Unassociated Document

For the nine months ended September 30, 2008, consolidated revenues were $2,782,865,000, 25% lower than the $3,701,945,000 reported for the same period of 2007. Net income for the nine months ended September 30, 2008 was $131,349,000, a decrease of 51% when compared to the nine months ended September 30, 2007. Diluted earnings per share for the nine months ended September 30, 2008 was $22.21, a decrease of 47% from $42.25 per diluted share for the comparable period of 2007.

Homebuilding

New orders in the third quarter of 2008 decreased 25% to 2,002 units, when compared to 2,660 units in the third quarter of 2007. The cancellation rate in the quarter ended September 30, 2008 was 24% compared to 27% in the third quarter of 2007 and 19% in the second quarter of 2008. Settlements decreased in the third quarter of 2008 to 2,750 units, 21% less than the same period of 2007. The Company’s backlog of homes sold but not settled at the end of the 2008 quarter decreased on a unit basis by 35% to 4,583 units and 44% on a dollar basis to $1,499,830,000 when compared to the same period last year.

Homebuilding revenues for the three months ended September 30, 2008 totaled $928,265,000, 27% lower than the year earlier period. Gross profit margins decreased to 13.2% in the 2008 third quarter compared to 14.4% for the same period in 2007. Gross profit margins were impacted by land deposit impairments of approximately $43,000,000, 461 basis points of revenue, in the 2008 third quarter, and approximately $97,000,000, 760 basis points of revenue, in the year ago period. Gross profit margins excluding the land deposit impairments were 17.8% in the 2008 third quarter compared to 22.0% for the same period in 2007. Income before tax from the homebuilding segment totaled $56,535,000 in the 2008 third quarter, a decrease of 56% when compared to the third quarter of the previous year. Operating unit activity and financial performance are being negatively impacted by high levels of new and existing home inventories, affordability issues, a tight mortgage lending environment and declining homebuyer confidence.

Mortgage Banking

Mortgage closed loan production of $610,313,000 for the three months ended September 30, 2008 was 23% lower than the same period last year. Operating income for the mortgage banking operations during the third quarter of 2008 decreased 76% to $4,072,000, when compared to $16,814,000 reported for the same period of 2007. Operating income in the current quarter was negatively impacted by a $4,100,000 decrease in unrealized income from the fair value measurements required under SFAS No. 157, Fair Value Measurement, and more competitive mortgage pricing.

Some of the statements in this release made by the Company constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “will,” “should” or “anticipates” or the negative thereof or other variations thereof or comparable terminology, or by discussion of strategies, each of which involves risks and uncertainties. All statements other than those of historical facts included herein, including those regarding market trends, NVR’s financial position, business strategy, the outcome of pending litigation, projected plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to, general economic and business conditions (on both a national and regional level), interest rate changes, access to suitable financing by NVR and NVR’s customers, competition, the availability and cost of land and other raw materials used by NVR in its homebuilding operations, shortages of labor, weather related slow downs, building moratoria, governmental regulation, the ability of NVR to integrate any acquired business, fluctuation and volatility of stock and other financial markets, mortgage financing availability and other factors over which NVR has little or no control. The Company has no obligation to update such forward-looking statements.

NVR, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007

*Homebuilding:*
Revenues	$	928,265		$	1,270,471		$	2,739,167		$	3,642,721
Other income		4,256			4,209			14,356			16,425
Cost of sales		(805,931	)		(1,087,399	)		(2,305,231	)		(3,002,746	)
Selling, general and administrative		(66,796	)		(54,906	)		(240,833	)		(253,510	)
Operating income		59,794			132,375			207,459			402,890
Interest expense		(3,259	)		(3,375	)		(9,730	)		(9,995	)
Homebuilding income		56,535			129,000			197,729			392,895

*Mortgage Banking:*
Mortgage banking fees		10,946			21,617			43,698			59,224
Interest income		929			1,078			2,608			3,415
Other income		188			320			531			780
General and administrative		(7,761	)		(6,001	)		(23,823	)		(24,278	)
Interest expense		(230	)		(200	)		(544	)		(513	)
Mortgage banking income		4,072			16,814			22,470			38,628

*Income before taxes*		60,607			145,814			220,199			431,523

Income tax expense		(24,056	)		(54,701	)		(88,850	)		(164,842	)

*Net income*	$	36,551		$	91,113		$	131,349		$	266,681


*Basic earnings per share*	$	6.72		$	17.25		$	24.60		$	48.35

*Diluted earnings per share*	$	6.12		$	15.26		$	22.21		$	42.25

*Basic average shares outstanding*		5,438			5,283			5,340			5,516

*Diluted average shares outstanding*		5,968			5,969			5,915			6,312

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

	September 30, 2008		December 31, 2007
	(unaudited)

ASSETS

*Homebuilding:*
Cash and cash equivalents	$	963,313	$	660,709
Receivables		10,444		10,855
Inventory:
Lots and housing units, covered under
sales agreements with customers		536,895		573,895
Unsold lots and housing units		67,570		105,838
Manufacturing materials and other		6,555		9,121
		611,020		688,854

Contract land deposits		130,575		188,528
Assets not owned, consolidated
per FIN 46R		127,074		180,206
Property, plant and equipment, net		26,834		32,911
Reorganization value in excess of amounts
allocable to identifiable assets, net		41,580		41,580
Goodwill and other indefinite and definite
life intangibles, net		11,707		11,782
Other assets		253,785		252,461

		2,176,332		2,067,886

*Mortgage Banking:*
Cash and cash equivalents		1,728		3,500
Mortgage loans held for sale, net		113,839		107,338
Property and equipment, net		903		881
Reorganization value in excess of amounts
allocable to identifiable assets, net		7,347		7,347

Other assets		8,003		7,464

		131,820		126,530

Total assets	$	2,308,152	$	2,194,416

(Continued)

NVR, Inc.

Consolidated Balance Sheets (continued)

(in thousands, except share and per share data)

	September 30, 2008			December 31, 2007
	(unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITY

*Homebuilding:*
Accounts payable	$	181,403		$	219,048
Accrued expenses and other liabilities		235,564			251,475
Liabilities related to assets not owned,
consolidated per FIN 46R		118,323			164,369
Customer deposits		93,117			125,315
Other term debt		2,630			2,820
Senior notes		200,000			200,000
		831,037			963,027
Mortgage Banking:
Accounts payable and other liabilities		13,858			18,551
Notes payable		90,782			83,463
		104,640			102,014

Total liabilities		935,677			1,065,041

*Commitments and contingencies*

Shareholders’ equity:
Common stock, $0.01 par value; 60,000,000
shares authorized; 20,561,187 and 20,592,640
shares issued for September 30, 2008 and
December 31, 2007, respectively		206			206
Additional paid-in capital		706,560			663,631
Deferred compensation trust - 515,950 and
516,085 shares of NVR, Inc. common stock for
September 30, 2008 and December 31, 2007,
respectively		(75,495	)		(75,636	)
Deferred compensation liability		75,495			75,636

Retained earnings		3,661,344			3,529,995
Less treasury stock at cost - 15,108,940 and
15,455,086 shares for September 30, 2008 and
December 31, 2007, respectively		(2,995,635	)		(3,064,457	)
Total shareholders’ equity		1,372,475			1,129,375
Total liabilities and shareholders’ equity	$	2,308,152		$	2,194,416

NVR, Inc.

Operating Activity

(unaudited)

(dollars in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007

*Homebuilding data:*
New orders (units):
Mid Atlantic (1)		965			1,061			3,598			4,785
North East (2)		205			260			725			1,022
Mid East (3)		577			667			2,020			2,620
South East (4)		255			672			1,060			1,895
Total		2,002			2,660			7,403			10,322

Average new order price	$	302.9		$	330.1		$	314.1		$	358.4

Settlements (units):
Mid Atlantic (1)		1,266			1,656			3,851			4,728
North East (2)		264			345			813			918
Mid East (3)		756			936			2,012			2,347
South East (4)		464			539			1,289			1,646
Total		2,750			3,476			7,965			9,639

Average settlement price	$	337.1		$	365.1		$	343.5		$	377.5

Backlog (units):
Mid Atlantic (1)								2,473			3,722
North East (2)								417			644
Mid East (3)								1,121			1,547
South East (4)								572			1,158
Total								4,583			7,071

Average backlog price							$	327.3		$	381.2

Community count (average)		426			506			437			517
Lots controlled at end of period								58,300			79,700

*Mortgage banking data:*
Loan closings	$	610,313		$	793,749		$	1,727,718		$	2,358,218
Capture rate		86	%		84	%		84	%		85	%

*Common stock information:*
Shares outstanding at end of period								5,452,247			5,135,600
Number of shares repurchased		-			479,088			-			784,788
Aggregate cost of shares repurchased		-		$	297,859			-		$	507,472

(1)	Virginia, West Virginia, Maryland, and Delaware

(2)	Eastern Pennsylvania and New Jersey

(3)	Western Pennsylvania, Kentucky, New York and Ohio

(4)	North Carolina, South Carolina and Tennessee

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

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



	NVR, Inc.

Date: October 21, 2008	By:	/s/ Dennis M. Seremet
		Name: Dennis M. Seremet
		Title: Senior Vice President and Chief Financial Officer

Exhibit Number		Exhibit Description

99.1		Press release dated October 21, 2008.

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