News Release
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NVR, Inc. Announces First Quarter Results
Net income and diluted earnings per share were favorably impacted by the reduction in the Company's effective tax rate in the first quarter of 2018 to 13.1% from 22.1% in the first quarter of 2017. The reduction in the effective tax rate was primarily due to the following items:
- The enactment of the Tax Cuts and Jobs Act in
December 2017 , which lowered the Company's federal statutory tax rate from 35% to 21%, and - The retroactive reinstatement of certain expired energy tax credits under the Bipartisan Budget Act of 2018, which resulted in the Company recognizing a tax benefit of approximately
$6,200,000 related to homes settled in 2017.
Additionally, the effective tax rate in both the first quarter of 2018 and 2017 was favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling
Homebuilding
New orders in the first quarter of 2018 increased 17% to 5,174 units, when compared to 4,424 units in the first quarter of 2017. The average sales price of new orders in the first quarter of 2018 was
Homebuilding revenues in the first quarter of 2018 totaled
Mortgage Banking
Mortgage closed loan production in the first quarter of 2018 totaled
About NVR
Some of the statements in this release made by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should" or "anticipates" or the negative thereof or other comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, NVR's financial position, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by NVR and NVR's customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; competition; the availability and cost of land and other raw materials used by NVR in its homebuilding operations; shortages of labor; weather related slow-downs; building moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control. NVR undertakes no obligation to update such forward-looking statements except as required by law.
NVR, Inc. |
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Consolidated Statements of Income |
||||||||
(in thousands, except per share data) |
||||||||
(Unaudited) |
||||||||
Three Months Ended March 31, |
||||||||
2018 |
2017 |
|||||||
Homebuilding: |
||||||||
Revenues |
$ |
1,490,093 |
$ |
1,247,587 |
||||
Other income |
1,977 |
1,102 |
||||||
Cost of sales |
(1,211,946) |
(1,026,017) |
||||||
Selling, general and administrative |
(105,547) |
(99,904) |
||||||
Operating income |
174,577 |
122,768 |
||||||
Interest expense |
(6,007) |
(5,578) |
||||||
Homebuilding income |
168,570 |
117,190 |
||||||
Mortgage Banking: |
||||||||
Mortgage banking fees |
39,321 |
29,505 |
||||||
Interest income |
2,093 |
1,661 |
||||||
Other income |
524 |
309 |
||||||
General and administrative |
(19,235) |
(16,246) |
||||||
Interest expense |
(275) |
(258) |
||||||
Mortgage banking income |
22,428 |
14,971 |
||||||
Income before taxes |
190,998 |
132,161 |
||||||
Income tax expense |
(24,949) |
(29,238) |
||||||
Net income |
$ |
166,049 |
$ |
102,923 |
||||
Basic earnings per share |
$ |
45.19 |
$ |
27.78 |
||||
Diluted earnings per share |
$ |
39.34 |
$ |
25.12 |
||||
Basic weighted average shares outstanding |
3,675 |
3,705 |
||||||
Diluted weighted average shares outstanding |
4,220 |
4,097 |
NVR, Inc. |
||||||||
Consolidated Balance Sheets |
||||||||
(in thousands, except share and per share data) |
||||||||
(Unaudited) |
||||||||
March 31, 2018 |
December 31, 2017 |
|||||||
ASSETS |
||||||||
Homebuilding: |
||||||||
Cash and cash equivalents |
$ |
414,763 |
$ |
645,087 |
||||
Restricted cash |
20,767 |
19,438 |
||||||
Receivables |
22,374 |
20,026 |
||||||
Inventory: |
||||||||
Lots and housing units, covered under sales agreements with customers |
1,170,604 |
1,046,094 |
||||||
Unsold lots and housing units |
124,312 |
148,620 |
||||||
Land under development |
33,078 |
34,212 |
||||||
Building materials and other |
16,398 |
17,273 |
||||||
1,344,392 |
1,246,199 |
|||||||
Contract land deposits, net |
361,891 |
370,429 |
||||||
Property, plant and equipment, net |
41,326 |
43,191 |
||||||
Reorganization value in excess of amounts allocable to identifiable assets, net |
41,580 |
41,580 |
||||||
Other assets |
204,329 |
198,930 |
||||||
2,451,422 |
2,584,880 |
|||||||
Mortgage Banking: |
||||||||
Cash and cash equivalents |
10,803 |
21,707 |
||||||
Restricted cash |
3,230 |
2,256 |
||||||
Mortgage loans held for sale, net |
344,023 |
352,489 |
||||||
Property and equipment, net |
6,237 |
6,327 |
||||||
Reorganization value in excess of amounts allocable to identifiable assets, net |
7,347 |
7,347 |
||||||
Other assets |
23,003 |
14,273 |
||||||
394,643 |
404,399 |
|||||||
Total assets |
$ |
2,846,065 |
$ |
2,989,279 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Homebuilding: |
||||||||
Accounts payable |
$ |
265,155 |
$ |
261,973 |
||||
Accrued expenses and other liabilities |
314,897 |
341,891 |
||||||
Customer deposits |
167,486 |
150,033 |
||||||
Senior notes |
597,220 |
597,066 |
||||||
1,344,758 |
1,350,963 |
|||||||
Mortgage Banking: |
||||||||
Accounts payable and other liabilities |
34,499 |
32,824 |
||||||
34,499 |
32,824 |
|||||||
Total liabilities |
1,379,257 |
1,383,787 |
||||||
Commitments and contingencies |
||||||||
Shareholders' equity: |
||||||||
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of |
206 |
206 |
||||||
Additional paid-in capital |
1,678,100 |
1,644,197 |
||||||
Deferred compensation trust – 108,642 and 108,640 shares of NVR, Inc. common stock as of |
(17,389) |
(17,383) |
||||||
Deferred compensation liability |
17,389 |
17,383 |
||||||
Retained earnings |
6,400,185 |
6,231,940 |
||||||
Less treasury stock at cost – 16,936,586 and 16,864,324 shares as of March 31, 2018 and December 31, |
(6,611,683) |
(6,270,851) |
||||||
Total shareholders' equity |
1,466,808 |
1,605,492 |
||||||
Total liabilities and shareholders' equity |
$ |
2,846,065 |
$ |
2,989,279 |
NVR, Inc. |
||||||||
Operating Activity |
||||||||
(dollars in thousands) |
||||||||
(Unaudited) |
||||||||
Three Months Ended March 31, |
||||||||
2018 |
2017 |
|||||||
Homebuilding data: |
||||||||
New orders (units) |
||||||||
Mid Atlantic (1) |
2,503 |
2,125 |
||||||
North East (2) |
371 |
359 |
||||||
Mid East (3) |
1,296 |
1,134 |
||||||
South East (4) |
1,004 |
806 |
||||||
Total |
5,174 |
4,424 |
||||||
Average new order price |
$ |
378.2 |
$ |
392.6 |
||||
Settlements (units) |
||||||||
Mid Atlantic (1) |
1,926 |
1,658 |
||||||
North East (2) |
301 |
268 |
||||||
Mid East (3) |
879 |
725 |
||||||
South East (4) |
790 |
605 |
||||||
Total |
3,896 |
3,256 |
||||||
Average settlement price |
$ |
382.4 |
$ |
383.1 |
||||
Backlog (units) |
||||||||
Mid Atlantic (1) |
4,801 |
4,008 |
||||||
North East (2) |
752 |
699 |
||||||
Mid East (3) |
2,315 |
1,908 |
||||||
South East (4) |
1,941 |
1,437 |
||||||
Total |
9,809 |
8,052 |
||||||
Average backlog price |
$ |
381.7 |
$ |
396.6 |
||||
New order cancellation rate |
14 |
% |
16 |
% |
||||
Community count (average) |
485 |
486 |
||||||
Lots controlled at end of period |
91,300 |
79,100 |
||||||
Mortgage banking data: |
||||||||
Loan closings |
$ |
1,009,673 |
$ |
843,341 |
||||
Capture rate |
86 |
% |
86 |
% |
||||
Common stock information: |
||||||||
Shares outstanding at end of period |
3,618,744 |
3,735,638 |
||||||
Number of shares repurchased |
116,268 |
50,922 |
||||||
Aggregate cost of shares repurchased |
$ |
357,242 |
$ |
85,547 |
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(1) Maryland, Virginia, West Virginia, Delaware and Washington, D.C. |
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(2) New Jersey and Eastern Pennsylvania |
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(3) New York, Ohio, Western Pennsylvania, Indiana and Illinois |
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(4) North Carolina, South Carolina, Tennessee and Florida |
View original content:http://www.prnewswire.com/news-releases/nvr-inc-announces-first-quarter-results-300632611.html
SOURCE
Curt McKay, (703) 956-4058, ir@nvrinc.com