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

 

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SOURCE NVR, Inc.