NVR, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS

RESTON, Va., Feb. 1, 2022 /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, 2021 of $334.6 million, or $89.09 per diluted share.  Net income and diluted earnings per share for the fourth quarter ended December 31, 2021 increased 10% and 16%, respectively, when compared to 2020 fourth quarter net income of $305.0 million, or $76.93 per diluted share.  Consolidated revenues for the fourth quarter of 2021 totaled $2.23 billion, a decrease of 5% from $2.34 billion in the fourth quarter of 2020. 

For the year ended December 31, 2021, consolidated revenues were $8.95 billion, a 19% increase from $7.54 billion reported in 2020. Net income for the year ended December 31, 2021 was $1.24 billion, an increase of 37% when compared to the year ended December 31, 2020. Diluted earnings per share for the year ended December 31, 2021 was $320.48, an increase of 39% from $230.11 per diluted share for 2020.

Homebuilding
New orders in the fourth quarter of 2021 increased by 4% to 5,685 units, when compared to 5,485 units in the fourth quarter of 2020. The average sales price of new orders in the fourth quarter of 2021 was $454,900, an increase of 14% when compared with the fourth quarter of 2020.  The cancellation rate in the fourth quarter of 2021 was 10% compared to 12% in the fourth quarter of 2020.  Settlements in the fourth quarter of 2021 decreased by 16% to 5,100 units, compared to 6,060 units in the fourth quarter of 2020.  Our backlog of homes sold but not settled as of December 31, 2021 increased on a unit basis by 10% to 12,730 units and increased on a dollar basis by 26% to $5.78 billion when compared to the respective backlog unit and dollar balances as of December 31, 2020.

Homebuilding revenues of $2.18 billion in the fourth quarter of 2021 decreased by 4% compared to homebuilding revenues of $2.26 billion in the fourth quarter of 2020.  Gross profit margin in the fourth quarter of 2021 increased to 24.4%, compared to 19.5% in the fourth quarter of 2020.  Income before tax from the homebuilding segment totaled $392.0 million in the fourth quarter of 2021, an increase of 21% when compared to the fourth quarter of 2020.

New orders for the year ended December 31, 2021 decreased by 2% to 22,721 units, compared to 23,082 units in 2020.  Settlements for the year ended December 31, 2021 increased by 9% to 21,540 units, compared to 19,766 units settled in 2020. Homebuilding revenues for the year ended December 31, 2021 totaled $8.70 billion, which was 19% higher than 2020. Gross profit margin for the year ended December 31, 2021 increased to 22.3%, compared to 19.0% in 2020.  Income before tax for the homebuilding segment increased 51% for the year ended December 31, 2021 to $1.42 billion, compared to $938.0 million in 2020.

Mortgage Banking
Mortgage closed loan production in the fourth quarter of 2021 totaled $1.48 billion, a decrease of 11% when compared to the fourth quarter of 2020.  Income before tax from the mortgage banking segment totaled $34.8 million in the fourth quarter of 2021, a decrease of 44% when compared to $61.8 million in the fourth quarter of 2020.  This decrease was primarily attributable to a decrease in secondary marketing gains.

Mortgage closed loan production for the year ended December 31, 2021 increased 14% to $6.07 billion. Income before tax from the mortgage banking segment for the year ended December 31, 2021 increased 23% to $171.6 million from $140.1 million in 2020.

Effective Tax Rate
Our effective tax rate for the three and twelve months ended December 31, 2021 was 21.6% and 22.2%, respectively, compared to 20.9% and 16.4% for the three and twelve months ended December 31, 2020, respectively. The effective tax rates in each period were favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $10.5 million and $48.4 million for the three and twelve months ended December 31, 2021, respectively, and $11.9 million and $92.2 million for the three and twelve months ended December 31, 2020, respectively.

Other Matters - COVID-19
The COVID-19 pandemic has had a significant impact on all facets of our business.  Our primary focus as we face this challenge is to do everything we can to ensure the safety and well-being of our employees, customers and trade partners.  In each of our markets, we continue to operate in accordance with the guidelines issued by the Centers for Disease Control and Prevention as well as state and local health department guidelines, which has resulted in significant changes to the way we conduct business. 

Although current demand for new homes is strong, there remains uncertainty regarding the extent and timing of disruption to our business that may result from COVID-19 and related governmental actions.  There is also uncertainty as to the effects of economic relief efforts on the U.S. economy, unemployment, consumer confidence, demand for our homes and the mortgage market, including lending standards and secondary mortgage markets. We are unable to predict the extent to which this will impact our operational and financial performance including the impact of future developments such as the duration and spread of COVID-19, corresponding governmental actions, and the impact of such on our employees, customers and trade partners.

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-four 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: the impact of COVID-19 on the economy; 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.

SOURCE NVR, Inc.