NVR, INC. 
By RESTON, Va., Jan. 26, 2012 /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, 2011 of $32,392,000, $6.32 per diluted share. Net income decreased 45% and diluted earnings per share decreased 37% for its fourth quarter ended December 31, 2011 when compared to the 2010 fourth quarter. Consolidated revenues for the fourth quarter of 2011 totaled $741,288,000, a 9% decrease from $811,005,000 for the comparable 2010 quarter.
For the year ended December 31, 2011, consolidated revenues were $2,659,149,000, 13% lower than the $3,041,892,000 reported for the same period of 2010. Net income for the year ended December 31, 2011 was $129,420,000, a decrease of 37% when compared to the year ended December 31, 2010. Diluted earnings per share for the year ended December 31, 2011 was $23.01, a decrease of 31% from $33.42 per diluted share for the comparable period of 2010.
Homebuilding
New orders in the fourth quarter of 2011 increased 22% to 2,158 units, when compared to 1,765 units in the fourth quarter of 2010. The cancellation rate in the fourth quarter of 2011 was 14.9% compared to 18.4% in the fourth quarter of 2010 and 15.0% in the third quarter of 2011. Settlements decreased in the fourth quarter of 2011 to 2,391 units, 9% lower than the same period of 2010. The Company's backlog of homes sold but not settled at the end the 2011 increased on a unit basis by 26% to 3,676 units and on a dollar basis by 21% to $1,160,879,000 when compared to the prior year end.
Homebuilding revenues for the three months ended December 31, 2011 totaled $728,808,000, 8% lower than the year earlier period. Gross profit margins decreased to 15.4% in the 2011 fourth quarter compared to 17.6% for the same period in 2010. Gross margins were negatively impacted by continued price pressure. Income before tax from the homebuilding segment totaled $43,939,000 in the 2011 fourth quarter, a decrease of 44% when compared to the fourth quarter of the previous year. Gross profit margins and pre-tax income were negatively impacted by a land deposit impairment charge of $4,445,000 in the fourth quarter of 2011 and $4,915,000 in the fourth quarter of 2010.
New orders for the 2011 fiscal year totaled 9,247 units, down 2% when compared to the 9,415 units reported for 2010. Home settlements for 2011 decreased 15% to 8,487 units when compared to 10,030 units settled in 2010. Homebuilding revenues for 2011 totaled $2,611,195,000, 12% lower than 2010. Gross profit margins decreased to 17.1% in 2011 from 18.2% in 2010. Pre-tax homebuilding income decreased 36% to $184,588,000 for the 2011 fiscal year when compared to 2010.
Mortgage Banking
Mortgage closed loan production of $520,919,000 for the three months ended December 31, 2011 was 13% lower than the same period last year. Operating income for the mortgage banking operations during the fourth quarter of 2011 decreased 17% to $6,506,000, when compared to $7,806,000 reported for the same period of 2010.
Mortgage closed loan production for the 2011 fiscal year decreased 16% to $1,868,472,000. Income before tax from the mortgage banking segment for 2011 decreased 30% to $22,988,000 from the $32,925,000 reported for 2010.
About NVR
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding unit sells and builds homes under the Ryan Homes, NVHomes, Rymarc Homes and Fox Ridge Homes trade names, and operates in twenty-seven metropolitan areas in fifteen states. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com, www.foxridgehomes.com, and www.rymarc.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. 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, increased regulation of the mortgage banking industry, 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)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2011 2010 2011 2010
---- ---- ---- ----
Homebuilding:
Revenues $728,808 $794,470 $2,611,195 $2,980,758
Other
income 639 1,522 4,301 9,299
Cost
of
sales (616,722) (654,965) (2,165,625) (2,438,292)
Selling,
general
and
administrative (68,571) (61,982) (264,266) (257,394)
------- ------- -------- --------
Operating
income 44,154 79,045 185,605 294,371
Interest
expense (215) (338) (1,017) (4,903)
---- ---- ------ ------
Homebuilding
income 43,939 78,707 184,588 289,468
Mortgage
Banking:
Mortgage
banking
fees 12,480 16,535 47,954 61,134
Interest
income 1,913 1,608 5,702 5,411
Other
income 145 202 456 767
General
and
administrative (7,878) (10,254) (30,249) (33,261)
Interest
expense (154) (285) (875) (1,126)
---- ---- ---- ------
Mortgage
banking
income 6,506 7,806 22,988 32,925
----- ----- ------ ------
Income
before
taxes 50,445 86,513 207,576 322,393
Income
tax
expense (18,053) (27,815) (78,156) (116,388)
------- ------- ------- --------
Net
income $32,392 $58,698 $129,420 $206,005
======= ======= ======== ========
Basic
earnings
per
share $6.51 $10.41 $23.66 $34.96
===== ====== ====== ======
Diluted
earnings
per
share $6.32 $9.96 $23.01 $33.42
===== ===== ====== ======
Basic
average
shares
outstanding 4,979 5,641 5,469 5,893
===== ===== ===== =====
Diluted
average
shares
outstanding 5,126 5,892 5,624 6,165
===== ===== ===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31, December 31,
2011 2010
------------- -------------
ASSETS
Homebuilding:
Cash and cash equivalents $475,566 $1,190,731
Receivables 6,789 6,948
Inventory:
Lots and housing units,
covered under
sales agreements with
customers 363,833 275,272
Unsold lots and housing units 82,578 70,542
Land under development 78,045 78,058
Manufacturing materials and
other 8,694 7,457
----- -----
533,150 431,329
Assets related to consolidated
variable interest entity 20,182 22,371
Contract land deposits, net 131,930 100,786
Property, plant and equipment,
net 23,243 19,523
Reorganization value in excess
of amounts
allocable to identifiable
assets, net 41,580 41,580
Other assets, net 268,878 243,005
------- -------
1,501,318 2,056,273
--------- ---------
Mortgage Banking:
Cash and cash equivalents 4,766 2,661
Mortgage loans held for sale,
net 252,352 177,244
Property and equipment, net 1,694 950
Reorganization value in excess
of amounts
allocable to identifiable
assets, net 7,347 7,347
Other assets 12,008 15,586
------ ------
278,167 203,788
------- -------
Total assets $1,779,485 $2,260,061
========== ==========
(Continued)
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
December 31, December 31,
2011 2010
------------- -------------
LIABILITIES AND SHAREHOLDERS'
EQUITY
Homebuilding:
Accounts payable $125,649 $115,578
Accrued expenses and other
liabilities 183,810 237,052
Liabilities related to
consolidated variable interest
entity 1,013 500
Non-recourse debt related to
consolidated variable
interest entity 4,983 7,592
Customer deposits 61,223 53,705
Other term debt 1,613 1,751
----- -----
378,291 416,178
------- -------
Mortgage Banking:
Accounts payable and other
liabilities 26,395 13,171
Note payable - 90,338
--- ------
26,395 103,509
------ -------
Total liabilities 404,686 519,687
------- -------
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value;
60,000,000 shares
authorized; 20,556,198 and
20,557,913 shares
issued as of December 31, 2011
and
December 31, 2010, respectively 206 206
Additional paid-in-capital 1,072,779 951,234
Deferred compensation trust -
152,964 and
158,894 shares of NVR, Inc.
common
stock as of December 31, 2011
and
December 31, 2010, respectively (25,581) (27,582)
Deferred compensation liability 25,581 27,582
Retained earnings 4,158,492 4,029,072
Less treasury stock at cost -
15,578,565 and
14,894,357 shares at December
31, 2011
and December 31, 2010,
respectively (3,856,678) (3,240,138)
---------- ----------
Total shareholders' equity 1,374,799 1,740,374
--------- ---------
Total liabilities and
shareholders' equity $1,779,485 $2,260,061
========== ==========
NVR, Inc.
Operating Activity
(dollars in thousands)
(unaudited)
Three Months Ended December Twelve Months Ended
31, December 31,
---------------------------- --------------------
2011 2010 2011 2010
---- ---- ---- ----
Homebuilding
data:
New
orders
(units)
Mid
Atlantic
(1) 1,113 888 4,616 4,775
North
East
(2) 233 177 872 827
Mid
East
(3) 486 469 2,412 2,656
South
East
(4) 326 231 1,347 1,157
Total 2,158 1,765 9,247 9,415
===== ===== ===== =====
Average
new
order
price $311.7 $321.7 $304.1 $304.0
Settlements
(units)
Mid
Atlantic
(1) 1,236 1,387 4,238 5,043
North
East
(2) 192 196 728 920
Mid
East
(3) 616 774 2,335 2,886
South
East
(4) 347 282 1,186 1,181
Total 2,391 2,639 8,487 10,030
===== ===== ===== ======
Average
settlement
price $304.6 $301.0 $307.5 $297.1
Backlog
(units)
Mid
Atlantic
(1) 1,973 1,595
North
East
(2) 376 232
Mid
East
(3) 807 730
South
East
(4) 520 359
Total 3,676 2,916
===== =====
Average
backlog
price $315.8 $328.6
Community
count
(average) 381 379 384 371
Lots
controlled
at
end
of
period 53,000 52,300
Mortgage
banking
data:
Loan
closings $520,919 $597,949 $1,868,472 $2,219,946
Capture
rate 88% 91% 88% 90%
Common
stock
information:
Shares
outstanding
at
end
of
period 4,977,633 5,663,556
Number
of
shares
repurchased 38,323 63,516 1,017,588 644,562
Aggregate
cost
of
shares
repurchased $22,674 $39,786 $689,302 $417,079
(1) Virginia, West Virginia, Maryland and Delaware
(2) New Jersey and eastern Pennsylvania
(3) Kentucky, western Pennsylvania, New York, Ohio,
Indiana and Illinois
(4) North Carolina, South Carolina, Tennessee and
Florida
SOURCE NVR, Inc.
