10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 1-12378

NVR, Inc.

(Exact name of registrant as specified in its charter)

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

11700 Plaza America Drive, Suite 500

Reston, Virginia 20190

(703) 956-4000

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Not Applicable

(Former name, former address, and former fiscal year if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	NVR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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 Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2023 there were 3,264,331 total shares of common stock outstanding.

NVR, Inc.

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements	1
	Condensed Consolidated Balance Sheets (unaudited)	1
	Condensed Consolidated Statements of Income (unaudited)	3
	Condensed Consolidated Statements of Cash Flows (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	35
Item 4.	Controls and Procedures	35
PART II	OTHER INFORMATION	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 6.	Exhibits	37
	SIGNATURE	38

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NVR, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
	June 30, 2023		December 31, 2022
ASSETS
Homebuilding:
Cash and cash equivalents	$	2,678,709	$	2,503,424
Restricted cash	51,392		48,455
Receivables	26,757		20,842
Inventory:
Lots and housing units, covered under sales agreements with customers	1,815,169		1,554,955
Unsold lots and housing units	158,004		181,952
Land under development	24,502		27,100
Building materials and other	22,414		24,268
	2,020,089		1,788,275
Contract land deposits, net	516,709		496,080
Property, plant and equipment, net	57,711		57,950
Operating lease right-of-use assets	73,469		71,081
Reorganization value in excess of amounts allocable to identifiable assets, net	41,580		41,580
Other assets	239,086		219,483
	5,705,502		5,247,170
Mortgage Banking:
Cash and cash equivalents	13,873		19,415
Restricted cash	14,083		2,974
Mortgage loans held for sale, net	438,756		316,806
Property and equipment, net	4,704		3,559
Operating lease right-of-use assets	22,814		16,011
Reorganization value in excess of amounts allocable to identifiable assets, net	7,347		7,347
Other assets	59,696		47,691
	561,273		413,803
Total assets	$	6,266,775	$	5,660,973

See notes to condensed consolidated financial statements.

1

NVR, Inc.
Condensed Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(unaudited)
	June 30, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable	$	377,558	$	334,016
Accrued expenses and other liabilities	291,563		437,234
Customer deposits	368,763		313,804
Operating lease liabilities	78,661		75,818
Senior notes	913,963		914,888
	2,030,508		2,075,760
Mortgage Banking:
Accounts payable and other liabilities	58,667		61,396
Operating lease liabilities	24,337		16,968
	83,004		78,364
Total liabilities	2,113,512		2,154,124
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both June 30, 2023 and December 31, 2022	206		206
Additional paid-in capital	2,747,687		2,600,014
Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of both June 30, 2023 and December 31, 2022	(16,710)		(16,710)
Deferred compensation liability	16,710		16,710
Retained earnings	12,521,793		11,773,414
Less treasury stock at cost – 17,294,792 and 17,336,397 shares as of June 30, 2023 and December 31, 2022, respectively	(11,116,423)		(10,866,785)
Total shareholders' equity	4,153,263		3,506,849
Total liabilities and shareholders' equity	$	6,266,775	$	5,660,973

See notes to condensed consolidated financial statements.

2

NVR, Inc.

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Homebuilding:
Revenues	$	2,283,769	$	2,610,062	$	4,415,102	$	4,919,289
Other income	34,259		3,896		67,205		5,235
Cost of sales	(1,728,146)		(1,924,727)		(3,336,056)		(3,576,092)
Selling, general and administrative	(148,543)		(132,432)		(292,161)		(261,942)
Operating income	441,339		556,799		854,090		1,086,490
Interest expense	(6,628)		(11,852)		(13,629)		(24,656)
Homebuilding income	434,711		544,947		840,461		1,061,834
Mortgage Banking:
Mortgage banking fees	54,561		48,881		101,505		118,063
Interest income	3,823		2,772		6,841		4,846
Other income	1,102		1,303		2,091		2,375
General and administrative	(22,854)		(23,486)		(45,488)		(46,394)
Interest expense	(167)		(405)		(424)		(767)
Mortgage banking income	36,465		29,065		64,525		78,123
Income before taxes	471,176		574,012		904,986		1,139,957
Income tax expense	(67,149)		(140,698)		(156,607)		(280,543)
Net income	$	404,027	$	433,314	$	748,379	$	859,414
Basic earnings per share	$	123.84	$	131.84	$	230.20	$	257.65
Diluted earnings per share	$	116.54	$	123.65	$	216.52	$	240.05
Basic weighted average shares outstanding	3,263		3,287		3,251		3,336
Diluted weighted average shares outstanding	3,467		3,504		3,456		3,580

See notes to condensed consolidated financial statements.

3

NVR, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	748,379	$	859,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,405		8,991
Equity-based compensation expense	47,436		31,755
Contract land deposit recoveries, net	(9,999)		(6,342)
Gain on sale of loans, net	(81,131)		(94,813)
Mortgage loans closed	(2,620,507)		(3,133,046)
Mortgage loans sold and principal payments on mortgage loans held for sale	2,542,359		3,195,784
Distribution of earnings from unconsolidated joint ventures	2,000		4,000
Net change in assets and liabilities:
Increase in inventory	(231,814)		(431,379)
Increase in contract land deposits	(10,630)		(20,917)
Decrease (increase) in receivables	4,183		(16,394)
(Decrease) increase in accounts payable and accrued expenses	(89,815)		25,716
Increase in customer deposits	54,959		21,656
Other, net	(19,621)		2,781
Net cash provided by operating activities	344,204		447,206
Cash flows from investing activities:
Investments in and advances to unconsolidated joint ventures	(1,224)		(9,222)
Distribution of capital from unconsolidated joint ventures	180		—
Purchase of property, plant and equipment	(11,448)		(8,751)
Proceeds from the sale of property, plant and equipment	2,039		346
Net cash used in investing activities	(10,453)		(17,627)
Cash flows from financing activities:
Purchase of treasury stock	(311,125)		(1,015,703)
Redemption of senior notes	—		(600,000)
Principal payments on finance lease liabilities	(811)		(723)
Proceeds from the exercise of stock options	161,724		113,822
Net cash used in financing activities	(150,212)		(1,502,604)
Net increase (decrease) in cash, restricted cash, and cash equivalents	183,539		(1,073,025)
Cash, restricted cash, and cash equivalents, beginning of the period	2,574,518		2,636,984
Cash, restricted cash, and cash equivalents, end of the period	$	2,758,057	$	1,563,959
Supplemental disclosures of cash flow information:
Interest paid during the period, net of interest capitalized	$	14,781	$	32,627
Income taxes paid during the period, net of refunds	$	262,608	$	291,721

See notes to condensed consolidated financial statements.

4

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

1. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements include the accounts of NVR, Inc. (“NVR”, the “Company”, "we", "us" or "our") and its subsidiaries and certain other entities in which the Company is deemed to be the primary beneficiary (see Notes 2 and 3 to the accompanying condensed consolidated financial statements).  Intercompany accounts and transactions have been eliminated in consolidation. The statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Because the accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP, they should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments (consisting only of normal recurring accruals except as otherwise noted herein) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

For the three and six months ended June 30, 2023 and 2022, comprehensive income equaled net income; therefore, a separate statement of comprehensive income is not included in the accompanying condensed consolidated financial statements.

Revenue Recognition

Homebuilding revenue is recognized on the settlement date at the contract sales price, when control is transferred to our customers. Our contract liabilities, which consist of deposits received from customers on homes not settled, were $368,763 and $313,804 as of June 30, 2023 and December 31, 2022, respectively. We expect that substantially all of the customer deposits held at December 31, 2022 will be recognized in revenue in 2023. Our contract assets consist of prepaid sales compensation and totaled approximately $22,000 and $15,300, as of June 30, 2023 and December 31, 2022, respectively. Prepaid sales compensation is included in homebuilding “Other assets” on the accompanying condensed consolidated balance sheets.

2.    Variable Interest Entities ("VIEs")

Fixed Price Finished Lot Purchase Agreements (“LPAs”)

We generally do not engage in the land development business. Instead, we typically acquire finished building lots at market prices from various development entities under LPAs. The LPAs require deposits that may be forfeited if we fail to perform under the LPAs. The deposits required under the LPAs are in the form of cash or letters of credit in varying amounts, and typically range up to 10% of the aggregate purchase price of the finished lots.  

The deposit placed by us pursuant to the LPA is deemed to be a variable interest in the respective development entities. Those development entities are deemed to be VIEs. Therefore, the development entities with which we enter into LPAs, including the joint venture limited liability corporations discussed below, are evaluated for possible consolidation by us. We have concluded that we are not the primary beneficiary of the development entities with which we enter into LPAs, and therefore, we do not consolidate any of these VIEs.

5

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

As of June 30, 2023, we controlled approximately 123,900 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $553,300 and $8,200, respectively. Our sole legal obligation and economic loss for failure to perform under these LPAs is limited to the amount of the deposit pursuant to the liquidated damage provisions contained in the LPAs and, in very limited circumstances, specific performance obligations. For the three and six months ended June 30, 2023, we recorded a net reversal of approximately $6,900 and $10,000, respectively, related to previously impaired lot deposits based on current market conditions. For the three and six months ended June 30, 2022, we recorded a net reversal of approximately $400 and $6,300, respectively, related to previously impaired lot deposits. Our contract land deposit asset is shown net of a $46,401 and $57,060 impairment reserve at June 30, 2023 and December 31, 2022, respectively.

In addition, we have certain properties under contract with land owners that are expected to yield approximately 21,500 lots, which are not included in the number of total lots controlled. Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with deposits in cash and letters of credit totaling approximately $9,800 and $100, respectively, as of June 30, 2023, of which approximately $2,900 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.

Our total risk of loss related to contract land deposits is limited to the amount of the deposits pursuant to the liquidated damages provision of the LPAs. As of June 30, 2023 and December 31, 2022, our total risk of loss was as follows:

	June 30, 2023		December 31, 2022
Contract land deposits	$	563,110	$	553,140
Loss reserve on contract land deposits	(46,401)		(57,060)
Contract land deposits, net	516,709		496,080
Contingent obligations in the form of letters of credit	8,307		6,896
Total risk of loss	$	525,016	$	502,976

3.    Joint Ventures

On a limited basis, we obtain finished lots using joint venture limited liability corporations (“JVs”). The JVs are typically structured such that we are a non-controlling member and are at risk only for the amount we have invested, or have committed to invest, in addition to any deposits placed under LPAs with the joint venture. We are not a borrower, guarantor or obligor on any debt of the JVs, as applicable. We enter into LPAs to purchase lots from these JVs, and as a result have a variable interest in these JVs. We determined that we are not the primary beneficiary in any of the JVs because we and the other JV partner either share power or the other JV partner has the controlling financial interest.

At June 30, 2023, we had an aggregate investment totaling approximately $27,600 in four JVs that are expected to produce approximately 5,250 finished lots, of which approximately 4,900 lots were controlled by us and the remaining approximately 350 lots were either under contract with unrelated parties or not currently under contract. We had additional funding commitments totaling approximately $12,000 to one of the JVs at June 30, 2023. At December 31, 2022, our aggregate investment in JV's totaled approximately $27,200. Investments in JVs for the respective periods are reported in the homebuilding "Other assets" line item on the accompanying condensed consolidated balance sheets. None of the JVs had any indicators of impairment as of June 30, 2023.

We recognize income from the JVs as a reduction to the lot cost of the lots purchased from the respective JVs when the homes are settled, based on the expected total profitability and the total number of lots expected to be produced by the respective JVs.

6

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

We classify distributions received from unconsolidated JVs using the cumulative earnings approach. As a result, distributions received up to the amount of cumulative earnings recognized by us are reported as distributions of earnings and those in excess of that amount are reported as a distribution of capital. These distributions are classified within the accompanying condensed consolidated statements of cash flows as cash flows from operating activities and investing activities, respectively.

4.    Land Under Development

On a limited basis, we directly acquire raw land parcels already zoned for their intended use to develop into finished lots.  Land under development includes the land acquisition costs, direct improvement costs, capitalized interest, where applicable, and real estate taxes.

As of June 30, 2023, we owned land with a carrying value of $24,502 that we intend to develop into approximately 1,600 finished lots. We have additional funding commitments of approximately $1,900 under a joint development agreement related to one project, a portion of which we expect will be offset by development credits of approximately $900. As of December 31, 2022, the carrying value of land under development was $27,100. None of the raw parcels had any indicators of impairment as of June 30, 2023.

5.    Capitalized Interest

We capitalize interest costs to land under development during the active development of finished lots. In addition, we capitalize interest costs on our JV investments while the investments are considered qualified assets pursuant to ASC Topic 835-20 - Interest. Capitalized interest is transferred to sold or unsold inventory as the development of finished lots is completed, then charged to cost of sales upon our settlement of homes and the respective lots. Interest incurred in excess of the interest capitalizable based on the level of qualified assets is expensed in the period incurred.

The following table reflects the changes in our capitalized interest during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest capitalized, beginning of period	$	205	$	640	$	570	$	593
Interest incurred	6,822		12,349		13,826		25,603
Interest charged to interest expense	(6,795)		(12,257)		(14,053)		(25,423)
Interest charged to cost of sales	(43)		(52)		(154)		(93)
Interest capitalized, end of period	$	189	$	680	$	189	$	680

7

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

6.    Earnings per Share

The following weighted average shares and share equivalents were used to calculate basic and diluted earnings per share ("EPS") for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Weighted average number of shares outstanding used to calculate basic EPS	3,262,529	3,286,574	3,250,960	3,335,644
Dilutive securities:
Stock options and restricted share units	204,407	217,730	205,446	244,445
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS	3,466,936	3,504,304	3,456,406	3,580,089

The following non-qualified stock options ("Options") and restricted stock units ("RSUs") issued under equity incentive plans were outstanding during the three and six months ended June 30, 2023 and 2022, but were not included in the computation of diluted EPS because the effect would have been anti-dilutive.

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Anti-dilutive securities	14,610	217,662	175,338	189,988

7.    Shareholders’ Equity

A summary of changes in shareholders’ equity for the three months ended June 30, 2023 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, March 31, 2023	$	206	$	2,676,641	$	12,117,766	$	(10,949,267)	$	(16,710)	$	16,710	$	3,845,346
Net income	—		—		404,027		—		—		—		404,027
Purchase of common stock for treasury	—		—		—		(201,077)		—		—		(201,077)
Equity-based compensation	—		25,159		—		—		—		—		25,159
Proceeds from Options exercised	—		79,808		—		—		—		—		79,808
Treasury stock issued upon Option exercise	—		(33,921)		—		33,921		—		—		—
Balance, June 30, 2023	$	206	$	2,747,687	$	12,521,793	$	(11,116,423)	$	(16,710)	$	16,710	$	4,153,263

8

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

A summary of changes in shareholders’ equity for the six months ended June 30, 2023 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, December 31, 2022	$	206	$	2,600,014	$	11,773,414	$	(10,866,785)	$	(16,710)	$	16,710	$	3,506,849
Net income	—		—		748,379		—		—		—		748,379
Purchase of common stock for treasury	—		—		—		(311,125)		—		—		(311,125)
Equity-based compensation	—		47,436		—		—		—		—		47,436
Proceeds from Options exercised	—		161,724		—		—		—		—		161,724
Treasury stock issued upon Option exercise and RSU vesting	—		(61,487)		—		61,487		—		—		—
Balance, June 30, 2023	$	206	$	2,747,687	$	12,521,793	$	(11,116,423)	$	(16,710)	$	16,710	$	4,153,263

We repurchased 34,827 and 56,001 shares of our outstanding common stock during the three and six months ended June 30, 2023, respectively. We settle Option exercises and vesting of RSUs by issuing shares of treasury stock. We issued 53,615 and 97,556 shares from the treasury account during the three and six months ended June 30, 2023, respectively, in settlement of Option exercises and vesting of RSUs. Shares are relieved from the treasury account based on the weighted average cost basis of treasury shares.

9

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

A summary of changes in shareholders’ equity for the three months ended June 30, 2022 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, March 31, 2022	$	206	$	2,416,660	$	10,473,939	$	(10,165,206)	$	(16,710)	$	16,710	$	2,725,599
Net income	—		—		433,314		—		—		—		433,314
Purchase of common stock for treasury	—		—		—		(266,915)		—		—		(266,915)
Equity-based compensation	—		20,087		—		—		—		—		20,087
Proceeds from Options exercised	—		79,581		—		—		—		—		79,581
Treasury stock issued upon Option exercise	—		(18,205)		—		18,205		—		—		—
Balance, June 30, 2022	$	206	$	2,498,123	$	10,907,253	$	(10,413,916)	$	(16,710)	$	16,710	$	2,991,666

A summary of changes in shareholders’ equity for the six months ended June 30, 2022 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, December 31, 2021	$	206	$	2,378,191	$	10,047,839	$	(9,423,858)	$	(16,710)	$	16,710	$	3,002,378
Net income	—		—		859,414		—		—		—		859,414
Purchase of common stock for treasury	—		—		—		(1,015,703)		—		—		(1,015,703)
Equity-based compensation	—		31,755		—		—		—		—		31,755
Proceeds from Options exercised	—		113,822		—		—		—		—		113,822
Treasury stock issued upon Option exercise	—		(25,645)		—		25,645		—		—		—
Balance, June 30, 2022	$	206	$	2,498,123	$	10,907,253	$	(10,413,916)	$	(16,710)	$	16,710	$	2,991,666

We repurchased 61,078 and 207,132 shares of our outstanding common stock during the three and six months ended June 30, 2022, respectively. We issued 30,396 and 43,719 shares from the treasury account during the three and six months ended June 30, 2022, respectively, in settlement of Option exercises.  

8.    Product Warranties

We establish warranty and product liability reserves (“Warranty Reserve”) to provide for estimated future expenses as a result of construction and product defects, product recalls and litigation incidental to our homebuilding business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the estimated current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, consultations with third party experts such as engineers, and discussions with our general counsel and outside counsel retained to handle specific product liability cases.

10

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

The following table reflects the changes in our Warranty Reserve during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Warranty reserve, beginning of period	$	144,431	$	135,341	$	144,006	$	134,859
Provision	22,312		24,551		43,582		42,518
Payments	(24,323)		(21,652)		(45,168)		(39,137)
Warranty reserve, end of period	$	142,420	$	138,240	$	142,420	$	138,240

9.    Segment Disclosures

Our homebuilding operations are aggregated geographically into four homebuilding reportable segments and our mortgage banking operations are presented as one reportable segment. The homebuilding reportable segments are comprised of operating divisions in the following geographic areas:

Mid Atlantic:	Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
North East:	New Jersey and Eastern Pennsylvania
Mid East:	New York, Ohio, Western Pennsylvania, Indiana and Illinois
South East:	North Carolina, South Carolina, Tennessee, Florida and Georgia

Homebuilding profit before tax includes all revenues and income generated from the sale of homes, less the cost of homes sold, selling, general and administrative expenses and a corporate capital allocation charge. The corporate capital allocation charge is eliminated in consolidation and is based on the segment’s average net assets employed. The corporate capital allocation charged to the operating segment allows the Chief Operating Decision Maker (“CODM”) to determine whether the operating segment’s results are providing the desired rate of return after covering our cost of capital.  

Assets not allocated to the operating segments are not included in either the operating segment’s corporate capital allocation charge or the CODM’s evaluation of the operating segment’s performance. We record charges on contract land deposits when it is determined that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. Mortgage banking profit before tax consists of revenues generated from mortgage financing, title insurance and closing services, less the costs of such services and general and administrative costs. Mortgage banking operations are not charged a corporate capital allocation charge.

In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between segment profit and consolidated profit before tax include unallocated corporate overhead (including all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense. Our overhead functions such as accounting, treasury and human resources are centrally performed and these costs are not allocated to our operating segments. Consolidation adjustments consist of such items necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments. External corporate interest expense primarily consists of interest charges on our 3.00% Senior Notes due 2030 (the “Senior Notes”), which are not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.

11

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

The following tables present segment revenues, profit and assets with reconciliations to the amounts reported for the consolidated enterprise, where applicable:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Homebuilding Mid Atlantic	$	1,058,794	$	1,208,312	$	1,999,942	$	2,350,020
Homebuilding North East	232,926		237,394		416,356		412,945
Homebuilding Mid East	411,682		521,038		814,079		982,442
Homebuilding South East	580,367		643,318		1,184,725		1,173,882
Mortgage Banking	54,561		48,881		101,505		118,063
Total consolidated revenues	$	2,338,330	$	2,658,943	$	4,516,607	$	5,037,352

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Income before taxes:
Homebuilding Mid Atlantic	$	195,254	$	251,739	$	354,292	$	501,520
Homebuilding North East	44,932		41,297		76,992		67,225
Homebuilding Mid East	61,756		82,512		118,224		153,695
Homebuilding South East	106,648		150,822		232,058		264,276
Mortgage Banking	37,843		28,800		67,270		78,906
Total segment profit before taxes	446,433		555,170		848,836		1,065,622
Reconciling items:
Contract land deposit reserve adjustment (1)	6,888		419		10,479		6,345
Equity-based compensation expense (2)	(25,159)		(20,087)		(47,436)		(31,755)
Corporate capital allocation (3)	72,617		77,512		141,691		147,256
Unallocated corporate overhead	(46,360)		(32,282)		(92,325)		(77,543)
Consolidation adjustments and other (4)	(9,998)		2,004		(5,999)		50,764
Corporate interest expense	(6,589)		(11,816)		(13,543)		(24,571)
Corporate interest income	33,344		3,092		63,283		3,839
Reconciling items sub-total	24,743		18,842		56,150		74,335
Consolidated income before taxes	$	471,176	$	574,012	$	904,986	$	1,139,957

(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2.

(2)The increase in equity-based compensation expense for the three and six months ended June 30, 2023 was primarily attributable to a four year block grant of Options and RSUs issued in May 2022.

12

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance, and was as follows for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Corporate capital allocation charge:
Homebuilding Mid Atlantic	$	35,337	$	37,121	$	68,516	$	71,208
Homebuilding North East	8,272		8,158		15,597		15,245
Homebuilding Mid East	9,819		12,875		19,479		24,292
Homebuilding South East	19,189		19,358		38,099		36,511
Total	$	72,617	$	77,512	$	141,691	$	147,256

(4)The consolidation adjustments and other for the three and six month periods of 2023 and 2022 is primarily driven by units under construction as well as significant fluctuations in lumber prices year over year. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled. In both the three and six month periods of 2023, the consolidation adjustment was negatively impacted by the recognition of previously deferred home package costs that included significantly higher priced lumber. This impact was offset partially by a reduction in the number of units under construction year over year, resulting in a decrease in intercompany profits deferred, as compared to the three and six month periods of 2022.

	June 30, 2023		December 31, 2022
Assets:
Homebuilding Mid Atlantic	$	1,271,377	$	1,152,564
Homebuilding North East	317,956		250,001
Homebuilding Mid East	393,767		378,833
Homebuilding South East	752,310		697,923
Mortgage Banking	553,926		406,456
Total segment assets	3,289,336		2,885,777
Reconciling items:
Cash and cash equivalents	2,678,709		2,503,424
Deferred taxes	146,663		143,585
Intangible assets and goodwill	49,368		49,368
Operating lease right-of-use assets	73,469		71,081
Finance lease right-of-use assets	13,231		13,745
Contract land deposit reserve	(46,401)		(57,060)
Consolidation adjustments and other	62,400		51,053
Reconciling items sub-total	2,977,439		2,775,196
Consolidated assets	$	6,266,775	$	5,660,973

13

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

10.    Fair Value

GAAP assigns a fair value hierarchy to the inputs used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs.

Financial Instruments

The estimated fair values of our Senior Notes as of June 30, 2023 and December 31, 2022 were $792,540 and $788,166, respectively. The estimated fair value is based on recent market prices of similar transactions, which is classified as Level 2 within the fair value hierarchy. The carrying values at June 30, 2023 and December 31, 2022 were $913,963 and $914,888, respectively. Except as otherwise noted below, we believe that insignificant differences exist between the carrying value and the fair value of our financial instruments, which consist primarily of cash equivalents, due to their short term nature.

Derivative Instruments and Mortgage Loans Held for Sale

In the normal course of business, our wholly-owned mortgage subsidiary, NVR Mortgage Finance, Inc. (“NVRM”), enters into contractual commitments to extend credit to our homebuyers with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by NVRM. All mortgagors are evaluated for credit worthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to a broker/dealer. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, NVRM enters into optional or mandatory delivery forward sale contracts to sell whole loans and mortgage-backed securities to broker/dealers. The forward sales contracts lock in an interest rate and price for the sale of loans similar to the specific rate lock commitments. NVRM does not engage in speculative or trading derivative activities. Both the rate lock commitments to borrowers and the forward sale contracts to broker/dealers are undesignated derivatives and, accordingly, are marked to fair value through earnings. At June 30, 2023, there were rate lock commitments to extend credit to borrowers aggregating $2,618,808 and open forward delivery contracts aggregating $2,780,429, which hedge both the rate lock commitments and closed loans held for sale.

The fair value of NVRM’s rate lock commitments to borrowers and the related input levels include, as applicable:

i)the assumed gain/loss of the expected resultant loan sale (Level 2);

ii)the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and

iii)the value of the servicing rights associated with the loan (Level 2).

The assumed gain/loss considers the excess servicing to be received or buydown fees to be paid upon securitization of the loan. The excess servicing and buydown fees are calculated pursuant to contractual terms with investors. To calculate the effects of interest rate movements, NVRM utilizes applicable published mortgage-backed security prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount. NVRM sells all of its loans on a servicing released basis, and receives a servicing released premium upon sale. Thus, the value of the servicing rights is included in the fair value measurement and is based upon contractual terms with investors and varies depending on the loan type. NVRM

14

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

assumes a fallout rate when measuring the fair value of rate lock commitments. Fallout is defined as locked loan commitments for which NVRM does not close a mortgage loan and is based on historical experience.

The fair value of NVRM’s forward sales contracts to broker/dealers solely considers the market price movement of the same type of security between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

Mortgage loans held for sale are recorded at fair value when closed, and thereafter are carried at the lower of cost or fair value, net of deferred origination costs, until sold. Fair value is measured using Level 2 inputs. As of June 30, 2023, the fair value of loans held for sale of $438,756 included on the accompanying condensed consolidated balance sheet was increased by $2,486 from the aggregate principal balance of $436,270. As of December 31, 2022, the fair value of loans held for sale of $316,806 was decreased by $2,675 from the aggregate principal balance of $319,481.

The fair value measurement of NVRM's undesignated derivative instruments was as follows:

	June 30, 2023		December 31, 2022
Rate lock commitments:
Gross assets	$	44,034	$	32,246
Gross liabilities	24,585		20,946
Net rate lock commitments	$	19,449	$	11,300
Forward sales contracts:
Gross assets	$	14,063	$	4,843
Gross liabilities	944		20,903
Net forward sales contracts	$	13,119	$	(16,060)

As of June 30, 2023, the net rate lock commitments and the net forward sales contracts are reported in mortgage banking "Other assets," on the accompanying condensed consolidated balance sheets. As of December 31, 2022, the net rate lock commitments are reported in mortgage banking "Other assets" and the net forward sales contracts are reported in mortgage banking "Accrued expenses and other liabilities".

The fair value measurement as of June 30, 2023 was as follows:

	Notional or Principal Amount		Assumed Gain From Loan Sale		Interest Rate Movement Effect		Servicing Rights Value		Security Price Change		Total Fair Value Measurement
Rate lock commitments	$	2,618,808	$	8,932	$	(23,985)	$	34,502	$	—	$	19,449
Forward sales contracts	$	2,780,429	—		—		—		13,119		13,119
Mortgages held for sale	$	436,270	1,754		(5,715)		6,447		—		2,486
Total fair value measurement			$	10,686	$	(29,700)	$	40,949	$	13,119	$	35,054

The total fair value measurement as of December 31, 2022 was a net loss of $7,435. NVRM recorded a fair value adjustment to income of $301 and $42,489 for the three and six months ended June 30, 2023, respectively. NVRM recorded a fair value adjustment to expense of $27,540 and $17,430 for the three and six months ended June 30, 2022, respectively. Unrealized gains/losses from the change in the fair value measurements are included in earnings as a component of mortgage banking fees in the accompanying condensed consolidated statements of income. The fair value measurement will be impacted in the future by the change in the value of the servicing rights, interest rate movements, security price fluctuations, and the volume and product mix of NVRM’s closed loans and locked loan commitments.

15

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

11.    Debt

As of June 30, 2023, we had the following debt instruments outstanding:

Senior Notes

Our outstanding Senior Notes have an aggregate principal balance of $900,000, mature on May 15, 2030 and bear interest at 3.00%, payable semi-annually in arrears on May 15 and November 15. The Senior Notes are senior unsecured obligations and rank equally in right of payment with any of our existing and future unsecured senior indebtedness. The Senior Notes were issued in three separate issuances, $600,000 issued at a discount to yield 3.02%, and the two additional issuances totaling $300,000 issued at a premium to yield 2.00%. The Senior Notes have been reflected net of the unamortized discount or premium, as applicable, and the unamortized debt issuance costs in the accompanying condensed consolidated balance sheet.

The indenture governing the Senior Notes does not contain any financial covenants; however, it does contain, among other items, and subject to certain exceptions, covenants that restrict our ability to create, incur, assume or guarantee secured debt, enter into sale and leaseback transactions and conditions related to mergers and/or the sale of assets. We were in compliance with all covenants under the Senior Notes at June 30, 2023.

Credit Agreement

We have an unsecured Credit Agreement (the “Credit Agreement”), which provides for aggregate revolving loan commitments of $300,000 (the “Facility”). Under the Credit Agreement, we may request increases of up to $300,000 to the Facility in the form of revolving loan commitments or term loans to the extent that new or existing lenders agree to provide additional revolving loan or term loan commitments. The Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit, of which approximately $13,700 was outstanding at June 30, 2023. The Credit Agreement termination date is February 12, 2026. There were no borrowings outstanding under the Facility at June 30, 2023.

Repurchase Agreement

NVRM provides for its mortgage origination and other operating activities using cash generated from its operations, borrowings from its parent company, NVR, as well as a revolving mortgage repurchase agreement (the “Repurchase Agreement”), which is non-recourse to NVR. The Repurchase Agreement provides for loan purchases up to $150,000, subject to certain sub-limits. Amounts outstanding under the Repurchase Agreement are collateralized by the Company’s mortgage loans held for sale.

Effective July 19, 2023, NVRM entered into the First Amendment to Second Amended and Restated Master Repurchase Agreement with U.S. Bank National Association, as Agent and a Buyer (the "Amended MRA"), which extended the term of the Repurchase Agreement through July 17, 2024. All other terms and conditions under the Amended Repurchase Agreement remained materially consistent. At June 30, 2023, there were no borrowing base limitations reducing the amount available under the Repurchase Agreement and there were no borrowings outstanding.

12.    Commitments and Contingencies

We are involved in various litigation arising in the ordinary course of business. In the opinion of management, and based on advice of legal counsel, this litigation is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Legal costs incurred in connection with outstanding litigation are expensed as incurred.

13.    Leases

We have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have finance leases for certain plant equipment and one of our production facilities which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued

16

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our finance lease ROU assets and finance lease liabilities were $13,231 and $14,690, respectively, as of June 30, 2023, and $13,745 and $15,002, respectively, as of December 31, 2022. Our leases have remaining lease terms of up to 17.2 years, some of which include options to extend the lease for up to 20 years, and some of which include options to terminate the lease.

We recognize operating lease expense on a straight-line basis over the lease term. We have elected to use the portfolio approach for certain equipment leases which have similar lease terms and payment schedules. Additionally, for certain equipment we account for the lease and non-lease components as a single lease component. Our sublease income is de minimis.

We have certain leases, primarily the leases of model homes, which have initial lease terms of twelve months or less ("Short-term leases"). We elected to exclude these leases from the recognition requirements under Topic 842, and these leases have not been included in our recognized ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Lease expense
Operating lease expense	$	9,475	$	8,529	$	18,615	$	16,630
Finance lease expense:
Amortization of ROU assets	511		473		1,013		937
Interest on lease liabilities	105		103		211		207
Short-term lease expense	7,531		6,491		15,023		12,823
Total lease expense	$	17,622	$	15,596	$	34,862	$	30,597

17

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

Other information related to leases was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023			2022
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,420	$	6,935	$	14,736		$	14,104
Operating cash flows from finance leases	105		103		211			207
Financing cash flows from finance leases	411		367		811			723
ROU assets obtained in exchange for lease obligations:
Operating leases	$	10,090	$	18,073	$	23,337		$	23,886
Finance leases	$	250	$	451	$	499		$	723
					June 30, 2023			December 31, 2022
Weighted-average remaining lease term (in years):
Operating leases					5.9			6.0
Finance leases					10.4			10.8
Weighted-average discount rate:
Operating leases					4.0		%	3.6		%
Finance leases					3.0		%	2.9		%

14.    Income Taxes

Our effective tax rate for the three and six months ended June 30, 2023 was 14.3% and 17.3%, respectively, compared to 24.5% and 24.6% for the three and six months ended June 30, 2022, respectively. The decrease in the effective tax rate in the three and six month periods of 2023 compared to the same periods in 2022 was primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $55,906 and $79,151 for the three and six months ended June 30, 2023, respectively, and $8,744 and $17,190 for the three and six months ended June 30, 2022, respectively.

18

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

(dollars in thousands, except per share data)

Forward-Looking Statements

Some of the statements in this Quarterly Report on Form 10-Q, as well as statements made by us in periodic press releases or other public communications, 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, our financial position and financial results, 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 our actual results or performance 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 us and our 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 us in our homebuilding operations; shortages of labor; the economic impact of a major epidemic or pandemic; 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 we have little or no control.  We undertake no obligation to update such forward-looking statements except as required by law.  For additional information regarding risk factors, see Part II, Item 1A of this Quarterly Report on Form 10-Q and Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Unless the context otherwise requires, references to “NVR,” “we,” “us,” or “our” include NVR and its consolidated subsidiaries.

Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022

Business Environment and Current Outlook

New home demand in the second quarter of 2023, continued the improving trend from the first quarter. Demand has been favorably impacted by a limited supply of homes in the resale market and improving consumer confidence. Homebuyers have adjusted to the higher mortgage interest rates as the interest rate environment has stabilized, but affordability continues to be a challenge. There remains uncertainty in the market as the Federal Reserve continues to address high inflation rates by raising interest rates, which could lead to an economic slowdown. With the inflationary pressures and higher demand, we expect to continue to face cost pressures related to building materials, labor and land costs, as well as pricing pressures, which will impact profit margins based on our ability to manage these costs while balancing sales pace and pricing. We have seen an improvement in our supply chain which has improved our construction cycle times. We believe that we are well positioned to take advantage of opportunities that may arise from future economic and homebuilding market volatility due to the strength of our balance sheet and our disciplined lot acquisition strategy.

19

Business

Our primary business is the construction and sale of single-family detached homes, townhomes and condominiums, all of which are primarily constructed on a pre-sold basis. To fully serve customers of our homebuilding operations, we also operate a mortgage banking and title services business. We primarily conduct our operations in mature markets. Additionally, we generally grow our business through market share gains in our existing markets and by expanding into markets contiguous to our current active markets. Our four homebuilding reportable segments consist of the following regions:

Mid Atlantic:	Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
North East:	New Jersey and Eastern Pennsylvania
Mid East:	New York, Ohio, Western Pennsylvania, Indiana and Illinois
South East:	North Carolina, South Carolina, Tennessee, Florida and Georgia

Our lot acquisition strategy is predicated upon avoiding the financial requirements and risks associated with direct land ownership and development. We generally do not engage in land development (see discussion below of our land development activities). Instead, we typically acquire finished building lots from various third party land developers pursuant to fixed price finished lot purchase agreements (“LPAs”). These LPAs require deposits, typically ranging up to 10% of the aggregate purchase price of the finished lots, in the form of cash or letters of credit that may be forfeited if we fail to perform under the LPA. This strategy has allowed us to maximize inventory turnover, which we believe enables us to minimize market risk and to operate with less capital, thereby enhancing rates of return on equity and total capital.

In addition to constructing homes primarily on a pre-sold basis and utilizing what we believe is a conservative lot acquisition strategy, we focus on obtaining and maintaining a leading market position in each market we serve. This strategy allows us to gain valuable efficiencies and competitive advantages in our markets, which we believe contributes to minimizing the adverse effects of regional economic cycles and provides growth opportunities within these markets. Our continued success is contingent upon our ability to control an adequate supply of finished lots on which to build.

In certain specific strategic circumstances, we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development. Once we acquire control of raw ground, we determine whether to sell the raw parcel to a developer and enter into an LPA with the developer to purchase the finished lots or to hire a developer to develop the land on our behalf. While joint venture arrangements and direct land development activity are not our preferred method of acquiring finished building lots, we may enter into additional transactions in the future on a limited basis where there exists a compelling strategic or prudent financial reason to do so. We expect, however, to continue to acquire substantially all our finished lot inventory using LPAs with forfeitable deposits.

As of June 30, 2023, we controlled approximately 130,400 lots as described below.

Lot Purchase Agreements

We controlled approximately 123,900 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $553,300 and $8,200, respectively. Included in the number of controlled lots are approximately 9,700 lots for which we have recorded a contract land deposit impairment reserve of approximately $46,400 as of June 30, 2023.

Joint Venture Limited Liability Corporations (“JVs”)

We had an aggregate investment totaling approximately $27,600 in four JVs, expected to produce approximately 5,250 lots. Of the lots to be produced by the JVs, approximately 4,900 lots were controlled by us and approximately 350 were either under contract with unrelated parties or currently not under contract. We had additional funding commitments totaling approximately $12,000 to one of the JVs at June 30, 2023.

Land Under Development

We owned land with a carrying value of approximately $24,500 that we intend to develop into approximately 1,600 finished lots. We had additional funding commitments of approximately $1,900 under a joint development

20

agreement related to one parcel, a portion of which we expect will be offset by development credits of approximately $900.

See Notes 2, 3 and 4 to the condensed consolidated financial statements included herein for additional information regarding LPAs, JVs and land under development, respectively.

Raw Land Purchase Agreements

In addition, we have certain properties under contract with land owners that are expected to yield approximately 21,500 lots, which are not included in the number of total lots controlled. Some of these properties may require rezoning or other approvals to achieve the expected yield. As of June 30, 2023, these properties are controlled with deposits in cash and letters of credit totaling approximately $9,800 and $100, respectively, of which approximately $2,900 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.

Key Financial Results

Our consolidated revenues for the second quarter of 2023 totaled $2,338,330, a 12% decrease from the second quarter of 2022. Net income for the second quarter ended June 30, 2023 was $404,027, or $116.54 per diluted share, decreases of 7% and 6% when compared to net income and diluted earnings per share for the second quarter of 2022, respectively. Our homebuilding gross profit margin percentage decreased to 24.3% in the second quarter of 2023 from 26.3% in the second quarter of 2022. New orders, net of cancellations (“New Orders”) increased by 27% in the second quarter of 2023 compared to the second quarter of 2022. The New Order cancellation rate for the second quarter of 2023 decreased to 10.9% from 14.3% in the same period in 2022. The average sales price for New Orders in the second quarter of 2023 was $447.3, a decrease of 5% compared to the second quarter of 2022.

Homebuilding Operations

The following table summarizes the results of operations and other data for our homebuilding operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Financial Data:
Revenues	$	2,283,769		$	2,610,062		$	4,415,102		$	4,919,289
Cost of sales	$	1,728,146		$	1,924,727		$	3,336,056		$	3,576,092
Gross profit margin percentage	24.3		%	26.3		%	24.4		%	27.3		%
Selling, general and administrative expenses	$	148,543		$	132,432		$	292,161		$	261,942
Operating Data:
New orders (units)	5,905			4,663			11,793			10,590
Average new order price	$	447.3		$	471.6		$	444.3		$	468.3
Settlements (units)	5,085			5,820			9,724			11,034
Average settlement price	$	449.0		$	448.4		$	454.0		$	445.8
Backlog (units)							11,231			12,286
Average backlog price							$	458.6		$	473.9
New order cancellation rate	10.9		%	14.3		%	12.4		%	12.1		%

Consolidated Homebuilding - Three Months Ended June 30, 2023 and 2022

Homebuilding revenues decreased 13% in the second quarter of 2023 compared to the same period in 2022, as a result of a 13% decrease in settlements. The average settlement price remained relatively flat quarter over quarter. The decrease in settlements was attributable to a 23% lower backlog unit balance entering the second

21

quarter of 2023 compared to the backlog unit balance entering the second quarter of 2022. Gross profit margin percentage in the second quarter of 2023 decreased to 24.3%, from 26.3% in the second quarter of 2022. Gross profit margin was negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs quarter over quarter.

New Orders increased 27%, while the average sales price of New Orders decreased 5% in the second quarter of 2023 compared to the second quarter of 2022. New Orders were favorably impacted by improved demand quarter over quarter attributable to a limited supply of homes in the resale market and improving consumer confidence as mortgage interest rates began to stabilize. In addition, New Orders were positively impacted by a 5% increase in the average number of active communities quarter over quarter. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

Selling, general and administrative (“SG&A”) expense in the second quarter of 2023 increased by approximately $16,100 compared to the second quarter of 2022, and as a percentage of revenue increased to 6.5% from 5.1% quarter over quarter. The increase in SG&A expense was primarily attributable to a $12,400 increase in personnel costs.

Consolidated Homebuilding - Six Months Ended June 30, 2023 and 2022

Homebuilding revenues decreased 10% in the first six months of 2023 compared to the same period in 2022, as a result of a 12% decrease in settlements, partially offset by a 2% increase in the average settlement price. The decrease in the number of units settled was attributable to a 28% lower backlog unit balance entering 2023 compared to the backlog unit balance entering 2022, offset partially by a higher backlog turnover rate year over year. The increase in the average settlement price was primarily attributable to a 4% higher average sales price of units in backlog entering 2023 compared to backlog entering 2022. Gross profit margin percentage in the first six months of 2023 decreased to 24.4%, from 27.3% in the first six months of 2022. Gross profit margins were negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs year over year.

New Orders increased 11% while the average sales price of New Orders decreased 5% in the first six months of 2023 compared to the same period in 2022. New Orders were favorably impacted by improved demand in 2023 attributable to a limited supply of homes in the resale market and improving consumer confidence as mortgage interest rates began to stabilize. In addition, New Orders were positively impacted by a 4% increase in the average number of active communities year over year. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

SG&A expense in the first six months of 2023 increased by approximately $30,200 compared to the same period in 2022, and as a percentage of revenue increased to 6.6% in 2023 from 5.3% in 2022. The increase in SG&A expense was primarily attributable to a $15,300 increase in personnel costs. In addition, SG&A expense was higher due to an increase in equity-based compensation of approximately $12,500 due to the issuance of a four year block grant of Options and RSUs in the second quarter of 2022.

Our backlog represents homes sold but not yet settled with our customers. As of June 30, 2023, our backlog decreased on a unit basis by 9% to 11,231 units and on a dollar basis by 12% to $5,150,347 when compared to 12,286 units and $5,821,745, respectively, as of June 30, 2022. The decrease in the number of backlog units was primarily attributable to a 28% lower backlog unit balance entering 2023 compared to the backlog unit balance entering 2022, offset partially by an 11% increase in New Orders year over year. Backlog dollars were lower primarily due to the decrease in backlog units in 2023, coupled with a 5% decrease in the average sales price of New Orders year over year.

Our backlog may be impacted by customer cancellations for various reasons that are beyond our control, such as failure to obtain mortgage financing, inability to sell an existing home, job loss, or a variety of other reasons. In any period, a portion of the cancellations that we experience are related to new sales that occurred during the same period, and a portion are related to sales that occurred in prior periods and therefore appeared in the opening backlog for the current period. Calculated as the total of all cancellations during the period as a percentage of gross sales during that same period, our cancellation rate was approximately 12% both in the first six months of 2023 and

22

2022. During the most recent four quarters, approximately 5% of a reporting quarter’s opening backlog cancelled during the fiscal quarter. We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation rate that may occur during the remainder of 2023 or future years. Other than those units that are cancelled, and subject to potential construction delays resulting from continued supply chain disruptions, we expect to settle substantially all of our June 30, 2023 backlog within the next twelve months.

The backlog turnover rate is impacted by various factors, including, but not limited to, changes in New Order activity, internal production capacity, external subcontractor capacity, building material supply chain disruptions and other external factors over which we do not exercise control.

Reportable Segments

Homebuilding segment profit includes all revenues and income generated from the sale of homes, less the cost of homes sold, SG&A expenses, and a corporate capital allocation charge determined by corporate management. The corporate capital allocation charge eliminates in consolidation and is based on the segment’s average net assets employed. The corporate capital allocation charged to the operating segment allows the Chief Operating Decision Maker to determine whether the operating segment is providing the desired rate of return after covering our cost of capital.

We record charges on contract land deposits when we determine that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. We evaluate our entire net contract land deposit portfolio for impairment each quarter. For presentation purposes below, the contract land deposit reserve at June 30, 2023 and December 31, 2022 has been allocated to the respective year’s reportable segments to show contract land deposits on a net basis. The net contract land deposit balances below also include approximately $8,200 and $6,900 at June 30, 2023 and December 31, 2022, respectively, of letters of credit issued as deposits in lieu of cash.

The following tables summarize certain homebuilding operating activity by reportable segment for the three and six months ended June 30, 2023 and 2022.

Selected Segment Financial Data:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Mid Atlantic	$	1,058,794	$	1,208,312	$	1,999,942	$	2,350,020
North East	232,926		237,394		416,356		412,945
Mid East	411,682		521,038		814,079		982,442
South East	580,367		643,318		1,184,725		1,173,882

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Gross profit margin:
Mid Atlantic	$	265,492	$	323,986	$	494,753	$	642,200
North East	63,439		59,162		112,528		100,866
Mid East	90,452		115,849		175,065		217,256
South East	152,011		194,236		319,473		346,335

23

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Gross profit margin percentage:
Mid Atlantic	25.1	%	26.8	%	24.7	%	27.3	%
North East	27.2	%	24.9	%	27.0	%	24.4	%
Mid East	22.0	%	22.2	%	21.5	%	22.1	%
South East	26.2	%	30.2	%	27.0	%	29.5	%

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Segment profit:
Mid Atlantic	$	195,254	$	251,739	$	354,292	$	501,520
North East	44,932		41,297		76,992		67,225
Mid East	61,756		82,512		118,224		153,695
South East	106,648		150,822		232,058		264,276

Operating Activity:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	Units	Average Price		Units	Average Price		Units	Average Price		Units	Average Price
New orders, net of cancellations:
Mid Atlantic	2,348	$	519.2	1,860	$	535.1	4,583	$	517.8	4,167	$	531.8
North East	463	$	557.0	441	$	503.7	905	$	564.9	901	$	513.5
Mid East	1,339	$	390.3	1,114	$	410.5	2,656	$	387.3	2,648	$	403.6
South East	1,755	$	365.7	1,248	$	420.0	3,649	$	363.5	2,874	$	421.6
Total	5,905	$	447.3	4,663	$	471.6	11,793	$	444.3	10,590	$	468.3

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	Units	Average Price		Units	Average Price		Units	Average Price		Units	Average Price
Settlements:
Mid Atlantic	2,030	$	521.3	2,292	$	527.1	3,825	$	522.7	4,472	$	525.5
North East	432	$	539.2	472	$	503.0	795	$	523.7	820	$	503.6
Mid East	1,067	$	385.7	1,356	$	384.2	2,056	$	395.9	2,566	$	382.8
South East	1,556	$	373.0	1,700	$	378.4	3,048	$	388.7	3,176	$	369.6
Total	5,085	$	449.0	5,820	$	448.4	9,724	$	454.0	11,034	$	445.8

	As of June 30,
	2023			2022
	Units	Average Price		Units	Average Price
Backlog:
Mid Atlantic	4,450	$	528.8	4,613	$	541.1
North East	995	$	587.9	1,050	$	519.3
Mid East	2,453	$	392.1	3,109	$	399.0
South East	3,333	$	375.1	3,514	$	438.2
Total	11,231	$	458.6	12,286	$	473.9

24

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
New order cancellation rate:
Mid Atlantic	10.3	%	15.2	%	13.1	%	12.5	%
North East	10.4	%	9.8	%	11.5	%	9.0	%
Mid East	11.4	%	17.0	%	12.6	%	14.1	%
South East	11.3	%	11.7	%	11.5	%	10.5	%

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Average active communities:
Mid Atlantic	169	155	166	153
North East	36	38	36	36
Mid East	111	121	112	125
South East	110	92	106	91
Total	426	406	420	405

Homebuilding Inventory:

	June 30, 2023		December 31, 2022
Sold inventory:
Mid Atlantic	$	883,452	$	727,501
North East	217,972		156,798
Mid East	299,783		278,034
South East	437,546		413,576
Total (1)	$	1,838,753	$	1,575,909

	June 30, 2023		December 31, 2022
Unsold lots and housing units inventory:
Mid Atlantic	$	86,927	$	111,816
North East	28,268		23,013
Mid East	11,013		17,044
South East	32,928		31,791
Total (1)	$	159,136	$	183,664

(1) The reconciling items between segment inventory and consolidated inventory include certain consolidation adjustments necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes. These consolidation adjustments are not allocated to our operating segments.

25

Lots Controlled and Land Deposits:

	June 30, 2023	December 31, 2022
Total lots controlled:
Mid Atlantic	46,100	48,200
North East	12,300	11,300
Mid East	20,500	21,800
South East	51,500	50,600
Total	130,400	131,900

	June 30, 2023		December 31, 2022
Contract land deposits, net:
Mid Atlantic	$	204,195	$	212,273
North East	57,902		54,558
Mid East	43,620		44,813
South East	219,179		191,332
Total	$	524,896	$	502,976

Mid Atlantic

Three Months Ended June 30, 2023 and 2022

The Mid Atlantic segment had an approximate $56,500, or 22%, decrease in segment profit in the second quarter of 2023 compared to the second quarter of 2022. The decrease in segment profit was driven by a decrease in segment revenues of approximately $149,500, or 12%, coupled with a decrease in gross profit margins. Segment revenues decreased primarily due to a decrease in settlements of 11%. The decrease in settlements was primarily attributable to an 18% lower backlog unit balance entering the second quarter of 2023 compared to backlog entering the second quarter of 2022, offset partially by a higher backlog turnover rate quarter over quarter. The Mid Atlantic segment’s gross profit margin percentage decreased to 25.1% in the second quarter of 2023 from 26.8% in the second quarter of 2022. Gross profit margins were negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs quarter over quarter.

Segment New Orders increased 26%, while the average sales price of New Orders decreased 3% in the second quarter of 2023 compared to the second quarter of 2022. New Orders were favorably impacted by improved demand as previously discussed in the "Consolidated Homebuilding" section above. In addition, New Orders were positively impacted by a 9% increase in the average number of active communities quarter over quarter. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

Six Months Ended June 30, 2023 and 2022

The Mid Atlantic segment had an approximate $147,200, or 29%, decrease in segment profit in the first six months of 2023 compared to the first six months of 2022. The decrease in segment profit was driven by a decrease in segment revenues of approximately $350,100, or 15%, coupled with a decrease in gross profit margins. Segment revenues decreased due to a 14% decrease in the number of units settled. The decrease in settlements was primarily attributable to a 25% lower backlog unit balance entering 2023 compared to backlog entering 2022, offset partially by a higher backlog turnover rate year over year. The Mid Atlantic segment’s gross profit margin percentage decreased to 24.7% in the first six months of 2023 from 27.3% in the first six months of 2022. Gross profit margins were negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs year over year.

Segment New Orders increased 10% in the first six months of 2023 compared to the first six months of 2022, while the average sales price of New Orders decreased 3% year over year. New Orders were favorably impacted by

26

improved demand as previously discussed in the "Consolidated Homebuilding" section above. In addition, New Orders were positively impacted by an 8% increase in the average number of active communities year over year. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

North East

Three Months Ended June 30, 2023 and 2022

The North East segment had an approximate $3,600, or 9%, increase in segment profit in the second quarter of 2023 compared to the second quarter of 2022, due primarily to an increase in gross profit margins to 27.2% in the second quarter of 2023 from 24.9% in the second quarter of 2022. Gross profit margins were favorably impacted primarily by a 7% increase in average settlement prices and lower lumber costs quarter over quarter. Segment revenues in the second quarter of 2023 decreased by approximately $4,500, or 2%, due to an 8% decrease in settlements, offset partially by a 7% increase in the average settlement price, quarter over quarter. The decrease in settlements is attributable primarily to an 11% lower backlog unit balance entering the second quarter of 2023 compared to backlog entering the second quarter of 2022. The average settlement price increase quarter over quarter was primarily due to a 12% higher average sales price of units in backlog entering the second quarter of 2023 compared to backlog entering the second quarter of 2022.

Segment New Orders and the average sales price of New Orders increased 5% and 11%, respectively, in the second quarter of 2023 compared to the second quarter of 2022. New Orders were favorably impacted by improved demand as previously discussed in the "Consolidated Homebuilding" section above. The increase in the average sales price of New Orders was attributable to a shift in New Orders to higher priced markets within the segment, coupled with a shift in communities in certain markets quarter over quarter.

Six Months Ended June 30, 2023 and 2022

The North East segment had an approximate $9,800, or 15%, increase in segment profit in the first six months of 2023 compared to the first six months of 2022, due primarily to an increase in gross profit margins to 27.0% in the first six months of 2023 from 24.4% in the first six months of 2022. Gross profit margins were favorably impacted primarily by a 4% increase in the average settlement price and lower lumber prices year over year. Segment revenues in the first six months of 2023 increased by approximately $3,400, or 1%, due to an increase in the average settlement price of 4%, offset partially by a 3% decrease in the number of units settled. The increase in the average settlement price was primarily attributable to an 8% higher average sales price of units in backlog entering 2023 compared to backlog entering 2022. The decrease in settlements was attributable to a 9% lower backlog unit balance entering 2023 compared to backlog entering 2022.  

Segment New Orders remained relatively flat in the first six months of 2023 compared to the first six months of 2022, while the average sales price of New Orders increased 10% year over year. The increase in the average sales price of New Orders was attributable to a shift in New Orders to higher priced markets within the segment, coupled with a shift to higher priced communities in certain markets year over year.

Mid East

Three Months Ended June 30, 2023 and 2022

The Mid East segment had an approximate $20,800, or 25%, decrease in segment profit in the second quarter of 2023 compared to the second quarter of 2022, due primarily to a decrease in segment revenues of approximately $109,400, or 21%. Segment revenues decreased due to a 21% decrease in the number of units settled which was attributable primarily to a 35% lower backlog balance entering the second quarter of 2023 compared to the same period of 2022, offset partially by a higher backlog turnover rate quarter over quarter. The segment's gross profit margin percentage remained relatively flat quarter over quarter.

Segment New Orders increased 20% in the second quarter of 2023 compared to the second quarter of 2022, while the average sales price of New Orders decreased 5%. New Orders were favorably impacted by improved demand as previously discussed in the "Consolidated Homebuilding" section above. The average sales price of New

27

Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

Six Months Ended June 30, 2023 and 2022

The Mid East segment had an approximate $35,500, or 23%, decrease in segment profit in the first six months of 2023 compared to the first six months of 2022, due primarily to a decrease in segment revenues of approximately $168,400, or 17%, coupled with a decrease in gross profit margins. Segment revenues decreased due to a 20% decrease in settlements year over year, offset partially by a 3% increase in the average settlement price. The decrease in settlements was attributable primarily to a 39% lower backlog balance entering 2023 compared to the backlog entering 2022, offset partially by a higher backlog turnover rate year over year. The increase in the average settlement price was primarily attributable to a 6% higher average sales price of units in backlog entering 2023 compared to backlog entering 2022. The segment's gross profit margin percentage decreased to 21.5% in the first six months of 2023 from 22.1% in the first six months of 2022. Gross profit margins were negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs year over year.

Segment New Orders remained relatively flat in the first six months of 2023 compared to the first six months of 2022, while the average sales price of New Orders decreased 4%. New Orders were favorably impacted by improved demand as previously discussed in the "Consolidated Homebuilding" section above. The increased demand was offset by an 11% decrease in the number of active communities year over year. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

South East

Three Months Ended June 30, 2023 and 2022

The South East segment had an approximate $44,200, or 29%, decrease in segment profit in the second quarter of 2023 compared to the second quarter of 2022. The decrease in segment profit was primarily driven by a decrease in segment revenues of approximately $63,000, or 10%, coupled with a decrease in gross profit margins. The decrease in revenues was primarily attributable to an 8% decrease in the number of units settled quarter over quarter. Settlements were lower due primarily to a 21% lower backlog unit balance entering the second quarter of 2023 compared to the backlog unit balance entering the second quarter of 2022, offset partially by a higher backlog turnover rate quarter over quarter. The segment’s gross profit margin percentage decreased to 26.2% in the second quarter of 2023 from 30.2% in the second quarter of 2022. Gross profit margins were negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs quarter over quarter.

Segment New Orders increased 41% in the second quarter of 2023 compared to the second quarter of 2022, while the average sales price of New Orders decreased 13% quarter over quarter. New Orders were favorably impacted by a 20% increase in the average number of active communities quarter over quarter. In addition, New Orders were favorably impacted by improved demand as previously discussed in the "Consolidated Homebuilding" section above. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years.

Six Months Ended June 30, 2023 and 2022

The South East segment had an approximate $32,200, or 12%, decrease in segment profit in the first six months of 2023 compared to the first six months of 2022 due primarily to a decrease in gross profit margins to 27.0% in the first six months of 2023 from 29.5% in the first six months of 2022. Gross profit margins were negatively impacted primarily by higher costs for labor, certain materials, incentives and closing costs, offset partially by lower lumber costs year over year. Segment revenues in the first six months of 2023 increased by approximately $10,800, or 1%, due to an increase in the average settlement price of 5%, partially offset by a 4% decrease in the number of units settled year over year. The increase in the average settlement price was primarily attributable to a 3% higher average sales price of units in backlog entering 2023 compared to backlog entering 2022.

28

The decrease in the number of units settled was primarily attributable to a 28% lower backlog unit balance entering 2023 compared to backlog entering 2022, offset partially by a higher backlog turnover rate year over year.

Segment New Orders increased 27% in the first six months of 2023 compared to the first six months of 2022, while the average sales price of New Orders decreased 14% year over year. The increase in New Orders was primarily attributable to a 16% increase in the average number of active communities year over year. In addition, New Orders were favorably impacted by improved demand as previously discussed in the "Consolidated Homebuilding" section above. The average sales price of New Orders was negatively impacted by pricing pressure attributable to affordability issues resulting from higher mortgage interest rates period over period and significant home price appreciation over the previous two years, coupled with a shift in New Orders to lower priced communities in several markets within the segment.

29

Homebuilding Segment Reconciliations to Consolidated Homebuilding Operations

In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between homebuilding segment profit and homebuilding consolidated income before tax include unallocated corporate overhead (which includes all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense. Our overhead functions, such as accounting, treasury and human resources, are centrally performed and the costs are not allocated to our operating segments. Consolidation adjustments consist of such items to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments. External corporate interest expense primarily consists of interest charges on our Senior Notes, and is not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Homebuilding consolidated gross profit:
Mid Atlantic	$	265,492	$	323,986	$	494,753	$	642,200
North East	63,439		59,162		112,528		100,866
Mid East	90,452		115,849		175,065		217,256
South East	152,011		194,236		319,473		346,335
Consolidation adjustments and other	(15,771)		(7,898)		(22,773)		36,540
Homebuilding consolidated gross profit	$	555,623	$	685,335	$	1,079,046	$	1,343,197

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Homebuilding consolidated income before taxes:
Mid Atlantic	$	195,254	$	251,739	$	354,292	$	501,520
North East	44,932		41,297		76,992		67,225
Mid East	61,756		82,512		118,224		153,695
South East	106,648		150,822		232,058		264,276
Reconciling items:
Contract land deposit reserve adjustment (1)	6,888		419		10,479		6,345
Equity-based compensation expense (2)	(23,781)		(20,352)		(44,691)		(30,972)
Corporate capital allocation (3)	72,617		77,512		141,691		147,256
Unallocated corporate overhead	(46,360)		(32,282)		(92,325)		(77,543)
Consolidation adjustments and other (4)	(9,998)		2,004		(5,999)		50,764
Corporate interest expense	(6,589)		(11,816)		(13,543)		(24,571)
Corporate interest income	33,344		3,092		63,283		3,839
Reconciling items sub-total	26,121		18,577		58,895		75,118
Homebuilding consolidated income before taxes	$	434,711	$	544,947	$	840,461	$	1,061,834

(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2 in the accompanying condensed consolidated financial statements.

(2)The increase in equity-based compensation expense for the three and six-month periods ended June 30, 2023 was primarily attributable to a four-year block grant of Options and RSUs issued in May 2022.

30

(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments.  The corporate capital allocation charge is based on the segment’s monthly average asset balance, and is as follows for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Corporate capital allocation charge:
Mid Atlantic	$	35,337	$	37,121	$	68,516	$	71,208
North East	8,272		8,158		15,597		15,245
Mid East	9,819		12,875		19,479		24,292
South East	19,189		19,358		38,099		36,511
Total	$	72,617	$	77,512	$	141,691	$	147,256

(4)The consolidation adjustments and other for the three and six month periods of 2023 and 2022 is primarily driven by units under construction as well as significant fluctuations in lumber prices year over year. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled. In both the three and six month periods of 2023, the consolidation adjustment was negatively impacted by the recognition of previously deferred home package costs that included significantly higher priced lumber. This impact was offset partially by a reduction in the number of units under construction year over year, resulting in a decrease in intercompany profits deferred, as compared to the three and six month periods of 2022.

31

Mortgage Banking Segment

Three and Six Months Ended June 30, 2023 and 2022

We conduct our mortgage banking activity through NVR Mortgage Finance, Inc. (“NVRM”), a wholly owned subsidiary. NVRM focuses exclusively on serving the homebuilding segment customer base. NVRM sells all of the mortgage loans it closes to investors in the secondary markets on a servicing-released basis, typically within 30 days from the loan closing. The following table summarizes the results of our mortgage banking operations and certain statistical data for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Loan closing volume:
Total principal	$	1,381,647		$	1,647,972		$	2,618,930		$	3,132,565
Loan volume mix:
Adjustable rate mortgages	2		%	10		%	3		%	8		%
Fixed-rate mortgages	98		%	90		%	97		%	92		%
Operating profit:
Segment profit	$	37,843		$	28,800		$	67,270		$	78,906
Equity-based compensation expense	(1,378)			265			(2,745)			(783)
Mortgage banking income before tax	$	36,465		$	29,065		$	64,525		$	78,123
Capture rate:	86		%	84		%	85		%	85		%
Mortgage banking fees:
Net gain on sale of loans	$	43,863		$	36,835		$	81,131		$	94,813
Title services	10,663			11,997			20,315			23,173
Servicing fees	35			49			59			77
	$	54,561		$	48,881		$	101,505		$	118,063

Loan closing volume for the three and six months ended June 30, 2023 decreased by approximately $266,300, or 16%, and $513,600, or 16%, respectively, from the same periods in 2022. The decrease in loan closing volume during both the three and six months ended June 30, 2023 was primarily attributable to the 13% and 12% decreases in the homebuilding segment’s number of units settled, respectively, compared to the same periods in 2022.

Segment profit for the three months ended June 30, 2023 increased by approximately $9,000, or 31%, from the same period in 2022. This increase was primarily attributable to an increase in mortgage banking fees and a decrease in general and administrative expenses. Mortgage banking fees increased by approximately $5,700, or 12%, during the three months ended June 30, 2023, resulting from an increase in gains on sales of loans in the second quarter. General and administrative expenses decreased by approximately $2,300, or 10%, during the three months ended June 30, 2023 resulting from a decrease in personnel costs.

Segment profit for the six months ended June 30, 2023 decreased by approximately $11,600, or 15%, from the same period in 2022. This decrease was primarily attributable to a decrease of approximately $16,600, or 14%, in mortgage banking fees, primarily due to a decrease in secondary marketing gains on sales of loans in the first quarter of 2023 compared to the same period 2022.

32

Seasonality

We generally have higher New Order activity in the first half of the year and higher home settlements, revenue and net income in the second half of the year. However, our typical seasonal New Order and settlement trends have been affected since 2020 by the pandemic, supply chain disruptions and the significant fluctuations in mortgage interest rates. We cannot therefore predict whether period-to-period fluctuations will be consistent with historical patterns.

Effective Tax Rate

Our effective tax rate for the three and six months ended June 30, 2023 was 14.3% and 17.3%, respectively, compared to 24.5% and 24.6% for the three and six months ended June 30, 2022, respectively. The decrease in the effective tax rate in the three and six month periods of 2023 compared to the same periods in 2022 was primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled approximately $55,900 and $79,200 for the three and six months ended June 30, 2023, respectively, and approximately $8,700 and $17,200 for the three and six months ended June 30, 2022, respectively.

We expect to experience volatility in our effective tax rate in future quarters as the amount of the excess tax benefit from equity-based awards is dependent on our stock price when awards are exercised as well as on the timing of exercises, which historically has varied from quarter to quarter.

Liquidity and Capital Resources

We fund our operations primarily from our current cash holdings and cash flows generated by operating activities. In addition, we have available a short-term unsecured working capital revolving credit facility and revolving mortgage repurchase facility, as further described below. As of June 30, 2023, we had approximately $2,700,000 in cash and cash equivalents, approximately $286,300 in unused committed capacity under our revolving credit facility and $150,000 in unused committed capacity under our revolving mortgage repurchase facility.

Material Cash Requirements

We believe that our current cash holdings, cash generated from operations, and cash available under our short-term unsecured credit agreement and revolving mortgage repurchase facility, as well as the public debt and equity markets, will be sufficient to satisfy both our short term and long term cash requirements for working capital to support our daily operations and meet commitments under our contractual obligations with third parties. Our material contractual obligations primarily consist of the following:

(i) Payments due to service our debt and interest on that debt. Future interest payments on our remaining outstanding senior notes total approximately $185,550, with $27,000 due within the next twelve months.

(ii) Payment obligations totaling approximately $321,000 under existing LPAs for deposits to be paid to land developers, assuming that contractual development milestones are met by the developers and we exercise our option to acquire finished lots under those LPAs. We expect to make the majority of these payments within the next three years.

(iii) Obligations under operating and finance leases related primarily to office space and our production facilities. See Note 14 of this Quarterly Report on Form 10-Q for additional discussion of our leases.

In addition to funding growth in our homebuilding and mortgage banking operations, we historically have used a substantial portion of our excess liquidity to repurchase outstanding shares of our common stock in open market and privately negotiated transactions. This ongoing repurchase program assists us in accomplishing our primary objective, creating increases in shareholder value. See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this Quarterly Report on Form 10-Q for further discussion of repurchase activity during the second quarter of 2023. For the six months ended June 30, 2023, we repurchased 56,001 shares of our common stock at an aggregate purchase price of $311,125. As of June 30, 2023, we had approximately $196,560 available under a Board approved repurchase authorization.

33

Capital Resources

Senior Notes

As of June 30, 2023, we had Senior Notes with an aggregate principal balance of $900,000, which mature in May 2030. The Senior Notes are senior unsecured obligations and rank equally in right of payment with any of our existing and future unsecured senior indebtedness, will rank senior in right of payment to any of our future indebtedness that is by its terms expressly subordinated to the Senior Notes and will be effectively subordinated to any of our existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness. The indenture governing the Senior Notes does not contain any financial covenants; however, it does contain, among other items, and subject to certain exceptions, covenants that restrict our ability to create, incur, assume or guarantee secured debt, enter into sale and leaseback transactions and conditions related to mergers and/or the sale of assets. We were in compliance with all covenants under the Senior Notes at June 30, 2023.

Credit Agreement

We have an unsecured revolving credit agreement (the "Credit Agreement") with a group of lenders which may be used for working capital and general corporate purposes. The Credit Agreement provides for aggregate revolving loan commitments of $300,000 (the "Facility"). Under the Credit Agreement, we may request increases of up to $300,000 to the Facility in the form of revolving loan commitments or term loans to the extent that new or existing lenders agree to provide additional revolving loan or term loan commitments. In addition, the Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit of which there was approximately $13,700 outstanding at June 30, 2023. The Credit Agreement termination date is February 12, 2026. There were no borrowings outstanding under the Credit Agreement at June 30, 2023.

Repurchase Agreement

NVRM has an unsecured revolving mortgage repurchase facility (the "Repurchase Agreement") which provides for aggregate borrowings up to $150,000 and is non-recourse to NVR. In July 2023, NVRM entered into the First Amendment to the Repurchase Agreement, which extended the term of the Repurchase Agreement through July 17, 2024. All other terms and conditions under the amended Repurchase Agreement remained materially consistent. At June 30, 2023, there were no borrowing base limitations reducing the amount available under the Repurchase Agreement. There was no borrowings outstanding under the Repurchase Agreement at June 30, 2023.

For additional information regarding the Senior Notes, Credit Agreement and Repurchase Agreement, see Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

Cash Flows

For the six months ended June 30, 2023, cash, restricted cash, and cash equivalents increased by $183,539.  Net cash provided by operating activities was $344,204 for the six months ended June 30, 2023, due primarily to cash provided by earnings. Cash was primarily used to fund the increase in inventory of $231,814, attributable to an increase in units under construction at June 30, 2023 compared to December 31, 2022 and a net use of approximately $159,300 from mortgage loan activity.

Net cash used in investing activities for the six months ended June 30, 2023 was $10,453. Cash was used primarily for purchases of property, plant and equipment of $11,448.

Net cash used in financing activities was $150,212 for the six months ended June 30, 2023.  Cash was used to repurchase 56,001 shares of our common stock at an aggregate purchase price of $311,125 under our ongoing common stock repurchase program, discussed above. Cash was provided from stock option exercise proceeds totaling $161,724.

Critical Accounting Estimates

There have been no material changes to our critical accounting estimates as previously disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

34

Item 3. Quantitative and Qualitative Disclosure about Market Risk

There have been no material changes in our market risks during the six months ended June 30, 2023. For additional information regarding our market risks, see Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective.  There have been no changes in our internal control over financial reporting in the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

35

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

We are involved in various litigation arising in the ordinary course of business. In the opinion of management, and based on advice of legal counsel, this litigation is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Legal costs incurred in connection with outstanding litigation are expensed as incurred.

Item 1A. Risk Factors

There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

On August 3, 2022, we publicly announced that our Board of Directors authorized the repurchase of up to an aggregate of $500 million of our outstanding common stock in one or more open market and/or privately negotiated transactions. The repurchase authorization does not have an expiration date. We repurchased the following shares of our common stock during the second quarter of 2023 under this repurchase authorization:

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)
April 1 - 30, 2023	—	$	—	—	$	397,637
May 1 - 31, 2023	15,570	$	5,664.19	15,570	$	309,445
June 1 - 30, 2023	19,257	$	5,862.04	19,257	$	196,560
Total	34,827	$	5,773.58	34,827

On August 2, 2023, the Board of Directors approved an additional repurchase authorization of up to an aggregate of $500 million. The repurchase authorization does not have an expiration date.

36

Item 6.    Exhibits

Exhibit Number	Exhibit Description
10.1	First Amendment to Second Amended and Restated Master Repurchase Agreement dated July 19, 2023 between NVR Mortgage Finance, Inc. and U.S. Bank National Association. Filed herewith.
31.1	Certification of NVR’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
31.2	Certification of NVR’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
32	Certification of NVR’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

37

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 thereunto duly authorized.

		NVR, Inc.
Date: August 2, 2023	By:	/s/ Daniel D. Malzahn
		Daniel D. Malzahn
		Senior Vice President, Chief Financial Officer and Treasurer

38

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT (this “Amendment”), dated as of July 19, 2023 (the “Effective Date”), is made and entered into among NVR MORTGAGE FINANCE, INC., a Virginia corporation (the “Seller”), U.S. BANK NATIONAL ASSOCIATION, as agent (in such capacity, the “Agent”) and a Buyer, and the other Buyers (the “Buyers”).

RECITALS

A.The Seller and the Buyers are parties to a Second Amended and Restated Master Repurchase Agreement dated as of July 20, 2022 (as further amended, restated or otherwise modified from time to time, the “Repurchase Agreement”); and

B.The Seller and the Buyers now desire to amend certain provisions of the Repurchase Agreement as set forth herein.

AGREEMENT

In consideration of the premises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, all parties hereto agree as follows:

Section 1. Definitions. Capitalized terms used and not otherwise defined in this Amendment have the meanings specified in the Repurchase Agreement.

Section 2. Amendments. The Repurchase Agreement is hereby amended as follows:

2.1 Definitions. Section 1.2 of the Repurchase Agreement is hereby amended by adding or amending and restating, as applicable, the following defined terms to read in their entireties as follows:

“First Amendment Date” means July 19, 2023.

“Termination Date” means the earlier of (i) July 17, 2024, and (ii) the date when the Buyers’ Commitments are terminated pursuant to this Agreement, by order of any Governmental Authority or by operation of law.

2.2 Facility Fee. Section 9.1 of the Repurchase Agreement is amended by replacing the reference to “one-hundred twenty five one-thousandths of one percent (0.125%)” with “one-tenth of one percent (0.10%)”.

2.3 Anti-Corruption Laws; Sanctions. Section 15.5 of the Repurchase Agreement is amended and restated in its entirety as follows:

The Seller, its Subsidiaries and their respective directors, officers, and employees and, to the knowledge of the Seller, the agents of the Seller and its Subsidiaries are in compliance with Anti-Corruption Laws and all applicable

4884-5220-3626\3

Sanctions in all material respects. The Seller and its Subsidiaries have implemented and maintain in effect policies and procedures designed to ensure compliance with Anti-Corruption Laws and applicable Sanctions. None of the Seller, any of its Subsidiaries or any director, officer, employee, agent, or affiliate of the Seller or any of its Subsidiaries is an individual or entity that is, or is 50% or more owned (individually or in the aggregate, directly or indirectly) or controlled by individuals or entities (including any agency, political subdivision or instrumentality of any government) that are (a) the target of any Sanctions or (b) located, organized or resident in a country or territory that is the subject of Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Syria, Crimea, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, and the Kherson and Zaporizhzhia regions of Ukraine).

2.4 Use of Proceeds. Section 17.6 of the Repurchase Agreement is amended and restated in its entirety as follows:

The Seller shall not, directly or indirectly, use any of the proceeds of the Transactions for the purpose, whether immediate, incidental or ultimate, of buying any “margin stock” or of maintaining, reducing or retiring any Debt and Contingent Indebtedness originally incurred to purchase a stock that is currently any “margin stock”, or for any other purpose which might constitute this transaction a “purpose credit”, in each case within the meaning of Regulation U or otherwise take or permit to be taken any action which would involve a violation of Regulation U or Regulation T or any other regulation of the Board of Governors of the Federal Reserve System. The Seller will not, directly or indirectly, use the proceeds of the Transactions, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws or (b)(i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans or Letters of Credit, whether as Administrative Agent, Arranger, Issuing Bank, Lender, underwriter, advisor, investor, or otherwise).

2.5 Schedules and Exhibits. Schedule AI to the Repurchase Agreement is amended and restated in its entirety to read as set forth on Schedule AI to this Amendment.

Section 3. Representations, Warranties, Authority, No Adverse Claim.

3.1 Reassertion of Representations and Warranties, No Default. The Seller hereby represents and warrants that on and as of the date hereof and after giving effect to this Amendment (a) all of the representations and warranties in the Repurchase Agreement are true, correct, and complete in all respects as of the date hereof as though made on and as of such date, except for changes permitted by the terms of the Repurchase Agreement, and (b) there will exist no Default or Event of Default under the Repurchase

Agreement, as amended by this Amendment, on such date that the Buyers have not waived.

3.2 Authority, No Conflict, No Consent Required. The Seller represents and warrants that it has the power, legal right, and authority to enter into this Amendment and has duly authorized by proper corporate action the execution and delivery of this Amendment and none of the agreements herein contravenes or constitutes a default under any agreement, instrument, or indenture to which the Seller is a party or a signatory, any provision of the Seller’s articles of incorporation or bylaws, or any other agreement or requirement of law or results in the imposition of any Lien on any of its property under any agreement binding on or applicable to the Seller or any of its property except, if any, in favor of the Buyers. The Seller represents and warrants that no consent, approval, or authorization of or registration or declaration with any Person, including but not limited to any governmental authority, is required in connection with the execution and delivery by the Seller of this Amendment or the performance of obligations of the Seller herein described, except for those that the Seller has obtained or provided and as to which the Seller has delivered certified copies of documents evidencing each such action to the Buyers.

3.3 No Adverse Claim. The Seller hereby warrants, acknowledges, and agrees that no events have taken place and no circumstances exist at the date hereof that would give the Seller a basis to assert a defense, offset, or counterclaim to any claim of the Agent or the Buyers with respect to the Seller’s obligations under the Repurchase Agreement as amended by this Amendment.

Section 4. Conditions Precedent. The effectiveness of the amendments hereunder on the Effective Date shall be subject to satisfaction of the following conditions precedent:

4.1 The Agent shall have received the following documents in a quantity sufficient that the Seller and each Buyer may each have a fully executed original of each such document:

a.this Amendment duly executed by the Seller, the Agent, and the Buyers;

b.a certificate of the Secretary or an Assistant Secretary of the Seller certifying (i) that there has been no change to Seller’s articles of incorporation or bylaws since copies of the same were delivered to the Agent on July 25, 2011; (ii) as to a copy attached thereto of resolutions authorizing the execution, delivery, and performance of this Amendment, and the other documents and agreements executed and delivered in connection herewith; and (iii) as to the names, incumbency, and specimen signatures of the persons authorized to execute this Amendment on behalf of the Seller; and

c.such other documents as the Agent reasonably requests.

4.2 The Seller shall have paid any outstanding Agent’s Fees and any other fees then due under Article 9 of the Repurchase Agreement.

Section 5. Miscellaneous.

5.1 Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Repurchase Agreement and the other Repurchase Documents. Except as expressly modified and superseded by this Amendment, the terms and provisions of the Repurchase Agreement and each other Repurchase Document are ratified and confirmed and shall continue in full force and effect.

5.2 Survival. The representations and warranties made by the Seller in this Amendment shall survive the execution and delivery of this Amendment.

5.3 Reference to Repurchase Agreement. Each of the Repurchase Documents, including the Repurchase Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Repurchase Agreement as amended hereby, is hereby amended so that any reference in such Repurchase Document to the Repurchase Agreement shall refer to the Repurchase Agreement as amended and modified hereby.

5.4 Applicable Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York as applicable to the Repurchase Agreement.

5.5 Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of the Agent, the Buyers, the Seller, and their respective successors and assigns, except that the Seller may not assign or transfer any of its rights or obligations hereunder without the prior written consent of each of the Buyers.

5.6 Counterparts. This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument.

5.7 Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

5.8 ENTIRE AGREEMENT. THIS AMENDMENT AND THE OTHER REPURCHASE DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first written above.

NVR MORTGAGE FINANCE, INC., as

Seller

By: /s/ William B. Carter

Name: William B. Carter

Title: President

U.S. BANK NATIONAL ASSOCIATION,

as Agent and as a Buyer

By: /s/ Rodney Davis

Name: Rodney Davis

Title: Senior Vice President

SCHEDULE AI TO MASTER REPURCHASE AGREEMENT

**Fannie Mae and Freddie Mac are designated as Approved eNote Investors.

EX-31.1

Exhibit 31.1

SARBANES-OXLEY ACT SECTION 302 CERTIFICATIONS

I, Eugene J. Bredow, certify that:

1.I have reviewed this report on Form 10-Q of NVR, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2023	By:	/s/ Eugene J. Bredow
		Eugene J. Bredow
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

SARBANES-OXLEY ACT SECTION 302 CERTIFICATIONS

I, Daniel D. Malzahn, certify that:

1.I have reviewed this report on Form 10-Q of NVR, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2023	By:	/s/ Daniel D. Malzahn
		Daniel D. Malzahn
		Senior Vice President, Chief Financial Officer and Treasurer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of NVR, Inc. for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of NVR, Inc., hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NVR, Inc.

Date: August 2, 2023	By:	/s/ Eugene J. Bredow
		Eugene J. Bredow
		President and Chief Executive Officer
	By:	/s/ Daniel D. Malzahn
		Daniel D. Malzahn
		Senior Vice President, Chief Financial Officer and Treasurer

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	1-12378
Entity Registrant Name	NVR, Inc.
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1394360
Entity Address, Address Line One	11700 Plaza America Drive
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Reston
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20190
City Area Code	703
Local Phone Number	956-4000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	NVR
Security Exchange Name	NYSE
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		3,264,331
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000906163
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Contract land deposits, net	$ 516,709	$ 496,080
Total assets	6,266,775	5,660,973
Inventory:
Land under development	24,502
LIABILITIES AND SHAREHOLDERS' EQUITY
Total liabilities	2,113,512	2,154,124
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both June 30, 2023 and December 31, 2022	206	206
Additional paid-in capital	2,747,687	2,600,014
Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of both June 30, 2023 and December 31, 2022	(16,710)	(16,710)
Deferred compensation liability	16,710	16,710
Retained earnings	12,521,793	11,773,414
Less treasury stock at cost – 17,294,792 and 17,336,397 shares as of June 30, 2023 and December 31, 2022, respectively	(11,116,423)	(10,866,785)
Total shareholders' equity	4,153,263	3,506,849
Total liabilities and shareholders' equity	6,266,775	5,660,973
Mortgage Banking
ASSETS
Cash and cash equivalents	13,873	19,415
Restricted cash	14,083	2,974
Mortgage loans held for sale, net	438,756	316,806
Property, plant and equipment, net	4,704	3,559
Operating lease right-of-use assets	22,814	16,011
Goodwill	7,347	7,347
Other assets	59,696	47,691
Total assets	561,273	413,803
LIABILITIES AND SHAREHOLDERS' EQUITY
Operating lease liabilities	24,337	16,968
Accounts payable and other liabilities	58,667	61,396
Total liabilities	83,004	78,364
Home Building Segment
ASSETS
Cash and cash equivalents	2,678,709	2,503,424
Restricted cash	51,392	48,455
Receivables	26,757	20,842
Contract land deposits, net	516,709	496,080
Property, plant and equipment, net	57,711	57,950
Operating lease right-of-use assets	73,469	71,081
Goodwill	41,580	41,580
Other assets	239,086	219,483
Total assets	5,705,502	5,247,170
Inventory:
Lots and housing units, covered under sales agreements with customers	1,815,169	1,554,955
Unsold lots and housing units	158,004	181,952
Land under development	24,502	27,100
Building materials and other	22,414	24,268
Total Inventory	2,020,089	1,788,275
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	377,558	334,016
Accrued expenses and other liabilities	291,563	437,234
Customer deposits	368,763	313,804
Operating lease liabilities	78,661	75,818
Senior notes	913,963	914,888
Total liabilities	$ 2,030,508	$ 2,075,760

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	60,000,000	60,000,000
Common stock, shares issued (in shares)	20,555,330	20,555,330
Deferred compensation trust (in shares)	106,697	106,697
Treasury stock (in shares)	17,294,792	17,336,397

XML

Condensed Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues	$ 2,338,330	$ 2,658,943	$ 4,516,607	$ 5,037,352
Interest expense	(6,795)	(12,257)	(14,053)	(25,423)
Income before taxes	471,176	574,012	904,986	1,139,957
Income tax expense	(67,149)	(140,698)	(156,607)	(280,543)
Net income	$ 404,027	$ 433,314	$ 748,379	$ 859,414
Basic earnings per share (USD per share)	$ 123.84	$ 131.84	$ 230.20	$ 257.65
Diluted earnings per share (USD per share)	$ 116.54	$ 123.65	$ 216.52	$ 240.05
Basic weighted average shares outstanding (in shares)	3,262,529	3,286,574	3,250,960	3,335,644
Diluted weighted average shares outstanding (in shares)	3,466,936	3,504,304	3,456,406	3,580,089
Home Building Segment
Revenues	$ 2,283,769	$ 2,610,062	$ 4,415,102	$ 4,919,289
Other income	34,259	3,896	67,205	5,235
Cost of Goods and Services Sold	1,728,146	1,924,727	3,336,056	3,576,092
Selling, general and administrative	(148,543)	(132,432)	(292,161)	(261,942)
Operating income	441,339	556,799	854,090	1,086,490
Interest expense	(6,628)	(11,852)	(13,629)	(24,656)
Income before taxes	434,711	544,947	840,461	1,061,834
Mortgage Banking
Revenues	54,561	48,881	101,505	118,063
Interest income	3,823	2,772	6,841	4,846
Other income	1,102	1,303	2,091	2,375
General and administrative	(22,854)	(23,486)	(45,488)	(46,394)
Interest expense	(167)	(405)	(424)	(767)
Income before taxes	$ 36,465	$ 29,065	$ 64,525	$ 78,123

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 748,379	$ 859,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,405	8,991
Equity-based compensation expense	47,436	31,755
Contract land deposit recoveries, net	(9,999)	(6,342)
Gain on sale of loans, net	(81,131)	(94,813)
Mortgage loans closed	(2,620,507)	(3,133,046)
Mortgage loans sold and principal payments on mortgage loans held for sale	2,542,359	3,195,784
Net change in assets and liabilities:
Increase in inventory	(231,814)	(431,379)
Increase in contract land deposits	(10,630)	(20,917)
Decrease (increase) in receivables	4,183	(16,394)
(Decrease) increase in accounts payable and accrued expenses	(89,815)	25,716
Increase in customer deposits	54,959	21,656
Other, net	(19,621)	2,781
Net Cash Provided by (Used in) Operating Activities	344,204	447,206
Cash flows from investing activities:
Investments in and advances to unconsolidated joint ventures	(1,224)	(9,222)
Distribution of capital from unconsolidated joint ventures	180	0
Purchase of property, plant and equipment	(11,448)	(8,751)
Proceeds from the sale of property, plant and equipment	2,039	346
Net Cash Provided by (Used in) Investing Activities	(10,453)	(17,627)
Cash flows from financing activities:
Purchase of treasury stock	(311,125)	(1,015,703)
Repayments of Senior Debt	0	(600,000)
Principal payments on finance lease liabilities	(811)	(723)
Proceeds from the exercise of stock options	161,724	113,822
Net Cash Provided by (Used in) Financing Activities	(150,212)	(1,502,604)
Net increase (decrease) in cash, restricted cash, and cash equivalents	183,539	(1,073,025)
Cash, restricted cash, and cash equivalents, beginning of the period	2,574,518	2,636,984
Cash, restricted cash, and cash equivalents, end of the period	2,758,057	1,563,959
Supplemental disclosures of cash flow information:
Interest paid during the period, net of interest capitalized	14,781	32,627
Income taxes paid during the period, net of refunds	262,608	291,721
Distribution of earnings from unconsolidated joint ventures	$ 2,000	$ 4,000

XML

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesWe are involved in various litigation arising in the ordinary course of business. In the opinion of management, and based on advice of legal counsel, this litigation is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Legal costs incurred in connection with outstanding litigation are expensed as incurred.

XML

Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements include the accounts of NVR, Inc. (“NVR”, the “Company”, "we", "us" or "our") and its subsidiaries and certain other entities in which the Company is deemed to be the primary beneficiary (see Notes 2 and 3 to the accompanying condensed consolidated financial statements).  Intercompany accounts and transactions have been eliminated in consolidation. The statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Because the accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP, they should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments (consisting only of normal recurring accruals except as otherwise noted herein) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

For the three and six months ended June 30, 2023 and 2022, comprehensive income equaled net income; therefore, a separate statement of comprehensive income is not included in the accompanying condensed consolidated financial statements.

Revenue Recognition

Homebuilding revenue is recognized on the settlement date at the contract sales price, when control is transferred to our customers. Our contract liabilities, which consist of deposits received from customers on homes not settled, were $368,763 and $313,804 as of June 30, 2023 and December 31, 2022, respectively. We expect that substantially all of the customer deposits held at December 31, 2022 will be recognized in revenue in 2023. Our contract assets consist of prepaid sales compensation and totaled approximately $22,000 and $15,300, as of June 30, 2023 and December 31, 2022, respectively. Prepaid sales compensation is included in homebuilding “Other assets” on the accompanying condensed consolidated balance sheets.

XML

Variable Interest Entities ("VIEs")

6 Months Ended

Jun. 30, 2023

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure [Abstract]

Variable Interest Entities ("VIEs")

Variable Interest Entities ("VIEs")

Fixed Price Finished Lot Purchase Agreements (“LPAs”)

We generally do not engage in the land development business. Instead, we typically acquire finished building lots at market prices from various development entities under LPAs. The LPAs require deposits that may be forfeited if we fail to perform under the LPAs. The deposits required under the LPAs are in the form of cash or letters of credit in varying amounts, and typically range up to 10% of the aggregate purchase price of the finished lots.  

The deposit placed by us pursuant to the LPA is deemed to be a variable interest in the respective development entities. Those development entities are deemed to be VIEs. Therefore, the development entities with which we enter into LPAs, including the joint venture limited liability corporations discussed below, are evaluated for possible consolidation by us. We have concluded that we are not the primary beneficiary of the development entities with which we enter into LPAs, and therefore, we do not consolidate any of these VIEs.

As of June 30, 2023, we controlled approximately 123,900 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $553,300 and $8,200, respectively. Our sole legal obligation and economic loss for failure to perform under these LPAs is limited to the amount of the deposit pursuant to the liquidated damage provisions contained in the LPAs and, in very limited circumstances, specific performance obligations. For the three and six months ended June 30, 2023, we recorded a net reversal of approximately $6,900 and $10,000, respectively, related to previously impaired lot deposits based on current market conditions. For the three and six months ended June 30, 2022, we recorded a net reversal of approximately $400 and $6,300, respectively, related to previously impaired lot deposits. Our contract land deposit asset is shown net of a $46,401 and $57,060 impairment reserve at June 30, 2023 and December 31, 2022, respectively.

In addition, we have certain properties under contract with land owners that are expected to yield approximately 21,500 lots, which are not included in the number of total lots controlled. Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with deposits in cash and letters of credit totaling approximately $9,800 and $100, respectively, as of June 30, 2023, of which approximately $2,900 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.

Our total risk of loss related to contract land deposits is limited to the amount of the deposits pursuant to the liquidated damages provision of the LPAs. As of June 30, 2023 and December 31, 2022, our total risk of loss was as follows:

	June 30, 2023		December 31, 2022
Contract land deposits	$	563,110	$	553,140
Loss reserve on contract land deposits	(46,401)		(57,060)
Contract land deposits, net	516,709		496,080
Contingent obligations in the form of letters of credit	8,307		6,896
Total risk of loss	$	525,016	$	502,976

XML

Joint Ventures Joint Ventures

6 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Joint Ventures

Joint Ventures

On a limited basis, we obtain finished lots using joint venture limited liability corporations (“JVs”). The JVs are typically structured such that we are a non-controlling member and are at risk only for the amount we have invested, or have committed to invest, in addition to any deposits placed under LPAs with the joint venture. We are not a borrower, guarantor or obligor on any debt of the JVs, as applicable. We enter into LPAs to purchase lots from these JVs, and as a result have a variable interest in these JVs. We determined that we are not the primary beneficiary in any of the JVs because we and the other JV partner either share power or the other JV partner has the controlling financial interest.

At June 30, 2023, we had an aggregate investment totaling approximately $27,600 in four JVs that are expected to produce approximately 5,250 finished lots, of which approximately 4,900 lots were controlled by us and the remaining approximately 350 lots were either under contract with unrelated parties or not currently under contract. We had additional funding commitments totaling approximately $12,000 to one of the JVs at June 30, 2023. At December 31, 2022, our aggregate investment in JV's totaled approximately $27,200. Investments in JVs for the respective periods are reported in the homebuilding "Other assets" line item on the accompanying condensed consolidated balance sheets. None of the JVs had any indicators of impairment as of June 30, 2023.

We recognize income from the JVs as a reduction to the lot cost of the lots purchased from the respective JVs when the homes are settled, based on the expected total profitability and the total number of lots expected to be produced by the respective JVs.

We classify distributions received from unconsolidated JVs using the cumulative earnings approach. As a result, distributions received up to the amount of cumulative earnings recognized by us are reported as distributions of earnings and those in excess of that amount are reported as a distribution of capital. These distributions are classified within the accompanying condensed consolidated statements of cash flows as cash flows from operating activities and investing activities, respectively.

XML

Land Under Development	6 Months Ended
	Jun. 30, 2023
Real Estate [Abstract]
Land Under Development	Land Under DevelopmentOn a limited basis, we directly acquire raw land parcels already zoned for their intended use to develop into finished lots.  Land under development includes the land acquisition costs, direct improvement costs, capitalized interest, where applicable, and real estate taxes.As of June 30, 2023, we owned land with a carrying value of $24,502 that we intend to develop into approximately 1,600 finished lots. We have additional funding commitments of approximately $1,900 under a joint development agreement related to one project, a portion of which we expect will be offset by development credits of approximately $900. As of December 31, 2022, the carrying value of land under development was $27,100. None of the raw parcels had any indicators of impairment as of June 30, 2023

XML

Capitalized Interest

6 Months Ended

Jun. 30, 2023

Capitalized Interest Costs, Including Allowance for Funds Used During Construction [Abstract]

Capitalized Interest

Capitalized Interest

We capitalize interest costs to land under development during the active development of finished lots. In addition, we capitalize interest costs on our JV investments while the investments are considered qualified assets pursuant to ASC Topic 835-20 - Interest. Capitalized interest is transferred to sold or unsold inventory as the development of finished lots is completed, then charged to cost of sales upon our settlement of homes and the respective lots. Interest incurred in excess of the interest capitalizable based on the level of qualified assets is expensed in the period incurred.

The following table reflects the changes in our capitalized interest during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest capitalized, beginning of period	$	205	$	640	$	570	$	593
Interest incurred	6,822		12,349		13,826		25,603
Interest charged to interest expense	(6,795)		(12,257)		(14,053)		(25,423)
Interest charged to cost of sales	(43)		(52)		(154)		(93)
Interest capitalized, end of period	$	189	$	680	$	189	$	680

XML

Earnings per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

The following weighted average shares and share equivalents were used to calculate basic and diluted earnings per share ("EPS") for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Weighted average number of shares outstanding used to calculate basic EPS	3,262,529	3,286,574	3,250,960	3,335,644
Dilutive securities:
Stock options and restricted share units	204,407	217,730	205,446	244,445
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS	3,466,936	3,504,304	3,456,406	3,580,089

The following non-qualified stock options ("Options") and restricted stock units ("RSUs") issued under equity incentive plans were outstanding during the three and six months ended June 30, 2023 and 2022, but were not included in the computation of diluted EPS because the effect would have been anti-dilutive.

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Anti-dilutive securities	14,610	217,662	175,338	189,988

XML

Shareholders' Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Shareholders' Equity

Shareholders’ EquityA summary of changes in shareholders’ equity for the three months ended June 30, 2023 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, March 31, 2023	$	206	$	2,676,641	$	12,117,766	$	(10,949,267)	$	(16,710)	$	16,710	$	3,845,346
Net income	—		—		404,027		—		—		—		404,027
Purchase of common stock for treasury	—		—		—		(201,077)		—		—		(201,077)
Equity-based compensation	—		25,159		—		—		—		—		25,159
Proceeds from Options exercised	—		79,808		—		—		—		—		79,808
Treasury stock issued upon Option exercise	—		(33,921)		—		33,921		—		—		—
Balance, June 30, 2023	$	206	$	2,747,687	$	12,521,793	$	(11,116,423)	$	(16,710)	$	16,710	$	4,153,263

A summary of changes in shareholders’ equity for the six months ended June 30, 2023 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, December 31, 2022	$	206	$	2,600,014	$	11,773,414	$	(10,866,785)	$	(16,710)	$	16,710	$	3,506,849
Net income	—		—		748,379		—		—		—		748,379
Purchase of common stock for treasury	—		—		—		(311,125)		—		—		(311,125)
Equity-based compensation	—		47,436		—		—		—		—		47,436
Proceeds from Options exercised	—		161,724		—		—		—		—		161,724
Treasury stock issued upon Option exercise and RSU vesting	—		(61,487)		—		61,487		—		—		—
Balance, June 30, 2023	$	206	$	2,747,687	$	12,521,793	$	(11,116,423)	$	(16,710)	$	16,710	$	4,153,263

We repurchased 34,827 and 56,001 shares of our outstanding common stock during the three and six months ended June 30, 2023, respectively. We settle Option exercises and vesting of RSUs by issuing shares of treasury stock. We issued 53,615 and 97,556 shares from the treasury account during the three and six months ended June 30, 2023, respectively, in settlement of Option exercises and vesting of RSUs. Shares are relieved from the treasury account based on the weighted average cost basis of treasury shares.

A summary of changes in shareholders’ equity for the three months ended June 30, 2022 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, March 31, 2022	$	206	$	2,416,660	$	10,473,939	$	(10,165,206)	$	(16,710)	$	16,710	$	2,725,599
Net income	—		—		433,314		—		—		—		433,314
Purchase of common stock for treasury	—		—		—		(266,915)		—		—		(266,915)
Equity-based compensation	—		20,087		—		—		—		—		20,087
Proceeds from Options exercised	—		79,581		—		—		—		—		79,581
Treasury stock issued upon Option exercise	—		(18,205)		—		18,205		—		—		—
Balance, June 30, 2022	$	206	$	2,498,123	$	10,907,253	$	(10,413,916)	$	(16,710)	$	16,710	$	2,991,666

A summary of changes in shareholders’ equity for the six months ended June 30, 2022 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, December 31, 2021	$	206	$	2,378,191	$	10,047,839	$	(9,423,858)	$	(16,710)	$	16,710	$	3,002,378
Net income	—		—		859,414		—		—		—		859,414
Purchase of common stock for treasury	—		—		—		(1,015,703)		—		—		(1,015,703)
Equity-based compensation	—		31,755		—		—		—		—		31,755
Proceeds from Options exercised	—		113,822		—		—		—		—		113,822
Treasury stock issued upon Option exercise	—		(25,645)		—		25,645		—		—		—
Balance, June 30, 2022	$	206	$	2,498,123	$	10,907,253	$	(10,413,916)	$	(16,710)	$	16,710	$	2,991,666

We repurchased 61,078 and 207,132 shares of our outstanding common stock during the three and six months ended June 30, 2022, respectively. We issued 30,396 and 43,719 shares from the treasury account during the three and six months ended June 30, 2022, respectively, in settlement of Option exercises.

XML

Product Warranties

6 Months Ended

Jun. 30, 2023

Product Warranties Disclosures [Abstract]

Product Warranties

Product WarrantiesWe establish warranty and product liability reserves (“Warranty Reserve”) to provide for estimated future expenses as a result of construction and product defects, product recalls and litigation incidental to our homebuilding business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the estimated current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, consultations with third party experts such as engineers, and discussions with our general counsel and outside counsel retained to handle specific product liability cases.The following table reflects the changes in our Warranty Reserve during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Warranty reserve, beginning of period	$	144,431	$	135,341	$	144,006	$	134,859
Provision	22,312		24,551		43,582		42,518
Payments	(24,323)		(21,652)		(45,168)		(39,137)
Warranty reserve, end of period	$	142,420	$	138,240	$	142,420	$	138,240

XML

Segment Disclosures

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Disclosures

Segment Disclosures

Our homebuilding operations are aggregated geographically into four homebuilding reportable segments and our mortgage banking operations are presented as one reportable segment. The homebuilding reportable segments are comprised of operating divisions in the following geographic areas:

Mid Atlantic:	Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
North East:	New Jersey and Eastern Pennsylvania
Mid East:	New York, Ohio, Western Pennsylvania, Indiana and Illinois
South East:	North Carolina, South Carolina, Tennessee, Florida and Georgia

Homebuilding profit before tax includes all revenues and income generated from the sale of homes, less the cost of homes sold, selling, general and administrative expenses and a corporate capital allocation charge. The corporate capital allocation charge is eliminated in consolidation and is based on the segment’s average net assets employed. The corporate capital allocation charged to the operating segment allows the Chief Operating Decision Maker (“CODM”) to determine whether the operating segment’s results are providing the desired rate of return after covering our cost of capital.  

Assets not allocated to the operating segments are not included in either the operating segment’s corporate capital allocation charge or the CODM’s evaluation of the operating segment’s performance. We record charges on contract land deposits when it is determined that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are generally charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit. Mortgage banking profit before tax consists of revenues generated from mortgage financing, title insurance and closing services, less the costs of such services and general and administrative costs. Mortgage banking operations are not charged a corporate capital allocation charge.

In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between segment profit and consolidated profit before tax include unallocated corporate overhead (including all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest expense. Our overhead functions such as accounting, treasury and human resources are centrally performed and these costs are not allocated to our operating segments. Consolidation adjustments consist of such items necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments. External corporate interest expense primarily consists of interest charges on our 3.00% Senior Notes due 2030 (the “Senior Notes”), which are not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.

The following tables present segment revenues, profit and assets with reconciliations to the amounts reported for the consolidated enterprise, where applicable:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Homebuilding Mid Atlantic	$	1,058,794	$	1,208,312	$	1,999,942	$	2,350,020
Homebuilding North East	232,926		237,394		416,356		412,945
Homebuilding Mid East	411,682		521,038		814,079		982,442
Homebuilding South East	580,367		643,318		1,184,725		1,173,882
Mortgage Banking	54,561		48,881		101,505		118,063
Total consolidated revenues	$	2,338,330	$	2,658,943	$	4,516,607	$	5,037,352

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Income before taxes:
Homebuilding Mid Atlantic	$	195,254	$	251,739	$	354,292	$	501,520
Homebuilding North East	44,932		41,297		76,992		67,225
Homebuilding Mid East	61,756		82,512		118,224		153,695
Homebuilding South East	106,648		150,822		232,058		264,276
Mortgage Banking	37,843		28,800		67,270		78,906
Total segment profit before taxes	446,433		555,170		848,836		1,065,622
Reconciling items:
Contract land deposit reserve adjustment (1)	6,888		419		10,479		6,345
Equity-based compensation expense (2)	(25,159)		(20,087)		(47,436)		(31,755)
Corporate capital allocation (3)	72,617		77,512		141,691		147,256
Unallocated corporate overhead	(46,360)		(32,282)		(92,325)		(77,543)
Consolidation adjustments and other (4)	(9,998)		2,004		(5,999)		50,764
Corporate interest expense	(6,589)		(11,816)		(13,543)		(24,571)
Corporate interest income	33,344		3,092		63,283		3,839
Reconciling items sub-total	24,743		18,842		56,150		74,335
Consolidated income before taxes	$	471,176	$	574,012	$	904,986	$	1,139,957

(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2.

(2)The increase in equity-based compensation expense for the three and six months ended June 30, 2023 was primarily attributable to a four year block grant of Options and RSUs issued in May 2022.

(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance, and was as follows for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Corporate capital allocation charge:
Homebuilding Mid Atlantic	$	35,337	$	37,121	$	68,516	$	71,208
Homebuilding North East	8,272		8,158		15,597		15,245
Homebuilding Mid East	9,819		12,875		19,479		24,292
Homebuilding South East	19,189		19,358		38,099		36,511
Total	$	72,617	$	77,512	$	141,691	$	147,256

(4)The consolidation adjustments and other for the three and six month periods of 2023 and 2022 is primarily driven by units under construction as well as significant fluctuations in lumber prices year over year. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled. In both the three and six month periods of 2023, the consolidation adjustment was negatively impacted by the recognition of previously deferred home package costs that included significantly higher priced lumber. This impact was offset partially by a reduction in the number of units under construction year over year, resulting in a decrease in intercompany profits deferred, as compared to the three and six month periods of 2022.

	June 30, 2023		December 31, 2022
Assets:
Homebuilding Mid Atlantic	$	1,271,377	$	1,152,564
Homebuilding North East	317,956		250,001
Homebuilding Mid East	393,767		378,833
Homebuilding South East	752,310		697,923
Mortgage Banking	553,926		406,456
Total segment assets	3,289,336		2,885,777
Reconciling items:
Cash and cash equivalents	2,678,709		2,503,424
Deferred taxes	146,663		143,585
Intangible assets and goodwill	49,368		49,368
Operating lease right-of-use assets	73,469		71,081
Finance lease right-of-use assets	13,231		13,745
Contract land deposit reserve	(46,401)		(57,060)
Consolidation adjustments and other	62,400		51,053
Reconciling items sub-total	2,977,439		2,775,196
Consolidated assets	$	6,266,775	$	5,660,973

XML

Fair Value

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

GAAP assigns a fair value hierarchy to the inputs used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs.

Financial Instruments

The estimated fair values of our Senior Notes as of June 30, 2023 and December 31, 2022 were $792,540 and $788,166, respectively. The estimated fair value is based on recent market prices of similar transactions, which is classified as Level 2 within the fair value hierarchy. The carrying values at June 30, 2023 and December 31, 2022 were $913,963 and $914,888, respectively. Except as otherwise noted below, we believe that insignificant differences exist between the carrying value and the fair value of our financial instruments, which consist primarily of cash equivalents, due to their short term nature.

Derivative Instruments and Mortgage Loans Held for Sale

In the normal course of business, our wholly-owned mortgage subsidiary, NVR Mortgage Finance, Inc. (“NVRM”), enters into contractual commitments to extend credit to our homebuyers with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames established by NVRM. All mortgagors are evaluated for credit worthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to a broker/dealer. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, NVRM enters into optional or mandatory delivery forward sale contracts to sell whole loans and mortgage-backed securities to broker/dealers. The forward sales contracts lock in an interest rate and price for the sale of loans similar to the specific rate lock commitments. NVRM does not engage in speculative or trading derivative activities. Both the rate lock commitments to borrowers and the forward sale contracts to broker/dealers are undesignated derivatives and, accordingly, are marked to fair value through earnings. At June 30, 2023, there were rate lock commitments to extend credit to borrowers aggregating $2,618,808 and open forward delivery contracts aggregating $2,780,429, which hedge both the rate lock commitments and closed loans held for sale.

The fair value of NVRM’s rate lock commitments to borrowers and the related input levels include, as applicable:

i)the assumed gain/loss of the expected resultant loan sale (Level 2);

ii)the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and

iii)the value of the servicing rights associated with the loan (Level 2).

The assumed gain/loss considers the excess servicing to be received or buydown fees to be paid upon securitization of the loan. The excess servicing and buydown fees are calculated pursuant to contractual terms with investors. To calculate the effects of interest rate movements, NVRM utilizes applicable published mortgage-backed security prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount. NVRM sells all of its loans on a servicing released basis, and receives a servicing released premium upon sale. Thus, the value of the servicing rights is included in the fair value measurement and is based upon contractual terms with investors and varies depending on the loan type. NVRM

assumes a fallout rate when measuring the fair value of rate lock commitments. Fallout is defined as locked loan commitments for which NVRM does not close a mortgage loan and is based on historical experience.

The fair value of NVRM’s forward sales contracts to broker/dealers solely considers the market price movement of the same type of security between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

Mortgage loans held for sale are recorded at fair value when closed, and thereafter are carried at the lower of cost or fair value, net of deferred origination costs, until sold. Fair value is measured using Level 2 inputs. As of June 30, 2023, the fair value of loans held for sale of $438,756 included on the accompanying condensed consolidated balance sheet was increased by $2,486 from the aggregate principal balance of $436,270. As of December 31, 2022, the fair value of loans held for sale of $316,806 was decreased by $2,675 from the aggregate principal balance of $319,481.

The fair value measurement of NVRM's undesignated derivative instruments was as follows:

	June 30, 2023		December 31, 2022
Rate lock commitments:
Gross assets	$	44,034	$	32,246
Gross liabilities	24,585		20,946
Net rate lock commitments	$	19,449	$	11,300
Forward sales contracts:
Gross assets	$	14,063	$	4,843
Gross liabilities	944		20,903
Net forward sales contracts	$	13,119	$	(16,060)

As of June 30, 2023, the net rate lock commitments and the net forward sales contracts are reported in mortgage banking "Other assets," on the accompanying condensed consolidated balance sheets. As of December 31, 2022, the net rate lock commitments are reported in mortgage banking "Other assets" and the net forward sales contracts are reported in mortgage banking "Accrued expenses and other liabilities".

The fair value measurement as of June 30, 2023 was as follows:

	Notional or Principal Amount		Assumed Gain From Loan Sale		Interest Rate Movement Effect		Servicing Rights Value		Security Price Change		Total Fair Value Measurement
Rate lock commitments	$	2,618,808	$	8,932	$	(23,985)	$	34,502	$	—	$	19,449
Forward sales contracts	$	2,780,429	—		—		—		13,119		13,119
Mortgages held for sale	$	436,270	1,754		(5,715)		6,447		—		2,486
Total fair value measurement			$	10,686	$	(29,700)	$	40,949	$	13,119	$	35,054

The total fair value measurement as of December 31, 2022 was a net loss of $7,435. NVRM recorded a fair value adjustment to income of $301 and $42,489 for the three and six months ended June 30, 2023, respectively. NVRM recorded a fair value adjustment to expense of $27,540 and $17,430 for the three and six months ended June 30, 2022, respectively. Unrealized gains/losses from the change in the fair value measurements are included in earnings as a component of mortgage banking fees in the accompanying condensed consolidated statements of income. The fair value measurement will be impacted in the future by the change in the value of the servicing rights, interest rate movements, security price fluctuations, and the volume and product mix of NVRM’s closed loans and locked loan commitments.

XML

Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

As of June 30, 2023, we had the following debt instruments outstanding:

Senior Notes

Our outstanding Senior Notes have an aggregate principal balance of $900,000, mature on May 15, 2030 and bear interest at 3.00%, payable semi-annually in arrears on May 15 and November 15. The Senior Notes are senior unsecured obligations and rank equally in right of payment with any of our existing and future unsecured senior indebtedness. The Senior Notes were issued in three separate issuances, $600,000 issued at a discount to yield 3.02%, and the two additional issuances totaling $300,000 issued at a premium to yield 2.00%. The Senior Notes have been reflected net of the unamortized discount or premium, as applicable, and the unamortized debt issuance costs in the accompanying condensed consolidated balance sheet.

The indenture governing the Senior Notes does not contain any financial covenants; however, it does contain, among other items, and subject to certain exceptions, covenants that restrict our ability to create, incur, assume or guarantee secured debt, enter into sale and leaseback transactions and conditions related to mergers and/or the sale of assets. We were in compliance with all covenants under the Senior Notes at June 30, 2023.

Credit Agreement

We have an unsecured Credit Agreement (the “Credit Agreement”), which provides for aggregate revolving loan commitments of $300,000 (the “Facility”). Under the Credit Agreement, we may request increases of up to $300,000 to the Facility in the form of revolving loan commitments or term loans to the extent that new or existing lenders agree to provide additional revolving loan or term loan commitments. The Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit, of which approximately $13,700 was outstanding at June 30, 2023. The Credit Agreement termination date is February 12, 2026. There were no borrowings outstanding under the Facility at June 30, 2023.

Repurchase Agreement

NVRM provides for its mortgage origination and other operating activities using cash generated from its operations, borrowings from its parent company, NVR, as well as a revolving mortgage repurchase agreement (the “Repurchase Agreement”), which is non-recourse to NVR. The Repurchase Agreement provides for loan purchases up to $150,000, subject to certain sub-limits. Amounts outstanding under the Repurchase Agreement are collateralized by the Company’s mortgage loans held for sale.

Effective July 19, 2023, NVRM entered into the First Amendment to Second Amended and Restated Master Repurchase Agreement with U.S. Bank National Association, as Agent and a Buyer (the "Amended MRA"), which extended the term of the Repurchase Agreement through July 17, 2024. All other terms and conditions under the Amended Repurchase Agreement remained materially consistent. At June 30, 2023, there were no borrowing base limitations reducing the amount available under the Repurchase Agreement and there were no borrowings outstanding.

XML

Leases

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Leases

LeasesWe have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have finance leases for certain plant equipment and one of our production facilities which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued

expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our finance lease ROU assets and finance lease liabilities were $13,231 and $14,690, respectively, as of June 30, 2023, and $13,745 and $15,002, respectively, as of December 31, 2022. Our leases have remaining lease terms of up to 17.2 years, some of which include options to extend the lease for up to 20 years, and some of which include options to terminate the lease.

We recognize operating lease expense on a straight-line basis over the lease term. We have elected to use the portfolio approach for certain equipment leases which have similar lease terms and payment schedules. Additionally, for certain equipment we account for the lease and non-lease components as a single lease component. Our sublease income is de minimis.

We have certain leases, primarily the leases of model homes, which have initial lease terms of twelve months or less ("Short-term leases"). We elected to exclude these leases from the recognition requirements under Topic 842, and these leases have not been included in our recognized ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Lease expense
Operating lease expense	$	9,475	$	8,529	$	18,615	$	16,630
Finance lease expense:
Amortization of ROU assets	511		473		1,013		937
Interest on lease liabilities	105		103		211		207
Short-term lease expense	7,531		6,491		15,023		12,823
Total lease expense	$	17,622	$	15,596	$	34,862	$	30,597

Other information related to leases was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023			2022
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,420	$	6,935	$	14,736		$	14,104
Operating cash flows from finance leases	105		103		211			207
Financing cash flows from finance leases	411		367		811			723
ROU assets obtained in exchange for lease obligations:
Operating leases	$	10,090	$	18,073	$	23,337		$	23,886
Finance leases	$	250	$	451	$	499		$	723
					June 30, 2023			December 31, 2022
Weighted-average remaining lease term (in years):
Operating leases					5.9			6.0
Finance leases					10.4			10.8
Weighted-average discount rate:
Operating leases					4.0		%	3.6		%
Finance leases					3.0		%	2.9		%

Leases

LeasesWe have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have finance leases for certain plant equipment and one of our production facilities which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued

expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our finance lease ROU assets and finance lease liabilities were $13,231 and $14,690, respectively, as of June 30, 2023, and $13,745 and $15,002, respectively, as of December 31, 2022. Our leases have remaining lease terms of up to 17.2 years, some of which include options to extend the lease for up to 20 years, and some of which include options to terminate the lease.

We recognize operating lease expense on a straight-line basis over the lease term. We have elected to use the portfolio approach for certain equipment leases which have similar lease terms and payment schedules. Additionally, for certain equipment we account for the lease and non-lease components as a single lease component. Our sublease income is de minimis.

We have certain leases, primarily the leases of model homes, which have initial lease terms of twelve months or less ("Short-term leases"). We elected to exclude these leases from the recognition requirements under Topic 842, and these leases have not been included in our recognized ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Lease expense
Operating lease expense	$	9,475	$	8,529	$	18,615	$	16,630
Finance lease expense:
Amortization of ROU assets	511		473		1,013		937
Interest on lease liabilities	105		103		211		207
Short-term lease expense	7,531		6,491		15,023		12,823
Total lease expense	$	17,622	$	15,596	$	34,862	$	30,597

Other information related to leases was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023			2022
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,420	$	6,935	$	14,736		$	14,104
Operating cash flows from finance leases	105		103		211			207
Financing cash flows from finance leases	411		367		811			723
ROU assets obtained in exchange for lease obligations:
Operating leases	$	10,090	$	18,073	$	23,337		$	23,886
Finance leases	$	250	$	451	$	499		$	723
					June 30, 2023			December 31, 2022
Weighted-average remaining lease term (in years):
Operating leases					5.9			6.0
Finance leases					10.4			10.8
Weighted-average discount rate:
Operating leases					4.0		%	3.6		%
Finance leases					3.0		%	2.9		%

XML

Income Taxes

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

14.    Income Taxes

Our effective tax rate for the three and six months ended June 30, 2023 was 14.3% and 17.3%, respectively, compared to 24.5% and 24.6% for the three and six months ended June 30, 2022, respectively. The decrease in the effective tax rate in the three and six month periods of 2023 compared to the same periods in 2022 was primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $55,906 and $79,151 for the three and six months ended June 30, 2023, respectively, and $8,744 and $17,190 for the three and six months ended June 30, 2022, respectively.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements include the accounts of NVR, Inc. (“NVR”, the “Company”, "we", "us" or "our") and its subsidiaries and certain other entities in which the Company is deemed to be the primary beneficiary (see Notes 2 and 3 to the accompanying condensed consolidated financial statements).  Intercompany accounts and transactions have been eliminated in consolidation. The statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Because the accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP, they should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments (consisting only of normal recurring accruals except as otherwise noted herein) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue from Contract with Customer

Revenue RecognitionHomebuilding revenue is recognized on the settlement date at the contract sales price, when control is transferred to our customers.

XML

Variable Interest Entities ("VIEs") (Tables)

6 Months Ended

Jun. 30, 2023

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure [Abstract]

Total Risk of Loss Related to Contract Land Deposits

Our total risk of loss related to contract land deposits is limited to the amount of the deposits pursuant to the liquidated damages provision of the LPAs. As of June 30, 2023 and December 31, 2022, our total risk of loss was as follows:

	June 30, 2023		December 31, 2022
Contract land deposits	$	563,110	$	553,140
Loss reserve on contract land deposits	(46,401)		(57,060)
Contract land deposits, net	516,709		496,080
Contingent obligations in the form of letters of credit	8,307		6,896
Total risk of loss	$	525,016	$	502,976

XML

Capitalized Interest (Tables)

6 Months Ended

Jun. 30, 2023

Capitalized Interest Costs, Including Allowance for Funds Used During Construction [Abstract]

Summary of Interest Costs Incurred, Capitalized, Expensed and Charged to Cost of Sales

The following table reflects the changes in our capitalized interest during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Interest capitalized, beginning of period	$	205	$	640	$	570	$	593
Interest incurred	6,822		12,349		13,826		25,603
Interest charged to interest expense	(6,795)		(12,257)		(14,053)		(25,423)
Interest charged to cost of sales	(43)		(52)		(154)		(93)
Interest capitalized, end of period	$	189	$	680	$	189	$	680

XML

Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Weighted Average Shares and Share Equivalents Used to Calculate Basic and Diluted Earnings Per Share

The following weighted average shares and share equivalents were used to calculate basic and diluted earnings per share ("EPS") for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Weighted average number of shares outstanding used to calculate basic EPS	3,262,529	3,286,574	3,250,960	3,335,644
Dilutive securities:
Stock options and restricted share units	204,407	217,730	205,446	244,445
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS	3,466,936	3,504,304	3,456,406	3,580,089

Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following non-qualified stock options ("Options") and restricted stock units ("RSUs") issued under equity incentive plans were outstanding during the three and six months ended June 30, 2023 and 2022, but were not included in the computation of diluted EPS because the effect would have been anti-dilutive.

	Three Months Ended June 30,		Six Months Ended June 30,
	2023	2022	2023	2022
Anti-dilutive securities	14,610	217,662	175,338	189,988

XML

Shareholders' Equity (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2023

Jun. 30, 2022

Jun. 30, 2023

Jun. 30, 2022

Equity [Abstract]

Summary of Changes in Shareholders' Equity

A summary of changes in shareholders’ equity for the three months ended June 30, 2023 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, March 31, 2023	$	206	$	2,676,641	$	12,117,766	$	(10,949,267)	$	(16,710)	$	16,710	$	3,845,346
Net income	—		—		404,027		—		—		—		404,027
Purchase of common stock for treasury	—		—		—		(201,077)		—		—		(201,077)
Equity-based compensation	—		25,159		—		—		—		—		25,159
Proceeds from Options exercised	—		79,808		—		—		—		—		79,808
Treasury stock issued upon Option exercise	—		(33,921)		—		33,921		—		—		—
Balance, June 30, 2023	$	206	$	2,747,687	$	12,521,793	$	(11,116,423)	$	(16,710)	$	16,710	$	4,153,263

A summary of changes in shareholders’ equity for the three months ended June 30, 2022 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, March 31, 2022	$	206	$	2,416,660	$	10,473,939	$	(10,165,206)	$	(16,710)	$	16,710	$	2,725,599
Net income	—		—		433,314		—		—		—		433,314
Purchase of common stock for treasury	—		—		—		(266,915)		—		—		(266,915)
Equity-based compensation	—		20,087		—		—		—		—		20,087
Proceeds from Options exercised	—		79,581		—		—		—		—		79,581
Treasury stock issued upon Option exercise	—		(18,205)		—		18,205		—		—		—
Balance, June 30, 2022	$	206	$	2,498,123	$	10,907,253	$	(10,413,916)	$	(16,710)	$	16,710	$	2,991,666

A summary of changes in shareholders’ equity for the six months ended June 30, 2023 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, December 31, 2022	$	206	$	2,600,014	$	11,773,414	$	(10,866,785)	$	(16,710)	$	16,710	$	3,506,849
Net income	—		—		748,379		—		—		—		748,379
Purchase of common stock for treasury	—		—		—		(311,125)		—		—		(311,125)
Equity-based compensation	—		47,436		—		—		—		—		47,436
Proceeds from Options exercised	—		161,724		—		—		—		—		161,724
Treasury stock issued upon Option exercise and RSU vesting	—		(61,487)		—		61,487		—		—		—
Balance, June 30, 2023	$	206	$	2,747,687	$	12,521,793	$	(11,116,423)	$	(16,710)	$	16,710	$	4,153,263

A summary of changes in shareholders’ equity for the six months ended June 30, 2022 is presented below:

	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Deferred Compensation Trust		Deferred Compensation Liability		Total
Balance, December 31, 2021	$	206	$	2,378,191	$	10,047,839	$	(9,423,858)	$	(16,710)	$	16,710	$	3,002,378
Net income	—		—		859,414		—		—		—		859,414
Purchase of common stock for treasury	—		—		—		(1,015,703)		—		—		(1,015,703)
Equity-based compensation	—		31,755		—		—		—		—		31,755
Proceeds from Options exercised	—		113,822		—		—		—		—		113,822
Treasury stock issued upon Option exercise	—		(25,645)		—		25,645		—		—		—
Balance, June 30, 2022	$	206	$	2,498,123	$	10,907,253	$	(10,413,916)	$	(16,710)	$	16,710	$	2,991,666

XML

Product Warranties (Tables)

6 Months Ended

Jun. 30, 2023

Product Warranties Disclosures [Abstract]

Summary of Changes in Product Warranties Reserve

The following table reflects the changes in our Warranty Reserve during the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Warranty reserve, beginning of period	$	144,431	$	135,341	$	144,006	$	134,859
Provision	22,312		24,551		43,582		42,518
Payments	(24,323)		(21,652)		(45,168)		(39,137)
Warranty reserve, end of period	$	142,420	$	138,240	$	142,420	$	138,240

XML

Segment Disclosures (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Revenues

The following tables present segment revenues, profit and assets with reconciliations to the amounts reported for the consolidated enterprise, where applicable:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
Homebuilding Mid Atlantic	$	1,058,794	$	1,208,312	$	1,999,942	$	2,350,020
Homebuilding North East	232,926		237,394		416,356		412,945
Homebuilding Mid East	411,682		521,038		814,079		982,442
Homebuilding South East	580,367		643,318		1,184,725		1,173,882
Mortgage Banking	54,561		48,881		101,505		118,063
Total consolidated revenues	$	2,338,330	$	2,658,943	$	4,516,607	$	5,037,352

Profit before Taxes

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Income before taxes:
Homebuilding Mid Atlantic	$	195,254	$	251,739	$	354,292	$	501,520
Homebuilding North East	44,932		41,297		76,992		67,225
Homebuilding Mid East	61,756		82,512		118,224		153,695
Homebuilding South East	106,648		150,822		232,058		264,276
Mortgage Banking	37,843		28,800		67,270		78,906
Total segment profit before taxes	446,433		555,170		848,836		1,065,622
Reconciling items:
Contract land deposit reserve adjustment (1)	6,888		419		10,479		6,345
Equity-based compensation expense (2)	(25,159)		(20,087)		(47,436)		(31,755)
Corporate capital allocation (3)	72,617		77,512		141,691		147,256
Unallocated corporate overhead	(46,360)		(32,282)		(92,325)		(77,543)
Consolidation adjustments and other (4)	(9,998)		2,004		(5,999)		50,764
Corporate interest expense	(6,589)		(11,816)		(13,543)		(24,571)
Corporate interest income	33,344		3,092		63,283		3,839
Reconciling items sub-total	24,743		18,842		56,150		74,335
Consolidated income before taxes	$	471,176	$	574,012	$	904,986	$	1,139,957

(1)This item represents changes to the contract land deposit impairment reserve, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2.

(2)The increase in equity-based compensation expense for the three and six months ended June 30, 2023 was primarily attributable to a four year block grant of Options and RSUs issued in May 2022.

(3)This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance, and was as follows for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Corporate capital allocation charge:
Homebuilding Mid Atlantic	$	35,337	$	37,121	$	68,516	$	71,208
Homebuilding North East	8,272		8,158		15,597		15,245
Homebuilding Mid East	9,819		12,875		19,479		24,292
Homebuilding South East	19,189		19,358		38,099		36,511
Total	$	72,617	$	77,512	$	141,691	$	147,256

(4)The consolidation adjustments and other for the three and six month periods of 2023 and 2022 is primarily driven by units under construction as well as significant fluctuations in lumber prices year over year. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled. In both the three and six month periods of 2023, the consolidation adjustment was negatively impacted by the recognition of previously deferred home package costs that included significantly higher priced lumber. This impact was offset partially by a reduction in the number of units under construction year over year, resulting in a decrease in intercompany profits deferred, as compared to the three and six month periods of 2022.

Assets

	June 30, 2023		December 31, 2022
Assets:
Homebuilding Mid Atlantic	$	1,271,377	$	1,152,564
Homebuilding North East	317,956		250,001
Homebuilding Mid East	393,767		378,833
Homebuilding South East	752,310		697,923
Mortgage Banking	553,926		406,456
Total segment assets	3,289,336		2,885,777
Reconciling items:
Cash and cash equivalents	2,678,709		2,503,424
Deferred taxes	146,663		143,585
Intangible assets and goodwill	49,368		49,368
Operating lease right-of-use assets	73,469		71,081
Finance lease right-of-use assets	13,231		13,745
Contract land deposit reserve	(46,401)		(57,060)
Consolidation adjustments and other	62,400		51,053
Reconciling items sub-total	2,977,439		2,775,196
Consolidated assets	$	6,266,775	$	5,660,973

XML

Fair Value (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Undesignated Derivative Instruments

The fair value measurement of NVRM's undesignated derivative instruments was as follows:

	June 30, 2023		December 31, 2022
Rate lock commitments:
Gross assets	$	44,034	$	32,246
Gross liabilities	24,585		20,946
Net rate lock commitments	$	19,449	$	11,300
Forward sales contracts:
Gross assets	$	14,063	$	4,843
Gross liabilities	944		20,903
Net forward sales contracts	$	13,119	$	(16,060)

Fair Value Measurement

The fair value measurement as of June 30, 2023 was as follows:

	Notional or Principal Amount		Assumed Gain From Loan Sale		Interest Rate Movement Effect		Servicing Rights Value		Security Price Change		Total Fair Value Measurement
Rate lock commitments	$	2,618,808	$	8,932	$	(23,985)	$	34,502	$	—	$	19,449
Forward sales contracts	$	2,780,429	—		—		—		13,119		13,119
Mortgages held for sale	$	436,270	1,754		(5,715)		6,447		—		2,486
Total fair value measurement			$	10,686	$	(29,700)	$	40,949	$	13,119	$	35,054

Fair Value Measurements, Recurring and Nonrecurring

The estimated fair values of our Senior Notes as of June 30, 2023 and December 31, 2022 were $792,540 and $788,166, respectively. The estimated fair value is based on recent market prices of similar transactions, which is classified as Level 2 within the fair value hierarchy. The carrying values at June 30, 2023 and December 31, 2022 were $913,963 and $914,888, respectively. Except as otherwise noted below, we believe that insignificant differences exist between the carrying value and the fair value of our financial instruments, which consist primarily of cash equivalents, due to their short term nature.

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Components of Lease Expense and Other Information related to Leases

The components of lease expense were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Lease expense
Operating lease expense	$	9,475	$	8,529	$	18,615	$	16,630
Finance lease expense:
Amortization of ROU assets	511		473		1,013		937
Interest on lease liabilities	105		103		211		207
Short-term lease expense	7,531		6,491		15,023		12,823
Total lease expense	$	17,622	$	15,596	$	34,862	$	30,597

ScheduleofSupplementalCashFlowInformationRelatedtoLeases

Other information related to leases was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023			2022
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,420	$	6,935	$	14,736		$	14,104
Operating cash flows from finance leases	105		103		211			207
Financing cash flows from finance leases	411		367		811			723
ROU assets obtained in exchange for lease obligations:
Operating leases	$	10,090	$	18,073	$	23,337		$	23,886
Finance leases	$	250	$	451	$	499		$	723
					June 30, 2023			December 31, 2022
Weighted-average remaining lease term (in years):
Operating leases					5.9			6.0
Finance leases					10.4			10.8
Weighted-average discount rate:
Operating leases					4.0		%	3.6		%
Finance leases					3.0		%	2.9		%

XML

Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Assets
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract cost	$ 22,000	$ 15,300
Home Building Segment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted cash and cash equivalents	51,392	48,455
Contract liabilities for customer deposits	$ 368,763	$ 313,804

XML

Variable Interest Entities ("VIEs") - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) lot	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) lot	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Variable Interest Entity [Line Items]
Letters of credit related to lots	$ 8,307		$ 8,307
Net Contract Land Deposit Impairment Recoveries	6,900	$ 400	(10,000)	$ 6,300
Loss reserve on contract land deposits	46,401		46,401		$ 57,060
Contract land deposits in cash	$ 563,110		563,110		553,140
Contingent obligations in the form of letters of credit					6,896
Contract land deposit recoveries, net			$ (9,999)	$ (6,342)
Contingent obligations in the form of letters of credit					$ 6,896
Variable Interest Entities
Variable Interest Entity [Line Items]
Maximum range of deposits required under the purchase agreements	10.00%		10.00%
Lots controlled by NVR | lot	123,900		123,900
Contract land deposits in cash under lot purchase Agreements	$ 553,300		$ 553,300
Letters of credit related to lots	$ 8,200		$ 8,200
Contract on Raw Ground with Landowners
Variable Interest Entity [Line Items]
Lots controlled by NVR | lot	21,500		21,500
Contract land deposits in cash	$ 9,800		$ 9,800
Refundable deposits and letters of credit	2,900		2,900
Contingent obligations in the form of letters of credit	100		100
Contingent obligations in the form of letters of credit	$ 100		$ 100

XML

Variable Interest Entities ("VIEs") - Total Risk of Loss Related to Contract Land Deposits (Detail) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure [Abstract]
Contract land deposits	$ 563,110	$ 553,140
Loss reserve on contract land deposits	(46,401)	(57,060)
Contract land deposits, net	516,709	496,080
Contingent obligations in the form of letters of credit		6,896
Total risk of loss	525,016	$ 502,976
Letters of credit related to lots	$ 8,307

XML

Joint Ventures - Additional Information (Detail) $ in Thousands	Jun. 30, 2023 USD ($) joint_venture lot	Dec. 31, 2022 USD ($)
Joint Ventures [Line Items]
Aggregate investment	$ 27,600
Number of joint ventures | joint_venture	4
Expected production of finished lots | lot	5,250
Total lots controlled by company under the joint venture | lot	4,900
Total lots either under contract with unrelated parties or not under the current contract | lot	350
Additional funding commitments in the aggregate	$ 12,000
Other Assets
Joint Ventures [Line Items]
Aggregate investment		$ 27,200
Home Building Segment
Joint Ventures [Line Items]
Restricted cash and cash equivalents	51,392	48,455
Accrued expenses and other liabilities	$ 291,563	$ 437,234

XML

Land Under Development - Additional Information (Detail) $ in Thousands	Jun. 30, 2023 USD ($) lot
Real Estate [Abstract]
Carrying value of raw parcels of land	$ 24,502
Number of finished lots expected to be developed from raw parcels of land | lot	1,600
Aggregate additional funding commitments related to raw land property under joint development	$ 1,900
Expected development credits that will offset the aggregate additional funding commitments related to raw land property development	$ 900

XML

Capitalized Interest - Summary of Interest Costs Incurred, Capitalized, Expensed and Charged to Cost of Sales (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Capitalized Interest Costs, Including Allowance for Funds Used During Construction [Roll Forward]
Interest capitalized, beginning of period	$ 205	$ 640	$ 570	$ 593
Interest incurred	6,822	12,349	13,826	25,603
Interest expense	(6,795)	(12,257)	(14,053)	(25,423)
Interest charged to cost of sales	(43)	(52)	(154)	(93)
Interest capitalized, end of period	$ 189	$ 680	$ 189	$ 680

XML

Earnings Per Share - Weighted Average Shares and Share Equivalents Used to Calculate Basic and Diluted Earnings Per Share (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Weighted average number of shares outstanding used to calculate basic EPS (in shares)	3,262,529	3,286,574	3,250,960	3,335,644
Dilutive securities:
Stock options and restricted share units (in shares)	204,407	217,730	205,446	244,445
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS (in shares)	3,466,936	3,504,304	3,456,406	3,580,089

XML

Earnings Per Share - Summary of Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Anti-dilutive securities (in shares)	14,610	217,662	175,338	189,988

XML

Shareholders' Equity - Summary of Changes in Shareholders' Equity (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 3,845,346	$ 2,725,599	$ 3,506,849	$ 3,002,378
Net income	404,027	433,314	748,379	859,414
Purchase of common stock for treasury	(201,077)	(266,915)	(311,125)	(1,015,703)
Equity-based compensation	25,159	20,087	47,436	31,755
Proceeds from Options exercised	79,808	79,581	161,724	113,822
Ending Balance	$ 4,153,263	$ 2,991,666	$ 4,153,263	$ 2,991,666
Common stock repurchased (in shares)	34,827	61,078	56,001	207,132
Reissued shares during the period, shares (in shares)	53,615	30,396	97,556	43,719
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	$ 206	$ 206	$ 206	$ 206
Ending Balance	206	206	206	206
Additional Paid-In Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	2,676,641	2,416,660	2,600,014	2,378,191
Equity-based compensation	25,159	20,087	47,436	31,755
Proceeds from Options exercised	79,808	79,581	161,724	113,822
Treasury stock issued upon Option exercise and RSU vesting	(33,921)	(18,205)	(61,487)	(25,645)
Ending Balance	2,747,687	2,498,123	2,747,687	2,498,123
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	12,117,766	10,473,939	11,773,414	10,047,839
Net income	404,027	433,314	748,379	859,414
Ending Balance	12,521,793	10,907,253	12,521,793	10,907,253
Treasury Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	(10,949,267)	(10,165,206)	(10,866,785)	(9,423,858)
Purchase of common stock for treasury	(201,077)	(266,915)	(311,125)	(1,015,703)
Treasury stock issued upon Option exercise and RSU vesting	33,921	18,205	61,487	25,645
Ending Balance	(11,116,423)	(10,413,916)	(11,116,423)	(10,413,916)
Deferred Compensation Trust
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	(16,710)	(16,710)	(16,710)	(16,710)
Ending Balance	(16,710)	(16,710)	(16,710)	(16,710)
Deferred Compensation Liability
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning Balance	16,710	16,710	16,710	16,710
Ending Balance	$ 16,710	$ 16,710	$ 16,710	$ 16,710

XML

Shareholders' Equity - Additional Information (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Equity [Abstract]
Common stock repurchased (in shares)	34,827	61,078	56,001	207,132
Reissued shares during the period, shares (in shares)	53,615	30,396	97,556	43,719

XML

Product Warranties Product Warranties - Schedule of Product Warranties Reserves (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]
Warranty reserve, beginning of period	$ 144,431	$ 135,341	$ 144,006	$ 134,859
Provision	22,312	24,551	43,582	42,518
Payments	(24,323)	(21,652)	(45,168)	(39,137)
Warranty reserve, end of period	$ 142,420	$ 138,240	$ 142,420	$ 138,240

XML

Segment Disclosures - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2023 segment
Senior Notes due 2030
Segment Reporting Information [Line Items]
Senior notes interest rate	3.00%
Home Building Segment
Segment Reporting Information [Line Items]
Number of reportable segments	4
Mortgage Banking
Segment Reporting Information [Line Items]
Number of reportable segments	1

XML

Segment Disclosures - Revenues (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 2,338,330	$ 2,658,943	$ 4,516,607	$ 5,037,352
Home Building Segment
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	2,283,769	2,610,062	4,415,102	4,919,289
Home Building Segment | Mid Atlantic
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	1,058,794	1,208,312	1,999,942	2,350,020
Home Building Segment | North East
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	232,926	237,394	416,356	412,945
Home Building Segment | Mid East
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	411,682	521,038	814,079	982,442
Home Building Segment | South East
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	580,367	643,318	1,184,725	1,173,882
Mortgage Banking
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 54,561	$ 48,881	$ 101,505	$ 118,063

XML

Segment Disclosures - Income before Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	$ 471,176	$ 574,012	$ 904,986	$ 1,139,957
Equity-based compensation expense			(47,436)	(31,755)
Corporate interest expense	(6,795)	(12,257)	(14,053)	(25,423)
Home Building Segment
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	434,711	544,947	840,461	1,061,834
Corporate interest expense	(6,628)	(11,852)	(13,629)	(24,656)
Mortgage Banking
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	36,465	29,065	64,525	78,123
Corporate interest expense	(167)	(405)	(424)	(767)
Interest income	3,823	2,772	6,841	4,846
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	446,433	555,170	848,836	1,065,622
Operating Segments | Home Building Segment | Mid Atlantic
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	195,254	251,739	354,292	501,520
Operating Segments | Home Building Segment | North East
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	44,932	41,297	76,992	67,225
Operating Segments | Home Building Segment | Mid East
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	61,756	82,512	118,224	153,695
Operating Segments | Home Building Segment | South East
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	106,648	150,822	232,058	264,276
Operating Segments | Mortgage Banking
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	37,843	28,800	67,270	78,906
Corporate and Reconciling Items
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Income before taxes	24,743	18,842	56,150	74,335
Contract land deposit reserve adjustment	6,888	419	10,479	6,345
Equity-based compensation expense	(25,159)	(20,087)	(47,436)	(31,755)
Corporate capital allocation	72,617	77,512	141,691	147,256
Unallocated corporate overhead	(46,360)	(32,282)	(92,325)	(77,543)
Consolidation adjustments and other (4)	(9,998)	2,004	(5,999)	50,764
Corporate interest expense	(6,589)	(11,816)	(13,543)	(24,571)
Interest income	33,344	3,092	63,283	3,839
Corporate and Reconciling Items | Home Building Segment | Mid Atlantic
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Corporate capital allocation	35,337	37,121	68,516	71,208
Corporate and Reconciling Items | Home Building Segment | North East
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Corporate capital allocation	8,272	8,158	15,597	15,245
Corporate and Reconciling Items | Home Building Segment | Mid East
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Corporate capital allocation	9,819	12,875	19,479	24,292
Corporate and Reconciling Items | Home Building Segment | South East
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Corporate capital allocation	$ 19,189	$ 19,358	$ 38,099	$ 36,511

XML

Segment Disclosures - Corporate Capital Allocation Charge (Detail) - Corporate and Reconciling Items - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting, Other Significant Reconciling Item [Line Items]
Corporate capital allocation charge	$ 72,617	$ 77,512	$ 141,691	$ 147,256
Home Building Segment | Mid Atlantic
Segment Reporting, Other Significant Reconciling Item [Line Items]
Corporate capital allocation charge	35,337	37,121	68,516	71,208
Home Building Segment | North East
Segment Reporting, Other Significant Reconciling Item [Line Items]
Corporate capital allocation charge	8,272	8,158	15,597	15,245
Home Building Segment | Mid East
Segment Reporting, Other Significant Reconciling Item [Line Items]
Corporate capital allocation charge	9,819	12,875	19,479	24,292
Home Building Segment | South East
Segment Reporting, Other Significant Reconciling Item [Line Items]
Corporate capital allocation charge	$ 19,189	$ 19,358	$ 38,099	$ 36,511

XML

Segment Disclosures - Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 6,266,775	$ 5,660,973
Finance Lease, Right-of-Use Asset	13,231	13,745
Contract land deposit reserve	(46,401)	(57,060)
Home Building Segment
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	5,705,502	5,247,170
Cash and cash equivalents	2,678,709	2,503,424
Operating lease right-of-use assets	73,469	71,081
Mortgage Banking
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	561,273	413,803
Cash and cash equivalents	13,873	19,415
Operating lease right-of-use assets	22,814	16,011
Operating Segments
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	3,289,336	2,885,777
Operating Segments | Home Building Segment | Mid Atlantic
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	1,271,377	1,152,564
Operating Segments | Home Building Segment | North East
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	317,956	250,001
Operating Segments | Home Building Segment | Mid East
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	393,767	378,833
Operating Segments | Home Building Segment | South East
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	752,310	697,923
Operating Segments | Mortgage Banking
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	553,926	406,456
Corporate and Reconciling Items
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	2,977,439	2,775,196
Cash and cash equivalents	2,678,709	2,503,424
Deferred taxes	146,663	143,585
Intangible assets and goodwill	49,368	49,368
Operating lease right-of-use assets	73,469	71,081
Finance Lease, Right-of-Use Asset	13,231	13,745
Contract land deposit reserve	(46,401)	(57,060)
Consolidation adjustments and other	$ 62,400	$ 51,053

XML

Fair Value - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total fair value measurement gain/(loss)			$ 35,054		$ (7,435)
Home Building Segment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes carrying value	$ 913,963		913,963		914,888
Home Building Segment | Senior Notes due 2030
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes carrying value	913,963		913,963		914,888
Home Building Segment | Level 2 | Fair Value, Recurring | Senior Notes due 2030
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior Notes fair value	792,540		792,540		788,166
Mortgage Banking | Level 2 | Not Designated as Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value adjustment income (expense)	301	$ 27,540	42,489	$ 17,430
Mortgage Banking | Level 2 | Fair Value, Recurring | Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value disclosure, off-balance sheet risks, face amount, liability	2,618,808		2,618,808
Total fair value measurement gain/(loss)			19,449
Mortgage Banking | Level 2 | Fair Value, Recurring | Forward Sales Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value disclosure, off-balance sheet risks, face amount, liability	2,780,429		2,780,429
Total fair value measurement gain/(loss)			13,119
Mortgage Banking | Level 2 | Fair Value, Recurring | Mortgages Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trade and loans receivables held-for-sale, net, not part of disposal group	438,756		438,756		$ 316,806
Fair Value, principal amount, loans held for sale	$ 436,270	$ 319,481	436,270	319,481
Fair value, option, changes in fair value, gain (loss)			$ 2,486	$ 2,675

XML

Fair Value - Undesignated Derivative Instruments (Detail) - Mortgage Banking - Level 2 - Fair Value, Recurring - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Assets | Rate Lock Commitments
Derivatives, Fair Value [Line Items]
Gross assets	$ 44,034	$ 32,246
Gross liabilities	24,585	20,946
Net rate lock commitments and forward sales contracts	19,449	11,300
Accrued Liabilities | Forward Sales Contracts
Derivatives, Fair Value [Line Items]
Gross assets	14,063	4,843
Gross liabilities	944	20,903
Net rate lock commitments and forward sales contracts	$ 13,119	$ (16,060)

XML

Fair Value - Fair Value Measurement (Detail) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assumed Gain From Loan Sale	$ 10,686
Interest Rate Movement Effect	(29,700)
Servicing Rights Value	40,949
Security Price Change	13,119
Total Fair Value Measurement	35,054		$ (7,435)
Mortgage Banking | Level 2 | Fair Value, Recurring | Rate Lock Commitments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value disclosure, off-balance sheet risks, face amount, liability	2,618,808
Assumed Gain From Loan Sale	8,932
Interest Rate Movement Effect	(23,985)
Servicing Rights Value	34,502
Total Fair Value Measurement	19,449
Mortgage Banking | Level 2 | Fair Value, Recurring | Forward Sales Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value disclosure, off-balance sheet risks, face amount, liability	2,780,429
Security Price Change	13,119
Total Fair Value Measurement	13,119
Mortgage Banking | Level 2 | Fair Value, Recurring | Mortgages Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assumed Gain From Loan Sale	1,754
Interest Rate Movement Effect	(5,715)
Servicing Rights Value	6,447
Fair value, option, changes in fair value, gain (loss)	2,486	$ 2,675
Fair Value, principal amount, loans held for sale	$ 436,270	$ 319,481

XML

Debt - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2023 USD ($)
Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum loan borrowing capacity	$ 300,000,000
Increase in commitment available	300,000,000
Debt outstanding	0
Credit Agreement | Revolving Credit Facility | Sublimit for Issuance of Letters of Credit
Debt Instrument [Line Items]
Maximum loan borrowing capacity	100,000,000
Letters of credit outstanding	13,700,000
Repurchase Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum loan borrowing capacity	150,000,000
Debt outstanding	0
Borrowing base limitations	0
Senior Notes due 2030
Debt Instrument [Line Items]
Senior notes principal amount	$ 900,000,000
Frequency of senior notes payment	semi-annually in arrears on May 15 and November 15
$600M Senior Notes Due Two Thousand Thirty
Debt Instrument [Line Items]
Senior notes principal amount	$ 600,000,000
Senior notes effective interest rate	3.02%
Additional Senior Notes Due Two Thousand Thirty
Debt Instrument [Line Items]
Senior notes principal amount	$ 300,000,000
Senior notes effective interest rate	2.00%

XML

Leases - Narrative (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease, term	17 years 2 months 12 days
Operating lease, option to extend	20
Finance Lease, Right-of-Use Asset	$ 13,231	$ 13,745
Finance Lease, Liability	$ 14,690	$ 15,002

XML

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Leases [Abstract]
Operating Lease, Expense	$ 9,475	$ 8,529	$ 18,615	$ 16,630
Finance Lease, Right-of-Use Asset, Amortization	511	473	1,013	937
Finance Lease, Interest Expense	105	103	211	207
Short-term Lease Payments	7,531	6,491	15,023	12,823
Lease, Cost	$ 17,622	$ 15,596	$ 34,862	$ 30,597

XML

Leases - Supplemental Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Supplemental Cash Flows Information:
Operating cash flows from operating leases	$ 7,420	$ 6,935	$ 14,736	$ 14,104
Operating cash flows from finance leases	105	103	211	207
Financing cash flows from finance leases	411	367	811	723
ROU assets obtained in exchange for lease obligations:
Operating leases	10,090	18,073	23,337	23,886
Finance leases	$ 250	$ 451	$ 499	$ 723
Weighted-average remaining lease term (in years):
Operating leases	5 years 10 months 24 days		5 years 10 months 24 days		6 years
Finance leases	10 years 4 months 24 days		10 years 4 months 24 days		10 years 9 months 18 days
Weighted-average discount rate:
Operating leases	4.00%		4.00%		3.60%
Finance leases	3.00%		3.00%		2.90%

XML

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	14.30%	24.50%	17.30%	24.60%
Excess tax benefit recognized	$ 55,906	$ 8,744	$ 79,151	$ 17,190