Earnings per Share

6 Months Ended

Jun. 30, 2011

Earnings per Share [Abstract]

Earnings per Share

5. Earnings per Share

     The following weighted average shares and share equivalents are used to calculate basic and diluted earnings per share for the three and six months ended June 30, 2011 and 2010:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Weighted average number of shares outstanding used to calculate basic EPS		5,785,000		6,123,000		5,804,000		6,095,000
Dilutive Securities:
Stock options and restricted share units		144,000		282,000		170,000		307,000
Weighted average number of shares and share equivalents used to calculate diluted EPS		5,929,000		6,405,000		5,974,000		6,402,000

     The assumed proceeds used in the treasury method for calculating NVR’s diluted earnings per share includes the amount the employee must pay upon exercise, the amount of compensation cost attributed to future services and not yet recognized, and the amount of tax benefits that would be credited to additional paid-in capital assuming exercise of the option or the vesting of the restricted share unit. The assumed amount credited to additional paid-in capital equals the tax benefit from assumed exercise of stock options or the assumed vesting of restricted share units after consideration of the intrinsic value upon assumed exercise less the actual stock-based compensation expense to be recognized in the income statement from 2006 and future periods.

     Stock options issued under equity benefit plans to purchase 449,134 and 448,810 shares of common stock were outstanding during the three and six month periods ended June 30, 2011, and stock options issued under equity benefit plans to purchase 435,548 and 434,206 shares of common stock were outstanding during the three and six months ended June 30, 2010, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive in the respective periods.