SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 25, 2007

NVR, Inc.

(Exact name of registrant as specified in its
charter)

Virginia		1-12378		54-1394360
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

11700 Plaza America Drive, Suite 500, Reston, Virginia		20190
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 703-956-4000

 

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition

     On January 25, 2007, NVR, Inc. issued a press release reporting its financial results for the quarter and year-to-date periods ended December 31, 2006. A copy of this press release is furnished hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

     (c) Exhibits

Number				Description
	99.1			Press release dated January 25, 2007.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

				NVR, Inc.
Date:   February 5, 2007		By:		/s/ Robert W. Henley
		Name:		Robert W. Henley
		Title:		Vice President
				and Controller

INDEX TO EXHIBITS

Exhibit Number				Exhibit Description
	99.1			Press release dated January 25, 2007.

Exhibit 99.1

NVR, INC. ANNOUNCES FOURTH QUARTER RESULTS

FOR IMMEDIATE RELEASE		Contact:		Dan Malzahn
		Office:		(703) 956-4204

January 25, 2007, Reston, VA—NVR, Inc. (AMEX: NVR), one of the nation’s largest homebuilding and mortgage banking companies, announced that diluted earnings per share for its fourth quarter ended December 31, 2006 decreased 31% and net income decreased 39% when compared to the 2005 fourth quarter. Net income for the 2006 fourth quarter was $135,167,000, $20.86 per diluted share, compared to net income of $222,537,000, $30.29 per diluted share, for the same period of 2005. The fourth quarter results were negatively impacted by land deposit impairments of approximately $60,000,000. These impairments lowered gross margins by 375 basis points and reduced diluted earnings per share by $5.65. Consolidated revenues for the last three months of 2006 totaled $1,627,130,000, a 2% decrease from $1,658,204,000 for the comparable 2005 quarter.

Net income for the 2006 fiscal year was $587,412,000, $88.05 per diluted share, compared to net income of $697,559,000, $89.61 per diluted share for 2005, a 16% decrease in net income and a 2% decrease in diluted earnings per share. The full year results were negatively impacted by land deposit impairments of approximately $174,000,000. These impairments lowered gross margins by 288 basis points and reduced diluted earnings per share by $15.88. Consolidated revenues for 2006 totaled $6,134,124,000, a 17% increase from the $5,262,347,000 for 2005.

Homebuilding

New orders for the fourth quarter of 2006 decreased 17% to 3,002 units, when compared to 3,615 units for the fourth quarter of 2005. The cancellation rate in the fourth quarter of 2006 was 20% compared to 13% in the fourth quarter of 2005 and 27% in the third quarter of 2006. The cancellation rate in Washington was 34% in the quarter compared to 18% in the fourth quarter of 2005 and 39% in the third quarter of 2006. The average sales price of new orders in the fourth quarter of 2006 declined by 10% from the fourth quarter of 2005. The decline is the result of a decrease in the average sales price of new orders in the Mid Atlantic and North East markets of 17% and 12%, respectively.

Settlements decreased in the fourth quarter of 2006 to 4,002 units, 4% less than the same period of 2005. Homebuilding revenues for the three months ended December 31, 2006 totaled $1,600,733,000, 2% lower than the year earlier period. Income before tax from the homebuilding segment totaled $201,884,000, a decrease of 41% when compared to the fourth quarter of the previous year. Gross profit margins decreased to 19.0% in the 2006 fourth quarter compared to 27.6% for the same period in 2005. The decline in gross profit margins is due to the previously mentioned land impairments and continued pricing pressures in many of our markets.

New orders for 2006 totaled 13,217 units, a 10% decrease when compared to the 14,653 units reported for 2005. Home settlements for 2006 increased 10% to 15,139 units when compared to

13,787 units closed in 2005. Homebuilding revenues for 2006 totaled $6,036,236,000, 17% higher than 2005. Pre-tax homebuilding income decreased to $897,838,000 for the 2006 fiscal year, a decrease of 17% from the prior year. Gross profit margins decreased to 22.1% in 2006 from 27.8% in 2005. The number of homes in backlog at the end of 2006 was 6,388 units, 23% lower than the 8,310 units in backlog at the end of 2005. The dollar volume in backlog decreased 28% to $2,634,720,000 at December 31, 2006, when compared to the same time last year.

Mortgage Banking

Mortgage closed loan production of $1,071,286,000 for the three months ended December 31, 2006 was 2% higher than the same period last year. Operating income contributed by the mortgage banking operations during the fourth quarter of 2006 decreased 8% to $17,875,000, when compared to $19,479,000 reported for the same period of 2005.

Operating income from the mortgage banking segment increased for the 2006 fiscal year to $65,133,000, a 13% increase from the $57,739,000 reported for 2005. Mortgage production for the year increased 16% to $3,918,206,000.

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. 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 variations thereof or comparable terminology, or by discussion of strategies, each of which involves risks and uncertainties. All statements other than those of historical facts included herein, including those regarding market trends, NVR’s financial position, business strategy, projected plans and objectives of management for future operations, are forward-looking statements. 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, general economic and business conditions (on both a national and regional level), interest rate changes, access to suitable financing, 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 moratoria, governmental regulation, the ability of NVR to integrate any acquired business, fluctuation and volatility of stock and other financial markets and other factors over which NVR has little or no control. The Company has no obligation to update such forward-looking statements.

NVR, Inc.
Consolidated Statements of Income

(amounts in thousands, except per share data)

		Three Months Ended December 31,								Twelve Months Ended December 31,
		2006				2005				2006				2005
Homebuilding:
Revenues		$	1,600,733			$	1,630,778			$	6,036,236			$	5,177,743
Other income			5,361				2,144				13,609				6,301
Cost of sales			(1,297,372	)			(1,180,762	)			(4,701,265	)			(3,738,030	)
Selling, general and administrative			(103,188	)			(102,249	)			(432,319	)			(345,525	)
Operating income			205,534				349,911				916,261				1,100,489
Interest expense			(3,650	)			(4,974	)			(18,423	)			(13,809	)
Homebuilding income			201,884				344,937				897,838				1,086,680
Mortgage Banking:
Mortgage banking fees			26,397				27,426				97,888				84,604
Interest income			2,468				1,738				7,704				5,014
Other income			317				413				1,334				1,435
General and administrative			(11,121	)			(9,069	)			(38,988	)			(31,555	)
Interest expense			(186	)			(1,029	)			(2,805	)			(1,759	)
Mortgage banking income			17,875				19,479				65,133				57,739
Income before taxes			219,759				364,416				962,971				1,144,419
Income tax expense			(84,592	)			(141,879	)			(375,559	)			(446,860	)
Net income		$	135,167			$	222,537			$	587,412			$	697,559
Basic earnings per share		$	24.43			$	37.34			$	104.08			$	110.36
Diluted earnings per share		$	20.86			$	30.29			$	88.05			$	89.61
Basic average shares outstanding			5,533				5,959				5,644				6,321
Diluted average shares outstanding			6,481				7,348				6,672				7,784

NVR, Inc.
Consolidated Balance Sheets

(in thousands, except share and per share data)

		December 31,
		2006				2005
ASSETS
Homebuilding:
Cash and cash equivalents		$	551,738			$	170,090
Receivables			12,213				40,562
Inventory:
Lots and housing units, covered under sales agreements with customers			667,100				723,657
Unsold lots and housing units			58,248				60,419
Manufacturing materials and other			8,268				9,899
			733,616				793,975
Contract land deposits, net			402,170				517,241
Assets not owned, consolidated per FIN 46R			276,419				275,306
Property, plant and equipment, net			40,430				31,096
Reorganization value in excess of amounts allocable to identifiable assets, net			41,580				41,580
Goodwill and other indefinite and definite life intangibles, net			11,936				12,061
Other assets			207,468				142,851
			2,277,570				2,024,762
Mortgage Banking:
Cash and cash equivalents			4,381				7,436
Mortgage loans held for sale, net			178,444				193,932
Property and equipment, net			1,168				1,003
Reorganization value in excess of amounts allocable to identifiable assets, net			7,347				7,347
Other assets			4,898				3,189
			196,238				212,907
Total assets		$	2,473,808			$	2,237,669
						(Continued)

NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)

		December 31,
		2006				2005
LIABILITIES AND SHAREHOLDERS’ EQUITY
Homebuilding:
Accounts payable		$	273,936			$	262,086
Accrued expenses and other liabilities			265,223				337,257
Liabilities related to assets not owned consolidated per FIN 46R			244,805				215,284
Customer deposits			165,354				256,837
Other term debt			3,080				3,325
Notes payable			—				103,000
Senior notes			200,000				200,000
			1,152,398				1,377,789
Mortgage Banking:
Accounts payable and other liabilities			15,784				25,902
Notes payable			153,552				156,816
			169,336				182,718
Total liabilities			1,321,734				1,560,507
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,592,640 shares issued for both 2006 and 2005			206				206
Additional paid-in-capital			585,438				473,886
Deferred compensation trust- 547,911 and 547,697 shares of NVR, Inc. common stock for 2006 and 2005, respectively			(80,491	)			(76,303	)
Deferred compensation liability			80,491				76,303
Retained earnings			3,196,040				2,608,628
Less treasury stock at cost – 15,075,113 and 14,964,482 shares for 2006 and 2005, respectively			(2,629,610	)			(2,405,558	)
Total shareholders’ equity			1,152,074				677,162
Total liabilities and shareholders’ equity		$	2,473,808			$	2,237,669

NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)

		Three Months Ended December 31,								Twelve Months Ended December 31,
		2006				2005				2006				2005
Homebuilding data:
New orders (units)
Mid Atlantic (1)			1,442				1,694				6,182				7,327
North East (2)			319				369				1,438				1,459
Mid East (3)			755				1,020				3,244				3,544
South East (4)			486				532				2,353				2,323
Total			3,002				3,615				13,217				14,653
Average new order price		$	366.7			$	407.1			$	377.4			$	404.6
Settlements (units)
Mid Atlantic (1)			1,980				2,017				7,491				6,735
North East (2)			485				557				1,682				1,390
Mid East (3)			965				987				3,571				3,404
South East (4)			572				619				2,395				2,258
Total			4,002				4,180				15,139				13,787
Average settlement price		$	399.5			$	389.6			$	398.2			$	374.9
Backlog (units)
Mid Atlantic (1)											3,665				4,974
North East (2)											540				784
Mid East (3)											1,274				1,601
South East (4)											909				951
Total											6,388				8,310
Average backlog price										$	412.4			$	442.0
Community count (average)			551				584				589				522
Lots controlled at end of year											88,500				106,000
Mortgage banking data:
Loan closings		$	1,071,286			$	1,047,941			$	3,918,206			$	3,388,118
Capture rate			87	%			87	%			86	%			87	%
Common stock information:
Shares outstanding at end of year											5,517,527				5,628,158
Weighted average basic shares outstanding			5,533,000				5,959,000				5,644,000				6,321,000
Weighted average diluted shares outstanding			6,481,000				7,348,000				6,672,000				7,784,000
Number of shares repurchased			192,200				625,900				481,141				1,269,050
Aggregate cost of shares repurchased		$	103,778			$	452,077			$	287,064			$	962,609