Earnings per Share

3 Months Ended

Mar. 31, 2012

Earnings per Share [Abstract]

Earnings per Share

5. Earnings per Share

The following weighted average shares and share equivalents were used to calculate basic and diluted earnings per share for the three months ended March 31, 2012 and 2011:

	Three Months Ended March 31,
	2012		2011
Weighted average number of shares outstanding used to calculate basic EPS		5,044,000		5,823,000
Dilutive Securities:
Stock options and restricted share units		115,000		197,000
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS		5,159,000		6,020,000

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 stock option or vesting of the restricted share unit. The assumed amount credited to additional paid-in-capital equals the tax benefit from the 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 recognized in the income statement.

Stock options issued under equity benefit plans to purchase 470,217 and 442,095 shares of common stock were outstanding during the quarters ended March 31, 2012 and 2011, respectively, but were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive.