EX-99.1 2 q32022ex991_earningsrelease.htm EX-99.1 Document

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Exhibit 99.1
NVR, INC. ANNOUNCES THIRD QUARTER RESULTS

October 25, 2022, 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, 2022 of $411.4 million, or $118.51 per diluted share. Net income and diluted earnings per share for the third quarter ended September 30, 2022 increased 24% and 37%, respectively, when compared to 2021 third quarter net income of $332.1 million, or $86.44 per diluted share. Consolidated revenues for the third quarter of 2022 totaled $2.78 billion, which increased 16% from $2.40 billion in the third quarter of 2021.
For the nine months ended September 30, 2022, consolidated revenues were $7.81 billion, a 16% increase from $6.72 billion reported in 2021. Net income for the nine months ended September 30, 2022 was $1.27 billion, an increase of 41% when compared to net income for the nine months ended September 30, 2021 of $902.1 million. Diluted earnings per share for the nine months ended September 30, 2022 was $358.61, an increase of 55% from $231.75 per diluted share for 2021.
Homebuilding
New orders in the third quarter of 2022 decreased by 15% to 4,421 units, when compared to 5,201 units in the third quarter of 2021. The average sales price of new orders in the third quarter of 2022 was $453,400, an increase of 3% when compared with the third quarter of 2021. The cancellation rate in the third quarter of 2022 was 15% compared to 9% in the third quarter of 2021. Settlements in the third quarter of 2022 increased by 5% to 5,949 units, compared to 5,683 units in the third quarter of 2021. The average settlement price in the third quarter of 2022 was $460,500, an increase of 12% from the third quarter of 2021. Our backlog of homes sold but not settled as of September 30, 2022 decreased on a unit basis by 11% to 10,758 units and decreased on a dollar basis by 5% to $5.09 billion when compared to the respective backlog unit and dollar balances as of September 30, 2021.
Homebuilding revenues of $2.74 billion in the third quarter of 2022 increased by 17% compared to homebuilding revenues of $2.34 billion in the third quarter of 2021. Gross profit margin in the third quarter of 2022 increased to 23.6%, compared to 22.2% in the third quarter of 2021. Income before tax from the homebuilding segment totaled $520.9 million in the third quarter of 2022, an increase of 32% when compared to the third quarter of 2021.
Mortgage Banking
Mortgage closed loan production in the third quarter of 2022 totaled $1.66 billion, an increase of 2% when compared to the third quarter of 2021. Income before tax from the mortgage banking segment totaled $17.6 million in the third quarter of 2022, a decrease of 55% when compared to $39.0 million in the third quarter of 2021. This decrease was primarily attributable to a decrease in secondary marketing gains.
Effective Tax Rate
Our effective tax rate for the three and nine months ended September 30, 2022 was 23.6% and 24.3%, respectively, compared to 23.5% and 22.5% for the three and nine months ended September 30, 2021, respectively. The increase in the effective tax rate for the nine month period in 2022 is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $27.7 million for the nine month period ended September 30, 2022, compared to $37.8 million for the nine month period ended September 30, 2021.
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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-five metropolitan areas in fifteen 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. 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: the impact of COVID-19 on the economy and related supply chain disruptions; 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,
2022202120222021
Homebuilding:
Revenues$2,739,445 $2,336,615 $7,658,734 $6,524,886 
Other income10,211 1,496 15,446 4,714 
Cost of sales(2,092,457)(1,817,939)(5,668,549)(5,117,065)
Selling, general and administrative(129,416)(112,226)(391,358)(347,051)
Operating income527,783 407,946 1,614,273 1,065,484 
Interest expense(6,854)(12,838)(31,510)(38,694)
Homebuilding income520,929 395,108 1,582,763 1,026,790 
Mortgage Banking:
Mortgage banking fees37,455 59,025 155,518 195,798 
Interest income3,437 2,336 8,283 6,577 
Other income1,294 1,022 3,669 2,877 
General and administrative(24,252)(22,959)(70,646)(67,228)
Interest expense(348)(405)(1,115)(1,216)
Mortgage banking income17,586 39,019 95,709 136,808 
Income before taxes538,515 434,127 1,678,472 1,163,598 
Income tax expense(127,122)(102,046)(407,665)(261,460)
Net income$411,393 $332,081 $1,270,807 $902,138 
Basic earnings per share$125.97 $93.25 $383.68 $249.30 
Diluted earnings per share$118.51 $86.44 $358.61 $231.75 
Basic weighted average shares outstanding3,266 3,561 3,312 3,619 
Diluted weighted average shares outstanding3,471 3,842 3,544 3,893 
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NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
September 30, 2022December 31, 2021
ASSETS
Homebuilding:
Cash and cash equivalents$1,748,506 $2,545,069 
Restricted cash51,239 60,730 
Receivables28,378 18,552 
Inventory:
Lots and housing units, covered under sales agreements with customers1,931,639 1,777,862 
Unsold lots and housing units194,882 127,434 
Land under development15,230 12,147 
Building materials and other28,698 29,923 
2,170,449 1,947,366 
Contract land deposits, net521,572 497,139 
Property, plant and equipment, net55,982 56,979 
Operating lease right-of-use assets69,933 59,010 
Reorganization value in excess of amounts allocable to identifiable assets, net41,580 41,580 
Other assets230,255 229,018 
4,917,894 5,455,443 
Mortgage Banking:
Cash and cash equivalents18,431 28,398 
Restricted cash2,924 2,519 
Mortgage loans held for sale, net316,094 302,192 
Property and equipment, net3,250 3,658 
Operating lease right-of-use assets14,534 9,758 
Reorganization value in excess of amounts allocable to identifiable assets, net7,347 7,347 
Other assets109,060 25,160 
471,640 379,032 
Total assets$5,389,534 $5,834,475 

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NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(unaudited)
September 30, 2022December 31, 2021
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable$393,941 $336,560 
Accrued expenses and other liabilities427,072 435,860 
Customer deposits376,160 417,463 
Operating lease liabilities74,670 64,128 
Senior notes915,346 1,516,255 
2,187,189 2,770,266 
Mortgage Banking:
Accounts payable and other liabilities102,101 51,394 
Operating lease liabilities15,405 10,437 
117,506 61,831 
Total liabilities2,304,695 2,832,097 
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, 2022 and December 31, 2021206 206 
Additional paid-in capital2,538,812 2,378,191 
Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of both September 30, 2022 and December 31, 2021(16,710)(16,710)
Deferred compensation liability16,710 16,710 
Retained earnings11,318,646 10,047,839 
Less treasury stock at cost – 17,343,353 and 17,107,889 shares as of September 30, 2022 and December 31, 2021, respectively(10,772,825)(9,423,858)
Total shareholders' equity3,084,839 3,002,378 
Total liabilities and shareholders' equity$5,389,534 $5,834,475 

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NVR, Inc.
Operating Activity
(dollars in thousands)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,

2022202120222021
UnitsAverage PriceUnitsAverage PriceUnitsAverage PriceUnitsAverage Price
New orders, net of cancellations:
Mid Atlantic (1)
1,813$516.2 2,024$523.7 5,980 $527.1 6,405 $519.8 
North East (2)
348$510.5 403$496.7 1,249 $512.7 1,237 $489.7 
Mid East (3)
955$406.7 1,190$376.8 3,603 $404.4 4,305 $365.4 
South East (4)
1,305$385.0 1,584$372.9 4,179 $410.2 5,089 $356.2 
Total
4,421$453.4 5,201$442.0 15,011 $463.9 17,036 $429.8 
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
UnitsAverage PriceUnitsAverage PriceUnitsAverage PriceUnitsAverage Price
Settlements:
Mid Atlantic (1)
2,417$530.6 2,177$497.3 6,889 $527.3 6,411 $478.4 
North East (2)
487$513.5 455$468.3 1,307 $507.3 1,260 $451.2 
Mid East (3)
1,468$388.3 1,430$351.8 4,034 $384.8 4,097 $343.2 
South East (4)
1,577$403.9 1,621$331.6 4,753 $381.0 4,672 $317.3 
Total
5,949$460.5 5,683$411.1 16,983 $450.9 16,440 $396.9 
As of September 30,
20222021
UnitsAverage PriceUnitsAverage Price
Backlog:
Mid Atlantic (1)
4,009$536.2 4,473$530.3 
North East (2)
911$519.1 927$499.0 
Mid East (3)
2,596$407.8 3,082$375.4 
South East (4)
3,242$433.5 3,663$377.0 
Total
10,758$472.8 12,145$442.4 
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NVR, Inc.
Operating Activity (Continued)
(dollars in thousands)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Average active communities:
Mid Atlantic (1)
164151157154
North East (2)
37343634
Mid East (3)
126125126130
South East (4)
9610492108
Total
423414411426
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Homebuilding data:
New order cancellation rate
15.0 %9.2 %13.0 %9.1 %
Lots controlled at end of period
131,400 118,600 
Mortgage banking data:
Loan closings
$1,656,187$1,615,880$4,788,751 $4,593,854 
Capture rate
81 %88 %84 %89 %
Common stock information:
Shares outstanding at end of period
3,211,977 3,512,686 
Number of shares repurchased
88,01679,620295,148 244,595 
Aggregate cost of shares repurchased
$368,490$398,488$1,384,193 $1,152,855 

(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, Florida and Georgia
Investor Relations Contact:
Curt McKay
(703) 956-4058
ir@nvrinc.com

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