News Release

NVR, Inc. Announces Fourth Quarter And Full Year Results

RESTON, Va., Jan. 25, 2017 /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, 2016 of $150,891,000, or $37.80 per diluted share.  Net income and diluted earnings per share for the fourth quarter ended December 31, 2016 increased 13% and 18%, respectively, when compared to the 2015 fourth quarter. Consolidated revenues for the fourth quarter of 2016 totaled $1,752,766,000, a 13% increase from $1,555,275,000 for the comparable 2015 quarter.

For the year ended December 31, 2016, consolidated revenues were $5,822,544,000, 13% higher than the $5,159,008,000 reported for 2015.  Net income for the year ended December 31, 2016 was $425,262,000, an increase of 11% when compared to the year ended December 31, 2015.  Diluted earnings per share for the year ended December 31, 2016 was $103.61, an increase of 15% from $89.99 per diluted share for 2015.

Homebuilding

New orders in the fourth quarter of 2016 increased 18% to 3,645 units, when compared to 3,100 units in the fourth quarter of 2015. The average sales price of new orders in the fourth quarter of 2016 was $395,200, an increase of 3% when compared with the fourth quarter of 2015.  The cancellation rate in the fourth quarter of 2016 was 17%, compared with 16% in the fourth quarter of 2015.  Settlements increased in the fourth quarter of 2016 to 4,419 units, 10% higher than the fourth quarter of 2015.  The Company's backlog of homes sold but not settled as of December 31, 2016 increased on a unit basis by 11% to 6,884 units and increased on a dollar basis by 14% to $2,704,277,000 when compared to December 31, 2015.

Homebuilding revenues in the fourth quarter of 2016 totaled $1,718,527,000, 12% higher than the year earlier period.  Gross profit margin in the fourth quarter of 2016 was 17.8%, compared to 18.9% in the fourth quarter of 2015.  Income before tax from the homebuilding segment totaled $208,263,000 in the fourth quarter of 2016, an increase of 8% when compared to the fourth quarter of 2015.

New orders for the year ended December 31, 2016 increased 11% to 15,583 units, when compared to 14,080 units in 2015.  Home settlements increased 12% year over year to 14,928 units in 2016 from 13,326 units in 2015.  Homebuilding revenues for the year ended December 31, 2016 totaled $5,709,223,000, which is 13% higher than 2015.  Gross profit margin for the year ended December 31, 2016 was 17.5%, compared to 18.7% in 2015.  Income before tax for the homebuilding segment for the year ended December 31, 2016 was $601,102,000, an 8% increase when compared to 2015.

Mortgage Banking

Mortgage closed loan production in the fourth quarter of 2016 totaled $1,201,164,000, an increase of 15% when compared to the fourth quarter of 2015. Income before tax from the mortgage banking segment for the fourth quarter of 2016 was $20,399,000, compared to $14,546,000 for the fourth quarter of 2015.

Mortgage closed loan production for the year ended December 31, 2016 increased 13% to $3,952,575,000.  Income before tax from the mortgage banking segment for the year ended December 31, 2016 increased to $60,595,000 from $47,883,000 in 2015.

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 and Heartland Homes trade names, and operates in twenty-eight 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,




2016



2015



2016



2015




(Unaudited)



(Unaudited)



(Unaudited)






Homebuilding:

















Revenues


$

1,718,527



$

1,528,084



$

5,709,223



$

5,065,200


Other income



597




466




2,820




2,956


Cost of sales



(1,413,440)




(1,238,588)




(4,707,861)




(4,118,782)


Selling, general and administrative



(91,534)




(91,920)




(382,459)




(371,127)


Operating income



214,150




198,042




621,723




578,247


Interest expense



(5,887)




(5,419)




(20,621)




(22,918)


Homebuilding income



208,263




192,623




601,102




555,329



















Mortgage Banking:

















Mortgage banking fees



34,239




27,191




113,321




93,808


Interest income



2,458




2,132




7,569




6,485


Other income



512




402




1,652




1,113


General and administrative



(16,516)




(14,994)




(60,861)




(52,882)


Interest expense



(294)




(185)




(1,086)




(641)


Mortgage banking income



20,399




14,546




60,595




47,883



















Income before taxes



228,662




207,169




661,697




603,212


Income tax expense



(77,771)




(73,165)




(236,435)




(220,285)



















Net income


$

150,891



$

134,004



$

425,262



$

382,927



















Basic earnings per share


$

40.25



$

34.23



$

110.53



$

95.21



















Diluted earnings per share


$

37.80



$

31.92



$

103.61



$

89.99



















Basic weighted average shares outstanding



3,749




3,915




3,847




4,022



















Diluted weighted average shares outstanding



3,992




4,198




4,104




4,255


 

 


NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)











December 31, 2016



December 31, 2015


ASSETS









Homebuilding:









Cash and cash equivalents


$

375,748



$

397,522


Restricted cash



17,561




23,440


Receivables



18,937




11,482


Inventory:









Lots and housing units, covered under sales agreements with customers



883,868




785,982


Unsold lots and housing units



145,065




147,832


Land under development



46,999




60,611


Building materials and other



16,168




12,101





1,092,100




1,006,526











Assets related to consolidated variable interest entity



1,251




1,749


Contract land deposits, net



379,844




343,295


Property, plant and equipment, net



45,915




44,651


Reorganization value in excess of amounts allocable to identifiable assets, net



41,580




41,580


Goodwill and finite-lived intangible assets, net



2,599




3,982


Other assets



257,811




257,941





2,233,346




2,132,168











Mortgage Banking:









Cash and cash equivalents



19,657




26,804


Restricted cash



1,857




2,038


Mortgage loans held for sale, net



351,958




319,553


Property and equipment, net



4,903




5,313


Reorganization value in excess of amounts allocable to identifiable assets, net



7,347




7,347


Other assets



24,875




18,495





410,597




379,550


Total assets


$

2,643,943



$

2,511,718











LIABILITIES AND SHAREHOLDERS' EQUITY









Homebuilding:









Accounts payable


$

251,212



$

227,437


Accrued expenses and other liabilities



336,318




304,922


Liabilities related to consolidated variable interest entity



882




1,091


Customer deposits



122,236




110,965


Senior notes



596,455




595,847





1,307,103




1,240,262


Mortgage Banking:









Accounts payable and other liabilities



32,399




32,291





32,399




32,291


Total liabilities



1,339,502




1,272,553











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, 2016 and December 31, 2015



206




206


Additional paid-in capital



1,515,828




1,447,795


Deferred compensation trust – 108,640 and 108,614 shares of NVR, Inc. common stock as of December 31, 2016 and December 31, 2015, respectively



(17,375)




(17,333)


Deferred compensation liability



17,375




17,333


Retained earnings



5,695,376




5,270,114


Less treasury stock at cost – 16,862,327 and 16,664,342 shares as of December 31, 2016 and December 31, 2015, respectively



(5,906,969)




(5,478,950)


Total shareholders' equity



1,304,441




1,239,165


Total liabilities and shareholders' equity


$

2,643,943



$

2,511,718


 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)











Three Months Ended December 31,



Twelve Months Ended December 31,




2016



2015



2016



2015


Homebuilding data:

















New orders (units)

















Mid Atlantic (1)



1,828




1,550




7,916




7,070


North East (2)



354




237




1,314




1,173


Mid East (3)



830




799




3,659




3,485


South East (4)



633




514




2,694




2,352


Total



3,645




3,100




15,583




14,080



















Average new order price


$

395.2



$

383.3



$

386.4



$

378.7



















Settlements (units)

















Mid Atlantic (1)



2,311




2,109




7,512




6,879


North East (2)



350




322




1,246




1,221


Mid East (3)



950




966




3,658




3,137


South East (4)



808




613




2,512




2,089


Total



4,419




4,010




14,928




13,326



















Average settlement price


$

388.8



$

381.6



$

381.2



$

379.9



















Backlog (units)

















Mid Atlantic (1)











3,541




3,137


North East (2)











608




540


Mid East (3)











1,499




1,498


South East (4)











1,236




1,054


Total











6,884




6,229



















Average backlog price










$

392.8



$

381.3



















Community count (average)



495




467




485




472


Lots controlled at end of period











78,000




74,500



















Mortgage banking data:

















Loan closings


$

1,201,164



$

1,042,440



$

3,952,575



$

3,492,342


Capture rate



89

%



88

%



88

%



88

%


















Common stock information:

















Shares outstanding at end of period











3,693,003




3,890,988


Number of shares repurchased



101,982




106,559




280,288




289,687


Aggregate cost of shares repurchased


$

163,608



$

167,921



$

455,351



$

431,367






(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

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nvr-inc-announces-fourth-quarter-and-full-year-results-300396074.html

SOURCE NVR, Inc.

Investor Relations Contact: Curt McKay, (703) 956-4058, ir@nvrinc.com