RESTON, Va., Jan. 28, 2020
/PRNewswire/ -- 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,
2019 of $256,137,000, or $64.41 per diluted share. Net income and
diluted earnings per share for the fourth quarter ended
December 31, 2019 both increased by 10% when compared to 2018
fourth quarter net income of $232,158,000, or $58.57 per diluted share. Consolidated
revenues for the fourth quarter of 2019 totaled $1,990,195,000, which decreased slightly from
$1,994,548,000 in the fourth quarter
of 2018.
For the year ended December 31, 2019, consolidated revenues
were $7,388,664,000, a 3% increase
from $7,163,674,000 reported for
2018. Net income for the year ended December 31, 2019
was $878,539,000, an increase of 10%
when compared to the year ended December 31, 2018.
Diluted earnings per share for the year ended December 31,
2019 was $221.13, an increase of 14%
from $194.80 per diluted share for
2018.
The Company's effective tax rate for the three and twelve months
ended December 31, 2019 decreased to 13.3% and 14.4%,
respectively, compared to 16.3% and 16.9% for the three and twelve
months ended December 31, 2018, respectively. The effective
tax rates for the 2019 fourth quarter and full year were favorably
impacted by the retroactive reinstatement of certain expired energy
tax credits under The Further Consolidated Appropriations Act,
which resulted in the Company recognizing a tax benefit of
approximately $15,100,000 in the
fourth quarter of 2019 related to homes settled in 2018 and
2019. Additionally, the effective tax rate in each period was
favorably impacted by the recognition of an income tax benefit
related to excess tax benefits from stock option exercises totaling
$14,657,000 and $101,466,000 for three and twelve months ended
December 31, 2019, respectively, and $18,870,000 and $77,478,000, for the three and twelve months
ended December 31, 2018, respectively.
Homebuilding
New orders in the fourth quarter of 2019 increased by 14% to
4,392 units, when compared to 3,841 units in the fourth quarter of
2018. The average sales price of new orders in the fourth quarter
of 2019 was $381,100, an increase of
1% when compared with the fourth quarter of 2018. Settlements
increased in the fourth quarter of 2019 to 5,331 units, which was
3% higher than the fourth quarter of 2018. The Company's
backlog of homes sold but not settled as of December 31, 2019
decreased on a unit basis by 2% to 8,233 units and decreased on a
dollar basis by 1% to $3,130,282,000
when compared to December 31, 2018.
Homebuilding revenues of $1,946,859,000 in the fourth quarter of 2019
decreased slightly compared to homebuilding revenues of
$1,954,403,000 in the fourth quarter
of 2018. Gross profit margin in the fourth quarter of 2019
increased to 19.5%, compared to 18.6% in the fourth quarter of
2018. Income before tax from the homebuilding segment totaled
$270,045,000 in the fourth quarter of
2019, an increase of 6% when compared to the fourth quarter of
2018.
New orders for the year ended December 31, 2019 increased
by 7% to 19,536 units, when compared to 18,281 units in 2018.
Settlements increased 7% year over year to 19,668 units in 2019
from 18,447 units in 2018. Homebuilding revenues for the year ended
December 31, 2019 totaled $7,220,844,000, which was 3% higher than 2018.
Gross profit margin for the year ended December 31, 2019 was
19.0%, compared to 18.7% in 2018. Income before tax for the
homebuilding segment for the year ended December 31, 2019 was
$923,879,000, a 6% increase when
compared to 2018.
Mortgage Banking
Mortgage closed loan production in the fourth quarter of 2019
totaled $1,418,742,000, an increase
of 5% when compared to the fourth quarter of 2018. Income
before tax from the mortgage banking segment totaled $25,257,000 in the fourth quarter of 2019, an
increase of 13% when compared to $22,364,000 in the fourth quarter of 2018.
Mortgage closed loan production for the year ended
December 31, 2019 increased 7% to $5,164,725,000. Income before tax from the
mortgage banking segment for the year ended December 31, 2019
increased 15% to $101,916,000 from
$88,626,000 in 2018.
Other Matters
On January 24, 2020, Jeff Martchek, President of Homebuilding
Operations, provided notice of his intention to retire. Mr.
Martchek has been employed by NVR since 1988. Mr. Martchek's
retirement will be effective in the second quarter of 2020 upon the
orderly transition of his duties.
About NVR
NVR, Inc. operates in two business segments: homebuilding
and mortgage banking. The homebuilding segment sells and
builds homes under the Ryan Homes, NVHomes and Heartland Homes
trade names, and operates in thirty-two metropolitan areas in
fourteen states and Washington,
D.C. For more information about NVR, Inc. and its brands, see
www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com and
www.heartlandluxuryhomes.com.
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, 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, NVR's financial
position, 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 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 the following: 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;
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 NVR in its homebuilding
operations; shortages of labor; 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 NVR has little or no
control. NVR undertakes no obligation to update such
forward-looking statements except as required by law.
NVR,
Inc.
|
Consolidated
Statements of Income
|
(in thousands, except
per share data)
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,946,859
|
|
|
$
|
1,954,403
|
|
|
$
|
7,220,844
|
|
|
$
|
7,004,304
|
|
Other
income
|
|
6,513
|
|
|
4,858
|
|
|
24,779
|
|
|
11,839
|
|
Cost of
sales
|
|
(1,567,392)
|
|
|
(1,590,735)
|
|
|
(5,849,862)
|
|
|
(5,692,127)
|
|
Selling, general and
administrative
|
|
(109,634)
|
|
|
(107,438)
|
|
|
(447,547)
|
|
|
(428,874)
|
|
Operating
income
|
|
276,346
|
|
|
261,088
|
|
|
948,214
|
|
|
895,142
|
|
Interest
expense
|
|
(6,301)
|
|
|
(6,014)
|
|
|
(24,335)
|
|
|
(24,036)
|
|
Homebuilding
income
|
|
270,045
|
|
|
255,074
|
|
|
923,879
|
|
|
871,106
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Banking:
|
|
|
|
|
|
|
|
|
Mortgage banking
fees
|
|
43,336
|
|
|
40,145
|
|
|
167,820
|
|
|
159,370
|
|
Interest
income
|
|
3,232
|
|
|
3,223
|
|
|
12,142
|
|
|
11,593
|
|
Other
income
|
|
818
|
|
|
722
|
|
|
2,857
|
|
|
2,546
|
|
General and
administrative
|
|
(21,859)
|
|
|
(21,467)
|
|
|
(79,858)
|
|
|
(83,838)
|
|
Interest
expense
|
|
(270)
|
|
|
(259)
|
|
|
(1,045)
|
|
|
(1,045)
|
|
Mortgage banking
income
|
|
25,257
|
|
|
22,364
|
|
|
101,916
|
|
|
88,626
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
295,302
|
|
|
277,438
|
|
|
1,025,795
|
|
|
959,732
|
|
Income tax
expense
|
|
(39,165)
|
|
|
(45,280)
|
|
|
(147,256)
|
|
|
(162,535)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
256,137
|
|
|
$
|
232,158
|
|
|
$
|
878,539
|
|
|
$
|
797,197
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
69.78
|
|
|
$
|
64.46
|
|
|
$
|
241.31
|
|
|
$
|
219.58
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
$
|
64.41
|
|
|
$
|
58.57
|
|
|
$
|
221.13
|
|
|
$
|
194.80
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
3,671
|
|
|
3,601
|
|
|
3,641
|
|
|
3,631
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
3,977
|
|
|
3,964
|
|
|
3,973
|
|
|
4,092
|
|
NVR,
Inc.
|
Consolidated Balance
Sheets
|
(in thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
ASSETS
|
|
(Unaudited)
|
|
|
Homebuilding:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,110,892
|
|
|
$
|
688,783
|
|
Restricted
cash
|
|
17,943
|
|
|
16,982
|
|
Receivables
|
|
18,278
|
|
|
18,641
|
|
Inventory:
|
|
|
|
|
Lots and housing
units, covered under sales agreements with customers
|
|
1,075,420
|
|
|
1,076,904
|
|
Unsold lots and
housing units
|
|
184,352
|
|
|
115,631
|
|
Land under
development
|
|
69,196
|
|
|
38,857
|
|
Building materials and
other
|
|
18,320
|
|
|
21,718
|
|
|
|
1,347,288
|
|
|
1,253,110
|
|
|
|
|
|
|
Contract land
deposits, net
|
|
413,851
|
|
|
396,177
|
|
Property, plant and
equipment, net
|
|
52,260
|
|
|
42,234
|
|
Operating lease
right-of-use assets
|
|
63,825
|
|
|
—
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
41,580
|
|
|
41,580
|
|
Deferred tax asset,
net
|
|
115,731
|
|
|
112,333
|
|
Other
assets
|
|
60,413
|
|
|
71,671
|
|
|
|
3,242,061
|
|
|
2,641,511
|
|
Mortgage
Banking:
|
|
|
|
|
Cash and cash
equivalents
|
|
29,412
|
|
|
23,092
|
|
Restricted
cash
|
|
2,276
|
|
|
3,071
|
|
Mortgage loans held
for sale, net
|
|
492,125
|
|
|
458,324
|
|
Property and
equipment, net
|
|
5,828
|
|
|
6,510
|
|
Operating lease
right-of-use assets
|
|
13,345
|
|
|
—
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
7,347
|
|
|
7,347
|
|
Other
assets
|
|
17,421
|
|
|
26,078
|
|
|
|
567,754
|
|
|
524,422
|
|
Total
assets
|
|
$
|
3,809,815
|
|
|
$
|
3,165,933
|
|
|
|
|
|
|
NVR,
Inc.
|
Consolidated Balance
Sheets (Continued)
|
(in thousands, except
share and per share data)
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
(Unaudited)
|
|
|
Homebuilding:
|
|
|
|
|
Accounts
payable
|
|
$
|
262,987
|
|
|
$
|
244,496
|
|
Accrued expenses and
other liabilities
|
|
346,035
|
|
|
332,871
|
|
Customer
deposits
|
|
131,886
|
|
|
138,246
|
|
Operating lease
liabilities
|
|
71,095
|
|
|
—
|
|
Senior
notes
|
|
598,301
|
|
|
597,681
|
|
|
|
1,410,304
|
|
|
1,313,294
|
|
Mortgage
Banking:
|
|
|
|
|
Accounts payable and
other liabilities
|
|
43,985
|
|
|
44,077
|
|
Operating lease
liabilities
|
|
14,282
|
|
|
—
|
|
|
|
58,267
|
|
|
44,077
|
|
Total
liabilities
|
|
1,468,571
|
|
|
1,357,371
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common stock, $0.01
par value; 60,000,000 shares authorized; 20,555,330
shares issued as of both December 31, 2019 and December 31,
2018
|
|
206
|
|
|
206
|
|
Additional paid-in
capital
|
|
2,055,407
|
|
|
1,820,223
|
|
Deferred compensation
trust – 107,295 and 107,340 shares of NVR, Inc.
common stock as of December 31, 2019 and December 31, 2018,
respectively
|
|
(16,912)
|
|
|
(16,937)
|
|
Deferred compensation
liability
|
|
16,912
|
|
|
16,937
|
|
Retained
earnings
|
|
7,909,872
|
|
|
7,031,333
|
|
Less treasury stock at
cost – 16,922,558 and 16,977,499 shares as of December
31, 2019 and December 31, 2018, respectively
|
|
(7,624,241)
|
|
|
(7,043,200)
|
|
Total shareholders'
equity
|
|
2,341,244
|
|
|
1,808,562
|
|
Total liabilities
and shareholders' equity
|
|
$
|
3,809,815
|
|
|
$
|
3,165,933
|
|
|
|
|
|
|
NVR,
Inc.
|
Operating
Activity
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
New orders, net
of cancellations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
1,947
|
|
|
$
|
443.2
|
|
|
1,865
|
|
|
$
|
429.4
|
|
|
8,799
|
|
|
$
|
424.4
|
|
|
8,906
|
|
|
$
|
429.4
|
|
North East
(2)
|
|
349
|
|
|
$
|
425.1
|
|
|
245
|
|
|
$
|
395.7
|
|
|
1,349
|
|
|
$
|
390.8
|
|
|
1,296
|
|
|
$
|
400.4
|
|
Mid East (3)
|
|
997
|
|
|
$
|
327.3
|
|
|
914
|
|
|
$
|
329.3
|
|
|
4,628
|
|
|
$
|
323.2
|
|
|
4,314
|
|
|
$
|
328.0
|
|
South East
(4)
|
|
1,099
|
|
|
$
|
305.9
|
|
|
817
|
|
|
$
|
300.8
|
|
|
4,760
|
|
|
$
|
302.6
|
|
|
3,765
|
|
|
$
|
297.7
|
|
Total
|
|
4,392
|
|
|
$
|
381.1
|
|
|
3,841
|
|
|
$
|
376.1
|
|
|
19,536
|
|
|
$
|
368.4
|
|
|
18,281
|
|
|
$
|
376.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
Settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,445
|
|
|
$
|
419.7
|
|
|
2,520
|
|
|
$
|
430.9
|
|
|
9,335
|
|
|
$
|
417.9
|
|
|
8,982
|
|
|
$
|
433.4
|
|
North East
(2)
|
|
392
|
|
|
$
|
382.4
|
|
|
393
|
|
|
$
|
400.9
|
|
|
1,325
|
|
|
$
|
388.5
|
|
|
1,415
|
|
|
$
|
410.4
|
|
Mid East (3)
|
|
1,239
|
|
|
$
|
320.0
|
|
|
1,271
|
|
|
$
|
322.8
|
|
|
4,621
|
|
|
$
|
324.8
|
|
|
4,406
|
|
|
$
|
330.4
|
|
South East
(4)
|
|
1,255
|
|
|
$
|
298.2
|
|
|
1,002
|
|
|
$
|
299.8
|
|
|
4,387
|
|
|
$
|
297.1
|
|
|
3,644
|
|
|
$
|
294.8
|
|
Total
|
|
5,331
|
|
|
$
|
365.2
|
|
|
5,186
|
|
|
$
|
376.8
|
|
|
19,668
|
|
|
$
|
367.1
|
|
|
18,447
|
|
|
$
|
379.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
2019
|
|
As of December 31,
2018
|
|
Units
|
|
Average
Price
|
|
Units
|
|
|
Average
Price
|
Backlog:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
3,612
|
|
|
$
|
440.1
|
|
|
4,148
|
|
|
$
|
423.4
|
|
North East
(2)
|
587
|
|
|
$
|
408.8
|
|
|
563
|
|
|
$
|
404.1
|
|
Mid East (3)
|
1,813
|
|
|
$
|
332.0
|
|
|
1,806
|
|
|
$
|
336.2
|
|
South East
(4)
|
2,221
|
|
|
$
|
314.6
|
|
|
1,848
|
|
|
$
|
304.1
|
|
Total
|
8,233
|
|
|
$
|
380.2
|
|
|
8,365
|
|
|
$
|
376.9
|
|
NVR,
Inc.
|
Operating Activity
(Continued)
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Average active
communities:
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
201
|
|
223
|
|
206
|
|
234
|
North East
(2)
|
|
36
|
|
34
|
|
33
|
|
36
|
Mid East (3)
|
|
143
|
|
118
|
|
134
|
|
119
|
South East
(4)
|
|
107
|
|
88
|
|
97
|
|
88
|
Total
|
|
487
|
|
463
|
|
470
|
|
|
477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Homebuilding
data:
|
|
|
|
|
|
|
|
|
New order
cancellation rate
|
|
16
|
%
|
|
17
|
%
|
|
15
|
%
|
|
15
|
%
|
Lots controlled at
end of period
|
|
|
|
|
|
104,900
|
|
|
99,700
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
data:
|
|
|
|
|
|
|
|
|
Loan
closings
|
|
$
|
1,418,742
|
|
|
$
|
1,356,430
|
|
|
$
|
5,164,725
|
|
|
$
|
4,829,406
|
|
Capture
rate
|
|
91
|
%
|
|
88
|
%
|
|
90
|
%
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
Common stock
information:
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period
|
|
|
|
|
|
3,632,772
|
|
|
3,577,831
|
|
Number of shares
repurchased
|
|
91,286
|
|
|
78,591
|
|
|
220,965
|
|
|
300,815
|
|
Aggregate cost of
shares repurchased
|
|
$
|
332,875
|
|
|
$
|
188,765
|
|
|
$
|
698,417
|
|
|
$
|
846,134
|
|
|
|
(1)
|
Maryland, Virginia,
West Virginia, Delaware and Washington, D.C.
|
|
|
(2)
|
New Jersey and
Eastern Pennsylvania
|
|
|
(3)
|
New York, Ohio,
Western Pennsylvania, Indiana and Illinois
|
|
|
(4)
|
North Carolina, South
Carolina, Tennessee and Florida
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/nvr-inc-announces-fourth-quarter-and-full-year-results-300994739.html
SOURCE NVR, Inc.