NVR, INC. ANNOUNCES FULL YEAR AND FOURTH QUARTER RESULTS

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

January 27, 2010, Reston, VA—NVR, Inc. (NYSE: NVR), one of the nation’s largest homebuilding and mortgage banking companies, announced net income for its fourth quarter ended December 31, 2009 of $60,639,000, $9.61 per diluted share, compared to a net loss of $30,457,000 and diluted loss per share of $5.54 for its prior year fourth quarter. Consolidated revenues for the fourth quarter of 2009 totaled $745,802,000, an 18% decrease from $910,174,000 for the comparable 2008 quarter.

For the year ended December 31, 2009, consolidated revenues were $2,743,848,000, 26% lower than the $3,693,039,000 reported for the year ended December 31, 2008. Net income for the year ended December 31, 2009 was $192,180,000, compared to $100,892,000 for the year ended December 31, 2008. Diluted earnings per share for the year ended December 31, 2009 was $31.26, an increase of 83% from $17.04 per diluted share for the comparable period of 2008.

Homebuilding

New orders in the fourth quarter of 2009 increased 47% to 2,000 units, compared to 1,357 units in the fourth quarter of 2008. The cancellation rate in the quarter ended December 31, 2009 was 15% compared to 30% in the fourth quarter of 2008 and 14% in the third quarter of 2009. Settlements decreased in the fourth quarter of 2009 to 2,550 units, 8% less than the same period of 2008.

Homebuilding revenues for the quarter ended December 31, 2009 totaled $730,140,000, 19% lower than the year earlier period. Gross profit margins increased to 18.9% in the 2009 fourth quarter compared to 2.6% for the same period in 2008. Income before tax from homebuilding operations totaled $75,815,000 in the 2009 fourth quarter, compared to a loss of $56,978,000 in the fourth quarter of the previous year. The fourth quarter 2008 gross profit margin results and pre-tax income were negatively impacted by a $109,800,000 land deposit impairment charge. The fourth quarter 2008 results were also impacted by goodwill impairment charges of $11,686,000.

New orders for the 2009 fiscal year totaled 9,409 units, a 7% increase when compared to the 8,760 units reported for 2008. Home settlements for 2009 decreased 16% to 9,042 units when compared to 10,741 units settled in 2008. Homebuilding revenues for 2009 totaled $2,683,467,000, 26% lower than 2008. Gross profit margins increased to 18.5% in 2009 from 12.6% in 2008. Pre-tax homebuilding income increased to $263,083,000 for the 2009 fiscal year, an increase of 87% from the prior year. Gross profit margins and pre-tax income were negatively impacted in 2008 by a $165,000,000 land deposit impairment charge. The Company’s backlog of homes sold but not settled at the end of 2009 increased on a unit basis by 12% to 3,531 units and on a dollar basis by 7% to $1,076,437,000 as compared to the prior year end.

Mortgage Banking

Mortgage closed loan production of $542,147,000 for the three months ended December 31, 2009 was 13% lower than the same period last year. Income before tax for the mortgage banking operations during the fourth quarter of 2009 increased to $8,712,000, compared to $4,234,000 reported for the same period of 2008. Pre-tax income in the current quarter was favorably impacted primarily by a decrease in incentives given to borrowers.

Mortgage closed loan production for the 2009 fiscal year decreased 12% to $2,060,376,000. Income before tax from the mortgage banking segment for 2009 increased 32% to $35,331,000 from the $26,704,000 reported for 2008.

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 by 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 Operations

(in thousands, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2009			2008			2009			2008

Homebuilding:
Revenues	$	730,140		$	899,535		$	2,683,467		$	3,638,702
Other income		2,186			2,030			8,697			16,386
Cost of sales		(592,221	)		(875,779	)		(2,185,733	)		(3,181,010	)
Selling, general and administrative		(62,132	)		(67,906	)		(233,152	)		(308,739	)
Operating income (loss)		77,973			(42,120	)		273,279			165,339
Interest expense		(2,158	)		(3,172	)		(10,196	)		(12,902	)
Goodwill and intangible asset impairment		-			(11,686	)		-			(11,686	)
Homebuilding income (loss)		75,815			(56,978	)		263,083			140,751

Mortgage Banking:
Mortgage banking fees		15,662			10,639			60,381			54,337
Interest income		897			1,347			2,979			3,955
Other income		171			214			629			745
General and administrative		(7,755	)		(7,756	)		(27,474	)		(31,579	)
Interest expense		(263	)		(210	)		(1,184	)		(754	)
Mortgage banking income		8,712			4,234			35,331			26,704

Income (loss) before taxes		84,527			(52,744	)		298,414			167,455

Income tax (expense) benefit		(23,888	)		22,287			(106,234	)		(66,563	)

Net income (loss)	$	60,639		$	(30,457	)	$	192,180		$	100,892


Basic earnings (loss) per share	$	10.21		$	(5.54	)	$	33.10		$	18.76

Diluted earnings (loss) per share	$	9.61		$	(5.54	)	$	31.26		$	17.04

Basic average shares outstanding		5,939			5,497			5,807			5,379

Diluted average shares outstanding		6,311			5,497			6,149			5,920

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

	December 31, 2009		December 31, 2008

ASSETS

Homebuilding:
Cash and cash equivalents	$	1,248,689	$	1,146,426
Marketable securities		219,535		-
Receivables		7,995		11,594
Inventory:
Lots and housing units, covered under sales agreements with customers		337,523		335,238
Unsold lots and housing units		73,673		57,639
Manufacturing materials and other		7,522		7,693
		418,718		400,570

Contract land deposits, net		49,906		29,073
Consolidated assets not owned		70,430		114,930
Property, plant and equipment, net		20,215		25,658
Reorganization value in excess of amounts allocable to identifiable assets, net		41,580		41,580
Other assets, net		258,659		242,626

		2,335,727		2,012,457

Mortgage Banking:
Cash and cash equivalents		1,461		1,217
Mortgage loans held for sale, net		40,097		72,488
Property and equipment, net		446		759
Reorganization value in excess of amounts allocable to identifiable assets, net		7,347		7,347
Other assets		10,692		8,968

		60,043		90,779

Total assets	$	2,395,770	$	2,103,236

(Continued)

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

	December 31, 2009			December 31, 2008

LIABILITIES AND SHAREHOLDERS’ EQUITY

Homebuilding:
Accounts payable	$	120,464		$	137,285
Accrued expenses and other liabilities		221,352			194,869
Liabilities related to consolidated assets not owned		65,915			109,439
Customer deposits		63,591			59,623
Other term debt		2,166			2,530
Senior notes		133,370			163,320
		606,858			667,066
Mortgage Banking:
Accounts payable and other liabilities		19,306			17,842
Notes payable		12,344			44,539
		31,650			62,381

Total liabilities		638,508			729,447

Commitments and contingencies

Shareholders’ equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,559,671 and 20,561,187 shares issued for December 31, 2009 and December 31, 2008, respectively		206			206
Additional paid-in capital		830,531			722,265
Deferred compensation trust – 265,278 and 514,470 shares of NVR, Inc. common stock for December 31, 2009 and December 31, 2008, respectively		(40,799	)		(74,978	)
Deferred compensation liability		40,799			74,978
Retained earnings		3,823,067			3,630,887
Less treasury stock at cost – 14,609,560 and 15,028,335 shares for December 31, 2009 and December 31, 2008, respectively		(2,896,542	)		(2,979,569	)
Total shareholders’ equity		1,757,262			1,373,789
Total liabilities and shareholders’ equity	$	2,395,770		$	2,103,236

NVR, Inc.

Operating Activity

(unaudited)

(dollars in thousands)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2009			2008			2009			2008

Homebuilding data:
New orders (units):
Mid Atlantic (1)		986			692			4,809			4,290
North East (2)		201			159			904			884
Mid East (3)		545			360			2,552			2,380
South East (4)		268			146			1,144			1,206
Total		2,000			1,357			9,409			8,760

Average new order price	$	297.8		$	296.0		$	292.7		$	311.3

Settlements (units):
Mid Atlantic (1)		1,349			1,389			4,722			5,240
North East (2)		241			273			882			1,086
Mid East (3)		655			750			2,323			2,762
South East (4)		305			364			1,115			1,653
Total		2,550			2,776			9,042			10,741

Average settlement price	$	286.2		$	323.6		$	296.4		$	338.4

Backlog (units):
Mid Atlantic (1)								1,863			1,776
North East (2)								325			303
Mid East (3)								960			731
South East (4)								383			354
Total								3,531			3,164

Average backlog price							$	304.9		$	316.9

Community count (average)		352			397			355			427
Lots controlled at end of year								46,300			45,000

Mortgage banking data:
Loan closings	$	542,147		$	623,623		$	2,060,376		$	2,351,341
Capture rate		90	%		89	%		91	%		85	%

Common stock information:
Shares outstanding at end of year								5,950,111			5,532,852

(1)

Virginia, West Virginia, Maryland and Delaware

(2)

Eastern Pennsylvania and New Jersey

(3)

Western Pennsylvania, Kentucky, New York, Ohio, and Indiana

(4)

North Carolina, South Carolina, Tennessee, and Florida