Results for the Three and Six Month Periods ended April 30, 2008:

-- Total revenues were $776.4 million for the second quarter of fiscal 2008 compared with total revenues of $1.1 billion in the same quarter a year ago. For the first half of fiscal 2008, total revenues were $1.9 billion compared to $2.3 billion for the same period last year.

-- Excluding unconsolidated joint ventures, the Company delivered 2,494 homes in the second quarter of fiscal 2008, a decrease of 21% from 3,150 home deliveries in the fiscal 2007 second quarter. For the first six months of fiscal 2008, the Company delivered 6,098 homes, excluding unconsolidated joint ventures, a 5% decline from 6,416 home deliveries in the first half of last year.

-- The number of net contracts for the second quarter of fiscal 2008, excluding unconsolidated joint ventures, declined 29% to 2,226 homes compared with last year's second quarter. For the first half of fiscal 2008, the number of net contracts, excluding unconsolidated joint ventures, decreased 34% to 3,737 homes compared with the same period in the prior year.

-- The Company's contract cancellation rate, excluding unconsolidated joint ventures, for the second quarter of fiscal 2008 was 29%, compared with the rate of 38% reported for the first quarter of fiscal 2008 and 32% in the second quarter of fiscal 2007.

-- During the second quarter of fiscal 2008, the Company incurred a total of $251.0 million of pre-tax land-related charges including land impairments of $226.4 million and write-offs of predevelopment costs and land deposits of $19.5 million, as well as $5.1 million representing its equity portion of write-offs and impairment charges in unconsolidated joint ventures.

-- Excluding land-related charges, the Company reported a pre-tax loss of $92.4 million and $167.1 million, respectively, for the three month and six month periods ended April 30, 2008. Including all land-related charges, the Company reported a pre-tax loss of $343.4 million for the second quarter of fiscal 2008 and $512.2 million for the first six months of fiscal 2008.

-- The Company recorded a $120.6 million FAS 109 deferred tax valuation allowance charge during the second quarter and a $141.8 million charge year to date.

-- For the second quarter of fiscal 2008, the Company reported an after tax loss of $340.7 million, or $5.29 per common share, compared with a net loss of $30.7 million, or $0.49 per common share, in the second quarter of fiscal 2007. For the six month period, the Company reported a net loss of $471.7 million, or $7.43 per common share, compared to an $88.0 million net loss, or $1.40 per common share, in the same period a year ago.

Balance Sheet as of April 30, 2008:

-- The Company generated $56.1 million of positive cash flow during the second quarter of fiscal 2008. At April 30, 2008, the Company had $119.9 million of homebuilding cash and the balance on the Company's revolving credit facility was $325.0 million.

-- Hovnanian's total land position decreased by 6,646 lots compared to January 31, 2008, reflecting owned and optioned position decreases of 2,108 lots and 4,538 lots, respectively. As of April 30, 2008, the Company had 27,191 lots controlled under option contracts and owned 25,264 lots. The total land position of 52,455 lots represents a 57% decline from the peak total land position at April 30, 2006.

-- The Company realized a 19% decline in started unsold homes and models, from 2,321 at January 31, 2008 to 1,885 at April 30, 2008. Excluding model homes, the Company had 1,503 started unsold homes as of the end of the second quarter of fiscal 2008.

Other Key Operating Data:

-- Homebuilding gross margin, before interest expense included in cost of sales, was 6.8% in the 2008 second quarter, compared with 16.3% in the second quarter of 2007 and 6.7% in the first quarter of 2008.

-- Pretax income from Financial Services in the second quarter of fiscal 2008 was $4.1 million and $7.2 million for the first six months of fiscal 2008.

-- The Company had 379 active selling communities on April 30, 2008, excluding unconsolidated joint ventures, a decline of 25 active communities, or 6%, from January 31, 2008. The Company had 437 active selling communities on April 30, 2007, excluding unconsolidated joint ventures.

-- During the second quarter of fiscal 2008, the Company delivered 196 homes through unconsolidated joint ventures, compared with 275 homes in last year's second quarter. The Company delivered 351 homes through unconsolidated joint ventures during the first half of 2008 compared with 564 homes during the same period in 2007.

-- Contract backlog, as of April 30, 2008, excluding unconsolidated joint ventures, was 3,577 homes with a sales value of $1.2 billion, a decrease of 54% from the same period a year ago. Excluding backlog from the Company's Fort Myers-Cape Coral operations in both periods, backlog decreased 41%.

Recent Capital Markets Activity During May 2008:

-- During May 2008, subsequent to the end of the second fiscal quarter, the Company completed the following transactions:

-- Raised $126 million from issuing 14.0 million shares of Class A Common Stock offering at $9.50 per share; and

-- Issued $600 million aggregate principal amount of 11 1/2% Senior Secured Notes due May 1, 2013.

-- Net proceeds from these offerings of approximately $705 million were used to pay off outstandings under the corporate credit facility and the excess will be used for general corporate purposes. After giving effect to these transactions, the Company would have had approximately $500 million in homebuilding cash and no borrowings on its revolving credit agreement as of April 30, 2008.

-- In addition, during May 2008, the Company amended its revolving credit agreement to substantially eliminate financial maintenance covenants and reduced total commitments to $300 million from $900 million, leaving the facility in place largely for the issuance of letters of credit, which at April 30, 2008 were $219.3 million. The maturity of the credit facility remains unchanged at May 2011.

Projections for Fiscal 2008:

-- The Company continues to project positive cash flow for fiscal 2008, such that the Company's homebuilding cash balance at October 31, 2008 is projected to exceed $800 million, including the cumulative cash flow from the first two quarters, which was roughly breakeven. -- Hovnanian Enterprises, Inc.