ 70,472  $ 52,568   $  128,183   $   97,329
                                        ========= =========  ===========  ==========
Per Share Data:
Basic:
  Income per common share.............. $   1.13  $   0.85   $     2.05   $     1.56
  Weighted average number of common
    shares outstanding.................   62,608    62,286       62,473       62,512
Assuming dilution:
  Income per common share.............. $   1.06  $   0.80   $     1.93   $     1.48
  Weighted average number of common
     shares outstanding................   66,408    65,522       66,393       65,888

See notes to condensed consolidated financial statements (unaudited).



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars In Thousands)

                              A Common Stock       B Common Stock
                           -------------------  -------------------
                              Shares               Shares
                            Issued and           Issued and          Paid-In  Retained  Treasury
                           Outstanding  Amount  Outstanding  Amount  Capital  Earnings    Stock    Total
                           -----------  ------  -----------  ------  -------  --------  --------  ---------
                                                                          
Balance, October 31, 2003.  45,255,680    $560   14,845,268    $155 $163,355  $705,182  $(49,540) $ 819,712

Acquisitions..............     489,236                                17,487               2,512     19,999

Sale of common stock under
  employee stock option
  plan....................     289,166       3                         1,904                          1,907

Stock bonus plan..........     196,886       2       54,652       1      474                            477
Conversion of Class B to
  Class A Common Stock....     205,301       2     (205,301)     (2)

Treasury stock purchase...      (2,102)                                                      (93)       (93)

Net Income................                                                     128,183              128,183
                           -----------  ------  -----------  ------  -------  --------  --------  ---------
Balance, April 30, 2004
(unaudited)...............  46,434,167    $567   14,694,619    $154 $183,220  $833,365  $(47,121) $ 970,185
                           ===========  ======  ===========  ======  =======  ========  ========  =========

See notes to condensed consolidated financial statements (unaudited).



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands - unaudited)
                                                  Six Months Ended
                                                              April 30,
                                                       ---------------------
                                                          2004       2003
                                                       ---------- ----------
                                                            
Cash Flows From Operating Activities:
  Net Income.......................................... $  128,183 $  97,329
  Adjustments to reconcile net income to net cash
    (used in) operating activities:
      Depreciation....................................      3,001     3,225
      Intangible amortization.........................      9,399     2,306
      Loss (gain) on sale and retirement of property
        and assets....................................         12       (28)
      Deferred income taxes...........................     (7,136)   (2,727)
      Impairment losses...............................        792     1,484
      Decrease (increase) in assets:
        Mortgage notes receivable.....................    108,968     9,516
        Receivables, prepaids and other assets........    (34,755)   (3,200)
        Inventories...................................   (366,625) (214,148)
     (Decrease) increase in liabilities:
        State and Federal income taxes................    (20,137)  (30,020)
        Tax effect from exercise of stock options.....       (592)   (2,830)
        Customers' deposits...........................     21,638    12,551
        Interest and other accrued liabilities........     (5,244)   (8,228)
        Post development completion costs.............     (3,376)    2,676
        Accounts payable..............................     18,340   (19,547)
                                                       ---------- ----------
          Net cash (used in) operating activities.....  (147,532)  (151,641)
                                                       ---------- ----------
Cash Flows From Investing Activities:
  Net proceeds from sale of property and assets.......       312        180
  Purchase of property, equipment and other fixed
    assets and acquisitions of homebuilding
    companies.........................................   (49,955)  (138,836)
  Net returns of capital from unconsolidated
    affiliates........................................       746      7,431
                                                       ---------- ----------
          Net cash (used in) investing activities.....   (48,897)  (131,225)
                                                       ---------- ----------
Cash Flows From Financing Activities:
  Proceeds from mortgages and notes................... 1,321,739    583,578
  Proceeds from senior debt...........................   365,000
  Principal payments on mortgages and notes...........(1,488,507)  (543,062)
  Purchase of treasury stock..........................       (93)    (7,261)
  Proceeds from sale of stock and employee stock plan.     2,384      3,147
                                                       ---------- ----------
          Net cash provided by financing activities....  200,523     36,402
                                                       ---------- ----------
Net Increase (Decrease) In Cash.........................   4,094   (246,464)
Cash and Cash Equivalents Balance, Beginning
  Of Period...........................................   128,221    269,990
                                                       ---------- ----------
Cash and Cash Equivalents Balance, End Of Period...... $ 132,315  $  23,526
                                                       ========== ==========
Supplemental Disclosures of Cash Flow
  Cash paid during the year for:
    Interest.........................................  $  38,692  $  30,504
                                                       ========== ==========
    Income taxes.....................................  $ 103,769  $  90,981
                                                       ========== ==========
Supplemental disclosures of noncash operating
  activities:
  Consolidated Inventory Not Owned:
    Specific performance options.....................  $  31,918  $  51,155
    Variable interest entities.......................    238,060     35,811
    Other options....................................     30,602     57,316
                                                       ---------- ----------
  Total Inventory Not Owned..........................  $ 300,580  $ 144,282
                                                       ========== ==========
See notes to condensed consolidated financial statements (unaudited).



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 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, 2003 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 Option Plan - Stock Options - SFAS No. 123 "Accounting for
Stock-Based Compensation" ("SFAS 123") establishes a fair value-based
method of accounting for stock-based compensation plans, including stock
options. Registrants may elect to continue accounting for stock option
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 new fair value approach had been adopted.
We intend to continue accounting for our stock option plan 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.

       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
fair value recognition method of recording stock option 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 options 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 is amortized to expense over the options' vesting period.  Our
pro forma information follows (dollars in thousands except for earnings per
share information):

                                  Three Months Ended    Six Months Ended
                                  ------------------  --------------------
                                   April      April     April      April
                                  30, 2004  30, 2003  30, 2004    30, 2003
                                  --------- --------- ---------   --------
Net income to common shareholders;
  as reported.....................$  70,472 $  52,568 $ 128,183   $ 97,329

Deduct:  total stock-based employee
  compensation expense determined
  under fair value based method for
  all awards......................... 1,110       528     1,931        988

Pro forma net income..............$  69,362 $  52,040 $ 126,252   $ 96,341
                                  ========= ========= =========   ========
Pro forma basic earnings per share$    1.11 $    0.84 $    2.02   $   1.54
                                  ========= ========= =========   ========
Basic earnings per share as
  reported......................  $    1.13 $    0.85 $    2.05   $   1.56
                                  ========= ========= =========   ========
Pro forma diluted earnings per
  share.......................    $    1.04 $    0.79 $    1.90   $   1.46
                                  ========= ========= =========   ========
Diluted earnings per share as
  Reported......................  $    1.06 $    0.80 $    1.93   $   1.48
                                  ========= ========= =========   ========

       Pro forma information regarding net income and earnings per share is
to be calculated as if we had accounted for our stock options under the
fair value method of SFAS 123. The fair value for those options is
established at the date of grant using a Black-Scholes option pricing model
with the following weighted-average assumptions for 2004 and 2003:  risk-
free interest rate of 4.2% and 4.3%, respectively; 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 3.6
and 5.1 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
estimate, management believes the existing models do not necessarily
provide a reliable measure of the fair value of its employee stock options.


	3.  Interest costs incurred, expensed and capitalized were:

                             Three Months Ended  Six Months Ended
                                  April 30,           April 30,
                             ------------------  -----------------
                               2004      2003     2004     2003
                             --------   -------  -------  --------
                                    (Dollars in Thousands)
Interest Capitalized at
  Beginning of Period........$ 29,477   $23,600  $24,833  $22,159
Plus Interest Incurred(1)(2).  22,204    15,305   43,791   30,425
Less Interest Expensed(2)....  19,096    13,425   36,039   27,104
                             --------   -------  -------  --------
Interest Capitalized at
  End of Period (2)......... $ 32,585   $25,480  $32,585  $25,480
                             ========   =======  =======  ========

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

	4.  Accumulated depreciation at April 30, 2004 and October 31, 2003
amounted to $29.4 million and $27.5 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 $0.7
million and $1.3 million during the three months ended April 30, 2004 and
2003, respectively, and $0.8 million and $1.5 million during the six months
ended April 30, 2004 and 2003, 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 $150,000 per occurrence general
liability insurance deductible 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 and six months ended April 30, 2004
and 2003 are as follows:


                                  Three Months Ended    Six Months Ended
                                      April 30,           April 30,
                                  ------------------  ------------------
                                    2004      2003      2004       2003
                                  --------  --------  --------  --------
                                          (Dollars in Thousands)
Balance, beginning of period..... $43,495   $25,992   $39,532   $22,392
Company acquisitions.............                                 2,170
Additions........................   8,427     4,468    16,607    10,230
Charges incurred.................  (4,736)   (1,570)   (8,953)   (5,902)
                                  --------  --------  --------  --------
Balance, end of period..........  $47,186   $28,890   $47,186   $28,890
                                  ========  ========  ========  ========

	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 our operations.

       8.  As of April 30, 2004 and October 31, 2003, respectively, we are
obligated under various performance letters of credit amounting to $127.1
million and $130.3 million.

	9.  We have an unsecured Revolving Credit Agreement ("Agreement")
with a group of banks that provides a revolving credit line of $590 million
through July 2006.  Interest is payable monthly and at various rates of
either the prime rate plus 0.275% or LIBOR plus 1.75%.  In addition, we pay
a fee equal to 0.350% per annum on the weighted average unused portion of
the line.  Each of our significant subsidiaries, except for our financial
services subsidiaries and joint ventures, are a guarantor under the
revolving credit agreement.  As of April 30, 2004 and October 31, 2003,
there was no outstanding balance under the Agreement.

       We have a secured mortgage loan warehouse agreement with a group of
banks, which is a short-term borrowing, that provides up to $200 million
through July 2004.  Interest is payable monthly at the Federal Funds Rate
plus 1.375%.  The loan is repaid when the underlying mortgage loans are
sold to permanent investors by us.  As of April 30, 2004 and October 31,
2003 borrowings under the agreement were $107.2 million and $166.7 million,
respectively.

       10.  On March 18, 2004, we issued $150 million 6 3/8% Senior Notes
due 2014.  The net proceeds of the issuance were used to redeem our 9 1/8%
Senior Notes which occurred on May 3, 2004 and for general corporate
purchases.  (See Note 17).

       On November 3, 2003, we issued $215 million 6 1/2% Senior Notes due
2014.  The net proceeds of the issuance were used for general corporate
purposes.

       At April 30, 2004, our long term debt consisted of:  $140.3 million
10 1/2% Senior Notes due 2007, $150 million 9 1/8% Senior Notes due 2009,
$100 million 8% Senior Notes due 2012, $215 million 6 1/2% Senior Notes due
2014,and $150 million 6 3/8% Senior Notes due 2014, (Senior Notes aggregate
$752.4 million, net of discount) $150 million 8 7/8% Senior Subordinated
Notes due 2012, and $150 million 7 3/4% Senior Subordinated Notes due 2013.
On March 18, 2004, we paid off our $115 million Term Loan with available
cash.

       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
outstanding options to purchase common stock, of approximately 3.8 million
and 3.2 million for the three months ended April 30, 2004 and 2003,
respectively, and approximately 3.9 million and 3.4 million for the six
months ended April 30, 2004 and 2003, 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 from financing 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 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 VIE's created
after January 31, 2003.  Pursuant to FASB revision to FIN 46, ("FIN 46R")
(See Note 13), 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 VIE's created
before February 1, 2003.

	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
have been 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 will 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
will consolidate it on our balance sheet.  The fair value of the VIE's
inventory will be 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 on our balance sheet the VIE
has optioned to other developers. In addition, if the VIE has creditors,
it's 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 VIE's based on land and lot option deposits does not
reflect the economic realities or risks of owning and developing land.

	At April 30, 2004 all VIE's 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 thirty-three
VIE's totaling $27.4 million.  Our option deposits represent our maximum
exposure to loss.  The fair value of the property owned by the VIE's was
$260.3 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 $238.1 million, was reported on the balance sheet
as "Minority interest from inventory not owned".  Creditors of these VIE's
have no recourse against our Company.

	We will continue to secure land and lots using options.  Not all our
deposits are with VIE's.  Including the deposits with the thirty-three
VIE's above, at April 30, 2004, we have total cash and letters of credit
deposits amounting to approximately $177.2 million to purchase land lots
with a total purchase price of $2.8 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.

       13.  Recent Accounting Pronouncements -	In December 2003, the
Financial Accounting Standards Board ("FASB") issued Revised Interpretation
No. 46, "Consolidation of Variable Interest Entities" ("FIN 46R").  FIN 46R
requires the primary beneficiary of a variable interest entity to
consolidate that entity.  The primary beneficiary of a variable interest
entity is the party that absorbs a majority of the variable interest
entity's expected losses, receives a majority of the entity's expected
residual returns, or both, as a result of ownership, contractual, or other
financial interests in the entity.  Expected losses are the expected
negative variability in the fair value of an entity's net assets exclusive
of its variable interests, and expected residual returns are the expected
positive variability in the fair value of an entity's net assets, exclusive
of variable interests.  We have fully implemented FIN 46 as of April 30,
2004.

	In March 2004, the Securities and Exchange Commission staff issued
Staff Accounting Bulletin 105 ("SAB 105").  Existing accounting guidance
requires an entity to record on its balance sheet the fair value of any
issued and outstanding mortgage loan commitments.  SAB 105 requires that
the fair value measurement include only differences between the guaranteed
interest rate in the loan commitment and a market interest rate, excluding
any future cash flows related to (i) expected fees to be received when the
loan commitment becomes a loan, (ii) gains from selling the loan, or (iii)
the servicing value created from the loan.  The guidance in SAB 105 must be
applied to mortgage loan commitments that are accounted for as derivatives
and are entered into after March 31, 2004.  The adoption of the guidance in
SAB 105 did not have a material adverse effect on our financial position or
results of operations.

       14.  On November 6, 2003 we acquired a Florida homebuilder for cash
and 489,236 shares of our Class A Common Stock.  This acquisition was
accounted for as a purchase, with the results of operations of this entity
included in our condensed consolidated financial statements as of the date
of acquisition.  In connection with the acquisition, we have definite life
intangible assets equal to the excess purchase price over the fair value of
the net assets estimated to be $33 million.  It is our policy to obtain
appraisals of acquisition intangibles.  We are awaiting the appraisal from
this acquisition.  Until the appraisal is received, we estimated the
intangible value for amortization calculations.  We expect to have our
final appraisal by our third quarter ended July 31, 2004.  We expect to
amortize the definite life intangibles over their estimated lives.

	15.  Intangible Assets - The intangible assets recorded on our
balance sheet are goodwill, tradenames, architectural designs, distribution
processes, and contractual agreements, with both definite and indefinite
lives resulting from acquisitions.  We no longer amortize goodwill or
indefinite life intangibles, but instead assess them 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 April 30, 2004 had issued and
outstanding approximately $300 million Senior Subordinated Notes, $752.4
million face value Senior Notes, and a Revolving Credit Agreement with no
outstanding balance. 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, a mortgage lending
subsidiary, a subsidiary engaged in homebuilding activity in Poland, our
Title Insurance subsidiaries, and joint ventures (collectively the "Non-
guarantor Subsidiaries"), have guaranteed fully and unconditionally, on a
joint and several basis, the obligation 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 present
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.




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -UNAUDITED
CONDENSED CONSOLIDATING BALANCE SHEET
APRIL 30, 2004
(Dollars in Thousands)
                                               Guarantor     Non-
                                             Subsidiary  Subsid-    Guarantor    Elimin-     Consol-
                                    Parent    Issuer     iaries    Subsidiaries  ations      idated
                                   --------  ---------- ---------- ------------ ---------- ----------
                                                                         
ASSETS
Homebuilding.......................$    115  $  143,368 $2,499,794 $     33,263 $          $2,676,540
Financial Services.................                             82      129,638               129,720
Income Taxes (Payable) Receivable.   25,774                  3,326          (56)               29,044
Investments in and amounts due to
  and from consolidated
  subsidiaries..................... 944,296     977,032 (1,202,771)      (5,776)  (712,781)
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Assets.......................$970,185  $1,120,400 $1,300,431 $    157,069 $ (712,781)$2,835,304
                                   ========  ========== ========== ============ ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding.......................$        $           $  430,772 $      1,526 $          $  432,298
Financial Services.................                           (117)     111,751               111,634
Notes Payable......................          1,072,829      (2,341)       4,153             1,074,641
Income Taxes Payable (Receivable).
Minority Interest..................                        238,827        7,719               246,546
Stockholders' Equity............... 970,185     47,571     633,290       31,920   (712,781)   970,185
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Liabilities and Stockholders'
  Equity...........................$970,185 $1,120,400  $1,300,431 $    157,069 $ (712,781)$2,835,304
                                   ========  ========== ========== ============ ========== ==========


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATING BALANCE SHEET
OCTOBER 31, 2003
(Dollars in Thousands)

                                                        Guarantor     Non-
                                             Subsidiary  Subsid-    Guarantor    Elimin-     Consol-
                                    Parent    Issuer     iaries    Subsidiaries  ations      idated
                                   --------  ---------- ---------- ------------ ---------- ----------
                                                                         
Assets
Homebuilding.......................$   (279) $  151,050 $1,910,484 $     35,632 $          $2,096,887
Financial Services.................                           (252)     234,557               234,305
Income Taxes (Payable)Receivable...  18,713      (1,241)   (15,656)        (637)                1,179
Investments in and amounts due to
  and from consolidated
  subsidiaries..................... 801,278     690,971   (851,398)     (56,837)  (584,014)
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Assets.......................$819,712  $  840,780 $1,043,178 $    212,715 $ (584,014)$2,332,371
                                   ========  ========== ========== ============ ========== ==========

Liabilities
Homebuilding.......................$         $          $  425,847 $      1,800 $          $  427,647
Financial Services.................                            (35)     172,663               172,628
Notes Payable......................             816,960     (2,984)       3,865               817,841
Income Taxes Payable (Receivables).
Minority Interest..................                         90,252        4,291                94,543
Stockholders' Equity............... 819,712      23,820    530,098       30,096   (584,014)   819,712
                                   --------  ---------- ---------- ------------ ---------- ----------
Total Liabilities and Stockholders'
  Equity...........................$819,712  $  840,780 $1,043,178 $    212,715 $ (584,014)$2,332,371
                                   ========  ========== ========== ============ ========== ==========




HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED APRIL 30, 2004
(Dollars in Thousands)

                                                       Guarantor    Non-
                                            Subsidiary  Subsid-   Guarantor     Elimin-     Consol-
                                   Parent    Issuer     iaries    Subsidiaries   ations     idated
                                   -------  ---------- ---------- ------------ ---------- ----------
                                                                        
Revenues:
  Homebuilding....................$         $      77  $  897,147 $      8,114 $          $  905,338
  Financial Services...............                         1,164       12,306                13,470
  Intercompany Charges.............            18,524      32,324                 (50,848)
  Equity In Pretax Income of
    Consolidated Subsidiaries......112,157                                       (112,157)
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Revenues................ 112,157     18,601     930,635       20,420   (163,005)   918,808
                                   -------  ---------- ---------- ------------ ---------- ----------
Expenses:
  Homebuilding.....................               653     827,734        6,308    (36,714)   797,981
  Financial Services...............                           575        8,888       (793)     8,670
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Expenses.................               653     828,309       15,196    (37,507)   806,651
                                   -------  ---------- ---------- ------------ ---------- ----------
Income (Loss) Before Income Taxes. 112,157     17,948     102,326        5,224   (125,498)   112,157
State and Federal Income Taxes..... 41,685      5,043      39,257        2,054    (46,354)    41,685
                                   -------  ---------- ---------- ------------ ---------- ----------
Net Income (Loss).................$ 70,472  $  12,905  $   63,069 $      3,170 $  (79,144)$   70,472
                                   =======  ========== ========== ============ ========== ==========


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED APRIL 30, 2003
(Dollars in Thousands)
                                              Guarantor    Non-
                                            Subsidiary  Subsid-   Guarantor      Elimin-    Consol-
                                   Parent    Issuer     iaries    Subsidiaries   ations     idated
                                   -------  ---------- ---------- ------------ ---------- ----------
                                                                        
Revenues:
  Homebuilding.....................$        $      166 $  668,756 $          1 $       (5)$  668,918
  Financial Services...............                         1,853        9,046                10,899
  Intercompany Charges.............             41,833      8,083                 (49,916)
  Equity In Pretax Income of
    Consolidated Subsidiaries...... 84,428                                        (84,428)
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Revenues................  84,428      41,999    678,692        9,047   (134,349)   679,817
                                   -------  ---------- ---------- ------------ ---------- ----------
Expenses:
  Homebuilding.....................             41,999    590,202         144     (43,129)   589,216
  Financial Services...............                           593       5,937        (357)     6,173
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Expenses.................             41,999    590,795       6,081     (43,486)   595,389
                                   -------  ---------- ---------- ------------ ---------- ----------
Income (Loss) Before Income Taxes.. 84,428                 87,897       2,966     (90,863)    84,428

State and Federal Income Taxes..... 31,860        (424)    33,236       1,299     (34,111)    31,860
                                   -------  ---------- ---------- ------------ ---------- ----------
Net Income (Loss)..................$52,568  $      424 $   54,661 $     1,667  $  (56,752)$   52,568
                                   =======  ========== ========== ============ ========== ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -UNAUDITED
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2004
(Dollars in Thousands)
                                              Guarantor    Non-
                                            Subsidiary  Subsid-   Guarantor      Elimin-    Consol-
                                   Parent    Issuer     iaries    Subsidiaries   ations     idated
                                   -------  ---------- ---------- ------------ ---------- ----------
                                                                        
Revenues:
  Homebuilding....................$         $      186 $1,649,463 $     16,214 $      (83)$1,665,780
  Financial Services...............                         2,116       26,127                28,243
  Intercompany Charges.............             34,808     63,440                 (98,248)
  Equity In Pretax Income of
    Consolidated Subsidiaries......204,852                                       (204,852)
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Revenues................ 204,852      34,994  1,715,019       42,341   (303,183) 1,694,023
                                   -------  ---------- ---------- ------------ ---------- ----------
Expenses:
  Homebuilding.....................                428  1,531,499       12,973    (72,426) 1,472,474
  Financial Services...............                         1,065       17,531     (1,899)    16,697
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Expenses.................                428  1,532,564       30,504    (74,325) 1,489,171
                                   -------  ---------- ---------- ------------ ---------- ----------
Income (Loss) Before Income Taxes..204,852      34,566    182,455       11,837   (228,858)   204,852

State and Federal Income Taxes..... 76,669      10,859     69,533        4,678    (85,070)    76,669
                                   -------  ---------- ---------- ------------ ---------- ----------
Net Income (Loss).................$128,183  $   23,707 $  112,922 $      7,159 $ (143,788)$  128,183
                                   =======  ========== ========== ============ ========== ==========


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -UNAUDITED
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2003
(Dollars in Thousands)

                                                       Guarantor    Non-
                                            Subsidiary  Subsid-   Guarantor     Elimin-    Consol-
                                   Parent    Issuer     iaries    Subsidiaries  ations     idated
                                   -------  ---------- ---------- ------------ ---------- ----------
                                                                        
Revenues:
  Homebuilding....................$         $      638 $1,285,420 $         10 $      (10)$1,286,058
  Financial Services...............                         3,463       17,931                21,394
  Intercompany Charges.............             85,371     11,459                 (96,830)
  Equity In Pretax Income of
    Consolidated Subsidiaries......155,564                                       (155,564)
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Revenues................ 155,564      86,009  1,300,342       17,941   (252,404) 1,307,452
                                   -------  ---------- ---------- ------------ ---------- ----------
Expenses:
  Homebuilding.....................             86,009  1,141,027          219    (87,361) 1,139,894
  Financial Services...............                         1,135       11,717       (858)    11,994
                                   -------  ---------- ---------- ------------ ---------- ----------
    Total Expenses.................             86,009  1,142,162       11,936    (88,219) 1,151,888
                                   -------  ---------- ---------- ------------ ---------- ----------

Income (Loss) Before Income Taxes..155,564                158,180        6,005   (164,185)   155,564

State and Federal Income Taxes..... 58,235        (629)    59,431        2,449    (61,251)    58,235
                                   -------  ---------- ---------- ------------ ---------- ----------
Net Income (Loss)..................$97,329  $      629 $   98,749 $      3,556 $ (102,934)$   97,329
                                   =======  ========== ========== ============ ========== ==========



HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 2004
(Dollars in Thousands)

                                                         Guarantor     Non-
                                              Subsidiary   Subsid-   Guarantor     Elimin-    Consol-
                                      Parent    Issuer     iaries   Subsidiaries   ations     idated
                                     --------  --------- ---------- ------------ ---------- ----------
                                                                          
Cash Flows From Operating Activities:
  Net Income........................$ 128,183  $  23,707 $  112,922 $      7,159 $(143,788) $ 128,183
  Adjustments to reconcile net income
    to net cash provided by
    (used in) operating activities...  32,298         82  (558,863)      106,980   143,788   (275,715)
                                     --------  --------- ---------- ------------ ---------- ----------
    Net Cash Provided By (Used In)
      Operating Activities........... 160,481     23,789  (445,941)      114,139             (147,532)

Net Cash (Used In)
  Investing Activities............... (19,865)             (28,822)         (210)             (48,897)

Net Cash Provided By (Used In)
  Financing Activities...............   2,419   250,000      7,788       (59,684)             200,523

Intercompany Investing and Financing
  Activities - Net...................(143,018) (286,061)   480,140       (51,061)
                                     --------  --------- ---------- ------------ ---------- ----------
Net Increase (Decrease) In Cash......      17   (12,272)   133,165         3,184                4,094
Balance, Beginning of Period.........      15   135,846    (14,372)        6,732              128,221
                                     --------  --------- ---------- ------------ ---------- ----------
Cash and Cash Equivalents Balance,
  End of Period.....................$      32 $ 123,574  $  (1,207) $      9,916 $          $ 132,315
                                     ========  ========= ========== ============ ========== ==========


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 2003
(Dollars in Thousands)


                                                         Guarantor     Non-
                                              Subsidiary   Subsid-   Guarantor     Elimin-    Consol-
                                      Parent    Issuer     iaries   Subsidiaries   ations     idated
                                     --------  --------- ---------- ------------ ---------- ----------
                                                                          
Cash Flows From Operating Activities:
  Net Income.........................$ 97,329  $     629 $   98,749 $      3,556 $ (102,934)$  97,329
  Adjustments to reconcile net income
    to net cash provided by
    (used in) operating activities... (29,463)     3,677   (347,348)      21,230    102,934  (248,970)
                                     --------  --------- ---------- ------------ ---------- ----------
    Net Cash Provided By (Used In)
      Operating Activities...........  67,866      4,306   (248,599)      24,786             (151,641)

Net Cash Provided By (Used In)
  Investing Activities...............  (3,233)     2,866   (130,704)        (154)            (131,225)

Net Cash Provided By (Used In)
  Financing Activities...............  (7,261)    29,800     20,937       (7,074)              36,402

Intercompany Investing and Financing
  Activities - Net................... (57,367)  (288,577)   365,968      (20,024)                   -
                                     --------  --------- ---------- ------------ ---------- ----------
Net Increase (Decrease) In Cash......       5   (251,605)     7,602       (2,466)            (246,464)
  Balance, Beginning of Period.......      10    218,844     43,689        7,447              269,990
                                     --------  --------- ---------- ------------ ---------- ----------
Cash and Cash Equivalents Balance,
  End of Period......................$     15  $ (32,761)$   51,291 $      4,981 $          $  23,526
                                     ========  ========= ========== ============ ========== ==========



       17. Subsequent Events - On May 3, 2004, we redeemed all of our $150
million outstanding 9 1/8% Senior Notes due 2009.  We recorded $8.7 million
of expenses associated with the extinguishment of this debt.

       In May 2004, we made a decision to change our fiscal 2002 California
acquisition brand name to K. Hovnanian Homes.  This will result in a
reclassification of $50 million from goodwill and indefinite life
intangibles to definite life intangibles on our July 31, 2004 Condensed
Consolidated Balance Sheet.



ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS


CRITICAL ACCOUNTING POLICIES

	Management believes that the following critical accounting policies
affect its more significant judgments and estimates used in the preparation
of its consolidated financial statements:

	Business Combinations - When we make an acquisition of another
company, we use the purchase method of accounting in accordance with the
Statement of Financial Accounting Standards (SFAS) No. 141 "Business
Combinations".  Under SFAS No. 141 (for acquisitions subsequent to June 30,
2001) and APB 16 (for acquisitions prior to June 30, 2001) we record as our
cost the estimated fair value of the acquired assets less liabilities
assumed.  Any difference between the cost of an acquired company and the
sum of the fair values of tangible assets less liabilities is recorded as
goodwill, indefinite or definite life intangibles.  The reported income of
an acquired company includes the operations of the acquired company from
the date of acquisition.

	Income Recognition from Home and Land Sales - Income from home and
land sales is recorded when title is conveyed to the buyer, adequate cash
payment has been received and there is no continued involvement.

	Income Recognition from Mortgage Loans - Profits and losses relating
to the sale of mortgage loans are recognized when legal control passes to
the buyer and the sales price is collected.

	Inventories - For inventories of communities under development, a
loss is recorded when events and circumstances indicate impairment and the
undiscounted future cash flows generated are less than the related carrying
amounts.  The impairment loss is based on discounted future cash flows
generated from expected revenue, less cost to complete including interest,
and selling costs.  Inventories and long-lived assets held for sale are
recorded at the lower of cost or fair value less selling costs.  Fair value
is defined as the amount at which an asset could be bought or sold in a
current transaction between willing parties, that is, other than in a
forced or liquidation sale.  Construction costs are accumulated during the
period of construction and charged to cost of sales under specific
identification methods.  Land, land development, and common facility costs
are allocated based on buildable acres to product types within each
community, then charged to cost of sales equally based upon the number of
homes to be constructed in each product type.

	Insurance Deductible Reserves - Our deductible is $150,000 per
occurrence for worker's compensation and general liability insurance.
Reserves have been established based upon actuarial analysis of estimated
losses incurred during 2004 and 2003.

	Interest - Costs related to properties under development are
capitalized during the land development and home construction period and
expensed along with the associated cost of sales as the related inventories
are sold.  Costs related to properties not under development are charged to
interest expense.

	Land Options - Costs are capitalized when incurred and either
included as part of the purchase price when the land is acquired or charged
to operations when we determine we will not exercise the option.  In
accordance with Financial Accounting Standards Board ("FASB")
Interpretation No. 46 ("FIN 46") "Consolidated of Variable Interest
Entities", an interpretation of Accounting Research Bulletin No. 51, SFAS
No. 49 "Accounting for Product Financing Arrangements" ("SFAS 49"), SFAS
No. 98 "Accounting for Leases" ("SFAS 98"), and Emerging Issues Task Force
("EITF") No. 97-10 "The Effects of Lessee Involvement in Asset
Construction" ("EITF 97-10"), we record on the Consolidated Balance Sheet
specific performance options, options with variable interest entities, and
other options under Consolidated inventory not owned with the offset to
Liabilities from inventory not owned, Minority interest from inventory not
owned and Minority interest from consolidated joint ventures.

	Intangible Assets - The intangible assets recorded on our balance
sheet are goodwill, tradenames, architectural designs, distribution
processes, and contractual agreements with both definite and indefinite
lives resulting from company acquisitions.  We no longer amortize goodwill
or indefinite life intangibles, but instead assess them periodically for
impairment.  We are amortizing the definite life intangibles over their
expected useful life, ranging from three to seven years.

	Post Development Completion Costs - In those instances where a
development is substantially completed and sold and we have additional
construction work to be incurred, an estimated liability is provided to
cover the cost of such work and is recorded in accounts payable and other
liabilities in the consolidated balance sheets.


CAPITAL RESOURCES AND LIQUIDITY

	Our operations consist primarily of residential housing development
and sales in our Northeast Region (New Jersey, southern New York state,
Pennsylvania, and Ohio), our Southeast Region (Washington D. C., Maryland,
Virginia, West Virginia, North Carolina, South Carolina, and Florida), our
Southwest Region (Texas and Arizona), and our West Region (California).  In
addition, we provide financial services to our homebuilding customers.

       Our cash uses during the six months ended April 30, 2004 were for
operating expenses, increases in housing inventories, construction, income
taxes, interest, the paydown of our revolving credit facility, the payoff
of our Term Loan, and the acquisition of a Florida homebuilder.  We
provided for our cash requirements from housing and land sales, the
revolving credit facility, the issuance of $365 million of Senior Notes,
financial service revenues, and other revenues.  We believe that these
sources of cash are sufficient to finance our working capital requirements
and other needs.

	On July 3, 2001, our Board of Directors authorized a stock repurchase
program to purchase up to 4 million shares of Class A Common Stock.  On
March 5, 2004 our Board of Directors authorized a 2-for-1 stock split in
the form of a 100% stock dividend.  As of April 30, 2004, 1.8 million
shares of Class A Common Stock have been purchased under this program.  In
addition in 2003, we retired at no cost 1.6 million shares that were held
by a seller of a previous acquisition.  All share information reflects our
dividend.

	Our homebuilding bank borrowings are made pursuant to an amended and
restated unsecured revolving credit agreement (the "Agreement") that
provides a revolving credit line and letter of credit line of $590 million
through July 2006.  Interest is payable monthly and at various rates of
either the prime rate plus 0.275% or LIBOR plus 1.75%.  At April 30, 2004,
there were no outstanding borrowings under our $590 million revolving
credit facility and we had approximately $122.9 million of homebuilding
cash.  At April 30, 2004 we had issued $127.1 million of letters of credit
which reduces cash available under our agreement.  We believe that we will
be able either to extend the Agreement beyond July 2006 or negotiate a
replacement facility, but there can be no assurance of such extension or
replacement facility.  We currently are in compliance and intend to
maintain compliance with the covenants under the Agreement.  Each of our
significant subsidiaries, except for our financial services subsidiaries
and joint ventures, is a guarantor under the revolving credit agreement.

	At April 30, 2004 we had $755.3 million of outstanding senior debt
($752.4 million, net of discount), comprised of $140.3 million 10 1/2%
Senior Notes due 2007, $150 million 9 1/8% Senior Notes due 2009, $100
million 8% Senior Notes due 2012, $215 million 6 1/2% Senior Notes due
2014, and $150 million 6 3/8% Senior Notes due 2014.  At April 30, 2004, we
had outstanding $300 million of senior subordinated debt comprised of $150
million 8 7/8% Senior Subordinated Notes due 2012, and $150 million 7 3/4%
Senior Subordinated Notes due 2013.  On May 3, 2004 we redeemed our 9 1/8%
Senior Notes due 2009, and we recorded $8.7 million of expenses associated
with the extinguishment of this debt.  Each of our significant
subsidiaries, except for our financial services subsidiaries and joint
ventures, is a guarantor of the Senior Notes and Senior Subordinated Notes.

	On March 18, 2004, we paid off our $115 million Term Loan.  We
recorded $0.9 million of expenses associated with the extinguishment of the
debt in Other operations on the Condensed Consolidated Statement of Income.

	Our mortgage banking subsidiary's warehousing agreement was amended
and restated on July 31, 2003.  Pursuant to the agreement, we may borrow up
to $200 million.  The agreement expires in July 2004 and interest is
payable monthly at the Federal Funds Rate plus 1.375%.  We believe that we
will be able either to extend this agreement beyond July 2004 or negotiate
a replacement facility, but there can be no assurance of such extension or
replacement facility.  As of April 30, 2004, the aggregate principal amount
of all borrowings under this agreement was $107 million.

       Total inventory increased $390.8 million during the six months ended
April 30, 2004.  This increase excluded the change in consolidated
inventory not owned of $126 million consisting of specific performance
options, options with variable interest entities, and other options that
were added to our balance sheet in accordance with SFAS 49, SFAS 98, and
EITF 97-10, and Variable Interest Entities in accordance with FIN 46.  See
"Notes to Condensed Consolidated Financial Statements" - Note 12 for
additional information on FIN 46.  Excluding the impact from our Florida
acquisition in November 2003 of $37.6 million, total inventory in our
Northeast Region increased $83.4 million, the Southeast Region increased
$73.1 million, the Southwest Region increased $35.8 million, and our West
Region increased $160.9 million.  The increase in inventory was primarily
the result of future planned organic growth in our existing markets.
Substantially all homes under construction or completed and included in
inventory at April 30, 2004 are expected to be closed during the next
twelve months.  Most inventory completed or under development is financed
through our line of credit, and senior and senior subordinated
indebtedness.

       We usually option property for development prior to acquisition.  By
optioning property, we are only subject to the loss of the cost of the
option and predevelopment costs if we choose not to exercise the option.
As a result, our commitment for major land acquisitions is reduced.

	The following table summarizes the number of buildable homes included
in our total residential real estate.  The April 30, 2004 and October 31,
2003 numbers exclude real estate owned and options in locations where we
have ceased development.

                                 Active       Proposed       Grand
                     Active    Communities   Developable     Total
                  Communities    Homes         Homes         Homes
                  -----------   ---------   ------------   ---------
April 30, 2004:

Northeast Region..       35        7,894        18,182       26,076
Southeast Region..      119       11,896        16,321       28,217
Southwest Region..       86        8,319         6,283       14,602
West Region.......       51        8,223         8,640       16,863
                  -----------   ---------   ------------   ---------
                        291       36,332        49,426       85,758
                  ===========   =========   ============   =========
   Owned..........                20,310         4,752       25,062
   Optioned.......                16,022        44,674       60,696
                                ---------   ------------   ---------
     Total........                36,332        49,426       85,758
                                =========   ============   =========


                                 Active       Proposed         Grand
                     Active    Communities   Developable       Total
                  Communities    Homes         Homes           Homes
                  -----------   ---------   ------------   ----------
October 31, 2003:

Northeast Region..      32        8,536        15,744         24,280
Southeast Region..     107       10,163        12,345         22,508
Southwest Region..      81        7,127         6,813         13,940
West Region.......      37        7,359         6,211         13,570
                  -----------  -----------   ----------   -----------
                       257       33,185        41,113         74,298
                  ===========  ===========   ==========   ===========
   Owned..........               16,111         5,359         21,470
   Optioned.......               17,074        35,754         52,828
                               -----------   ----------   -----------
     Total........               33,185        41,113         74,298
                               ===========   ==========   ===========

	Homes in active communities under contract at April 30, 2004 and
October 31, 2003 were 7,227 and 5,020, respectively.  Such amounts do not
include our build on your own lot contracts or contracts from our
unconsolidated joint ventures.

	The following table summarizes our started or completed unsold homes
and models:

                              April 30,               October 31,
                                2004                     2003
                     -----------------------   -----------------------
                     Unsold                    Unsold
                     Homes    Models   Total   Homes    Models   Total
                     ------   ------   -----   ------   ------   -----

Northeast Region....    116       55     171      130       44     174
Southeast Region....    164       36     200      207       32     239
Southwest Region....    628       93     721      557       94     651
West Region.........    128      122     250      185      105     290
                     ------   ------   -----   ------   ------   -----
  Total               1,036      306   1,342    1,079      275   1,354
                     ======   ======   =====   ======   ======   =====

	Receivables, deposits, and notes increased $10.6 million to $53.1
million at April 30, 2004.  The increase was primarily due to the timing of
cash received from homes that closed on April 30, 2004.  Receivables from
home sales amounted to $11.4 million and $4.1 million at April 30, 2004 and
October 31, 2003, respectively.

	Prepaid expenses and other assets are as follows:

                                       April 30,  October 31,   Dollar
                                        2004         2003       Change
                                      ----------  -----------  ---------
Prepaid insurance.................... $   6,945   $            $  6,945
Prepaid project costs................    43,099       34,171      8,928
Investment in joint ventures.........    22,486       23,232       (746)
Senior residential rental properties.     8,926        9,118       (192)
Other prepaids.......................    19,390       16,209      3,181
Other assets.........................    26,283       23,795      2,488
                                     -----------  -----------  ---------
                                     $  127,129   $  106,525   $ 20,604
                                     ===========  ===========  =========

	Prepaid insurance increased due to a payment of a full year of
insurance costs every first quarter.  These costs are amortized monthly on
a straight line basis.  Prepaid project costs increased due to increased
communities.  Prepaid project costs consist of community specific
expenditures that are used over the life of the community.  Such prepaids
are expensed as homes are delivered.  Investments in Joint Ventures have
remained relatively flat when comparing April 30, 2004 to October 31, 2003.
As of April 30, 2004 we have entered into two homebuilding joint ventures
and three land and land development joint ventures.  Other than completion
guarantees, no other guarantees associated with unconsolidated joint
ventures have been given.  Also included in prepaid expenses and other
assets are debt issuance fees, non-qualified associate benefit plan assets,
and miscellaneous prepaids and assets.

       At April 30, 2004, we had $82.7 million of goodwill and indefinite
life intangibles.  This amount resulted from company acquisitions prior to
fiscal 2003.  In May 2004, we made a decision to change our fiscal 2002
California acquisition brand name to K. Hovnanian Homes.  This will result
in a reclassification of $50 million from goodwill and indefinite life
intangibles to definite life intangibles on our July 31, 2004 Condensed
Consolidated Balance Sheet.

       Definite life intangibles increased $24.3 million to $81.3 million at
April 30, 2004.  This increase was the result of our November 6, 2003
Florida acquisition net of amortization expense.  To the extent the
acquisition price was greater than the book value of tangible assets which
were stepped up to fair values, purchase price premiums were classified as
intangibles.  Professionals are hired to appraise all acquired intangibles.
Such appraisals resulted in all fiscal 2003 acquisition premiums to be
categorized as definite life intangibles.  The intangibles from our fiscal
2004 acquisition are estimated, as we await the final appraisal.  See the
"Critical Accounting Policies" section of "Management's Discussion and
Analysis of Financial Condition and Results of Operations" for additional
explanation of intangibles.  For tax purposes all our intangibles, except
those resulting from an acquisition classified as a tax free exchange, are
being amortized over 15 years.

	Income taxes receivable increased $27.9 million to $29.0 million at
April 30, 2004.  This increase was primarily the result of the payment of
$28.4 million of federal and state taxes accrued at October 31, 2003 and
netted against deferred taxes receivable.  Deferred federal and state
income tax assets primarily represent the deferred tax benefits arising
from temporary differences between book and tax income which will be
recognized in future years as offset against future taxable income.

	Accounts payable and other liabilities are as follows:

                                       April 30,  October 31,  Dollar
                                         2004        2003      Change
                                       ---------  -----------  -------
Accounts payable.......................$ 88,782   $   68,935   $19,847
Reserves...............................  52,914       46,699     6,215
Accrued expenses.......................  19,980       27,064    (7,084)
Accrued compensation...................  49,166       72,495   (23,329)
Property secured by a mortgage.........  24,171            -    24,171
Other liabilities......................  16,536       15,503     1,033
                                       ---------  -----------  -------
                                       $251,549   $  230,696   $20,853
                                       =========  ===========  =======

	The increase in accounts payable and other liabilities was primarily
due to the consolidation of a property in our Northeast Region that was
secured by a mortgage which was subsequently replaced by a letter of
credit, increases in accounts payable due to our November 2003 Florida
acquisition as well as the opening of new communities in our existing
markets, increases in reserves for our General Liability policy and an
increase in miscellaneous other liabilities.  These increases were offset
by decreases in accrued expenses due to the payment of our fiscal year 2003
accruals and a decrease in accrued compensation due to the payout of our
fiscal year 2003 bonuses during the first six months of 2004.  Other
liabilities include payroll withholdings, deferred income, and a
nonrecourse mortgage associated with our Corporate Office.

	Financial Services - Mortgage loans held for sale consist of
residential mortgages receivable of which $115.2 million and $223.9 million
at April 30, 2004 and October 31, 2003, respectively, are being temporarily
warehoused and awaiting sale in the secondary mortgage market.  The balance
of mortgage loans held for sale are being held as an investment.  We may
incur risk with respect to mortgages that are delinquent, but only to the
extent the losses are not covered by mortgage insurance or resale value of
the house.  Historically, we have incurred minimal credit losses.




RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED APRIL 30, 2004
COMPARED TO THE THREE AND SIX MONTHS ENDED APRIL 30, 2003


Total Revenues:

	Compared to the same prior period, revenues increased as follows:

                                       Three Months Ended
                            ------------------------------------------
                            April 30,   April 30,   Dollar  Percentage
                              2004        2003      Change    Change
                            ------------------------------------------
                                       (Dollars In Thousands)
Homebuilding:
  Sale of homes........     $ 900,943   $ 666,553  $ 234,390     35.2%
  Land sales and other
    revenues...........         4,395       2,365      2,030     85.8%
  Financial Services...        13,470      10,899      2,571     23.6%
                            ----------  ----------  --------  --------
   Total Revenues...        $ 918,808   $ 679,817  $ 238,991     35.2%
                            ==========  ==========  ========  ========

                                       Six Months Ended
                            ------------------------------------------
                            April 30,   April 30,   Dollar  Percentage
                              2004        2003      Change    Change
                            ------------------------------------------
                                       (Dollars In Thousands)
Homebuilding:
  Sale of homes........    $1,658,216   $1,274,054 $ 384,162    30.2%
  Land sales and other
    revenues...........         7,564       12,004    (4,440)  (37.0%)
  Financial Services...        28,243       21,394     6,849    32.0%
                           -----------  ----------  --------  --------
   Total Revenues...       $1,694,023   $1,307,452 $ 386,571    29.6%
                           ===========  ==========  ========  ========

Homebuilding:

	Compared to the same prior period, housing revenues increased $234.4
million or 35.2% during the three months ended April 30, 2004 and increased
$384.2 million or 30.2% during the six months ended April 30, 2004.
Housing revenues are recorded at the time when title is conveyed to the
buyer, adequate cash payment has been received, and there is no continued
involvement.



	Information on homes delivered by market area is set forth below:

                         Three Months Ended       Six Months Ended
                             April 30,               April 30,
                        ---------------------   ----------------------
                           2004        2003        2004        2003
                        ----------  ----------  ----------  ----------
                                 (Dollars in Thousands)
Northeast Region: (1)
  Dollars............  $  208,620   $  148,155  $  400,528  $  284,918
  Homes..............         669          462       1,309         893

Southeast Region: (1)
  Dollars............  $  253,485   $  156,162  $  444,547  $  314,282
  Homes..............         987          621       1,774       1,244

Southwest Region: (1)
  Dollars............  $  154,564   $  106,767  $  282,378  $  179,429
  Homes..............         884          520       1,608         879

West Region:
  Dollars............  $  284,274   $  255,469  $  530,763  $  494,164
  Homes..............         813          893       1,563       1,756

Other:
  Dollars............  $       --   $       --  $       --  $    1,261
  Homes..............          --           --          --           9

Consolidated Total:
  Dollars............  $  900,943   $  666,553  $1,658,216  $1,274,054
  Homes..............       3,353        2,496       6,254       4,781

Unconsolidated Joint
  Ventures:
  Dollars............  $    8,484   $    2,178  $   11,310  $    4,173
  Homes..............          19           11          29          21

Totals:
  Housing Revenues...  $  909,427   $  668,731  $1,669,526  $1,278,227
  Homes Delivered....       3,372        2,507       6,283       4,802

(1)  April 30, 2004 includes six months of deliveries
  from our Texas, Ohio, Arizona, and Florida acquisitions which
  closed in January 2003, April 2003, August 2003, and
  November 2003, respectively.


	An important indicator of our future results are recently signed
contracts and home contract backlog for future deliveries.  Our sales
contracts and homes in contract backlog using base sales prices by market
area are set forth below:

                        Sales Contracts for the
                            Six Months Ended       Contract Backlog
                               April 30,            as of April 30,
                      -------------------------  ------------------------
                           2004          2003         2004       2003
                      -----------   -----------  -----------  -----------
                                      (Dollars in Thousands)
Northeast Region: (1)
  Dollars............ $  510,609    $  320,391   $  733,520   $  538,742
  Homes..............      1,550         1,007        2,440        2,024

Southeast Region: (1)
  Dollars............ $  592,990    $  397,360   $  750,663   $  423,614
  Homes..............      2,143         1,535        2,592        1,531

Southwest Region: (1)
  Dollars............ $  323,925    $  212,905   $  204,621   $  128,786
  Homes..............      1,873         1,085        1,254          645

West Region:
  Dollars............ $  832,706    $  546,086   $  587,174   $  336,741
  Homes..............      2,340         1,901        1,570        1,100

Other:
  Dollars............ $       --    $      313   $       --   $       --
  Homes..............         --             2           --           --

Consolidated Total:
  Dollars............ $2,260,230    $1,477,055   $2,275,978   $1,427,883
  Homes..............      7,906         5,530        7,856        5,300

Unconsolidated Joint
  Ventures:
  Dollars............ $  135,786    $    3,248   $  140,353   $    3,715
  Homes..............        230            16          237           18

Totals:
  Dollars............ $2,396,016    $1,480,303   $2,416,331   $1,431,598
  Homes...............     8,136         5,546        8,093        5,318

(1)  Included in sales contracts for the six months ended April 30, 2004
and contract backlog as of April 30, 2004 are sales contracts and backlog
from our Texas, Ohio, Arizona, and Florida acquisitions which closed in
January 2003, April 2003, August 2003, and November 2003, respectively.

       During May 2004, we signed an additional 1,454 net contracts
amounting to $431.1 million in consolidated communities and 33 net
contracts amounting to $23.8 million in unconsolidated joint ventures
compared to 1,215 net contracts amounting to $326.9 million in consolidated
communities and 3 net contracts amounting to $0.8 million in unconsolidated
joint ventures in the same month last year.


	Cost of sales includes expenses for housing and land and lot sales.
A breakout of such expenses for housing sales and housing gross margin is
set forth below:

                               Three Months Ended    Six Months Ended
                                    April 30,           April 30,
                              -------------------  ----------------------
                                2004       2003       2004        2003
                              --------   --------  ----------- ----------
                                        (Dollars in Thousands)

Sale of Homes................ $900,943   $666,553  $1,658,216  $1,274,054
Cost of Sales................  673,778    496,130   1,236,678     953,656
                              --------   --------  ----------  ----------
Housing Gross Margin......... $227,165   $170,423  $  421,538  $  320,398
                              ========   ========  ==========  ==========

Gross Margin Percentage......    25.2%      25.6%      25.4%        25.1%

	Cost of Sales expenses as a percentage of home sales revenues are
presented below:

                               Three Months Ended    Six Months Ended
                                   April 30,            April 30,
                              -------------------   --------   --------
                                2004       2003        2004       2003
                              --------   --------   --------   --------
Sale of Homes................   100.0%     100.0%     100.0%     100.0%
                              --------   --------   --------   --------
Cost of Sales:
      Housing, land &
        development costs....    66.7%      66.7%      66.5%      67.2%
      Commissions............     2.3%       2.1%       2.3%       2.1%
      Financing concessions..     1.1%       1.0%       1.0%       1.0%
      Overheads..............     4.7%       4.6%       4.8%       4.6%
                              --------   --------   --------   --------
Total Cost of Sales..........    74.8%      74.4%      74.6%      74.9%
                              --------   --------   --------   --------
Gross Margin.................    25.2%      25.6%      25.4%      25.1%
                              ========   ========   ========   ========

	We sell a variety of home types in various local communities, each
yielding a different gross margin.  As a result, depending on the
geographic mix of deliveries and the mix of both communities and of home
types delivered, consolidated quarterly gross margin will fluctuate up or
down and may not be representative of the consolidated gross margin for the
year.

	Excluding our Florida and Arizona acquisitions, our gross margins
increased to 26% and 26.2% during the three and six months ended April 30,
2004, respectively when compared to the same periods last year.  These
increases are primarily due to increases in sales prices and the effects
from some of the processing improvements that we have been implementing in
our existing operations.  The decreased margin from our Florida acquisition
is primarily due to the step up of inventory to reflect fair value at the
time of purchase.  Although we achieve targeted returns from our Arizona
acquisition through higher inventory turnover our margins are lower than
our average consolidated margins.  Another factor that has begun to hinder
our gross margins is the increase in material costs such as lumber.
Despite the effect of our acquisitions and material price increases, if
home prices continue to appreciate, there is the potential for upside in
our homebuilding gross margin for the full year in fiscal 2004.

	Homebuilding selling, general, and administrative expenses as a
percentage of homebuilding revenues, remained relatively flat at
approximately 9.0% for the three and six months ended April 30, 2004 when
compared to the same period last year.  Such expenses increased $20.9
million and $38.4 million during the three  and six months ended April 30,
2004, respectively, compared to the same period last year.  The dollar
increase was primarily due to our acquisitions and increased selling,
general and administrative costs associated with the increase in the number
of active selling communities in all of our regions.


Land Sales and Other Revenues:

	Land sales and other revenues consist primarily of land and lot
sales.  A breakout of land and lot sales is set forth below:

                                   Three Months Ended    Six Months Ended
                                       April 30,            April 30,
                                   ------------------   -------------------
                                     2004      2003        2004      2003
                                   --------  --------   --------   --------

Land and Lot Sales................ $   446   $ 1,298    $ 1,585    $ 9,750
Cost of Sales.....................     328     1,089      1,363      6,741
                                   --------  --------   --------   --------
Land and Lot Sales Gross Margin...     118       209        222      3,009
Interest Expense..................      30        11         40        355
                                   --------  --------   --------   --------
Land and Lot Sales Profit
  Before Tax...................... $    88   $   198    $   182    $ 2,654
                                   ========  ========   ========   ========

	Land and lot sales are incidental to our residential housing
operations and are expected to continue in the future but may significantly
fluctuate up or down.


Financial Services

	Financial services consist primarily of originating mortgages from
our homebuyers, selling such mortgages in the secondary market, and title
insurance activities.  For the three and six months ended April 30, 2004
financial services provided a $4.8 million and $11.5 million profit before
income taxes compared to a profit of $4.7 million and $9.4 million for the
same periods in 2003.  While the pretax profit increased slightly during
the three and six months ended April 30, 2004 compared to the same period
last year, the pretax margin percentage decreased.  This decrease is
primarily due to reduced spreads resulting from the steady rise in
homebuyers choosing to use Adjustable Rate Mortgage (ARM) products which
historically are less profitable to originate and lower gross spreads due
to increased competition for purchase mortgages as the market for
refinancing mortgages has significantly declined.


Corporate General and Administrative

	Corporate general and administrative expenses represents the
operations at our headquarters in Red Bank, New Jersey.  Such expenses
include our executive offices, information services, human resources,
corporate accounting, training, treasury, process redesign, internal audit,
construction services, and administration of insurance, quality, and
safety.  As a percentage of total revenues such expenses decreased to 1.6%
for the three months ended April 30, 2004 from 2.0% for the prior year's
three months and decreased to 1.7% for the six months ended April 30, 2004
from 2.1% for the prior year's six months.  Corporate general and
administrative expenses increased $1.2 million during the three and six
months ended April 30, 2004 compared to the same periods last year.
Increases in corporate general and administrative dollar expenses are
primarily attributed to increased headcount as our company continues to
grow.


Interest

	Interest expense includes housing and land and lot interest.
Interest expense is broken down as follows:

                            Three Months Ended    Six Months Ended
                                 April 30,           April 30,
                            ------------------   -------------------
                              2004      2003       2004       2003
                            --------  --------   --------   --------

Sale of Homes.............. $ 19,066  $ 13,414   $ 35,999   $ 26,749
Land and Lot Sales.........       30        11         40        355
                            --------  --------   --------   --------
Total...................... $ 19,096  $ 13,425   $ 36,039   $ 27,104
                            ========  ========   ========   ========

	Housing interest as a percentage of sale of homes revenues remained
flat at 2.0% for the three months ended April 30, 2004, compared to the
same period last year and increased 0.1% for the six months ended April 30,
2004 to 2.2% from 2.1% for the same period last year.  Housing interest as
a percentage of sale of homes remained relatively flat due to our efforts
to maintain leverage at a 50% net debt to capital level.


Other Operations

	Other operations consist primarily of miscellaneous residential
housing operations expenses, senior rental residential property operations,
amortization of senior and senior subordinated note issuance expenses,
earnout payments from homebuilding company acquisitions, amortization of
the consultant agreements and the right of first refusal agreement from our
California acquisition in fiscal 2002, minority interest relating to joint
ventures, and corporate owned life insurance.


Intangible Amortization

	We are amortizing our definite life intangibles over their expected
useful life, ranging from three to seven years.  Intangible amortization
increased $2.8 million and $7.1 million for the three and six months ended
April 30,2004, respectively, when compared to the same period last year.
This increase was the result of our November 2003 Florida acquisition and a
full six months of amortization expense from our Texas and Ohio
acquisitions that closed in January 2003 and April 2003, respectively.


Recent Accounting Pronouncements

	In December 2003, the Financial Accounting Standards Board ("FASB")
issued Revised Interpretation No. 46, "Consolidation of Variable Interest
Entities" ("FIN 46R").  FIN 46R requires the primary beneficiary of a
variable interest entity to consolidate that entity.  The primary
beneficiary of a variable interest entity is the party that absorbs a
majority of the variable interest entity's expected losses, receives a
majority of the entity's expected residual returns, or both, as a result of
ownership, contractual, or other financial interests in the entity.
Expected losses are the expected negative variability in the fair value of
an entity's net assets exclusive of its variable interests, and expected
residual returns are the expected positive variability in the fair value of
an entity's net assets, exclusive of variable interests.  We have fully
implemented FIN 46 as of April 30, 2004.

	In March 2004, the Securities and Exchange Commission staff issued
Staff Accounting Bulletin 105 ("SAB 105").  Existing accounting guidance
requires an entity to record on its balance sheet the fair value of any
issued and outstanding mortgage loan commitments.  SAB 105 requires that
the fair value measurement include only differences between the guaranteed
interest rate in the loan commitment and a market interest rate, excluding
any future cash flows related to (i) expected fees to be received when the
loan commitment becomes a loan, (ii) gains from selling the loan, or (iii)
the servicing value created from the loan.  The guidance in SAB 105 must be
applied to mortgage loan commitments that are accounted for as derivatives
and are entered into after March 31, 2004.  The adoption of the guidance in
SAB 105 did not have a material adverse effect on its financial position or
results of operations.


Total Taxes

	Total taxes as a percentage of income before taxes remained unchanged
at approximately 37.4% for both the six months ended April 30, 2004 and
2003.  Deferred federal and state income tax assets primarily represent the
deferred tax benefits arising from temporary differences between book and
tax income which will be recognized in future years as an offset against
future taxable income.  If for some reason the combination of future years
income (or loss) combined with the reversal of the timing differences
results in a loss, such losses can be carried back to prior years to
recover the deferred tax assets.  As a result, management is confident such
deferred tax assets are recoverable regardless of future income.


Inflation

	Inflation has a long-term effect on us because increasing costs of
land, materials, and labor result in increasing sale prices of our homes.
In general, these price increases have been commensurate with the general
rate of inflation in our housing markets and have not had a significant
adverse effect on the sale of our homes.  A significant risk faced by the
housing industry generally is that rising house costs, including land and
interest costs, will substantially outpace increases in the income of
potential purchasers.  In recent years, in the price ranges in which our
homes sell, we have not found this risk to be a significant problem.

	Inflation has a lesser short-term effect on us because we generally
negotiate fixed price contracts with our subcontractors and material
suppliers for the construction of our homes.  These prices usually are
applicable for a specified number of residential buildings or for a time
period of between three to twelve months.  Construction costs for
residential buildings represent approximately 56% of our homebuilding cost
of sales.


Mergers and Acquisitions

       On November 6, 2003, we acquired a Florida homebuilder for cash and
489,236 shares of our Class A Common Stock (shares reflect stock dividend).
On November 1, 2002 and December 31, 2002 we acquired two Texas
homebuilding companies.  On April 9, 2003, we acquired a build-on-your-own
lot homebuilder in Ohio and on August 8, 2003 we acquired a homebuilder in
Arizona.  All fiscal 2003 acquisitions were paid for in cash.




Safe Harbor Statement

       All statements in this Form 10-Q that are not historical facts should
be considered as "Forward-Looking Statements" within the meaning of the
Private Securities Litigation 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.  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.  Such risks,
uncertainties and other factors include, but are not limited to:

	.  Changes in general and local economic and business conditions;
	.  Weather conditions;
	.  Changes in market conditions;
	.  Changes in home prices and sales activity in the California,
           New Jersey, Texas, North Carolina, Virginia, and Maryland
           markets;
	.  Government regulation, including regulations concerning
           development of land, the homebuilding process, and the
           environment;
	.  Fluctuations in interest rates and the availability of mortgage
           financing;
	.  Shortages in and price fluctuations of raw materials and labor;
	.  The availability and cost of suitable land and improved lots;
	.  Levels of competition;
	.  Availability of financing to the Company;
	.  Utility shortages and outages or rate fluctuations; and
	.  Geopolitical risks, terrorist acts and other acts of war.

	Certain risks, uncertainties, and other factors are described in
detail in Item 1 and 2 "Business and Properties" in our Form 10-K for the
year ended October 31, 2003.




Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

	The primary market risk facing us is interest rate risk on our long-term debt.
In connection with our mortgage operations, mortgage loans held for sale and the
associated mortgage warehouse line of credit are subject to interest rate risk;
however, such obligations reprice frequently and are short-term in duration.  In
addition, we hedge the interest rate risk on mortgage loans by obtaining forward
commitments from private investors.  Accordingly, the risk from mortgage loans is
not material.  We do not hedge interest rate risk other than on mortgage loans
using financial instruments.  We are also subject to foreign currency risk but
this risk is not material.  The following table sets forth as of April 30, 2004,
our long term debt obligations, principal cash flows by scheduled maturity, weighted
average interest rates and estimated fair market value ("FMV").

                                 As of April 30, 2004
                  --------------------------------------------------
                                Expected Maturity Date
                                                                                            FMV @
                     2004     2005    2006    2007    2008    2009    Thereafter   Total    4/30/04
                  -------  -------  ------  ------ -------- -------- ----------  --------  --------
                                                                
                                         (Dollars in Thousands)
Long Term Debt(1):
  Fixed Rate....$34,214  $    81  $   88 $140,346 $   104 $150,112  $765,115  $1,090,060 $1,121,861
  Average
   interest rate  5.88%    8.38%   8.38%   10.50%   8.38%    9.12%     7.38%       7.98%

 (1) Does not include bonds collateralized by mortgages receivable.



Item 4.  CONTROLS AND PROCEDURES

    The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the
Company's reports under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including its chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required disclosures. Any
controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control
objectives. The Company's management, with the participation of the
Company's chief executive officer and chief financial officer, has
evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of April 30, 2004. Based upon that
evaluation and subject to the foregoing, the Company's chief executive
officer and chief financial officer concluded that the design and operation
of the Company's disclosure controls and procedures are effective to
accomplish their objectives.

    In addition, there was no change in the Company's internal control over
financial reporting that occurred during the quarter ended April 30, 2004
that has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.


PART II.  Other Information

     Item 2.     Changes in Securities, Use of Proceeds and Issuer
                 Purchases of Equity Securities.


	This table provides information with respect to our purchases of shares of our
Class A common stock during the fiscal second quarter of 2004.

	Issuer Purchases of Equity Securities (1)

                                                   Total Number
                                                     Of Shares      Maximum Number of
                                                   Purchased as      Shares That May
                                                  Part of Publicly  Yet Be Purchased
                 Total Number of   Average Price   Announced Plan    Under The Plan
Period           Shares Purchased  Paid Per Share    or Program        or Program
---------------- ----------------  -------------- ----------------  -----------------
                                                        
February 1, 2004
Through
February 29, 2004            -               -               -         2,192,124
-------------------------------------------------------------------------------------
March 1, 2004
Through
March 31, 2004           2,102         $44.29            2,102         2,190,022
-------------------------------------------------------------------------------------
April 1, 2004
Through
April 30, 2004               -              -                -         2,190,022
-------------------------------------------------------------------------------------
Total                    2,102         $44.29            2,102
                 ================  ============== ================

1.  In July 2001, our Board of Directors authorized a stock repurchase program to
purchase up to 4 million shares of Class A Common Stock.  On March 5, 2004, our Board of
Directors authorized a 2-for-1 stock split in the form of a 100% stock dividend.  All
share information reflects our dividend.



     Item 4.  Submission of Matters to a Vote of Security Holders.

	We held our annual stockholders meeting on March 5, 2004 at 10:30 a.m.
at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New
York, New York.  All share information reflects our dividend.  The following
matters were voted at the meeting:

       (1)  Election of all Directors to hold office until the next Annual
Meeting of Stockholders.  There were no broker non-votes.  The elected
Directors were:

                                  Class A                    Class B
                         Votes For  Votes Withheld  Votes For  Votes Withheld
                         ---------- -------------- ----------- --------------
Kevork S. Hovnanian      28,946,360    4,481,956   120,290,722      24,640
Ara K. Hovnanian         28,993,902    4,434,414   120,291,722      23,640
Geaton A. Decesaris,Jr.  28,945,182    4,483,134   120,291,722      23,640
Arthur M. Greenbaum      28,947,684    4,480,632   120,291,022      24,340
Edward A. Kangas         30,410,988    3,017,328   120,292,022      23,340
Desmond P. McDonald      30,395,378    3,032,934   120,291,022      24,340
John J. Robbins          30,411,256    3,017,060   120,292,022      23,340
J. Larry Sorsby          28,945,982    4,482,334   120,291,722      23,640
Stephen D. Weinroth      30,398,408    3,029,908   120,291,022      24,340

       (2)  Ratification of selection of Ernst & Young, LLP as certified
independent accountants for fiscal year ending October 31, 2004.  There were
no broker non-votes.

                               Class A           Class B
                            ------------       ------------

	  ..  Votes For        33,150,570         120,313,322
	  ..  Votes Against       253,956               2,000
	  ..  Abstain              23,790                  40

       (3)  The approval of an amendment to the Company's amended Certificate
of Incorporation to increase the total number of authorized shares of all
classes of stock from 100,100,000 to 230,100,000 of which 200,000,000 shares
will be Class A Common Stock, par value $0.01 per share, and 30,000,000
shares will be shares of Class B Common Stock, par value $0.01 per share, and
100,000 shares will be Preferred Stock, par value $0.01 per share.  There
were no broker non-votes.

                               Class A           Class B
                            ------------       ------------

	  ..  Votes For        32,091,296         120,303,442
	  ..  Votes Against     1,329,962              11,920
	  ..  Abstain               7,058                   -



       (4)  Approval of the Company's amended and restated Senior Executive
Short-Term Incentive Plan.

                                Class A           Class B
                             ------------       ------------

	  ..  Votes For         24,277,272        120,216,278
	  ..  Votes Against      2,386,066             55,620
	  ..  Abstain               34,494              5,200
        ..    Broker Non-Votes   6,730,484             38,264

       (5)  Approval of the Company's amended and restated 1999 Stock
Incentive Plan.

                                Class A           Class B
                             ------------       ------------

	  ..  Votes For         14,473,422        120,218,678
	  ..  Votes Against     11,230,260             53,220
	  ..  Abstain              994,150              5,200
          ..  Broker Non-Votes   6,730,484             38,264

     Item 6.     Exhibits and Reports on Form 8-K.
         (a)
                 Exhibit 3(a) Certificate of Incorporation of
                 the Registrant. (1)

                 Exhibit 3(b) Certificate of Amendment of
                 Certificate of Incorporation of the
                 Registrant. (2)

                 Exhibit 3(c) Certificate of Amendment of
                 Certificate of Incorporation of the Registrant. (3)

                 Exhibit 3(d) Restated Bylaws of the Registrant. (4)

                 Exhibit 4(a) Indenture dated as of March 18, 2004,
                 relating to 6 3/8% Senior Notes, among K. Hovnanian
                 Enterprises, Inc., the Guarantors named therein and
                 Wachovia Bank, National Association, as Trustee.(5)

                 Exhibit 31(a) Rule 13a-14(a)/15d-14(a)
                 Certification of Chief Executive Officer.

                 Exhibit 31(b) Rule 13a-14(a)/15d-14(a)
                 Certification of Chief Financial Officer

                 Exhibit 32(a) Section 1350 Certification of Chief
                 Executive Officer.

                 Exhibit 32(b) Section 1350 Certification of Chief
                 Financial Officer.

(1)   Incorporated by reference to Exhibits to
                 Registration Statement (No. 2-85198) on
                 Form S-1 of the Registrant.

(2)	Incorporated by reference to Exhibits to Registration
Statement (No. 333-106761) on Form S-3
of the Registrant.

           (3)   Incorporated by reference to Exhibit 3(c) to
                 Quarterly Report on Form 10-Q of the Registrant for
                 the quarter ended January 32, 2004.

(4)   Incorporated by reference to Exhibit 3.2 to
Registration Statement (No. 1-08551) on
Form 8-A of the Registrant.

(5)	Incorporated by reference to Exhibit 4.1 to
Registration Statement (No. 333-115742) on
                 Form S-4 of the Registrant.

         Item 6(b).  The following reports have been filed during quarter
ended April 30, 2004:
    On March 29, 2004, the Registrant filed a report on Form 8-K, Items 5 and
7.
    The following reports have been furnished during the quarter ended April
30, 2004:
    On March 1, 2004, the Registrant furnished a report on Form 8-K, Items 7
and 12.




                                  SIGNATURES



         Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                    HOVNANIAN ENTERPRISES, INC.
                                    (Registrant)



DATE:  June 14, 2004                /S/J. LARRY SORSBY
                                    J. Larry Sorsby,
                                    Executive Vice President and
                                    Chief Financial Officer




DATE:  June 14, 2004                /S/PAUL W. BUCHANAN
                                    Paul W. Buchanan,
                                    Senior Vice President
                                    Corporate Controller




CERTIFICATIONS
Exhibit 31(a)

I, Ara K. Hovnanian, President & Chief Executive Officer of Hovnanian
Enterprises, Inc.,
certify that:
1.  I have reviewed this quarterly report on Form 10-Q of Hovnanian
Enterprises, Inc.;
2.  Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3.  Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4.  The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5.  The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date:  June 11, 2004

/S/ARA K. HOVNANIAN
Ara K. Hovnanian
President and Chief Executive Officer



CERTIFICATIONS
Exhibit 31(b)

I, J. Larry Sorsby, Executive Vice President & Chief Financial Officer of
Hovnanian Enterprises, Inc., certify that:
1.  I have reviewed this quarterly report on Form 10-Q of Hovnanian
Enterprises, Inc.;
2.  Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3.  Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4.  The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5.  The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date:  June 11, 2004

/S/J. LARRY SORSBY
J. Larry Sorsby
Executive Vice President and Chief Financial Officer



Exhibit 32(a)

CERTIFICATION PURSUANT TO
 18 U.S.C. SECTION 1350,
 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Hovnanian Enterprises, Inc. (the
"Company") on Form 10-Q for the period ended April 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Ara
K. Hovnanian, President and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
1.  The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2.  The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date:  June 11, 2004

/S/ARA K. HOVNANIAN
Ara K. Hovnanian
President and Chief Executive Officer



Exhibit 32(b)

CERTIFICATION PURSUANT TO
 18 U.S.C. SECTION 1350,
 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Hovnanian Enterprises, Inc. (the
"Company") on Form 10-Q for the period ended April 30, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, J.
Larry Sorsby, Executive Vice President and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.  The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2.  The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Date:  June 11, 2004

/S/J. LARRY SORSBY
J. Larry Sorsby
Executive Vice President and Chief Financial Officer