☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Virginia
|
|
54-1394360
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
|
NVR
|
|
New York Stock Exchange
|
|
|
|
|
|
Large accelerated filer
|
☒
|
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
|
Smaller reporting company
|
☐
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
|
|
|
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
||
|
|
|
NVR, Inc.
|
||||||||
Condensed Consolidated Balance Sheets
|
||||||||
(in thousands, except share and per share data)
|
||||||||
(unaudited)
|
||||||||
|
|
|
|
|
||||
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
|
|
||
Homebuilding:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
860,956
|
|
|
$
|
688,783
|
|
Restricted cash
|
|
20,403
|
|
|
16,982
|
|
||
Receivables
|
|
28,943
|
|
|
18,641
|
|
||
Inventory:
|
|
|
|
|
||||
Lots and housing units, covered under sales agreements with customers
|
|
1,199,015
|
|
|
1,076,904
|
|
||
Unsold lots and housing units
|
|
132,667
|
|
|
115,631
|
|
||
Land under development
|
|
46,725
|
|
|
38,857
|
|
||
Building materials and other
|
|
19,321
|
|
|
21,718
|
|
||
|
|
1,397,728
|
|
|
1,253,110
|
|
||
|
|
|
|
|
||||
Contract land deposits, net
|
|
409,754
|
|
|
396,177
|
|
||
Property, plant and equipment, net
|
|
48,279
|
|
|
42,234
|
|
||
Operating lease right-of-use assets
|
|
65,027
|
|
|
—
|
|
||
Reorganization value in excess of amounts allocable to identifiable assets, net
|
|
41,580
|
|
|
41,580
|
|
||
Other assets
|
|
185,727
|
|
|
184,004
|
|
||
|
|
3,058,397
|
|
|
2,641,511
|
|
||
Mortgage Banking:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
21,363
|
|
|
23,092
|
|
||
Restricted cash
|
|
3,393
|
|
|
3,071
|
|
||
Mortgage loans held for sale, net
|
|
462,693
|
|
|
458,324
|
|
||
Property and equipment, net
|
|
6,240
|
|
|
6,510
|
|
||
Operating lease right-of-use assets
|
|
14,078
|
|
|
—
|
|
||
Reorganization value in excess of amounts allocable to identifiable assets, net
|
|
7,347
|
|
|
7,347
|
|
||
Other assets
|
|
29,729
|
|
|
26,078
|
|
||
|
|
544,843
|
|
|
524,422
|
|
||
Total assets
|
|
$
|
3,603,240
|
|
|
$
|
3,165,933
|
|
|
|
|
|
|
NVR, Inc.
|
||||||||
Condensed Consolidated Balance Sheets (Continued)
|
||||||||
(in thousands, except share and per share data)
|
||||||||
(unaudited)
|
||||||||
|
|
|
|
|
||||
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|||
Homebuilding:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
309,419
|
|
|
$
|
244,496
|
|
Accrued expenses and other liabilities
|
|
299,466
|
|
|
332,871
|
|
||
Customer deposits
|
|
146,207
|
|
|
138,246
|
|
||
Operating lease liabilities
|
|
72,360
|
|
|
—
|
|
||
Senior notes
|
|
597,991
|
|
|
597,681
|
|
||
|
|
1,425,443
|
|
|
1,313,294
|
|
||
Mortgage Banking:
|
|
|
|
|
|
|
||
Accounts payable and other liabilities
|
|
43,387
|
|
|
44,077
|
|
||
Operating lease liabilities
|
|
14,971
|
|
|
—
|
|
||
|
|
58,358
|
|
|
44,077
|
|
||
Total liabilities
|
|
1,483,801
|
|
|
1,357,371
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|||
|
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
|
|
|
||
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both June 30, 2019 and December 31, 2018
|
|
206
|
|
|
206
|
|
||
Additional paid-in capital
|
|
1,962,156
|
|
|
1,820,223
|
|
||
Deferred compensation trust – 107,295 and 107,340 shares of NVR, Inc. common stock as of June 30, 2019 and December 31, 2018, respectively
|
|
(16,912
|
)
|
|
(16,937
|
)
|
||
Deferred compensation liability
|
|
16,912
|
|
|
16,937
|
|
||
Retained earnings
|
|
7,429,948
|
|
|
7,031,333
|
|
||
Less treasury stock at cost – 16,911,734 and 16,977,499 shares as of June 30, 2019 and December 31, 2018, respectively
|
|
(7,272,871
|
)
|
|
(7,043,200
|
)
|
||
Total shareholders' equity
|
|
2,119,439
|
|
|
1,808,562
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
3,603,240
|
|
|
$
|
3,165,933
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Homebuilding:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
1,757,448
|
|
|
$
|
1,750,463
|
|
|
$
|
3,400,654
|
|
|
$
|
3,240,556
|
|
Other income
|
|
5,833
|
|
|
2,164
|
|
|
11,570
|
|
|
4,141
|
|
||||
Cost of sales
|
|
(1,425,388
|
)
|
|
(1,416,797
|
)
|
|
(2,764,194
|
)
|
|
(2,628,743
|
)
|
||||
Selling, general and administrative
|
|
(112,210
|
)
|
|
(106,517
|
)
|
|
(227,944
|
)
|
|
(212,064
|
)
|
||||
Operating income
|
|
225,683
|
|
|
229,313
|
|
|
420,086
|
|
|
403,890
|
|
||||
Interest expense
|
|
(6,033
|
)
|
|
(6,047
|
)
|
|
(12,026
|
)
|
|
(12,054
|
)
|
||||
Homebuilding income
|
|
219,650
|
|
|
223,266
|
|
|
408,060
|
|
|
391,836
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage Banking:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mortgage banking fees
|
|
42,746
|
|
|
36,842
|
|
|
86,551
|
|
|
76,163
|
|
||||
Interest income
|
|
2,737
|
|
|
2,915
|
|
|
5,570
|
|
|
5,008
|
|
||||
Other income
|
|
681
|
|
|
641
|
|
|
1,220
|
|
|
1,165
|
|
||||
General and administrative
|
|
(20,834
|
)
|
|
(21,796
|
)
|
|
(37,592
|
)
|
|
(41,031
|
)
|
||||
Interest expense
|
|
(268
|
)
|
|
(282
|
)
|
|
(490
|
)
|
|
(557
|
)
|
||||
Mortgage banking income
|
|
25,062
|
|
|
18,320
|
|
|
55,259
|
|
|
40,748
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before taxes
|
|
244,712
|
|
|
241,586
|
|
|
463,319
|
|
|
432,584
|
|
||||
Income tax expense
|
|
(34,503
|
)
|
|
(38,412
|
)
|
|
(64,704
|
)
|
|
(63,361
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
210,209
|
|
|
$
|
203,174
|
|
|
$
|
398,615
|
|
|
$
|
369,223
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
58.20
|
|
|
$
|
55.90
|
|
|
$
|
110.43
|
|
|
$
|
101.03
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
|
$
|
53.09
|
|
|
$
|
49.05
|
|
|
$
|
100.61
|
|
|
$
|
88.31
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
|
3,612
|
|
|
3,635
|
|
|
3,610
|
|
|
3,655
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average shares outstanding
|
|
3,959
|
|
|
4,142
|
|
|
3,962
|
|
|
4,181
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income
|
|
$
|
398,615
|
|
|
$
|
369,223
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
10,146
|
|
|
10,024
|
|
||
Equity-based compensation expense
|
|
37,910
|
|
|
28,104
|
|
||
Contract land deposit and other (recoveries) impairments, net
|
|
(23
|
)
|
|
44
|
|
||
Gain on sale of loans, net
|
|
(67,919
|
)
|
|
(58,891
|
)
|
||
Mortgage loans closed
|
|
(2,373,748
|
)
|
|
(2,223,302
|
)
|
||
Mortgage loans sold and principal payments on mortgage loans held for sale
|
|
2,428,410
|
|
|
2,229,894
|
|
||
Distribution of earnings from unconsolidated joint ventures
|
|
2,156
|
|
|
2,849
|
|
||
Net change in assets and liabilities:
|
|
|
|
|
|
|
||
Increase in inventory
|
|
(144,618
|
)
|
|
(187,416
|
)
|
||
(Increase) decrease in contract land deposits
|
|
(13,554
|
)
|
|
9,333
|
|
||
Increase in receivables
|
|
(9,597
|
)
|
|
(10,417
|
)
|
||
Increase (decrease) in accounts payable and accrued expenses
|
|
32,771
|
|
|
(11,332
|
)
|
||
Increase in customer deposits
|
|
7,961
|
|
|
22,000
|
|
||
Other, net
|
|
(5,891
|
)
|
|
(10,663
|
)
|
||
Net cash provided by operating activities
|
|
302,619
|
|
|
169,450
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Investments in and advances to unconsolidated joint ventures
|
|
(335
|
)
|
|
(284
|
)
|
||
Distribution of capital from unconsolidated joint ventures
|
|
7,167
|
|
|
6,027
|
|
||
Purchase of property, plant and equipment
|
|
(10,699
|
)
|
|
(9,251
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
|
1,069
|
|
|
425
|
|
||
Net cash used in investing activities
|
|
(2,798
|
)
|
|
(3,083
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Purchase of treasury stock
|
|
(304,479
|
)
|
|
(483,538
|
)
|
||
Principal payments on finance lease liabilities
|
|
(12
|
)
|
|
—
|
|
||
Proceeds from the exercise of stock options
|
|
178,831
|
|
|
86,094
|
|
||
Net cash used in financing activities
|
|
(125,660
|
)
|
|
(397,444
|
)
|
||
|
|
|
|
|
||||
Net increase (decrease) in cash, restricted cash, and cash equivalents
|
|
174,161
|
|
|
(231,077
|
)
|
||
Cash, restricted cash, and cash equivalents, beginning of the period
|
|
732,248
|
|
|
689,557
|
|
||
|
|
|
|
|
||||
Cash, restricted cash, and cash equivalents, end of the period
|
|
$
|
906,409
|
|
|
$
|
458,480
|
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
||
Interest paid during the period, net of interest capitalized
|
|
$
|
12,052
|
|
|
$
|
12,151
|
|
Income taxes paid during the period, net of refunds
|
|
$
|
71,486
|
|
|
$
|
86,269
|
|
•
|
to apply the package of practical expedients during transition, under which we were not required to reassess as of the date of adoption (i) whether any of our contracts are or contain leases, (ii) the classifications of our leases, and (iii) any initial direct costs related to those leases.
|
•
|
to exclude leases with an initial lease term of 12 months or less from the recognition requirements under Topic 842.
|
•
|
to utilize the portfolio approach for certain office equipment leases, grouping leases by asset type which have similar lease terms and payment schedules.
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract land deposits
|
|
$
|
437,646
|
|
|
$
|
425,393
|
|
Loss reserve on contract land deposits
|
|
(27,892
|
)
|
|
(29,216
|
)
|
||
Contract land deposits, net
|
|
409,754
|
|
|
396,177
|
|
||
Contingent obligations in the form of letters of credit
|
|
4,044
|
|
|
3,923
|
|
||
Specific performance obligations (1)
|
|
1,505
|
|
|
1,505
|
|
||
Total risk of loss
|
|
$
|
415,303
|
|
|
$
|
401,605
|
|
(1)
|
As of both June 30, 2019 and December 31, 2018, we were committed to purchase 10 finished lots under specific performance obligations.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest capitalized, beginning of period
|
|
$
|
4,140
|
|
|
$
|
5,545
|
|
|
$
|
4,154
|
|
|
$
|
5,583
|
|
Interest incurred
|
|
6,607
|
|
|
6,624
|
|
|
13,106
|
|
|
13,220
|
|
||||
Interest charged to interest expense
|
|
(6,301
|
)
|
|
(6,329
|
)
|
|
(12,516
|
)
|
|
(12,611
|
)
|
||||
Interest charged to cost of sales
|
|
(592
|
)
|
|
(452
|
)
|
|
(890
|
)
|
|
(804
|
)
|
||||
Interest capitalized, end of period
|
|
$
|
3,854
|
|
|
$
|
5,388
|
|
|
$
|
3,854
|
|
|
$
|
5,388
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted average number of shares outstanding used to calculate basic EPS
|
|
3,612
|
|
|
3,635
|
|
|
3,610
|
|
|
3,655
|
|
Dilutive securities:
|
|
|
|
|
|
|
|
|
||||
Stock options and restricted share units
|
|
347
|
|
|
507
|
|
|
352
|
|
|
526
|
|
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS
|
|
3,959
|
|
|
4,142
|
|
|
3,962
|
|
|
4,181
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Anti-dilutive securities
|
|
318
|
|
|
349
|
|
|
345
|
|
|
349
|
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Deferred
Compensation
Trust
|
|
Deferred
Compensation
Liability
|
|
Total
|
||||||||||||||
Balance, March 31, 2019
|
|
$
|
206
|
|
|
$
|
1,899,100
|
|
|
$
|
7,219,739
|
|
|
$
|
(7,220,269
|
)
|
|
$
|
(16,912
|
)
|
|
$
|
16,912
|
|
|
$
|
1,898,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
210,209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,209
|
|
|||||||
Deferred compensation activity, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Purchase of common stock for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,980
|
)
|
|
—
|
|
|
—
|
|
|
(87,980
|
)
|
|||||||
Equity-based compensation
|
|
—
|
|
|
18,577
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,577
|
|
|||||||
Proceeds from Options exercised
|
|
—
|
|
|
79,857
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79,857
|
|
|||||||
Treasury stock issued upon option exercise and restricted share vesting
|
|
—
|
|
|
(35,378
|
)
|
|
—
|
|
|
35,378
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, June 30, 2019
|
|
$
|
206
|
|
|
$
|
1,962,156
|
|
|
$
|
7,429,948
|
|
|
$
|
(7,272,871
|
)
|
|
$
|
(16,912
|
)
|
|
$
|
16,912
|
|
|
$
|
2,119,439
|
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Deferred
Compensation
Trust
|
|
Deferred
Compensation
Liability
|
|
Total
|
||||||||||||||
Balance, December 31, 2018
|
|
$
|
206
|
|
|
$
|
1,820,223
|
|
|
$
|
7,031,333
|
|
|
$
|
(7,043,200
|
)
|
|
$
|
(16,937
|
)
|
|
$
|
16,937
|
|
|
$
|
1,808,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
398,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
398,615
|
|
|||||||
Deferred compensation activity, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
(25
|
)
|
|
—
|
|
|||||||
Purchase of common stock for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(304,479
|
)
|
|
—
|
|
|
—
|
|
|
(304,479
|
)
|
|||||||
Equity-based compensation
|
|
—
|
|
|
37,910
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,910
|
|
|||||||
Proceeds from Options exercised
|
|
—
|
|
|
178,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
178,831
|
|
|||||||
Treasury stock issued upon option exercise and restricted share vesting
|
|
—
|
|
|
(74,808
|
)
|
|
—
|
|
|
74,808
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, June 30, 2019
|
|
$
|
206
|
|
|
$
|
1,962,156
|
|
|
$
|
7,429,948
|
|
|
$
|
(7,272,871
|
)
|
|
$
|
(16,912
|
)
|
|
$
|
16,912
|
|
|
$
|
2,119,439
|
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Deferred
Compensation
Trust
|
|
Deferred
Compensation
Liability
|
|
Total
|
||||||||||||||
Balance, March 31, 2018
|
|
$
|
206
|
|
|
$
|
1,678,100
|
|
|
$
|
6,400,185
|
|
|
$
|
(6,611,683
|
)
|
|
$
|
(17,389
|
)
|
|
$
|
17,389
|
|
|
$
|
1,466,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
203,174
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
203,174
|
|
|||||||
Deferred compensation activity, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
241
|
|
|
(241
|
)
|
|
—
|
|
|||||||
Purchase of common stock for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(126,296
|
)
|
|
—
|
|
|
—
|
|
|
(126,296
|
)
|
|||||||
Equity-based compensation
|
|
—
|
|
|
18,595
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,595
|
|
|||||||
Proceeds from Options exercised
|
|
—
|
|
|
45,290
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,290
|
|
|||||||
Treasury stock issued upon option exercise and restricted share vesting
|
|
—
|
|
|
(20,289
|
)
|
|
—
|
|
|
20,289
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, June 30, 2018
|
|
$
|
206
|
|
|
$
|
1,721,696
|
|
|
$
|
6,603,359
|
|
|
$
|
(6,717,690
|
)
|
|
$
|
(17,148
|
)
|
|
$
|
17,148
|
|
|
$
|
1,607,571
|
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Deferred
Compensation
Trust
|
|
Deferred
Compensation
Liability
|
|
Total
|
||||||||||||||
Balance, December 31, 2017
|
|
$
|
206
|
|
|
$
|
1,644,197
|
|
|
$
|
6,231,940
|
|
|
$
|
(6,270,851
|
)
|
|
$
|
(17,383
|
)
|
|
$
|
17,383
|
|
|
$
|
1,605,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cumulative-effect adjustment from adoption of ASU 2014-09, net of tax
|
|
—
|
|
|
—
|
|
|
2,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,196
|
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
369,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
369,223
|
|
|||||||
Deferred compensation activity, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|
(235
|
)
|
|
—
|
|
|||||||
Purchase of common stock for treasury
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(483,538
|
)
|
|
—
|
|
|
—
|
|
|
(483,538
|
)
|
|||||||
Equity-based compensation
|
|
—
|
|
|
28,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,104
|
|
|||||||
Proceeds from Options exercised
|
|
—
|
|
|
86,094
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
86,094
|
|
|||||||
Treasury stock issued upon option exercise and restricted share vesting
|
|
—
|
|
|
(36,699
|
)
|
|
—
|
|
|
36,699
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, June 30, 2018
|
|
$
|
206
|
|
|
$
|
1,721,696
|
|
|
$
|
6,603,359
|
|
|
$
|
(6,717,690
|
)
|
|
$
|
(17,148
|
)
|
|
$
|
17,148
|
|
|
$
|
1,607,571
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Warranty reserve, beginning of period
|
|
$
|
102,852
|
|
|
$
|
95,606
|
|
|
$
|
103,700
|
|
|
$
|
94,513
|
|
Provision
|
|
16,446
|
|
|
16,217
|
|
|
28,269
|
|
|
27,744
|
|
||||
Payments
|
|
(18,639
|
)
|
|
(12,121
|
)
|
|
(31,310
|
)
|
|
(22,555
|
)
|
||||
Warranty reserve, end of period
|
|
$
|
100,659
|
|
|
$
|
99,702
|
|
|
$
|
100,659
|
|
|
$
|
99,702
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Homebuilding Mid Atlantic
|
|
$
|
982,032
|
|
|
$
|
973,677
|
|
|
$
|
1,863,356
|
|
|
$
|
1,816,173
|
|
Homebuilding North East
|
|
121,804
|
|
|
147,618
|
|
|
244,431
|
|
|
270,332
|
|
||||
Homebuilding Mid East
|
|
359,908
|
|
|
363,288
|
|
|
698,457
|
|
|
653,525
|
|
||||
Homebuilding South East
|
|
293,704
|
|
|
265,880
|
|
|
594,410
|
|
|
500,526
|
|
||||
Mortgage Banking
|
|
42,746
|
|
|
36,842
|
|
|
86,551
|
|
|
76,163
|
|
||||
Total consolidated revenues
|
|
$
|
1,800,194
|
|
|
$
|
1,787,305
|
|
|
$
|
3,487,205
|
|
|
$
|
3,316,719
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income before taxes:
|
|
|
|
|
|
|
|
|
||||||||
Homebuilding Mid Atlantic
|
|
$
|
123,802
|
|
|
$
|
112,221
|
|
|
$
|
223,166
|
|
|
$
|
203,268
|
|
Homebuilding North East
|
|
11,563
|
|
|
16,777
|
|
|
23,023
|
|
|
32,481
|
|
||||
Homebuilding Mid East
|
|
40,291
|
|
|
42,174
|
|
|
75,766
|
|
|
69,385
|
|
||||
Homebuilding South East
|
|
30,825
|
|
|
29,203
|
|
|
65,861
|
|
|
52,440
|
|
||||
Mortgage Banking
|
|
26,173
|
|
|
19,685
|
|
|
55,731
|
|
|
42,235
|
|
||||
Total segment profit before taxes
|
|
232,654
|
|
|
220,060
|
|
|
443,547
|
|
|
399,809
|
|
||||
Reconciling items:
|
|
|
|
|
|
|
|
|
||||||||
Equity-based compensation expense (1)
|
|
(18,577
|
)
|
|
(18,595
|
)
|
|
(37,910
|
)
|
|
(28,104
|
)
|
||||
Corporate capital allocation (2)
|
|
56,177
|
|
|
53,954
|
|
|
110,735
|
|
|
104,653
|
|
||||
Unallocated corporate overhead
|
|
(29,354
|
)
|
|
(22,503
|
)
|
|
(61,089
|
)
|
|
(53,787
|
)
|
||||
Consolidation adjustments and other
|
|
9,836
|
|
|
14,701
|
|
|
20,034
|
|
|
22,031
|
|
||||
Corporate interest expense
|
|
(6,024
|
)
|
|
(6,031
|
)
|
|
(11,998
|
)
|
|
(12,018
|
)
|
||||
Reconciling items sub-total
|
|
12,058
|
|
|
21,526
|
|
|
19,772
|
|
|
32,775
|
|
||||
Consolidated income before taxes
|
|
$
|
244,712
|
|
|
$
|
241,586
|
|
|
$
|
463,319
|
|
|
$
|
432,584
|
|
(1)
|
The increase in equity-based compensation expense for the six-month period ended June 30, 2019 was primarily attributable to the equity grant in the second quarter of 2018.
|
(2)
|
This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance, and was as follows for the periods presented:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Corporate capital allocation charge:
|
|
|
|
|
|
|
|
|
||||||||
Homebuilding Mid Atlantic
|
|
$
|
31,378
|
|
|
$
|
31,501
|
|
|
$
|
61,794
|
|
|
$
|
61,949
|
|
Homebuilding North East
|
|
4,626
|
|
|
4,580
|
|
|
9,353
|
|
|
8,760
|
|
||||
Homebuilding Mid East
|
|
9,497
|
|
|
9,057
|
|
|
18,512
|
|
|
17,030
|
|
||||
Homebuilding South East
|
|
10,676
|
|
|
8,816
|
|
|
21,076
|
|
|
16,914
|
|
||||
Total
|
|
$
|
56,177
|
|
|
$
|
53,954
|
|
|
$
|
110,735
|
|
|
$
|
104,653
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets:
|
|
|
|
|
||||
Homebuilding Mid Atlantic
|
|
$
|
1,082,646
|
|
|
$
|
1,018,953
|
|
Homebuilding North East
|
|
154,143
|
|
|
144,412
|
|
||
Homebuilding Mid East
|
|
330,446
|
|
|
290,815
|
|
||
Homebuilding South East
|
|
380,499
|
|
|
332,468
|
|
||
Mortgage Banking
|
|
537,496
|
|
|
517,075
|
|
||
Total segment assets
|
|
2,485,230
|
|
|
2,303,723
|
|
||
Reconciling items:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
860,956
|
|
|
688,783
|
|
||
Deferred taxes
|
|
115,432
|
|
|
112,333
|
|
||
Intangible assets and goodwill
|
|
49,911
|
|
|
49,989
|
|
||
Operating lease right-of-use assets
|
|
65,027
|
|
|
—
|
|
||
Contract land deposit reserve
|
|
(27,892
|
)
|
|
(29,216
|
)
|
||
Consolidation adjustments and other
|
|
54,576
|
|
|
40,321
|
|
||
Reconciling items sub-total
|
|
1,118,010
|
|
|
862,210
|
|
||
Consolidated assets
|
|
$
|
3,603,240
|
|
|
$
|
3,165,933
|
|
i)
|
the assumed gain/loss of the expected resultant loan sale (Level 2);
|
ii)
|
the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and
|
iii)
|
the value of the servicing rights associated with the loan (Level 2).
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Rate lock commitments:
|
|
|
|
|
||||
Gross assets
|
|
$
|
19,151
|
|
|
$
|
13,831
|
|
Gross liabilities
|
|
199
|
|
|
345
|
|
||
Net rate lock commitments
|
|
$
|
18,952
|
|
|
$
|
13,486
|
|
Forward sales contracts:
|
|
|
|
|
||||
Gross assets
|
|
$
|
215
|
|
|
$
|
64
|
|
Gross liabilities
|
|
6,850
|
|
|
10,121
|
|
||
Net forward sales contracts
|
|
$
|
(6,635
|
)
|
|
$
|
(10,057
|
)
|
|
|
Notional or
Principal
Amount
|
|
Assumed
Gain/(Loss)
From Loan
Sale
|
|
Interest
Rate
Movement
Effect
|
|
Servicing
Rights
Value
|
|
Security
Price
Change
|
|
Total Fair
Value
Measurement
Gain/(Loss)
|
||||||||||||
Rate lock commitments
|
|
$
|
878,701
|
|
|
$
|
4,796
|
|
|
$
|
5,231
|
|
|
$
|
8,925
|
|
|
$
|
—
|
|
|
$
|
18,952
|
|
Forward sales contracts
|
|
$
|
1,169,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,635
|
)
|
|
(6,635
|
)
|
|||||
Mortgages held for sale
|
|
$
|
449,148
|
|
|
3,080
|
|
|
5,231
|
|
|
5,234
|
|
|
—
|
|
|
13,545
|
|
|||||
Total fair value measurement
|
|
|
|
$
|
7,876
|
|
|
$
|
10,462
|
|
|
$
|
14,159
|
|
|
$
|
(6,635
|
)
|
|
$
|
25,862
|
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Lease expense
|
|
|
|
|
||||
Operating lease expense
|
|
$
|
8,387
|
|
|
$
|
15,947
|
|
Finance lease expense:
|
|
|
|
|
||||
Amortization of ROU assets
|
|
21
|
|
|
21
|
|
||
Interest on lease liabilities
|
|
5
|
|
|
5
|
|
||
Short-term lease expense
|
|
5,640
|
|
|
11,245
|
|
||
Total lease expense
|
|
$
|
14,053
|
|
|
$
|
27,218
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019
|
||
Supplemental Cash Flows Information:
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
12,877
|
|
Operating cash flows from finance leases
|
|
5
|
|
|
Financing cash flows from finance leases
|
|
12
|
|
|
|
|
|
||
ROU assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
9,551
|
|
Finance leases
|
|
$
|
5,227
|
|
|
|
|
||
Weighted-average remaining lease term (in years):
|
|
|
||
Operating leases
|
|
4.7
|
|
|
Finance leases
|
|
7.0
|
|
|
|
|
|
||
Weighted-average discount rate:
|
|
|
||
Operating leases
|
|
3.7
|
%
|
|
Finance leases
|
|
3.0
|
%
|
Years Ending December 31,
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
|
$
|
17,125
|
|
|
$
|
358
|
|
2020
|
|
24,719
|
|
|
716
|
|
||
2021
|
|
18,844
|
|
|
716
|
|
||
2022
|
|
14,777
|
|
|
716
|
|
||
2023
|
|
11,149
|
|
|
716
|
|
||
Thereafter
|
|
15,207
|
|
|
2,612
|
|
||
Total minimum lease payments
|
|
101,821
|
|
|
5,834
|
|
||
Less:
|
|
|
|
|
||||
Imputed interest
|
|
(8,591
|
)
|
|
(618
|
)
|
||
Short-term lease payments
|
|
(5,899
|
)
|
|
—
|
|
||
Total lease liability
|
|
$
|
87,331
|
|
|
$
|
5,216
|
|
|
|
|
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
Mid Atlantic:
|
|
Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
|
North East:
|
|
New Jersey and Eastern Pennsylvania
|
Mid East:
|
|
New York, Ohio, Western Pennsylvania, Indiana and Illinois
|
South East:
|
|
North Carolina, South Carolina, Florida and Tennessee
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Financial Data:
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
1,757,448
|
|
|
$
|
1,750,463
|
|
|
$
|
3,400,654
|
|
|
$
|
3,240,556
|
|
Cost of sales
|
|
$
|
1,425,388
|
|
|
$
|
1,416,797
|
|
|
$
|
2,764,194
|
|
|
$
|
2,628,743
|
|
Gross profit margin percentage
|
|
18.9
|
%
|
|
19.1
|
%
|
|
18.7
|
%
|
|
18.9
|
%
|
||||
Selling, general and administrative expenses
|
|
$
|
112,210
|
|
|
$
|
106,517
|
|
|
$
|
227,944
|
|
|
$
|
212,064
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
||||||||
New orders (units)
|
|
5,239
|
|
|
4,964
|
|
|
10,378
|
|
|
10,138
|
|
||||
Average new order price
|
|
$
|
358.6
|
|
|
$
|
376.3
|
|
|
$
|
362.7
|
|
|
$
|
377.3
|
|
Settlements (units)
|
|
4,720
|
|
|
4,611
|
|
|
9,213
|
|
|
8,507
|
|
||||
Average settlement price
|
|
$
|
372.3
|
|
|
$
|
379.6
|
|
|
$
|
369.1
|
|
|
$
|
380.9
|
|
Backlog (units)
|
|
|
|
|
|
9,530
|
|
|
10,162
|
|
||||||
Average backlog price
|
|
|
|
|
|
$
|
369.0
|
|
|
$
|
380.0
|
|
||||
New order cancellation rate
|
|
13.1
|
%
|
|
13.0
|
%
|
|
13.6
|
%
|
|
13.3
|
%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Mid Atlantic
|
|
$
|
982,032
|
|
|
$
|
973,677
|
|
|
$
|
1,863,356
|
|
|
$
|
1,816,173
|
|
North East
|
|
121,804
|
|
|
147,618
|
|
|
244,431
|
|
|
270,332
|
|
||||
Mid East
|
|
359,908
|
|
|
363,288
|
|
|
698,457
|
|
|
653,525
|
|
||||
South East
|
|
293,704
|
|
|
265,880
|
|
|
594,410
|
|
|
500,526
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gross profit margin:
|
|
|
|
|
|
|
|
|
||||||||
Mid Atlantic
|
|
$
|
187,793
|
|
|
$
|
178,415
|
|
|
$
|
350,525
|
|
|
$
|
335,440
|
|
North East
|
|
23,248
|
|
|
28,338
|
|
|
46,087
|
|
|
54,517
|
|
||||
Mid East
|
|
68,294
|
|
|
68,118
|
|
|
129,643
|
|
|
119,129
|
|
||||
South East
|
|
56,526
|
|
|
52,421
|
|
|
116,104
|
|
|
96,639
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Gross profit margin percentage:
|
|
|
|
|
|
|
|
|
||||
Mid Atlantic
|
|
19.1
|
%
|
|
18.3
|
%
|
|
18.8
|
%
|
|
18.5
|
%
|
North East
|
|
19.1
|
%
|
|
19.2
|
%
|
|
18.9
|
%
|
|
20.2
|
%
|
Mid East
|
|
19.0
|
%
|
|
18.8
|
%
|
|
18.6
|
%
|
|
18.2
|
%
|
South East
|
|
19.2
|
%
|
|
19.7
|
%
|
|
19.5
|
%
|
|
19.3
|
%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Segment profit:
|
|
|
|
|
|
|
|
|
||||||||
Mid Atlantic
|
|
$
|
123,802
|
|
|
$
|
112,221
|
|
|
$
|
223,166
|
|
|
$
|
203,268
|
|
North East
|
|
11,563
|
|
|
16,777
|
|
|
23,023
|
|
|
32,481
|
|
||||
Mid East
|
|
40,291
|
|
|
42,174
|
|
|
75,766
|
|
|
69,385
|
|
||||
South East
|
|
30,825
|
|
|
29,203
|
|
|
65,861
|
|
|
52,440
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
||||||||||||
New orders, net of cancellations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mid Atlantic
|
|
2,322
|
|
|
$
|
411.3
|
|
|
2,414
|
|
|
$
|
427.0
|
|
|
4,766
|
|
|
$
|
415.3
|
|
|
4,917
|
|
|
$
|
430.4
|
|
North East
|
|
364
|
|
|
$
|
376.5
|
|
|
365
|
|
|
$
|
406.0
|
|
|
677
|
|
|
$
|
378.8
|
|
|
736
|
|
|
$
|
407.9
|
|
Mid East
|
|
1,276
|
|
|
$
|
317.9
|
|
|
1,142
|
|
|
$
|
328.0
|
|
|
2,490
|
|
|
$
|
319.0
|
|
|
2,438
|
|
|
$
|
327.2
|
|
South East
|
|
1,277
|
|
|
$
|
298.4
|
|
|
1,043
|
|
|
$
|
301.5
|
|
|
2,445
|
|
|
$
|
300.3
|
|
|
2,047
|
|
|
$
|
298.4
|
|
Total
|
|
5,239
|
|
|
$
|
358.6
|
|
|
4,964
|
|
|
$
|
376.3
|
|
|
10,378
|
|
|
$
|
362.7
|
|
|
10,138
|
|
|
$
|
377.3
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
||||||||||||
Settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mid Atlantic
|
|
2,326
|
|
|
$
|
422.2
|
|
|
2,239
|
|
|
$
|
434.8
|
|
|
4,469
|
|
|
$
|
416.9
|
|
|
4,165
|
|
|
$
|
436.0
|
|
North East
|
|
314
|
|
|
$
|
387.7
|
|
|
354
|
|
|
$
|
417.0
|
|
|
617
|
|
|
$
|
396.1
|
|
|
655
|
|
|
$
|
412.7
|
|
Mid East
|
|
1,097
|
|
|
$
|
328.0
|
|
|
1,092
|
|
|
$
|
332.6
|
|
|
2,127
|
|
|
$
|
328.3
|
|
|
1,971
|
|
|
$
|
331.5
|
|
South East
|
|
983
|
|
|
$
|
298.8
|
|
|
926
|
|
|
$
|
287.1
|
|
|
2,000
|
|
|
$
|
297.2
|
|
|
1,716
|
|
|
$
|
291.7
|
|
Total
|
|
4,720
|
|
|
$
|
372.3
|
|
|
4,611
|
|
|
$
|
379.6
|
|
|
9,213
|
|
|
$
|
369.1
|
|
|
8,507
|
|
|
$
|
380.9
|
|
|
|
As of June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
||||||
Backlog:
|
|
|
|
|
|
|
|
|
||||||
Mid Atlantic
|
|
4,445
|
|
|
$
|
421.2
|
|
|
4,976
|
|
|
$
|
427.1
|
|
North East
|
|
623
|
|
|
$
|
384.4
|
|
|
763
|
|
|
$
|
418.3
|
|
Mid East
|
|
2,169
|
|
|
$
|
324.2
|
|
|
2,365
|
|
|
$
|
334.7
|
|
South East
|
|
2,293
|
|
|
$
|
306.0
|
|
|
2,058
|
|
|
$
|
304.0
|
|
Total
|
|
9,530
|
|
|
$
|
369.0
|
|
|
10,162
|
|
|
$
|
380.0
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
New order cancellation rate:
|
|
|
|
|
|
|
|
|
||||
Mid Atlantic
|
|
13.2
|
%
|
|
13.6
|
%
|
|
14.0
|
%
|
|
14.0
|
%
|
North East
|
|
11.0
|
%
|
|
9.7
|
%
|
|
11.5
|
%
|
|
10.6
|
%
|
Mid East
|
|
13.2
|
%
|
|
12.6
|
%
|
|
13.0
|
%
|
|
12.4
|
%
|
South East
|
|
13.5
|
%
|
|
13.1
|
%
|
|
13.8
|
%
|
|
13.6
|
%
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Average active communities:
|
|
|
|
|
|
|
|
|
||||
Mid Atlantic
|
|
211
|
|
|
238
|
|
|
211
|
|
|
239
|
|
North East
|
|
34
|
|
|
37
|
|
|
32
|
|
|
37
|
|
Mid East
|
|
131
|
|
|
117
|
|
|
128
|
|
|
121
|
|
South East
|
|
94
|
|
|
88
|
|
|
89
|
|
|
86
|
|
Total
|
|
470
|
|
|
480
|
|
|
460
|
|
|
483
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Sold inventory:
|
|
|
|
|
||||
Mid Atlantic
|
|
$
|
677,808
|
|
|
$
|
622,997
|
|
North East
|
|
83,689
|
|
|
79,530
|
|
||
Mid East
|
|
221,768
|
|
|
195,149
|
|
||
South East
|
|
211,859
|
|
|
182,458
|
|
||
Total (1)
|
|
$
|
1,195,124
|
|
|
$
|
1,080,134
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Unsold lots and housing units inventory:
|
|
|
|
|
||||
Mid Atlantic
|
|
$
|
80,723
|
|
|
$
|
74,689
|
|
North East
|
|
12,548
|
|
|
11,088
|
|
||
Mid East
|
|
14,271
|
|
|
9,045
|
|
||
South East
|
|
24,744
|
|
|
20,611
|
|
||
Total (1)
|
|
$
|
132,286
|
|
|
$
|
115,433
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||
Total lots controlled:
|
|
|
|
|
||
Mid Atlantic
|
|
41,150
|
|
|
40,350
|
|
North East
|
|
9,250
|
|
|
8,950
|
|
Mid East
|
|
23,750
|
|
|
24,350
|
|
South East
|
|
27,250
|
|
|
26,050
|
|
Total
|
|
101,400
|
|
|
99,700
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract land deposits, net:
|
|
|
|
|
||||
Mid Atlantic
|
|
$
|
207,029
|
|
|
$
|
199,917
|
|
North East
|
|
47,338
|
|
|
42,591
|
|
||
Mid East
|
|
54,151
|
|
|
52,899
|
|
||
South East
|
|
105,280
|
|
|
104,693
|
|
||
Total
|
|
$
|
413,798
|
|
|
$
|
400,100
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Contract land deposit impairments (recoveries), net:
|
|
|
|
|
|
|
||||||||||
Mid Atlantic
|
|
$
|
—
|
|
|
$
|
184
|
|
|
$
|
289
|
|
|
$
|
182
|
|
North East
|
|
(200
|
)
|
|
641
|
|
|
1,050
|
|
|
641
|
|
||||
Mid East
|
|
9
|
|
|
21
|
|
|
9
|
|
|
26
|
|
||||
South East
|
|
—
|
|
|
5
|
|
|
—
|
|
|
1,915
|
|
||||
Total
|
|
$
|
(191
|
)
|
|
$
|
851
|
|
|
$
|
1,348
|
|
|
$
|
2,764
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Homebuilding consolidated gross profit:
|
|
|
|
|
|
|
|
|
||||||||
Mid Atlantic
|
|
$
|
187,793
|
|
|
$
|
178,415
|
|
|
$
|
350,525
|
|
|
$
|
335,440
|
|
North East
|
|
23,248
|
|
|
28,338
|
|
|
46,087
|
|
|
54,517
|
|
||||
Mid East
|
|
68,294
|
|
|
68,118
|
|
|
129,643
|
|
|
119,129
|
|
||||
South East
|
|
56,526
|
|
|
52,421
|
|
|
116,104
|
|
|
96,639
|
|
||||
Consolidation adjustments and other
|
|
(3,801
|
)
|
|
6,374
|
|
|
(5,899
|
)
|
|
6,088
|
|
||||
Homebuilding consolidated gross profit
|
|
$
|
332,060
|
|
|
$
|
333,666
|
|
|
$
|
636,460
|
|
|
$
|
611,813
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Homebuilding consolidated income before taxes:
|
|
|
|
|
|
|
|
|
||||||||
Mid Atlantic
|
|
$
|
123,802
|
|
|
$
|
112,221
|
|
|
$
|
223,166
|
|
|
$
|
203,268
|
|
North East
|
|
11,563
|
|
|
16,777
|
|
|
23,023
|
|
|
32,481
|
|
||||
Mid East
|
|
40,291
|
|
|
42,174
|
|
|
75,766
|
|
|
69,385
|
|
||||
South East
|
|
30,825
|
|
|
29,203
|
|
|
65,861
|
|
|
52,440
|
|
||||
Reconciling items:
|
|
|
|
|
|
|
|
|
||||||||
Equity-based compensation expense (1)
|
|
(17,466
|
)
|
|
(17,230
|
)
|
|
(37,438
|
)
|
|
(26,617
|
)
|
||||
Corporate capital allocation (2)
|
|
56,177
|
|
|
53,954
|
|
|
110,735
|
|
|
104,653
|
|
||||
Unallocated corporate overhead
|
|
(29,354
|
)
|
|
(22,503
|
)
|
|
(61,089
|
)
|
|
(53,787
|
)
|
||||
Consolidation adjustments and other
|
|
9,836
|
|
|
14,701
|
|
|
20,034
|
|
|
22,031
|
|
||||
Corporate interest expense
|
|
(6,024
|
)
|
|
(6,031
|
)
|
|
(11,998
|
)
|
|
(12,018
|
)
|
||||
Reconciling items sub-total
|
|
13,169
|
|
|
22,891
|
|
|
20,244
|
|
|
34,262
|
|
||||
Homebuilding consolidated income before taxes
|
|
$
|
219,650
|
|
|
$
|
223,266
|
|
|
$
|
408,060
|
|
|
$
|
391,836
|
|
(1)
|
The increase in equity-based compensation expense for the six-month period ended June 30, 2019 was primarily attributable to the equity grant in the second quarter of 2018.
|
(2)
|
This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance, and is as follows for the periods presented:
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Corporate capital allocation charge:
|
|
|
|
|
|
|
|
|
||||||||
Mid Atlantic
|
|
$
|
31,378
|
|
|
$
|
31,501
|
|
|
$
|
61,794
|
|
|
$
|
61,949
|
|
North East
|
|
4,626
|
|
|
4,580
|
|
|
9,353
|
|
|
8,760
|
|
||||
Mid East
|
|
9,497
|
|
|
9,057
|
|
|
18,512
|
|
|
17,030
|
|
||||
South East
|
|
10,676
|
|
|
8,816
|
|
|
21,076
|
|
|
16,914
|
|
||||
Total
|
|
$
|
56,177
|
|
|
$
|
53,954
|
|
|
$
|
110,735
|
|
|
$
|
104,653
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Loan closing volume:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total principal
|
|
$
|
1,231,039
|
|
|
$
|
1,214,101
|
|
|
$
|
2,372,037
|
|
|
$
|
2,223,774
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loan volume mix:
|
|
|
|
|
|
|
|
|
||||||||
Adjustable rate mortgages
|
|
11
|
%
|
|
10
|
%
|
|
11
|
%
|
|
9
|
%
|
||||
Fixed-rate mortgages
|
|
89
|
%
|
|
90
|
%
|
|
89
|
%
|
|
91
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating profit:
|
|
|
|
|
|
|
|
|
||||||||
Segment profit
|
|
$
|
26,173
|
|
|
$
|
19,685
|
|
|
$
|
55,731
|
|
|
$
|
42,235
|
|
Equity-based compensation expense
|
|
(1,111
|
)
|
|
(1,365
|
)
|
|
(472
|
)
|
|
(1,487
|
)
|
||||
Mortgage banking income before tax
|
|
$
|
25,062
|
|
|
$
|
18,320
|
|
|
$
|
55,259
|
|
|
$
|
40,748
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capture rate:
|
|
89
|
%
|
|
87
|
%
|
|
89
|
%
|
|
87
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Mortgage banking fees:
|
|
|
|
|
|
|
|
|
||||||||
Net gain on sale of loans
|
|
$
|
32,962
|
|
|
$
|
27,571
|
|
|
$
|
67,919
|
|
|
$
|
58,891
|
|
Title services
|
|
9,592
|
|
|
9,077
|
|
|
18,292
|
|
|
16,926
|
|
||||
Servicing fees
|
|
192
|
|
|
194
|
|
|
340
|
|
|
346
|
|
||||
|
|
$
|
42,746
|
|
|
$
|
36,842
|
|
|
$
|
86,551
|
|
|
$
|
76,163
|
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Approximate Dollar Value of
Shares that May Yet
Be Purchased Under
the Plans or
Programs
|
||||||
April 1 - 30, 2019
|
|
21,567
|
|
|
$
|
2,848.98
|
|
|
21,567
|
|
|
$
|
137,615
|
|
May 1 - 31, 2019
|
|
4,428
|
|
|
$
|
3,173.01
|
|
|
4,428
|
|
|
$
|
423,565
|
|
June 1 - 30, 2019
|
|
3,831
|
|
|
$
|
3,259.03
|
|
|
3,831
|
|
|
$
|
411,080
|
|
Total
|
|
29,826
|
|
|
$
|
2,949.75
|
|
|
29,826
|
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
File
Number
|
|
Exhibit
Number
|
|
Filing Date
|
10.1
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NVR, Inc.
|
|
|
|
Date: July 31, 2019
|
By:
|
/s/ Daniel D. Malzahn
|
|
|
Daniel D. Malzahn
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
NVR MORTGAGE FINANCE, INC., as Seller
|
||
By:
|
/s/ Eugene J. Bredow
|
|
Name:
|
Eugene J. Bredow
|
|
Title:
|
President
|
|
|
|
|
U.S. BANK NATIONAL ASSOCIATION, as Agent and as a Buyer
|
||
By:
|
/s/ Edwin D. Jenkins
|
|
Name:
|
Edwin D. Jenkins
|
|
Title:
|
Senior Vice President
|
|
|
|
|
Approved Investors List
|
||||
Investor
|
S&P CP Rating
|
Moody's CP Rating
|
Related Parent Company
|
Product Approval
|
Bayview Acquisitions, LLC
|
N/A
|
N/A
|
|
Conforming
|
Caliber Funding
|
N/A
|
N/A
|
|
Conforming
|
Dollar Bank
|
N/A
|
N/A
|
|
Non-Conforming/
Conforming
|
Federal Home Loan Mortgage Corp
|
N/A
|
N/A
|
|
Conforming
|
Federal National Mortgage Assoc.
|
N/A
|
N/A
|
|
Conforming
|
First National Bank of Pennsylvania
|
N/A
|
P-2
|
FNB Corporation
|
Non-Conforming/
Conforming
|
Ginnie Mae Securities
|
A-1
|
N/A
|
|
Conforming
|
Huntington National Bank of Columbus OH
|
N/A
|
N/A
|
Huntington National Bancshares, Inc.
|
Non-Conforming/
Conforming
|
Lakeview Loan Servicing
|
|
|
|
Non-Conforming/
Conforming
|
Merchants Mortgage
|
|
|
Merchants Bank of Indiana
|
Non-Conforming/
Conforming
|
NASA Federal Credit Union
|
|
|
|
Non-Conforming/ Conforming
|
Northpoint
|
|
|
|
Non-Conforming/
Conforming
|
PennyMac Corporation
|
N/A
|
N/A
|
PennyMac Mortgage Inv Trust
|
Non-Conforming/
Conforming
|
Pentagon Federal Credit Union, Alexandria VA
|
N/A
|
N/A
|
|
Non-Conforming/
Conforming
|
Roundpoint Mortgage Servicing Corp
|
N/A
|
N/A
|
|
Conforming
|
Sandy Spring Bank of Olney MD
|
N/A
|
N/A
|
|
Non-Conforming/
Conforming
|
U.S. Bank Home Mortgage
|
A-1
|
P-1
|
|
Non-Conforming/
Conforming
|
U.S. Department of Agriculture
|
|
|
|
Conforming
|
Wells Fargo Bank, N.A.
|
A-1
|
P-1
|
|
Non-Conforming/
Conforming
|
|
|
|
|
|
|
|
|
|
|
Approved Investors List
|
||||
Housing Agencies
|
||||
Delaware State Housing Agency
|
N/A
|
N/A
|
|
Conforming
|
District of Columbia Housing Finance Agency
|
N/A
|
N/A
|
|
Conforming
|
Florida State Housing
|
N/A
|
N/A
|
|
Conforming
|
HFA of Hillsborough County
|
N/A
|
N/A
|
|
Conforming
|
Housing Opportunities Commission
|
N/A
|
N/A
|
|
Conforming
|
Illinois Housing Development Authority
|
N/A
|
N/A
|
|
Conforming
|
Indiana Housing & Community Development Authority
|
N/A
|
N/A
|
|
Conforming
|
Maryland Community Development
|
N/A
|
N/A
|
|
Conforming
|
National Homebuyers Fund
|
N/A
|
N/A
|
Master Servicer - USBHM
|
Conforming
|
New Jersey Housing & Mortgage Finance
|
N/A
|
N/A
|
|
Conforming
|
North Carolina Housing Finance
|
N/A
|
N/A
|
|
Conforming
|
Ohio Housing Finance Agency
|
N/A
|
N/A
|
|
Conforming
|
Pennsylvania Housing Finance Agency
|
N/A
|
N/A
|
|
Conforming
|
Port of Cincinnati Greater Development Authority
|
N/A
|
N/A
|
Master Servicer - USBHM
|
Conforming
|
South Carolina State Housing Finance
|
N/A
|
N/A
|
|
Conforming
|
State of New York Mortgage Agency
|
N/A
|
N/A
|
|
Conforming
|
Tennessee Housing Development Agency
|
N/A
|
N/A
|
|
Conforming
|
Virginia Housing Development Authority
|
N/A
|
N/A
|
|
Conforming
|
West Virginia Housing Finance
|
N/A
|
N/A
|
|
Conforming
|
NVR MORTGAGE FINANCE, INC., as Seller
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
|
|
|
Consolidated Assets:
|
$ _________________
|
Minus Debt (excluding Qualified Subordinated Debt):
|
$ __________________
|
Minus Contingent Indebtedness:
|
$ __________________
|
Minus Intangible Assets:
|
$ __________________
|
Minus Affiliate Receivables:
|
$ __________________
|
ADJUSTED TANGIBLE NET WORTH:
|
$ __________________
|
Total Liabilities (excluding Qualified Subordinated Debt):
|
$ ____________
|
Adjusted Tangible Net Worth:
|
$ ____________
|
LEVERAGE RATIO:
|
_____ To 1.0
|
Consolidated Net Income (in accordance with GAAP):
|
$ _______________
|
Plus/Minus FAS-133 Adjustment
(calculated as of the end of the most recent fiscal quarter)
|
$ _______________
|
Plus/Minus Tax Adjustment
|
$ _______________
|
PRE-FAS 133 NET INCOME:
|
$ _______________
|
Unencumbered cash and cash equivalents:
|
$ _______________
|
Plus Unused availability (lesser of (i) aggregate Purchase Value - aggregate Purchase Price, or (ii) Maximum Aggregate Commitment - aggregate Purchase Price):
|
$ _______________
|
LIQUIDITY:
|
$ _______________
|
Ratio (expressed as a percentage of):
|
|
percentage of Seller’s Mortgage Loan originations under the FHA single family mortgage insurance program that were seriously delinquent or were claim terminated in the first two years after origination
|
_______%
|
to
|
|
percentage of all Mortgage Loan originations under the FHA single family mortgage insurance program that were seriously delinquent or were claim terminated in the first two years after origination
|
_______%
|
Ratio (two year):
|
________
|
|
|
Facility #1
|
Facility #2
|
Facility #3
|
LENDER / PROVIDER
|
|
|
|
|
COLLATERAL AGENT
|
|
|
|
|
COMMITTED AMOUNT
|
|
|
|
|
UNCOMMITTED AMOUNT
|
|
|
|
|
AMOUNT OUTSTANDING
|
|
|
|
|
MATURITY DATE
|
|
|
|
|
|
Pricing
|
|
|
|
|
Libor Floor
|
|
|
|
|
Collateral Fees
|
|
|
|
|
Facility Fee
|
|
|
|
|
Non-Use Fee
|
|
|
|
ELIGIBLE COLLATERAL
|
|
|
|
|
|
Eligible Collateral #1: Agency/conforming (incl. 40-year loans)
|
|
|
|
|
Eligible Collateral #2: Jumbo
|
|
|
|
|
Eligible Collateral #3:
|
|
|
|
|
Eligible Collateral #4:
|
|
|
|
|
Eligible Collateral #5:
|
|
|
|
|
Eligible Collateral #6:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COVENANTS
|
|
|
|
|
|
Covenant #1 Net Worth
|
|
|
|
|
Covenant #2 Leverage
|
|
|
|
|
Covenant #3 Liquidity
|
|
|
|
|
Covenant #4 Net income
|
|
|
|
MARK-TO-MARKET PROVISION
|
|
|
|
|
ADDITIONAL INDEBTEDNESS ALLOWED
|
|
|
|
|
ADDITIONAL LIENS ALLOWED
|
|
|
|
|
DIVIDENDS / DISTRIBUTIONS ALLOWED
|
|
|
|
|
CROSS-DEFAULTED
|
|
|
|
|
PERSONAL GUARANTY (Y/N?)
|
|
|
|
|
E and O Coverage Amount
|
|
|
|
|
Fidelity Bond Coverage
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this report on Form 10-Q of NVR, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
Date: July 31, 2019
|
By:
|
/s/ Paul C. Saville
|
|
|
Paul C. Saville
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of NVR, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
Date: July 31, 2019
|
By:
|
/s/ Daniel D. Malzahn
|
|
|
Daniel D. Malzahn
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of NVR, Inc.
|
|
|
|
Date: July 31, 2019
|
By:
|
/s/ Paul C. Saville
|
|
|
Paul C. Saville
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
By:
|
/s/ Daniel D. Malzahn
|
|
|
Daniel D. Malzahn
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|