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0000906163FALSE00009061632019-10-182019-10-18

UNITED STATES
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):  October 18, 2019

NVR, Inc.
(Exact name of registrant as specified in its charter)

Virginia1-1237854-1394360
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
 
11700 Plaza America Drive, Suite 500
Reston, Virginia 20190
(Address of principal executive offices) (Zip Code)

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

Not applicable
(Former name or former address, if changed since last report)

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareNVRNew York Stock Exchange
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a)of the Exchange Act. ☐




Item 2.02 Results of Operations and Financial Condition.
On October 18, 2019, NVR, Inc. issued a press release reporting its financial results for the quarter and year to date periods ended September 30, 2019. A copy of this press release is furnished herewith as Exhibit 99.1.
 
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit NumberExhibit Description
99.1  


SIGNATURE

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: October 18, 2019By:/s/ Daniel D. Malzahn
Daniel D. Malzahn
Senior Vice President, Chief Financial Officer and Treasurer
Document

https://cdn.kscope.io/194e1d994fca78abfa7c2aacc9d2c391-image11.jpg
Exhibit 99.1
NVR, INC. ANNOUNCES THIRD QUARTER RESULTS
October 18, 2019, Reston, VA—NVR, Inc. (NYSE: NVR), one of the nation’s largest homebuilding and mortgage banking companies, announced net income for its third quarter ended September 30, 2019 of $223,787,000, or $56.11 per diluted share. Net income and diluted earnings per share for the third quarter ended September 30, 2019 increased 14% and 16%, respectively, when compared to 2018 third quarter net income of $195,816,000, or $48.28 per diluted share. Consolidated revenues for the third quarter of 2019 totaled $1,911,264,000, a 3% increase from $1,852,407,000 in the third quarter of 2018.

For the nine months ended September 30, 2019, consolidated revenues were $5,398,469,000, a 4% increase from $5,169,126,000 reported for 2018. Net income for the nine months ended September 30, 2019 was $622,402,000, an increase of 10% when compared to the nine months ended September 30, 2018. Diluted earnings per share for the nine months ended September 30, 2019 was $156.61, an increase of 15% from $136.53 per diluted share for 2018.

The Company's effective tax rate for the three and nine months ended September 30, 2019 decreased to 16.2% and 14.8%, respectively, compared to 21.6% and 17.2% for the three and nine months ended September 30, 2018, respectively. The effective tax rate was favorably impacted by an increase in the income tax benefit recognized related to excess tax benefits from stock option exercises totaling $27,604,000 and $86,809,000 for three and nine months ended September 30, 2019, respectively, compared to $12,585,000 and $58,607,000, for the three and nine months ended September 30, 2018, respectively.
Homebuilding
New orders in the third quarter of 2019 increased by 11% to 4,766 units, when compared to 4,302 units in the third quarter of 2018. The average sales price of new orders in the third quarter of 2019 was $369,200, a decrease of 1% when compared with the third quarter of 2018. Settlements increased in the third quarter of 2019 to 5,124 units, which was 8% higher than the third quarter of 2018. The Company’s backlog of homes sold but not settled as of September 30, 2019 decreased on a unit basis by 6% to 9,172 units and decreased on a dollar basis by 7% to $3,402,933,000 when compared to September 30, 2018.
Homebuilding revenues of $1,873,331,000 in the third quarter of 2019 increased 4% compared to the third quarter of 2018. Gross profit margin in the third quarter of 2019 increased to 19.0%, compared to 18.6% in the third quarter of 2018. Income before tax from the homebuilding segment totaled $245,774,000 in the third quarter of 2019, an increase of 10% when compared to the third quarter of 2018.
Mortgage Banking
Mortgage closed loan production in the third quarter of 2019 totaled $1,373,946,000, an increase of 10% when compared to the third quarter of 2018. Income before tax from the mortgage banking segment totaled $21,400,000 in the third quarter of 2019, a decrease of 16% when compared to $25,514,000 in the third quarter of 2018. The decrease in income before tax is primarily due to a 12% decrease in mortgage banking fees, resulting from the timing of loan sales and a decrease in the fair value measurement adjustment.
About NVR
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-two metropolitan areas in fourteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and www.heartlandluxuryhomes.com.
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.
Page 1 of 6

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.
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NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
Homebuilding:
Revenues$1,873,331  $1,809,345  $5,273,985  $5,049,901  
Other income6,696  2,840  18,266  6,981  
Cost of sales(1,518,276) (1,472,649) (4,282,470) (4,101,392) 
Selling, general and administrative(109,969) (109,372) (337,913) (321,436) 
Operating income251,782  230,164  671,868  634,054  
Interest expense(6,008) (5,968) (18,034) (18,022) 
Homebuilding income245,774  224,196  653,834  616,032  
Mortgage Banking:
Mortgage banking fees37,933  43,062  124,484  119,225  
Interest income3,340  3,362  8,910  8,370  
Other income819  659  2,039  1,824  
General and administrative(20,407) (21,340) (57,999) (62,371) 
Interest expense(285) (229) (775) (786) 
Mortgage banking income21,400  25,514  76,659  66,262  
Income before taxes267,174  249,710  730,493  682,294  
Income tax expense(43,387) (53,894) (108,091) (117,255) 
Net income$223,787  $195,816  $622,402  $565,039  
Basic earnings per share$60.94  $54.21  $171.43  $155.22  
Diluted earnings per share$56.11  $48.28  $156.61  $136.53  
Basic weighted average shares outstanding3,672  3,612  3,631  3,640  
Diluted weighted average shares outstanding3,988  4,056  3,974  4,139  



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NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
September 30, 2019December 31, 2018
ASSETS
Homebuilding:
Cash and cash equivalents$1,068,172  $688,783  
Restricted cash18,337  16,982  
Receivables29,276  18,641  
Inventory:
Lots and housing units, covered under sales agreements with customers1,236,831  1,076,904  
Unsold lots and housing units161,417  115,631  
Land under development80,193  38,857  
Building materials and other18,008  21,718  
1,496,449  1,253,110  
Contract land deposits, net404,850  396,177  
Property, plant and equipment, net50,463  42,234  
Operating lease right-of-use assets63,505  —  
Reorganization value in excess of amounts allocable to identifiable assets, net41,580  41,580  
Other assets181,234  184,004  
3,353,866  2,641,511  
Mortgage Banking:
Cash and cash equivalents26,765  23,092  
Restricted cash2,493  3,071  
Mortgage loans held for sale, net411,223  458,324  
Property and equipment, net6,058  6,510  
Operating lease right-of-use assets13,857  —  
Reorganization value in excess of amounts allocable to identifiable assets, net7,347  7,347  
Other assets21,750  26,078  
489,493  524,422  
Total assets$3,843,359  $3,165,933  


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NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(Unaudited)
September 30, 2019December 31, 2018
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable$285,714  $244,496  
Accrued expenses and other liabilities319,347  332,871  
Customer deposits142,937  138,246  
Operating lease liabilities70,864  —  
Senior notes598,146  597,681  
1,417,008  1,313,294  
Mortgage Banking:
Accounts payable and other liabilities40,084  44,077  
Operating lease liabilities14,810  —  
54,894  44,077  
Total liabilities1,471,902  1,357,371  
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both September 30, 2019 and December 31, 2018206  206  
Additional paid-in capital2,020,180  1,820,223  
Deferred compensation trust – 107,295 and 107,340 shares of NVR, Inc. common stock as of September 30, 2019 and December 31, 2018, respectively(16,912) (16,937) 
Deferred compensation liability16,912  16,937  
Retained earnings7,653,735  7,031,333  
Less treasury stock at cost – 16,857,145 and 16,977,499 shares as of September 30, 2019 and December 31, 2018, respectively(7,302,664) (7,043,200) 
Total shareholders' equity2,371,457  1,808,562  
Total liabilities and shareholders' equity$3,843,359  $3,165,933  

Page 5 of 6

NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2019201820192018
Homebuilding data:
New orders (units)
Mid Atlantic (1)
2,086  2,124  6,852  7,041  
North East (2)
323  315  1,000  1,051  
Mid East (3)
1,141  962  3,631  3,400  
South East (4)
1,216  901  3,661  2,948  
Total
4,766  4,302  15,144  14,440  
Average new order price
$369.2  $374.0  $364.8  $376.3  
Settlements (units)
Mid Atlantic (1)
2,421  2,297  6,890  6,462  
North East (2)
316  367  933  1,022  
Mid East (3)
1,255  1,164  3,382  3,135  
South East (4)
1,132  926  3,132  2,642  
Total
5,124  4,754  14,337  13,261  
Average settlement price
$365.5  $380.5  $367.8  $380.8  
Backlog (units)
Mid Atlantic (1)
4,110  4,803  
North East (2)
630  711  
Mid East (3)
2,055  2,163  
South East (4)
2,377  2,033  
Total
9,172  9,710  
Average backlog price
$371.0  $377.1  
New order cancellation rate
16 %16 %14 %14 %
Community count (average)
473  479  464  481  
Lots controlled at end of period
102,000  96,400  
Mortgage banking data:
Loan closings
$1,373,946  $1,249,199  $3,745,983  $3,472,976  
Capture rate
90 %88 %89 %87 %
Common stock information:
Shares outstanding at end of period
3,698,185  3,595,069  
Number of shares repurchased
18,024  63,844  129,679  222,224  
Aggregate cost of shares repurchased
$61,064  $173,831  $365,542  $657,369  

(1)Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
(2)New Jersey and Eastern Pennsylvania
(3)New York, Ohio, Western Pennsylvania, Indiana and Illinois
(4)North Carolina, South Carolina, Tennessee and Florida
Investor Relations Contact:
Curt McKay
(703) 956-4058
ir@nvrinc.com

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