NVR, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS
RESTON, Va., Jan. 30, 2024 /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, 2023 of $410.1 million, or $121.56 per diluted share. Net income and diluted earnings per share for the fourth quarter ended December 31, 2023 decreased 10% and 9%, respectively, when compared to 2022 fourth quarter net income of $454.8 million, or $133.44 per diluted share. Consolidated revenues for the fourth quarter of 2023 totaled $2.43 billion, which decreased 10% from $2.71 billion in the fourth quarter of 2022.
For the year ended December 31, 2023, consolidated revenues were $9.52 billion, a 10% decrease from $10.53 billion reported in 2022. Net income for the year ended December 31, 2023 was $1.59 billion, a decrease of 8% when compared to net income for the year ended December 31, 2022 of $1.73 billion. Diluted earnings per share for the year ended December 31, 2023 was $463.31, a decrease of 6% from $491.82 per diluted share for 2022.
Homebuilding
New orders in the fourth quarter of 2023 increased by 25% to 5,190 units, when compared to 4,153 units in the fourth quarter of 2022. The average sales price of new orders in the fourth quarter of 2023 was $450,900, a decrease of 2% when compared with the fourth quarter of 2022. The cancellation rate in the fourth quarter of 2023 was 13% compared to 18% in the fourth quarter of 2022. Settlements in the fourth quarter of 2023 decreased by 7% to 5,332 units, compared to 5,749 units in the fourth quarter of 2022. The average settlement price in the fourth quarter of 2023 was $447,600, a decrease of 4% when compared with the fourth quarter of 2022. Our backlog of homes sold but not settled as of December 31, 2023 increased on a unit basis by 12% to 10,229 units and increased on a dollar basis by 10% to $4.76 billion when compared to the respective backlog unit and dollar balances as of December 31, 2022.
Homebuilding revenues of $2.39 billion in the fourth quarter of 2023 decreased by 11% compared to homebuilding revenues of $2.67 billion in the fourth quarter of 2022. Gross profit margin in the fourth quarter of 2023 decreased to 24.1%, compared to 25.3% in the fourth quarter of 2022. Income before tax from the homebuilding segment totaled $454.3 million in the fourth quarter of 2023, a decrease of 17% when compared to the fourth quarter of 2022.
New orders for the year ended December 31, 2023 increased by 13% to 21,729 units, compared to 19,164 units in 2022. Settlements for the year ended December 31, 2023 decreased by 9% to 20,662 units, compared to 22,732 units settled in 2022. Homebuilding revenues for the year ended December 31, 2023 totaled $9.31 billion, a 10% decrease from 2022. Gross profit margin for the year ended December 31, 2023 decreased to 24.3%, compared to 25.8% in 2022. Income before tax for the homebuilding segment decreased 16% for the year ended December 31, 2023 to $1.80 billion, compared to $2.13 billion in 2022.
Mortgage Banking
Mortgage closed loan production in the fourth quarter of 2023 totaled $1.50 billion, a decrease of 2% when compared to the fourth quarter of 2022. Income before tax from the mortgage banking segment totaled $29.7 million in the fourth quarter of 2023, an increase of 12% when compared to $26.4 million in the fourth quarter of 2022.
Mortgage closed loan production for the year ended December 31, 2023 decreased 9% to $5.74 billion. Income before tax from the mortgage banking segment for the year ended December 31, 2023 increased 9% to $132.8 million from $122.2 million in 2022.
Effective Tax Rate
Our effective tax rate for the three and twelve months ended December 31, 2023 was 15.3% and 17.5%, respectively, compared to 20.9% and 23.4% for the three and twelve months ended December 31, 2022, respectively. The decrease in the effective tax rate in each period is primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $42.5 million and $153.6 million for the three and twelve months ended December 31, 2023, respectively, and $22.6 million and $50.3 million for the three and twelve months ended December 31, 2022, respectively.
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-six metropolitan areas in fifteen 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 and financial results, 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; the economic impact of a major epidemic or pandemic; 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,
2023 2022 2023 2022
(unaudited) (unaudited) (unaudited)
Homebuilding:
Revenues $2,387,094 $2,668,036 $9,314,605 $10,326,770
Other income 40,891 21,592 148,010 37,038
Cost of sales (1,812,968) (1,993,722) (7,051,198) (7,662,271)
Selling, general and administrative (154,086) (140,995) (588,962) (532,353)
Operating income 460,931 554,911 1,822,455 2,169,184
Interest expense (6,618) (6,630) (26,875) (38,140)
Homebuilding income 454,313 548,281 1,795,580 2,131,044
Mortgage Banking:
Mortgage banking fees 45,476 44,146 203,597 199,664
Interest income 4,779 3,570 16,687 11,853
Other income 1,189 1,294 4,449 4,963
General and administrative (21,537) (22,300) (91,075) (92,946)
Interest expense (173) (269) (865) (1,384)
Mortgage banking income 29,734 26,441 132,793 122,150
Income before taxes 484,047 574,722 1,928,373 2,253,194
Income tax expense (73,972) (119,954) (336,762) (527,619)
Net income $410,075 $454,768 $1,591,611 $1,725,575
Basic earnings per share $128.46 $141.82 $491.52 $525.20
Diluted earnings per share $121.56 $133.44 $463.31 $491.82
Basic weighted average shares outstanding 3,192 3,207 3,238 3,286
Diluted weighted average shares outstanding 3,373 3,408 3,435 3,509
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31, 2023 December 31, 2022
(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $3,126,472 $2,503,424
Restricted cash 41,483 48,455
Receivables 29,000 20,842
Inventory:
Lots and housing units, covered under sales agreements with customers 1,674,686 1,554,955
Unsold lots and housing units 214,666 181,952
Land under development 36,895 27,100
Building materials and other 23,903 24,268
1,950,150 1,788,275
Contract land deposits, net 576,551 496,080
Property, plant and equipment, net 63,716 57,950
Operating lease right-of-use assets 70,384 71,081
Reorganization value in excess of amounts allocable to identifiable assets, net 41,580 41,580
Deferred tax assets, net 148,005 143,585
Other assets 94,746 75,898
6,142,087 5,247,170
Mortgage Banking:
Cash and cash equivalents 36,422 19,415
Restricted cash 11,067 2,974
Mortgage loans held for sale, net 222,560 316,806
Property and equipment, net 6,348 3,559
Operating lease right-of-use assets 23,541 16,011
Reorganization value in excess of amounts allocable to identifiable assets, net 7,347 7,347
Other assets 152,385 47,691
459,670 413,803
Total assets $6,601,757 $5,660,973
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
December 31, 2023 December 31, 2022
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $347,738 $334,016
Accrued expenses and other liabilities 413,043 437,234
Customer deposits 334,441 313,804
Operating lease liabilities 75,797 75,818
Senior notes 913,027 914,888
2,084,046 2,075,760
Mortgage Banking:
Accounts payable and other liabilities 127,511 61,396
Operating lease liabilities 25,475 16,968
152,986 78,364
Total liabilities 2,237,032 2,154,124
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares 206 206
issued as of both December 31, 2023 and December 31, 2022
Additional paid-in capital 2,848,528 2,600,014
Deferred compensation trust - 106,697 shares of NVR, Inc. common stock as of (16,710) (16,710)
both December 31, 2023 and December 31, 2022
Deferred compensation liability 16,710 16,710
Retained earnings 13,365,025 11,773,414
Less treasury stock at cost - 17,360,454 and 17,336,397 shares as of December (11,849,034) (10,866,785)
31, 2023 and December 31, 2022, respectively
Total shareholders' equity 4,364,725 3,506,849
Total liabilities and shareholders' equity $6,601,757 $5,660,973
NVR, Inc.
Operating Activity
(dollars in thousands)
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2023 2022 2023 2022
Units Average Units Average Units Average Units Average
Price Price Price Price
New orders, net of cancellations:
Mid Atlantic (1) 2,029 $500.9 1,836 $525.0 8,434 $515.5 7,816 $526.6
North East (2) 526 $597.7 430 $573.6 1,879 $573.2 1,679 $528.3
Mid East (3) 942 $412.2 741 $381.8 4,514 $396.5 4,344 $400.5
South East (4) 1,693 $366.9 1,146 $360.3 6,902 $366.4 5,325 $399.4
Total 5,190 $450.9 4,153 $459.0 21,729 $448.4 19,164 $462.8
Three Months Ended December 31, Twelve Months Ended December 31,
2023 2022 2023 2022
Units Average Units Average Units Average Units Average
Price Price Price Price
Settlements:
Mid Atlantic (1) 2,008 $519.5 2,153 $526.6 8,032 $521.5 9,042 $527.1
North East (2) 465 $567.1 456 $503.4 1,736 $546.2 1,763 $506.3
Mid East (3) 1,126 $391.3 1,484 $400.5 4,391 $392.4 5,518 $389.1
South East (4) 1,733 $368.9 1,656 $428.7 6,503 $377.2 6,409 $393.3
Total 5,332 $447.6 5,749 $464.0 20,662 $450.7 22,732 $454.3
As of December 31,
2023 2022
Units Average Units Average
Price Price
Backlog:
Mid Atlantic (1) 4,094 $522.5 3,692 $536.3
North East (2) 1,028 $602.0 885 $553.9
Mid East (3) 1,976 $412.1 1,853 $403.2
South East (4) 3,131 $378.4 2,732 $405.7
Total 10,229 $465.0 9,162 $472.2
NVR, Inc.
Operating Activity (Continued)
(dollars in thousands)
(unaudited)
Three Months Ended December 31, Twelve Months Ended December 31,
2023 2022 2023 2022
Average active communities:
Mid Atlantic (1) 167 169 166 160
North East (2) 36 37 36 36
Mid East (3) 105 127 110 126
South East (4) 130 95 115 93
Total 438 428 427 415
Three Months Ended December 31, Twelve Months Ended December 31,
2023 2022 2023 2022
Homebuilding data:
New order cancellation rate 13.0 % 18.4 % 12.8 % 14.2 %
Lots controlled at end of period 141,500 131,900
Mortgage banking data:
Loan closings $1,496,003 $1,524,665 $5,736,532 $6,313,416
Capture rate 88 % 80 % 87 % 83 %
Common stock information:
Shares outstanding at end of period 3,194,876 3,218,933
Number of shares repurchased 46,748 28,504 181,499 323,652
Aggregate cost of shares repurchased $286,428 $116,165 $1,081,815 $1,500,358
(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, Florida
and Georgia
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SOURCE NVR, INC.
