NVR (NVR) 10-K risk factor changes: FY2013 vs FY2012

During 2012, we began to see signs of strengthening within the homebuilding industry with increasing sales and stabilization of [removed: selling] [added: sales] prices in many markets.

However, the housing market continues to face challenges from a tight mortgage lending [removed: environment] [added: environment, increasing mortgage interest rates] and consumer confidence issues due to sustained high levels of unemployment.

[removed: The downturn experienced] [added: If the improvements] in the homebuilding industry [removed: could have a material adverse effect on] [added: do not continue or the industry suffers another downturn,] our [removed: sales either through fewer] gross sales [added: may decrease] and/or [added: we may have] higher cancellation rates, which could have a material adverse effect on our profitability, stock performance, ability to service our debt obligations and future cash flows.

In the event of [removed: further] adverse changes in economic or market conditions, we may cease further building activities in communities or restructure existing purchase agreements, resulting in forfeiture of some or all of any remaining land contract deposit paid to the developer.

[removed: In] the [removed: event that a substantial number of the] loans [removed: that we have originated fall into default and the investors to whom we sold the loan] determine that we did not underwrite the [removed: loan] [added: loans] in accordance with their requirements, we could be required to repurchase the loans from the investor or indemnify the investor for any losses incurred.

In the event that disruptions to the secondary markets [removed: similar to those which occurred during 2007 and 2008 continue to] tighten or eliminate the available liquidity within the secondary markets for mortgage loans, or the underwriting requirements by our secondary market investors continue to become more stringent, our ability to sell future mortgages could decline and we could be required, among other things, to fund our commitments to our buyers with our own financial resources, which is limited, or require our home buyers to find another source of financing.

In particular, [added: during 2013,] approximately [removed: 38%] [added: 25% and 12%] of our home settlements [removed: during 2012] occurred in the Washington, D.C. and Baltimore, MD metropolitan areas, [added: respectively,] which accounted for approximately [removed: 47%] [added: 31% and 15%, respectively,] of our [added: 2013] homebuilding [removed: revenues in 2012.][added: revenues.]

If we are required to seek financing to fund our working capital requirements, [removed: continued] volatility in [removed: these] [added: those] markets [removed: similar to that experienced in the past several years] may restrict our flexibility to access financing.

If we are at any time unsuccessful in obtaining sufficient capital to fund our planned homebuilding expenditures, we may experience a substantial delay in the completion of [removed: any] homes then under construction, or we may be unable to control or purchase finished building lots.

We are subject to various local, state and federal statutes, ordinances, rules and regulations concerning zoning, building design, construction and similar matters, including local regulations that impose restrictive zoning and density requirements in order to limit the number of homes that can eventually be built [added: within the boundaries of a particular area.]

In addition, we have from time to time been subject to, and may also be subject in the future to, periodic delays in our homebuilding projects due to building moratoriums in the areas in which we [removed: operate.][added: operate or delays in receiving the necessary governmental approvals.]

We face competition in our [removed: housing] [added: homebuilding] and mortgage banking operations.

Our main competition comes from national, regional and local mortgage bankers, [removed: thrifts,] [added: credit unions,] banks and mortgage brokers in each of these markets.

Significant increases in costs resulting from these shortages, or delays in construction of homes, could have a material adverse effect [removed: upon] [added: on] our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.

Extreme weather or other events, such as significant snowfalls, hurricanes, tornadoes, earthquakes, forest fires, floods, terrorist attacks or [removed: war,] [added: war] may affect our markets, our operations and our profitability.

These favorable trends continued into 2013.

In the event that a substantial number of the loans that we have originated fall into default and the investors to whom we sold

We may be subject to claims on mortgage loans sold to third parties.

Our mortgage banking operations may be responsible for losses associated with mortgage loans originated and sold to investors in the event of errors or omissions relating to certain representations and warranties that the loans sold meet certain requirements, including representations as to underwriting standards, the type of collateral, the existence of primary mortgage insurance, and the validity of certain borrower representations in connection with the loan.

The resolution of claims related to alleged breaches of these representations and warranties and repurchase claims could have a material adverse effect on our financial condition, cash flows and results of operations and could exceed existing estimates and accruals.

Because of the uncertainties inherent in estimating these matters, there can be no assurance that any amounts reserved will be adequate or that any potential inadequacies will not have an adverse effect on our results of operations.

In addition, new housing developments are often subject to various assessments or impact fees for schools, parks, streets, highways and other public improvements.

The cost of these assessments is subject to substantial change and can cause increases in the construction cost of our homes, which, in turn, could reduce our profitability.

The CFPB issued rules governing multiple issues in January 2013, including “Ability to Repay” underwriting provisions, definition and parameters of “Qualified Mortgages” and the establishment of certain protections from liability under “Ability to Repay” provisions for “Qualified Mortgages”.

The CFPB’s rulemaking also included limitations on certain fees and loan officer compensation requirements.

These rules were effective January 2014.

The tighter underwriting requirements and fee restrictions under these standards may negatively impact our mortgage loan origination business.

Increased regulation of the mortgage industry could harm our future sales and earnings.

The mortgage industry remains under intense scrutiny and continues to face increasing regulation at the federal, state and local level.

Potential changes to federal laws and regulations could have the effect of limiting the activities of FNMA and FHLMC, the entities that provide liquidity to the secondary mortgage market, which could lead to increases in mortgage interest rates.

At the same time, recent and proposed changes to the FHA’s rules to require increased borrower credit scores, increased down payment amounts, and limiting the amount of permitted seller concessions, lessen the number of buyers able to finance a new home.

All of these regulatory activities reduce the number of potential buyers who qualify for the financing necessary to purchase our homes, which could harm our future sales and earnings.

We rely on subcontractors to construct our homes.

The failure of our subcontractors to properly construct our homes may be costly.

We engage subcontractors to perform the actual construction of our homes.

Despite our quality control efforts, we may discover that our subcontractors were engaging in improper construction practices.

The occurrence of such events could require us to repair the homes in accordance with our standards and as required by law.

The cost of satisfying our legal obligations in these instances may be significant, and we may be unable to recover the cost of repair from subcontractors, suppliers and insurers.

Our failure to maintain the security of our electronic and other confidential information could expose us to liability and materially adversely affect our financial condition and results of operations.

Privacy, security, and compliance concerns have continued to increase as technology has evolved.

As part of our normal business activities, we collect and store certain confidential information, including personal information of homebuyers/borrowers and information about employees, vendors and suppliers.

This information is entitled to protection under a number of federal and state laws.

We may share some of this information with vendors who assist us with certain aspects of our business, particularly our mortgage and title businesses.

Our failure to maintain the security of the data which we are required to protect, including via the penetration of our network security and the misappropriation of confidential and personal information, could result in business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs, and also in deterioration in customers’ confidence in us and other competitive disadvantages, and thus could have a material adverse effect on our sales, profitability, stock performance, ability to service our debt obligations and future cash flows.

Forward-Looking Statements

Some of the statements in this Form 10-K, as well as statements made by us in periodic press releases or other public communications, 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 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.

within the boundaries of a particular area.

The Consumer Financial Protection Bureau issued rules governing multiple issues in January 2013, including “Ability to Repay” underwriting provisions, appraisal standards, servicing and escrow rules, and loan officer compensation requirements.

Additional rulemaking is expected within the next couple of months.

The ultimate impact of such provisions on lending institutions, including our mortgage banking subsidiary, will depend on the banking industry’s implementation of these new standards.

Results of Operations for the Years Ended December 31, [removed: 2012, 2011] [added: 2013, 2012] and [removed: 2010][added: 2011]

[removed: Overview][added: _Overview_]

| _Mid East:_ | | [removed: Kentucky,] New York, Ohio, western Pennsylvania, Indiana and Illinois |

Historically, we [added: generally] have not engaged in land development to obtain finished lots for use in our homebuilding operations.

Our continued success is contingent upon our ability to control an adequate supply of finished lots on which to build and on our developers’ ability to [removed: timely] deliver finished lots to meet the sales demands of our customers.

However, during the past several years, the impact of economic conditions on the homebuilding industry has negatively impacted our developers’ ability to obtain acquisition and development financing [removed: or] [added: and] to raise equity investments to finance land development [removed: activity, potentially constraining our supply of finished lots.][added: activity.]

[removed: This pressure has necessitated that] [added: As a result of the changing environment,] in certain specific strategic circumstances we deviate from our historical lot acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for development.

As of December 31, [removed: 2012,] [added: 2013,] we controlled approximately [removed: 53,200] [added: 58,100] lots under purchase agreements with deposits in cash and letters of credit totaling approximately [removed: $256,600] [added: $296,600] and [removed: $3,300,] [added: $2,500,] respectively.

[removed: Additionally,] [added: In addition,] we controlled approximately [removed: 7,400] [added: 6,000] lots through joint venture limited liability corporations with an aggregate investment of approximately [removed: $82,900.][added: $92,700.]

Included in the number of controlled lots are approximately [removed: 10,200] [added: 9,200] lots for which we have recorded a contract land deposit impairment reserve of approximately [removed: $65,000] [added: $59,800] as of December 31, [removed: 2012.][added: 2013.]

Further, as of December 31, [removed: 2012,] [added: 2013,] we had approximately [removed: $68,300] [added: $41,300] in land under development, that once fully developed will result in approximately [removed: 700] [added: 650] lots for use in our homebuilding operations.

See [removed: Note 3 and Note] [added: Notes 3,] 4 [added: and 5] to the consolidated financial statements included herein for additional information regarding [removed: contract land deposits] [added: fixed price purchase agreements, joint ventures] and land under development, respectively.

[removed: As a result of the favorable market conditions in 2012, our new orders, net of cancellations (“new orders”),] [added: New Orders] for [removed: 2012] [added: 2013] increased [removed: 18%] [added: 8%] from the prior year while our average new order [removed: selling] [added: sales] price of [removed: $328.8] [added: $360.4 in 2013] was [removed: 8%] [added: 10%] higher than the prior year.

Net income for [removed: 2012] [added: 2013] increased [removed: 40%] [added: 48%] from the prior year to [removed: $180,588.][added: $266,477.]

Diluted earnings per share in [removed: 2012] [added: 2013] was [removed: $35.12,] [added: $54.81,] an increase of [removed: 53%] [added: 56%] from the prior year.

The [removed: acquisition] [added: higher backlog balance entering 2013 was in part attributable to our Heartland Homes acquisition, which] added approximately 200 units and $81,600 to [removed: our] backlog [removed: balance] at [removed: the end of] [added: December 31,] 2012.

[removed: Although there were signs in 2012] [added: We believe] that the [added: continuation of the] housing market [removed: has begun to recover, we believe that continued growth] [added: recovery which began] in [removed: sales and prices will be reliant on] [added: 2012 is dependent upon] a sustained overall economic [removed: recovery] [added: recovery, driven by continued improvement in unemployment] and [removed: higher] consumer confidence levels.

[removed: In addition, the] [added: The] Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, contains numerous provisions affecting residential mortgages and mortgage lending practices.

[removed: Despite these ongoing economic uncertainties,] [added: Due to the strength of our balance sheet,] we believe that we are well positioned to take advantage of opportunities that may arise [removed: due to the strength of our balance sheet.][added: from future economic and homebuilding market volatility.]

| | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | |

| Revenues | | $ | [removed: 3,121,244] [added: 4,134,481] | | | $ | [removed: 2,611,195] [added: 3,121,244] | | | $ | [removed: 2,980,758] [added: 2,611,195] | |

| Cost of sales | | $ | [removed: 2,575,639] [added: 3,424,204] | | | $ | [removed: 2,165,625] [added: 2,575,639] | | | $ | [removed: 2,438,292] [added: 2,165,625] | |

| Gross profit margin percentage | | | [removed: 17.5] [added: 17.2] | % | | | [removed: 17.1] [added: 17.5] | % | | | [removed: 18.2] [added: 17.1] | % |

| Selling, general and administrative expenses | | $ | [removed: 301,184] [added: 313,029] | | | $ | [removed: 264,266] [added: 301,184] | | | $ | [removed: 257,394] [added: 264,266] | |

| Settlements (units) | | | [removed: 9,843] [added: 11,834] | | | | [removed: 8,487] [added: 9,843] | | | | [removed: 10,030] [added: 8,487] | |

| Average settlement price | | $ | [removed: 317.1] [added: 349.1] | | | $ | [removed: 307.5] [added: 317.1] | | | $ | [removed: 297.1] [added: 307.5] | |

| New orders (units) | | | [removed: 10,954] [added: 11,800] | | | | [removed: 9,247] [added: 10,954] | | | | [removed: 9,415] [added: 9,247] | |

| Average new order price | | $ | [removed: 328.8] [added: 360.4] | | | $ | [removed: 304.1] [added: 328.8] | | | $ | [removed: 304.0] [added: 304.1] | |

| Backlog (units) | | | [removed: 4,979] [added: 4,945] | | | | [removed: 3,676] [added: 4,979] | | | | [removed: 2,916] [added: 3,676] | |

| Average backlog price | | $ | [removed: 346.2] [added: 373.2] | | | $ | [removed: 315.8] [added: 346.2] | | | $ | [removed: 328.6] [added: 315.8] | |

| New order cancellation rate | | | [removed: 14.5] [added: 14.9] | % | | | [removed: 13.6] [added: 14.5] | % | | | [removed: 13.8] [added: 13.6] | % |

Average settlement prices in [removed: the current year] [added: 2012] were favorably impacted [removed: primarily] by a 7% higher average sales price of [removed: new orders] [added: New Orders] during the first six months of 2012 as compared to the same period in 2011, offset partially by a 4% lower average price of homes in backlog entering 2012 compared to the average price of homes in backlog entering 2011.

Homebuilding revenues for [removed: 2011 decreased 12%] [added: 2013 increased 32%] from [removed: 2010,] [added: 2012,] as a result of a [removed: 15% decrease] [added: 20% increase] in the number of homes [removed: settled, offset partially by] [added: settled and] a [removed: 4%] [added: 10%] increase in the average settlement price year over year.

The [removed: decrease] [added: increase] in [removed: the number of homes settled] [added: settlements] was attributable to a [removed: 17% lower beginning] [added: 45% higher] backlog unit balance entering [removed: 2011 as] [added: 2012] compared to [removed: the same period in 2010,] [added: 2011,] coupled with [removed: lower new orders] [added: a 23% increase] in [added: New Orders during] the first half of [removed: 2011 as] [added: 2012] compared to the [removed: first half of 2010.][added: same period in 2011.]

[removed: Average] [added: The average] settlement [removed: prices in 2011 were] [added: price was] favorably impacted by [removed: an 8%] [added: a 12%] higher average price of homes in [removed: the beginning] backlog entering [removed: 2011] [added: 2013] compared to the same period in [removed: 2010.][added: 2012, as well as by a 9% increase in the average sales price of homes in the first six months of 2013 compared to the same period in 2012.]

New [removed: orders] [added: Orders] and the average [removed: new order selling prices] [added: sales price] were higher year over year in each of our market segments.

In addition, [removed: the aforementioned] increased settlement volume and higher average settlement prices in 2012 allowed us to better leverage certain operating costs.

The increase in SG&A expense was attributable to an increase of approximately $19,700 in management incentive costs driven by [removed: our] improved [removed: financial results.]

In addition, personnel costs and sales and marketing [removed: costs,] [added: costs] were approximately $9,400 and $6,400 higher, respectively, in [removed: the current year] [added: 2012] due primarily to the 5% increase in the number of active communities [removed: year over year.][added: compared to 2011.]

SG&A expenses decreased as a percentage of revenue due to the [removed: aforementioned] 20% increase in revenues [removed: year over year.][added: in 2012 compared to 2011.]

Of the total finished lots expected to be developed, 125 lots are under contract to be sold to an unrelated party under lot purchase agreements.

During 2013, sales trends in the first six months were stronger than the last six months of the year.

During the first half of 2013, the homebuilding market continued to experience the favorable sales and pricing trends which began in 2012, driven by historically low mortgage interest rates and rising costs in the rental market which contributed to higher levels of housing affordability.

Sales trends in the second half of 2013 were negatively impacted by increasing mortgage interest rates, higher home prices and buyer uncertainty.

The housing market also continues to face challenges from tight mortgage underwriting standards.

While we have benefited from generally improved market conditions, we continue to face gross margin pressure due to increasing land and construction costs.

Our consolidated revenues for the year ended December 31, 2013 totaled $4,211,267, an increase of 32% from $3,184,650 in 2012.

The increase in the number of homes settled was primarily attributable to a 35% higher beginning backlog unit balance entering 2013 as compared to 2012, offset partially by a lower backlog turnover rate in 2013 compared to 2012.

The higher beginning backlog balance and average sales prices were driven by the favorable market conditions discussed in the _Overview_ section above.

New Orders and the average sales price of New Orders in 2013 increased 8% and 10%, respectively, when compared to 2012.

In addition, our December 2012 acquisition of Heartland Homes added 355 New Orders in 2013.

The increase in active communities and pricing in 2013 was attributable to the favorable market conditions through the first half of 2013 as discussed in the _Overview_ section above.

New Orders and the average sales price were higher year over year in each of our market segments.

The increase in New Orders as well as in the average New Order sales price was attributable to improved market conditions in 2012.

Gross profit margins in 2013 decreased to 17.2% from 17.5% in 2012.

Gross profit margins were negatively impacted in 2013 by two warranty accrual charges.

The first charge of approximately $15,600 was recognized in the second quarter of 2013 related to remediation of primarily water infiltration issues in a single completed community.

The water infiltration issues were the result of a design issue with several products developed for and built exclusively in that one community.

The second charge of approximately $16,000 was recorded in the fourth quarter of 2013 to increase the warranty accrual for a non-recurring service issue unrelated to the second quarter service issue.

Excluding these charges, gross profit margin was 17.9%, an increase of 46 basis points from the prior year.

Gross profit margin was favorably impacted by higher settlement volume in the current year allowing us to better leverage our operating costs, partially offset by higher construction costs, including lumber and certain other commodity costs, year over year.

We expect to continue to experience gross profit margin pressure over the next several quarters due to cost and pricing pressures.

SG&A expenses in 2013 increased approximately $11,800, or 4%, compared to 2012, but as a percentage of revenue decreased to 7.6% in 2013 from 9.7% in 2012.

The increase in SG&A expense was attributable to increases of approximately $20,300 in personnel costs in 2013 due to an increase in headcount year over year.

In addition, sales and marketing costs were approximately $14,400 higher in 2013 due to the increase in the number of active communities.

These cost increases were partially offset by an approximate $28,700 reduction in equity-based compensation in 2013 compared to 2012.

Equity-based compensation was favorably impacted as a result of the restricted share units (“RSUs”) issued in 2010 becoming fully vested as of December 31, 2012 and the reversal of approximately $7,100 in equity-based compensation expense previously recorded to SG&A expense as we adjusted our stock option forfeiture rates based on our actual forfeiture experience.

These reductions were offset partially by equity-based compensation expense incurred in 2013 related to RSUs issued in May 2013.

The decrease in SG&A costs as a percentage of revenue was driven by the 32% increase in revenue in 2013, allowing us to better leverage our overhead costs.

financial results in 2012.

Backlog units decreased approximately 1% to 4,945 as of December 31, 2013 compared to 4,979 as of December 31, 2012, while backlog dollars increased approximately 7% to $1,845,600 from $1,723,914 as of December 31, 2013 and December 31, 2012, respectively.

Backlog dollars were higher primarily due to a 10% increase in the average price of New Orders for the six-month period ended December 31, 2013 compared to the same period in 2012.

Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2013 backlog during 2014.

The backlog turnover rate is impacted by various factors, including, but not limited to, changes in New Order activity, internal production capacity, external subcontractor capacity and other external factors over which we do not exercise control.

| | | 2013 | | | | | | | | 2012 | | | | | | | | 2011 | | | | | | |

| | | | | | | Average | | | | | | | | Average | | | | | | | | Average | | |

| | | 2013 | | | | | | | | 2012 | | | | | | | | 2011 | | | | | | |

| | | | | | | Average | | | | | | | | Average | | | | | | | | Average | | |

| | | Units | | | | Price | | | | Units | | | | Price | | | | Units | | | | Price | | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

Of the lots controlled by the joint ventures, approximately 2,800 were not under contract at December 31, 2012.

Throughout 2012, the homebuilding market continued to experience a stabilization in prices and improving sales trends for new homes, after several years of declining home prices and sales.

These favorable market conditions are driven by improved affordability levels resulting from historically low mortgage interest rates and rising costs in the rental market.

In addition, certain markets have been favorably impacted by lower inventory levels.

Despite these improvements, the housing market continues to face challenges from a tight mortgage lending environment, consumer confidence issues due to sustained high levels of unemployment and uncertainty as to the long-term sustainability of the economic recovery, which to this point has been uneven.

Consolidated revenues totaled $3,184,650 for 2012, an increase of 20% from $2,659,149 in 2011.

On December 31, 2012, we completed the acquisition of substantially all of the assets and assumed certain liabilities of Heartland Homes, Inc., the second largest homebuilder in the Pittsburgh, PA market.

The acquisition did not impact our sales or settlements for 2012.

Heartland Homes settled approximately 400 homes during 2012.

Significant economic uncertainties remain which could result in sales, pricing and gross profit margin pressure over the next several quarters.

The Consumer Financial Protection Bureau issued rules governing multiple issues in January 2013, including “Ability to Repay” underwriting provisions, appraisal standards, servicing and escrow rules, and loan officer compensation requirements.

Additional rulemaking is expected within the next couple of months.

The ultimate impact of such provisions on lending institutions, including our mortgage banking subsidiary, will depend on the banking industry’s implementation of these new standards.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | Year Ended December 31, | | | | | | | | | | |

As discussed in the _Overview_ section above, we believe this increase as well as the increase in the average new order selling prices is attributable to lower housing inventory, improved affordability and a stabilization of housing prices in certain of our markets.

New orders in 2011 decreased 2% when compared to 2010, while the average sales price of new orders remained flat year over year.

During 2011, we continued to face selling pressure in most of our markets due to continuing economic uncertainty, driven by low consumer confidence and high unemployment rates.

Gross profit margins in 2011 declined to 17.1% from 18.2% in 2010.

Gross profit margins in 2011 were negatively impacted by pricing pressure and increased construction and sales incentive costs, driven by challenging market conditions in 2011.

SG&A expenses in 2011 increased approximately $6,900, or 3%, compared to 2010 and as a percentage of revenue increased to 10.1% in 2011 from 8.6% in the prior year.

The increase in SG&A expenses was primarily attributable to an approximate $10,500 increase in equity-based compensation costs in 2011 compared to 2010.

The increase in equity-based compensation resulted primarily from the favorable impact in 2010 of a reversal of approximately $6,600 in equity-based compensation expense related to an adjustment of our stock option forfeiture estimates to our actual forfeiture experience, while there was no forfeiture adjustment recorded in 2011.

In addition, the increase in equity-based compensation expense in 2011 resulted from incurring a full year of expense in 2011 for non-qualified stock options and restricted share units granted in the second quarter of 2010 under the 2010 Equity Incentive Plan.

This increase in SG&A expenses was partially offset by an approximate $4,100 decrease in personnel costs, primarily driven by a $7,800 decline in management incentives year over year.

SG&A expenses increased as a percentage of revenue due to the aforementioned 12% decrease in revenues year over year.

Backlog units and dollars increased approximately 26% to 3,676 and 21% to $1,160,879, respectively, as of December 31, 2011 compared to 2,916 and $958,287 as of December 31, 2010.

The increase in backlog units was primarily attributable to the decreased settlement activity in 2011.

Backlog dollars were favorably impacted by the backlog unit increase, offset partially by a 4% decline in the average price of homes in backlog in 2011 compared to 2010.

| Total | | $ | 3,121,244 | | | $ | 2,611,195 | | | $ | 2,980,758 | |

| Total | | $ | 552,254 | | | $ | 450,987 | | | $ | 537,767 | |

| Total | | $ | 271,139 | | | $ | 203,192 | | | $ | 302,338 | |

| Total (1) | | $ | 507,825 | | | $ | 356,511 | | | $ | 270,048 | |

| Total (1) | | $ | 78,742 | | | $ | 80,375 | | | $ | 66,425 | |

| Total | | $ | 194,876 | | | $ | 135,158 | | | $ | 107,396 | |

_2011 versus 2010_

Revenues decreased approximately $197,700, or 11%, in 2011 from 2010 on a 16% decrease in the number of units settled, offset partially by a 6% increase in the average settlement price year over year.

The segment’s gross profit margin percentage decreased to 18.1% in 2011 from 19.0% in 2010.

Segment profit and gross profit margins were negatively impacted by pricing pressure and increased construction and sales incentive costs in addition to the reduced settlement volume year over year and its impact on our ability to leverage certain operating costs.

In September 2012, we issued $600,000 of [removed: 3.95%] Senior [removed: Notes due 2022 (the “Notes”).][added: Notes.]

The [added: Senior] Notes mature on September 15, 2022 and bear interest at 3.95%, payable semi-annually in arrears on March 15 and September 15, commencing on March 15, 2013.

We generally have no obligation to prepay the [added: Senior] Notes prior to maturity, and [removed: thus] [added: therefore,] interest rate fluctuations should not have a significant impact on our fixed-rate debt.

[removed: Advances under the Repurchase Agreement carry a Pricing Rate based on the] LIBOR [removed: Rate plus the LIBOR] Margin, or the Default Pricing Rate, as determined under the Repurchase Agreement, provided that the Pricing Rate shall not be less than [removed: 3.10%.][added: 3.00%.]

At December 31, [removed: 2012] [added: 2013,] there was no debt outstanding under the Repurchase Agreement.

The following table represents the contractual balances of our on-balance sheet financial instruments at the expected maturity dates, as well as the fair values of those on-balance sheet financial instruments at December 31, [removed: 2012.][added: 2013.]

[added: | | |] Maturities (000’s) [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value | | |]

| | | [removed: 2013 | | | |] 2014 | | | | 2015 | | | | 2016 | | | | 2017 | | | | [added: 2018 | | | |] Thereafter | | | | Total | | | | [removed: Fair Value] | | |

| Average interest rate | | | [removed: 3.3] [added: 4.2] | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | [removed: 3.3] [added: 4.2] | % | | | | |

| Forward trades of mortgage-backed securities (a) | | $ | [removed: 490] [added: 6,153] | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | [removed: 490] [added: 6,153] | | | $ | [removed: 490] [added: 6,153] | |

| Forward loan commitments (a) | | $ | [removed: (1,094] [added: (2,697] | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | [removed: (1,094] [added: (2,697] | ) | | $ | [removed: (1,094] [added: (2,697] | ) |

| Interest-bearing deposits | | $ | [removed: 1,082,848] [added: 816,154] | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | [removed: 1,082,848] [added: 816,154] | | | $ | [removed: 1,082,848] [added: 816,154] | |

| Fixed rate obligations (b) | | $ | [removed: 642] [added: 115] | | | $ | [removed: 115] [added: —] | | | $ | — | | | $ | — | | | $ | — | | | $ | 600,000 | | | $ | [removed: 600,757] [added: 600,115] | | | $ | [removed: 618,757] [added: 575,317] | |

Advances under the Repurchase Agreement carry a Pricing Rate based on the LIBOR Rate plus the

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Mortgage loans held for sale | | $ | 213,577 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 213,577 | | | $ | 210,641 | |

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| Mortgage loans held for sale | | $ | 190,826 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 190,826 | | | $ | 188,929 | |

NVR, Inc. [removed: (“NVR”)] [added: (“NVR”), a Virginia corporation,] was formed in 1980 as NVHomes, Inc. Our primary business is the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis.

[removed: While we operate in multiple locations in fifteen states and Washington, D.C., primarily in the eastern part of the United States,] [added: During 2013,] approximately [removed: 38%] [added: 25% and 12%] of our home settlements [removed: in 2012] occurred in the Washington, D.C. and Baltimore, MD metropolitan areas, [added: respectively,] which accounted for approximately [removed: 47%] [added: 31% and 15%, respectively,] of our [removed: 2012] [added: 2013] homebuilding revenues.

Our homebuilding operations include the construction and sale of single-family detached homes, townhomes and condominium buildings under four trade names: Ryan Homes, NVHomes, Fox Ridge Homes [removed: and, as of January 1, 2013,] [added: and] Heartland [removed: Homes, which we acquired on December 31, 2012.][added: Homes.]

Ryan Homes operates in twenty-seven metropolitan areas located in Maryland, Virginia, Washington, D.C., West Virginia, Pennsylvania, New York, North Carolina, South Carolina, Florida, Ohio, New Jersey, Delaware, Indiana, [removed: Illinois, Kentucky] [added: Illinois] and Tennessee.

[removed: The] Fox Ridge Homes [removed: product is sold solely] [added: operates] in the Nashville, TN metropolitan area.

[removed: The] NVHomes [removed: product is sold] [added: operates] in Delaware and the Washington, D.C., Baltimore, [removed: MD and] [added: MD,] Philadelphia, PA [added: and Raleigh, NC] metropolitan areas.

[removed: The] Heartland Homes [removed: product is sold] [added: operates] in the Pittsburgh, PA metropolitan area.

[removed: In] [added: During] 2012, our average price [removed: of a settled unit] was approximately $317,100.

Our continued success is contingent upon our ability to control an adequate supply of finished lots on which to build and on our developers’ ability to [removed: timely] deliver finished lots to meet the sales demands of our customers.

However, during the past several years, the impact of economic conditions on the homebuilding industry has negatively impacted our developers’ ability to obtain acquisition and development financing [removed: or] [added: and] to raise equity investments to finance land development [removed: activity, potentially constraining our supply of finished lots.][added: activity.]

[added: As a result of the changing environment, in certain specific strategic circumstances we deviate from our historical lot] acquisition strategy and engage in joint venture arrangements with land developers or directly acquire raw ground already zoned for its intended use for [removed: development.]

As of December 31, [removed: 2012,] [added: 2013,] we controlled approximately [removed: 53,200] [added: 58,100] lots under purchase agreements with deposits in cash and letters of credit totaling approximately [removed: $256.6] [added: $296.6] million and [removed: $3.3] [added: $2.5] million, respectively.

Included in the number of controlled lots are approximately [removed: 10,200] [added: 9,200] lots for which we have recorded a contract land deposit impairment reserve of approximately [removed: $65.0] [added: $59.8] million as of December 31, [removed: 2012.][added: 2013.]

In addition, we had an aggregate investment totaling approximately [removed: $82.9] [added: $92.7] million in four separate joint venture limited liability corporations (“JVs”), expected to produce approximately [removed: 7,400] [added: 9,300] lots.

Of the lots controlled by the JVs, approximately [removed: 2,800] [added: 3,400] were not under contract with us at December 31, [removed: 2012.][added: 2013.]

Further, as of December 31, [removed: 2012,] [added: 2013,] we directly owned [removed: three] [added: five] separate raw parcels of land, zoned for their intended use, with a current cost basis, including development costs, of approximately [removed: $68.3] [added: $41.3] million that we intend to develop into approximately [removed: 700] [added: 650] finished lots for use in our homebuilding operations.

See [removed: Note 3 and Note] [added: Notes 3,] 4 [added: and 5] to the consolidated financial statements included herein for additional information regarding [added: fixed price purchase agreements,] JVs and land under development, respectively.

Our homes combine traditional, transitional, cottage or urban exterior designs with contemporary interior designs and amenities, generally include two to four bedrooms and range from approximately [removed: 1,400] [added: 800] to 7,300 square feet.

During [removed: 2012,] [added: 2013,] the prices at which we settled homes ranged from approximately [removed: $100,000] [added: $120,000] to $2.1 million and averaged approximately [removed: $317,100.][added: $349,100.]

| [removed: | |] _Mid Atlantic:_ | | Maryland, Virginia, West Virginia, Delaware and Washington, D.C. |

| [removed: | |] _North East:_ | | New Jersey and eastern Pennsylvania |

| [removed: | |] _Mid East:_ | | [removed: Kentucky,] New York, Ohio, western Pennsylvania, Indiana and Illinois |

| [removed: | |] _South East:_ | | North Carolina, South Carolina, Florida and Tennessee |

Backlog totaled [removed: 4,979] [added: 4,945] units and approximately [removed: $1.7] [added: $1.8] billion at December 31, [removed: 2012] [added: 2013] compared to backlog of [removed: 3,676] [added: 4,979] units and approximately [removed: $1.2] [added: $1.7] billion at December 31, [removed: 2011.][added: 2012.]

Backlog, which represents homes sold but not yet settled with the customer, may be impacted by customer cancellations for various reasons that are beyond our control, such as [added: the customer’s] failure to obtain mortgage financing, inability to sell an existing home, job [removed: loss,] [added: loss] or a variety of other reasons.

Expressed as the total of all cancellations during the period as a percentage of gross sales during the period, our cancellation rate was approximately 15% in [removed: 2012] [added: both 2013] and [added: 2012, and] 14% in [removed: both 2011 and 2010.][added: 2011.]

During each of [removed: 2012, 2011] [added: 2013, 2012] and [removed: 2010,] [added: 2011,] approximately 6% of a quarter’s opening backlog balance cancelled during the fiscal quarter.

See “Risk Factors” in Item 1A [added: and “Seasonality” in Item 7] of this Form 10-K.

In [removed: 2012,] [added: 2013,] NVRM closed approximately [removed: 8,000] [added: 8,600] loans with an aggregate principal amount of approximately [removed: $2.2] [added: $2.5] billion as compared to approximately [removed: 7,000] [added: 8,000] loans with an aggregate principal amount of approximately [removed: $1.9] [added: $2.2] billion in [removed: 2011.][added: 2012.]

NVRM is an approved seller/servicer for [removed: FNMA] [added: Fannie Mae (“FNMA”)] mortgage loans and an approved seller/issuer of [removed: GNMA, FHLMC, VA] [added: Ginnie Mae (“GNMA”), Freddie Mac (“FHLMC”), Department of Veterans Affairs (“VA”)] and [removed: FHA] [added: Federal Housing Administration (“FHA”)] mortgage loans.

NVRM’s main competition comes from national, regional, and local mortgage bankers, mortgage brokers, [removed: thrifts] [added: credit unions] and banks in each of these markets.

In addition, NVRM is subject to regulation at the state and federal [removed: level] [added: level, including regulations issued by the Consumer Financial Protection Bureau (the “CFPB”)] with respect to specific origination, selling and servicing practices.

NVRM’s mortgage loans in process that [removed: have] [added: had] not closed [removed: (“Pipeline”)] at December 31, [removed: 2012] [added: 2013] and [removed: 2011,] [added: 2012] had an aggregate principal balance of approximately $1.1 billion [removed: and $790 million, respectively.][added: in each year.]

NVRM’s cancellation rate was approximately [removed: 36% in 2012.][added: 35%,]

At December 31, [removed: 2012,] [added: 2013,] we employed [removed: 3,291] [added: 3,944] full-time persons.

These filings are available to the public over the internet at the SEC’s website at [removed: http://www.sec.gov.][added: _http://www.sec.gov._ All of the documents we file with the SEC may also be read and copied at the SEC’s public reference room located at 100 F Street, NE, Washington, DC 20549.]

Our website also includes a corporate governance section which contains our Corporate Governance Guidelines (which includes our Directors’ Independence Standards), Code of Ethics, Board of Directors’ Committee Charters for the Audit, Compensation, Corporate Governance, Nominating and Qualified Legal Compliance Committees, Policies and Procedures for the Consideration of Board of Director Candidates, [added: and] Policies and Procedures Regarding Communications with the NVR, Inc. Board of Directors, the Independent Lead Director and the Non-Management Directors as a [removed: group.][added: Group.]

We operate in multiple locations in fourteen states and Washington, D.C., primarily in the eastern part of the United States.

In 2013, our average price of a settled unit was approximately $349,100.

development.

Of the total finished lots expected to be developed, 125 lots are under contract to be sold to an unrelated party under lot purchase agreements.

During 2013, sales trends in the first six months were stronger than the last six months of the year.

During the first half of 2013, the homebuilding market continued to experience the favorable sales and pricing trends which began in 2012, driven by historically low mortgage interest rates and rising costs in the rental market which contributed to higher levels of housing affordability.

Sales trends in the second half of 2013 were negatively impacted by increasing mortgage interest rates, rising home prices and buyer uncertainty.

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Other than those units that are cancelled, we expect to settle substantially all of our December 31, 2013 backlog during 2014.

In addition, our homebuilding operations are regulated in certain areas by restrictive zoning and density requirements that limit the number of homes that can be built within the boundaries of a particular area.

36% and 29% in 2013, 2012 and 2011, respectively.

Forward-Looking Statements

Some of the statements in this Form 10-K, as well as statements made by us in periodic press releases or other public communications, 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 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.

##### [Table of Contents](#toc)

See Item 7 herein for additional discussion of the Heartland Homes acquisition.

This pressure has necessitated that in certain specific strategic circumstances we deviate from our historical lot

During the current year, the homebuilding market continued to experience a stabilization in prices and improving sales trends.

These favorable market conditions are driven by improved housing affordability levels resulting from historically low mortgage interest rates and rising costs in the rental market.

Despite these improvements, the homebuilding environment continues to face challenges from a tight mortgage lending environment, consumer confidence issues due to sustained high levels of unemployment and uncertainties as to the sustainability of the economic recovery.

During 2011, our average price was approximately $307,500.

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During both 2011 and 2010, NVRM’s loan cancellation rates were approximately 29%.

You may also read and copy any document we file at the SEC’s public reference room located at 100 F Street, NE, Washington, DC 20549.

These lawsuits are similar in nature to another lawsuit filed on October 29, 2004 by another former employee in the United States District Court for the Western District of New [removed: York.][added: York captioned Tracy v.]

The complaints [added: described above] seek injunctive relief, an award of unpaid wages, including fringe benefits, liquidated damages equal to the overtime wages allegedly due and not paid, attorney and other fees and interest, and where available, multiple damages.

[removed: The] [added: While the] suits were filed as purported class [removed: actions.][added: actions, none of them have been certified as such.]

[added: NVR, Inc.] The lawsuits filed in Ohio, Pennsylvania, Maryland, New Jersey and North Carolina have been stayed pending further developments in the [removed: New York] [added: Tracy] action.

[removed: We have since been] informed by the United States Department of Justice (“DOJ”) that the EPA forwarded the information on the matter to the DOJ, and the DOJ requested that we meet with the government to discuss the status of the case.

On April 29, 2013, the Western District of New York ruled that the claims asserted in the Tracy case were not appropriate for class action treatment and dismissed a number of individuals who had filed consents to join that action from the case.

The trial on the remaining individual plaintiff’s claims was held in October 2013.

On October 23, 2013, the jury in that trial ruled in our favor that the plaintiff was an exempt outside salesman.

On May 29, 2013, attorneys representing the individuals dismissed from the Tracy action filed another lawsuit on behalf of those individuals in the New York Supreme Court for Monroe County captioned Anderson v.

NVR, Inc. We removed the Anderson action to the Western District of New York on June 18, 2013.

Plaintiffs subsequently filed a motion to stay the Anderson action pending final disposition of the Tracy action, which we opposed.

We also filed a motion to sever the multitude of individuals participating in the Anderson action, leaving each plaintiff to pursue his or her claim individually to the extent that they chose to do so.

In addition, the jury verdict in the Tracy v.

NVR, Inc. matter in October 2013 upheld our classification of the position.

In light of the points noted above, we have not recorded any associated liabilities on the accompanying consolidated balance sheets in conjunction with the Anderson v.

NVR, Inc. case or any other legal challenges to the exempt status of our sales and marketing representatives.

We were subsequently

However, while a number of individuals have filed consents to join and assert federal claims in the New York action, none of the groups of employees that the lawsuits purport to represent have been certified as a class, and we have filed a motion to decertify the federal collective action claim and dismiss the individuals who filed consents from the case.

Because we are unable to determine the likelihood of an unfavorable outcome of these cases, or the amount of damages, if any, we have not recorded any associated liabilities on the accompanying consolidated balance sheets.

In August 2011, the Wage and Hour Division of the DOL notified us that it was initiating an investigation to determine our compliance with the Fair Standards Labor Act (“FSLA”).

In the notice, the DOL requested certain information, including payroll data for a two year period and multiple community-specific items related to our homebuilding operations.

We have cooperated with this information request and have either provided or made available the information that the DOL has requested.

The DOL has investigated our headquarters, two manufacturing facilities and certain of our operating divisions.

The DOL has communicated that it has not found any violations at any of these operations.

The DOL appears to have completed its investigation, although, in accordance with DOL practice, we have not been formally notified of such.

Thus, we cannot predict whether the DOL will investigate our other operations.

Further, it is important to understand that under the law, the DOL can investigate our other operations or even operations that it has previously audited, either on its own initiative or in response to an employee complaint.

We believe that our payroll practices are in compliance with the FSLA.

For the fiscal year ended December 31, [removed: 2012][added: 2013]

Registrant’s telephone number, including area [removed: code:][added: code: (703) 956-4000]

| [removed: Common] [added: Common] stock, par value $0.01 per [removed: share] [added: share] | | [removed: New] [added: New] York Stock [removed: Exchange] [added: Exchange] |

Securities registered pursuant to Section 12(g) of the [removed: Act:][added: Act: None]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T [removed: (232.405] [added: (§232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

The aggregate market value of the voting stock held by non-affiliates of NVR, Inc. on June 30, [removed: 2012,] [added: 2013,] the last business day of NVR, Inc.’s most recently completed second fiscal quarter, was approximately [removed: $4,130,615,000.][added: $4,100,372,390.]

As of February [removed: 14, 2013] [added: 17, 2014] there were [removed: 4,996,234] [added: 4,472,698] total shares of common stock outstanding.

Portions of the Proxy Statement of NVR, Inc. to be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934 on or prior to April 30, [removed: 2013] [added: 2014] are incorporated by reference into Part III of this report.

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| [removed: PART I] [added: [PART I](#tx638517_22)] | | | | | [added: | |]

| Item 1. | | [removed: [Business](#tx446058_1)] [added: [Business](#tx638517_1)] | | [added: |] 2 | [added: |]

| Item 1A. | | [Risk [removed: Factors](#tx446058_2)] [added: Factors](#tx638517_2)] | | [removed: 6] | [added: 7 | |]

| Item 1B. | | [Unresolved Staff [removed: Comments](#tx446058_3)] [added: Comments](#tx638517_3)] | | [removed: 11] | [added: 12 | |]

| Item 2. | | [removed: [Properties](#tx446058_4)] [added: [Properties](#tx638517_4)] | | [removed: 11] | [added: 12 | |]

| Item 3. | | [Legal [removed: Proceedings](#tx446058_5)] [added: Proceedings](#tx638517_5)] | | [removed: 12] | [added: 13 | |]

| Item 4. | | [Mine Safety [removed: Disclosures](#tx446058_6)] [added: Disclosures](#tx638517_6)] | | [removed: 13] | [added: 14 | |]

| | | [Executive Officers of the [removed: Registrant](#tx446058_7)] [added: Registrant](#tx638517_7)] | | [removed: 13] | [added: 14 | |]

| [removed: PART II] [added: [PART II](#tx638517_23)] | | | | | [added: | |]

| Item 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#tx446058_8)] [added: Securities](#tx638517_8)] | | [removed: 13] | [added: 15 | |]

| Item 6. | | [Selected Financial [removed: Data](#tx446058_9)] [added: Data](#tx638517_9)] | | [removed: 15] | [added: 17 | |]

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#tx446058_10)] [added: Operations](#tx638517_10)] | | [removed: 16] | [added: 17 | |]

| Item 7A. | | [Quantitative and Qualitative Disclosure About Market [removed: Risk](#tx446058_11)] [added: Risk](#tx638517_11)] | | [removed: 38] | [added: 39 | |]

| Item 8. | | [Financial Statements and Supplementary [removed: Data](#tx446058_12)] [added: Data](#tx638517_12)] | | [removed: 41] | [added: 42 | |]

| Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#tx446058_13)] [added: Disclosure](#tx638517_13)] | | [removed: 41] | [added: 42 | |]

| Item 9A. | | [Controls and [removed: Procedures](#tx446058_14)] [added: Procedures](#tx638517_14)] | | [removed: 41] | [added: 42 | |]

| Item 9B. | | [Other [removed: Information](#tx446058_15)] [added: Information](#tx638517_15)] | | [removed: 41] | [added: 42 | |]

| [removed: PART III] [added: [PART III](#tx638517_24)] | | | | | [added: | |]

| Item 10. | | [Directors, Executive Officers, and Corporate [removed: Governance](#tx446058_16)] [added: Governance](#tx638517_16)] | | [added: |] 42 | [added: |]

| Item 11. | | [Executive [removed: Compensation](#tx446058_17)] [added: Compensation](#tx638517_17)] | | [removed: 42] | [added: 43 | |]

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#tx446058_18)] [added: Matters](#tx638517_18)] | | [removed: 42] | [added: 43 | |]

| Item 13. | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#tx446058_19)] [added: Independence](#tx638517_19)] | | [added: |] 43 | [added: |]

| Item 14. | | [Principal Accountant Fees and [removed: Services](#tx446058_20)] [added: Services](#tx638517_20)] | | [added: |] 43 | [added: |]

| [removed: PART IV] [added: [PART IV](#tx638517_25)] | | | | | [added: | |]

| Item 15. | | [Exhibits and Financial Statement [removed: Schedules](#tx446058_21)] [added: Schedules](#tx638517_21)] | | [removed: 43] | [added: 44 | |]

10-K 1 d638517d10k.htm FORM 10-K

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10-K 1 d446058d10k.htm FORM 10-K

(703) 956-4000

None

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The current corporate office lease expires in April [removed: 2015.][added: 2026.]

In connection with the operation of the homebuilding segment, we lease [removed: manufacturing] [added: production] facilities in the following six locations: Thurmont, Maryland; Burlington County, New Jersey; Farmington, New York; Kings Mountain, North Carolina; Darlington, Pennsylvania; and Portland, Tennessee.

These facilities range in size from approximately 40,000 square feet to 400,000 square feet and [removed: combined] total approximately 1 million square [removed: feet of manufacturing space.][added: feet.]

The Portland lease expires in 2014, the Thurmont and Farmington leases expire in 2019, the Kings Mountain [removed: and] [added: lease expires in 2022, the] Burlington County [removed: leases expire] [added: lease expires] in [removed: 2022 and 2023, respectively,] [added: 2023] and the Darlington lease expires in 2025.

[removed: We] [added: In addition, we] own a [removed: manufacturing] [added: production] facility [removed: in Dayton, Ohio which contains] [added: with] approximately 100,000 square feet [removed: of manufacturing space.][added: in Dayton, Ohio.]

[removed: We also, in] [added: In] connection with both our homebuilding and mortgage banking businesses, [added: we also] lease office space in multiple locations for homebuilding divisional offices and mortgage banking and title services branches under leases expiring at various times through [removed: 2020,] [added: 2023,] none of which are individually material to our business.

| --- | --- |

Our current plant utilization has increased to 35% of total capacity in 2013, compared to 31% of total capacity in 2012.

Our current plant utilization has remained flat with the prior year at 31% of total capacity.

| Paul C. Saville | | [removed: 57] [added: 58] | | President and Chief Executive Officer of NVR |

| [removed: Dennis M. Seremet] [added: Daniel D. Malzahn] | | [removed: 58] [added: 44] | | [removed: Senior] Vice President, Chief Financial Officer and Treasurer of NVR |

| Robert W. Henley | | [removed: 46] [added: 47] | | President of NVRM |

| Eugene J. Bredow | | [removed: 43] [added: 44] | | Vice President and Controller of NVR |

[removed: | Daniel D. Malzahn | | 43 | |] [added: Malzahn_ was named] Vice President, Chief Financial Officer and Treasurer of NVR [removed: |][added: effective February 20, 2013.]

Saville_ was named President and Chief Executive Officer of [removed: NVR,] [added: NVR] effective July 1, 2005.

From May 2000 to June 30, 2005, Mr. Henley was Assistant [removed: Controller.][added: Controller of NVR.]

Prior to June 1, 2012, Mr. Bredow was the Vice President of Internal Audit and Corporate Governance [added: of NVR] since January 2008 and Director of Internal Audit and Corporate Governance from August 2004 to January 2008.

Prior to February 20, 2013, Mr. Malzahn was Vice President of Planning and Investor Relations [added: of NVR] since February 1, 2004.

From January 2000 to January 31, 2004, Mr. Malzahn was Manager of Business [removed: Planning.][added: Planning of NVR.]

##### [Table of Contents](#toc)

_Dennis M.

Seremet_ was named Vice President, Chief Financial Officer and Treasurer of NVR, effective July 1, 2005 and Senior Vice President effective December 14, 2007.

Prior to July 1, 2005, Mr. Seremet had been Vice President and Controller of NVR since April 1, 1995.

Mr. Seremet is retiring from NVR effective February 19, 2013 and will be succeeded by Daniel D.

Malzahn.

Malzahn_ has been named Vice President, Chief Financial Officer and Treasurer of NVR effective February 20, 2013 to succeed Mr. Seremet.

[added: Our shares of common stock are listed and principally traded on the New York Stock Exchange under the ticker symbol “NVR.”] The following table sets forth the high and low prices per share for our common stock for each fiscal quarter during the years ended December 31, [removed: 2012] [added: 2013] and [removed: 2011:][added: 2012:]

As of the close of business on February [removed: 14, 2013,] [added: 17, 2014,] there were [removed: 341] [added: 311] shareholders of record.

We had two repurchase authorizations outstanding during the quarter ended December 31, [removed: 2012.][added: 2013.]

On [removed: December 14, 2011 (“2011 Authorization”)] [added: July 30, 2013] and December [removed: 18, 2012 (“2012 Authorization”),] [added: 17, 2013,] we publicly announced the Board of Directors’ approval for us to repurchase up to an aggregate of $300 million per authorization, of our common stock in one or more open market and/or privately negotiated transactions.

The following table provides information regarding common stock repurchases for the quarter ended December 31, [removed: 2012:][added: 2013:]

The following chart graphs our performance in the form of cumulative total return to holders of our Common Stock since December 31, [removed: 2007] [added: 2008] in comparison to the Dow/Home Construction Index and the Dow Jones Industrial Index for that same period, assuming that $100 was invested in NVR stock and the indices on December 31, [removed: 2007.][added: 2008.]

[removed: ][added: ]

| _2013_ | | | | | | | | |

| Fourth Quarter | | $ | 1,042.55 | | | $ | 883.96 | |

| Third Quarter | | $ | 967.00 | | | $ | 830.00 | |

| Second Quarter | | $ | 1,084.00 | | | $ | 885.43 | |

| First Quarter | | $ | 1,100.00 | | | $ | 920.00 | |

| October 1 - 31, 2013 | | | 11,258 | | | $ | 922.22 | | | | 11,258 | | | $ | 246,425,479 | |

| November 1 - 30, 2013 | | | 72,870 | | | $ | 928.33 | | | | 72,870 | | | $ | 178,777,829 | |

| December 1 - 31, 2013 | | | 42,477 | | | $ | 957.04 | | | | 42,477 | | | $ | 438,125,597 | |

| Total | | | 126,605 | | | $ | 937.42 | | | | 126,605 | | | | | |

Our shares of common stock are listed and principally traded on the New York Stock Exchange.

| _2011_ | | | | | | | | |

| Fourth Quarter | | $ | 692.19 | | | $ | 554.71 | |

| Third Quarter | | $ | 760.37 | | | $ | 555.58 | |

| Second Quarter | | $ | 788.79 | | | $ | 701.00 | |

| First Quarter | | $ | 804.32 | | | $ | 674.07 | |

| October 1 – 31, 2012 | | | — | | | $ | — | | | | — | | | $ | 99,770,000 | |

| November 1 – 30, 2012 | | | 8,500 | | | $ | 841.53 | | | | 8,500 | | | $ | 92,617,000 | |

| December 1 – 31, 2012 | | | — | | | $ | — | | | | — | | | $ | 392,617,000 | |

| Total | | | 8,500 | | | $ | 841.53 | | | | 8,500 | | | | | |

The selected financial data should be read in conjunction with, and is qualified in its entirety by, the [added: accompanying] consolidated financial statements and related notes included [removed: elsewhere in this report.][added: herein.]

| | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | | | [removed: 2008] [added: 2009] | | |

| Revenues | | $ | [removed: 3,121,244] [added: 4,134,481] | | | $ | [removed: 2,611,195] [added: 3,121,244] | | | $ | [removed: 2,980,758] [added: 2,611,195] | | | $ | [removed: 2,683,467] [added: 2,980,758] | | | $ | [removed: 3,638,702] [added: 2,683,467] | |

| Gross profit | | | [removed: 545,605] [added: 710,277] | | | | [removed: 445,570] [added: 545,605] | | | | [removed: 542,466] [added: 445,570] | | | | [removed: 497,734] [added: 542,466] | | | | [removed: 457,692] [added: 497,734] | |

| Mortgage banking fees | | | [removed: 63,406] [added: 76,786] | | | | [removed: 47,954] [added: 63,406] | | | | [removed: 61,134] [added: 47,954] | | | | [removed: 60,381] [added: 61,134] | | | | [removed: 54,337] [added: 60,381] | |

| Interest income | | | [removed: 4,504] [added: 4,983] | | | | [removed: 5,702] [added: 4,504] | | | | [removed: 5,411] [added: 5,702] | | | | [removed: 2,979] [added: 5,411] | | | | [removed: 3,955] [added: 2,979] | |

| Interest expense | | | [removed: 546] [added: 545] | | | | [removed: 875] [added: 546] | | | | [removed: 1,126] [added: 875] | | | | [removed: 1,184] [added: 1,126] | | | | [removed: 754] [added: 1,184] | |

| Income from continuing operations | | $ | [removed: 180,588] [added: 266,477] | | | $ | [removed: 129,420] [added: 180,588] | | | $ | [removed: 206,005] [added: 129,420] | | | $ | [removed: 192,180] [added: 206,005] | | | $ | [removed: 100,892] [added: 192,180] | |

| Income from continuing operations per diluted share (1) | | $ | [removed: 35.12] [added: 54.81] | | | $ | [removed: 23.01] [added: 35.12] | | | $ | [removed: 33.42] [added: 23.01] | | | $ | [removed: 31.26] [added: 33.42] | | | $ | [removed: 17.04] [added: 31.26] | |

| Homebuilding inventory | | $ | [removed: 678,131] [added: 738,565] | | | $ | [removed: 533,150] [added: 678,131] | | | $ | [removed: 431,329] [added: 533,150] | | | $ | [removed: 418,718] [added: 431,329] | | | $ | [removed: 400,570] [added: 418,718] | |

| Contract land deposits, net | | | [removed: 191,538] [added: 236,885] | | | | [removed: 131,930] [added: 191,538] | | | | [removed: 100,786] [added: 131,930] | | | | [removed: 49,906] [added: 100,786] | | | | [removed: 29,073] [added: 49,906] | |

| Total assets | | | [removed: 2,604,842] [added: 2,486,148] | | | | [removed: 1,779,485] [added: 2,604,842] | | | | [removed: 2,260,061] [added: 1,779,485] | | | | [removed: 2,395,770] [added: 2,260,061] | | | | [removed: 2,103,236] [added: 2,395,770] | |

| Notes and loans payable [added: (2)] | | | [removed: 599,745] [added: 599,190] | | | | [removed: 1,613] [added: 599,745] | | | | [removed: 92,089] [added: 1,613] | | | | [removed: 147,880] [added: 92,089] | | | | [removed: 210,389] [added: 147,880] | |

| Shareholders’ equity | | | [removed: 1,480,477] [added: 1,261,352] | | | | [removed: 1,374,799] [added: 1,480,477] | | | | [removed: 1,740,374] [added: 1,374,799] | | | | [removed: 1,757,262] [added: 1,740,374] | | | | [removed: 1,373,789] [added: 1,757,262] | |

| (1) | For the years ended December 31, [added: 2013,] 2012, 2011, 2010, [removed: 2009] and [removed: 2008,] [added: 2009,] income from continuing operations per diluted share was computed based on [added: 4,861,702;] 5,141,529; 5,623,817; [removed: 6,164,617; 6,148,769] [added: 6,164,617] and [removed: 5,920,285] [added: 6,148,769] shares, respectively, which represents the weighted average number of shares and share equivalents outstanding for each year. |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | | | 2009 | | |

| (2) | Balance does not include non-recourse debt related to the consolidated variable interest entity. |

| --- | --- |

##### [Table of Contents](#toc)

As of the end of the period covered by this report, an evaluation was performed under the supervision and with the participation of our management, including the principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of [removed: 1934.][added: 1934, as amended (“Exchange Act”).]

Based on that evaluation, the principal executive officer and principal financial officer concluded that the design and operation of these disclosure controls and procedures as of December 31, [removed: 2012] [added: 2013] were effective to provide reasonable assurance that information required to be disclosed in our reports under the [removed: Securities] Exchange [removed: Act of 1934 is recorded,] [added: Act,] processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the [removed: Securities] Exchange [removed: Act of 1934.][added: Act.]

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in _Internal Control – Integrated [removed: Framework_] [added: Framework (1992)_] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework in _Internal Control – Integrated [removed: Framework_,] [added: Framework (1992)_,] our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2012.][added: 2013.]

Our internal control over financial reporting as of December 31, [removed: 2012] [added: 2013] has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.

None

Daniel D.

Malzahn has been named as the Vice President, Chief Financial Officer and Treasurer of NVR, Inc. effective February 20, 2013, replacing Dennis M.

Seremet upon Mr. Seremet’s retirement from NVR on February 19, 2013.

Mr. Seremet’s intention to retire was disclosed on a Form 8-K, filed with the Securities and Exchange Commission on May 10, 2012 which is incorporated herein by reference.

Mr. Malzahn, age 43, started his career at KPMG LLP after graduating from James Madison University in 1992.

He joined NVR in 1994 and served as an Internal Auditor until 1995, a Financial Analyst from 1995 until 2000, the Manager of Business Planning from 2000 until 2004 and NVR’s Vice President of Planning and Investor Relations from February 1, 2004 until February 2013.

##### [Table of Contents](#toc)

On February 19, 2013, the Company entered into an employment agreement with Mr. Malzahn for a term ending on January 1, 2016.

Pursuant to the agreement, Mr. Malzahn is entitled to a minimum base salary of $350,000.

A copy of Mr. Malzahn’s employment agreement is attached as Exhibit 10.8 to this Form 10-K, and is incorporated herein by reference.

Mr. Malzahn will participate in the 2013 Named Executive Officer Annual Incentive Compensation Plan as described in Exhibit 10.24, attached to this Form 10-K and incorporated herein by reference.

His maximum potential payout under the 2013 Named Executive Officer Annual Incentive Compensation Plan is equal to 100% of his base salary.

Mr. Malzahn will also receive a grant of 14,000 non-qualified fixed-priced stock options from the NVR, Inc. 2010 Equity Incentive Plan, which was filed as Exhibit 10.1 to NVR’s Form S-8 (No. 333-166512) filed on May 4, 2010 and is incorporated herein by reference.

The equity grant to Mr. Malzahn will be issued pursuant to the Form of Non-Qualified Stock Option Agreement filed as Exhibit 10.1 to NVR’s Form 8-K filed on May 6, 2010 and incorporated herein by reference.

NVR’s employment agreements with Mssrs.

Bredow and Henley were amended on February 19, 2013 to increase the payments due them upon retirement, termination without cause or voluntary termination within one year after a change in control from 50% of annual base salary to 100% of annual base salary.

The amendments to the employment agreements for Mssrs.

Bredow and Henley are attached to this Form 10-K as Exhibits 10.7 and 10.5, respectively, and are incorporated herein by reference.

Item 10 is hereby incorporated by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2013.][added: 2014.]

##### [Table of Contents](#toc)

Item 11 is hereby incorporated by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2013.][added: 2014.]

Security ownership of certain beneficial owners and management is hereby incorporated by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2013.][added: 2014.]

The table below sets forth information as of the end of our [removed: 2012] [added: 2013] fiscal year for (i) all equity compensation plans approved by our shareholders and (ii) all equity compensation plans not approved by our shareholders:

| Plan category | | Number of securities [removed: to be] [added: to be] issued upon [removed: exercise of] [added: exercise of] outstanding [removed: options, warrants] [added: options, warrants] and rights | | | | [removed: Weighted-average exercise] [added: Weighted-average exercise] price [removed: of outstanding options, warrants] [added: of outstanding options, warrants] and rights | | | | Number of [removed: securities remaining] [added: securities remaining] available [removed: for future] [added: for future] issuance [removed: under equity] [added: under equity] compensation [removed: plans (excluding securities reflected] [added: plans (excluding securities reflected] in the [removed: first column)] [added: first column)] | | |

| Equity compensation plans approved by security holders (1) | | | [removed: 488,484] [added: 500,955] | | | $ | [removed: 591.92] [added: 717.52] | | | | [removed: 172,107] [added: 79,730] | |

| Equity compensation plans not approved by security holders | | | [removed: 233,213] [added: 211,090] | | | $ | [removed: 622.77] [added: 636.12] | | | | — | |

| (1) | This category includes the [removed: restricted share units (“RSUs”)] [added: RSUs] authorized by the 2010 Equity Incentive Plan, which was approved by our shareholders at the May 4, 2010 Annual Meeting. At December 31, [removed: 2012,] [added: 2013,] there are [removed: 82,619] [added: 45,009] RSUs outstanding, issued at a $0 exercise price. Of the total [removed: 172,107] [added: 79,730] shares remaining available for future issuance, up to [removed: 83,967] [added: 48,476] may be issued as RSUs. The weighted-average exercise price of outstanding options under security holder approved plans excluding outstanding RSUs was [removed: $712.41.] [added: $788.36.] |

See Note [removed: 10] [added: 12] in the accompanying consolidated financial statements for a description of each of our equity compensation plans.

| Total | | | 712,045 | | | $ | 693.39 | | | | 79,730 | |

##### [Table of Contents](#toc)

| Total | | | 721,697 | | | $ | 601.89 | | | | 172,107 | |

Item 13 is hereby incorporated by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2013.][added: 2014.]

Item 14 is hereby incorporated by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2013.][added: 2014.]

##### [Table of Contents](#toc)

_NVR, [removed: Inc.—Consolidated] [added: Inc. - Consolidated] Financial Statements_

| [removed: _Exhibit_ _Number_] [added: Exhibit Number] | | [removed: _Description_] [added: Description] |

| 3.1 | | Restated Articles of Incorporation of NVR, Inc. [removed: (“NVR”).] Filed as Exhibit 3.1 to NVR’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference. |

| 4.1 | | Indenture dated as of April 14, 1998 between NVR, [added: Inc.,] as issuer and the Bank of New York as trustee. Filed as Exhibit 4.3 to NVR’s Current Report on Form 8-K filed April 23, 1998 and incorporated herein by reference. |

| 4.3 | | Fifth [removed: Supplement] [added: Supplemental] Indenture dated September 10, 2012 among NVR, Inc. and U.S. Bank Trust National Association. Filed as Exhibit 4.1 to NVR’s Form 8-K filed on September 10, 2012 and incorporated herein by reference. |

| 4.4 | | Form of Global [removed: Note filed] [added: Note. Filed] as Exhibit 4.2 to NVR’s Form 8-K filed on September 10, 2012 and incorporated herein by reference. |

| 10.2* | | Employment Agreement between NVR, Inc. and [removed: Dennis M. Seremet] [added: Robert W. Henley] dated December 21, 2010. Filed as Exhibit [removed: 10.2] [added: 10.4] to NVR’s Form 8-K filed on December 21, 2010 and incorporated herein by reference. |

| 10.3* | | [added: Amendment No. 1 to the] Employment Agreement between NVR, Inc. and Robert W. Henley dated December 21, 2010. Filed as Exhibit [removed: 10.4] [added: 10.1] to NVR’s Form 8-K filed on [removed: December 21, 2010] [added: May 31, 2012] and incorporated herein by reference. |

| 10.4* | | Amendment No. [removed: 1] [added: 2] to the Employment Agreement between NVR, Inc. and Robert W. Henley dated December 21, 2010. Filed as Exhibit [removed: 10.1] [added: 10.5] to NVR’s Form [removed: 8-K] [added: 10-K] filed on [removed: May 31, 2012] [added: February 19, 2013] and incorporated herein by reference. |

| [removed: 10.6*] [added: 10.5*] | | Employment Agreement between NVR, Inc. and Eugene J. Bredow dated May 31, 2012. Filed as Exhibit 10.2 to NVR’s Form 8-K filed on May 31, 2012 and incorporated herein by reference. |

| [removed: 10.7*] [added: 10.6*] | | Amendment No. 1 to the Employment Agreement between NVR, Inc. and Eugene J. Bredow dated May 31, 2012. Filed [removed: herewith.] [added: as Exhibit 10.7 to NVR’s Form 10-K filed on February 19, 2013 and incorporated herein by reference.] |

| [removed: 10.8*] [added: 10.7*] | | Employment Agreement between NVR, Inc. and Daniel D. Malzahn dated February 19, 2013. Filed [removed: herewith.] [added: as Exhibit 10.8 to NVR’s Form 10-K filed on February 19, 2013 and incorporated herein by reference.] |

| [removed: 10.9*] [added: 10.8*] | | Profit Sharing Plan of NVR, Inc. and Affiliated Companies. Filed as Exhibit 4.1 to NVR’s Registration Statement on Form S-8 (No. 333-29241) filed June 13, 1997 and incorporated herein by reference. |

| [removed: 10.10*] [added: 10.9*] | | Employee Stock Ownership Plan of NVR, Inc. Incorporated by reference to NVR’s Annual Report on Form 10-K/A for the year ended December 31, 1994. |

| [removed: 10.11*] [added: 10.10*] | | NVR, Inc. 1998 Management Long-Term Stock Option Plan. Filed as Exhibit 4 to NVR’s Registration Statement on Form S-8 (No. 333-79951) filed June 4, 1999 and incorporated herein by reference. |

| [removed: 10.12*] [added: 10.11*] | | NVR, Inc. 1998 Directors’ Long-Term Stock Option Plan. Filed as Exhibit 4 to NVR’s Registration Statement on Form S-8 (No. 333-79949) filed June 4, 1999 and incorporated herein by reference. |

| [removed: 10.13*] [added: 10.12*] | | NVR, Inc. Management Long-Term Stock Option Plan. Filed as Exhibit 99.3 to NVR’s Registration Statement on Form S-8 (No. 333-04975) filed May 31, 1996 and incorporated herein by reference. |

| [removed: 10.14*] [added: 10.13*] | | NVR, Inc. 2000 Broadly-Based Stock Option Plan. Filed as Exhibit 99.1 to NVR’s Registration Statement on Form S-8 (No. 333-56732) filed March 8, 2001 and incorporated herein by reference. |

| [removed: 10.15*] [added: 10.14*] | | NVR, Inc. Nonqualified Deferred Compensation Plan. Filed as Exhibit 10.1 to NVR’s Form 8-K filed on December 16, 2005 and incorporated herein by reference. |

| [removed: 10.16*] [added: 10.15*] | | Description of the Board of Directors’ compensation arrangement. Filed as Exhibit 10.27 to NVR’s Annual Report on Form 10-K for the period ended December 31, 2004 and incorporated herein by reference. |

| [removed: 10.17*] [added: 10.16*] | | [removed: The] NVR, Inc. 2010 Equity Incentive Plan. Filed as exhibit 10.1 to NVR’s Form S-8 (No. 333-166512) filed on May 4, 2010 and incorporated herein by reference. |

| 10.18* | | The Form of Non-Qualified Stock Option Agreement [removed: (Management] [added: (Director] grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as exhibit [removed: 10.1] [added: 10.2] to NVR’s Form 8-K filed on May 6, 2010 and incorporated herein by reference. |

| [removed: 10.19*] [added: 10.17*] | | The Form of Non-Qualified Stock Option Agreement [removed: (Director] [added: (Management] grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as exhibit [removed: 10.2] [added: 10.1] to NVR’s Form [removed: 8-K] [added: 10-Q] filed on [removed: May 6, 2010] [added: July 30, 2013] and incorporated herein by reference. |

| 10.20* | | The Form of Restricted Share Units Agreement [removed: (Management] [added: (Director] grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as exhibit [removed: 10.3] [added: 10.4] to NVR’s Form 8-K filed on May 6, 2010 and incorporated herein by reference. |

| [removed: 10.21*] [added: 10.19*] | | The Form of Restricted Share Units Agreement [removed: (Director] [added: (Management] grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as exhibit [removed: 10.4] [added: 10.2] to NVR’s Form [removed: 8-K] [added: 10-Q] filed on [removed: May 6, 2010] [added: July 30, 2013] and incorporated herein by reference. |

| [removed: 10.22*] [added: 10.21*] | | The Form of Non-Qualified Stock Option Agreement under the NVR, Inc. 2000 Broadly Based Stock Option Plan. Filed as Exhibit 10.1 to NVR’s Form 8-K filed January 3, 2008 and incorporated herein by reference. |

| [removed: 10.23*] [added: 10.22*] | | The Form of Non-Qualified Stock Option Agreement under the 1998 Directors’ Long-Term Stock Option Plan. Filed as Exhibit 10.34 to NVR’s Annual Report on Form 10-K for the period ended December 31, 2007 and incorporated herein by reference. |

| [removed: 10.24*] [added: 10.23*] | | Summary of [removed: 2013] [added: 2014] Named Executive Officer annual incentive compensation plan. Filed herewith. |

| /s/ Dwight C. Schar [removed: Dwight C. Schar] | | Chairman | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ C. E. Andrews [removed: C. E. Andrews] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ Robert C. Butler [removed: Robert C. Butler] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ Timothy M. Donahue [removed: Timothy M. Donahue] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ Thomas D. Eckert [removed: Thomas D. Eckert] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ Alfred E. Festa [removed: Alfred E. Festa] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ Manuel H. Johnson [removed: Manuel H. Johnson] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ [removed: Melquiades R. Martinez Melquiades R.] [added: Mel] Martinez | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ William A. Moran [removed: William A. Moran] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ David A. Preiser [removed: David A. Preiser] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ W. Grady Rosier [removed: W. Grady Rosier] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| /s/ Paul W. Whetsell [removed: Paul W. Whetsell] | | Director | | February [removed: 19, 2013] [added: 20, 2014] |

| Dwight C. Schar | | | | |

| C. E. Andrews | | | | |

| Robert C. Butler | | | | |

| Timothy M. Donahue | | | | |

| Thomas D. Eckert | | | | |

| Alfred E. Festa | | | | |

| /s/ Ed Grier | | Director | | February 20, 2014 |

| Ed Grier | | | | |

| Manuel H. Johnson | | | | |

| Mel Martinez | | | | |

| William A. Moran | | | | |

| David A. Preiser | | | | |

| W. Grady Rosier | | | | |

| Paul W. Whetsell | | | | |

| Paul C. Saville | | | | |

| Daniel D. Malzahn | | | | |

| Eugene J. Bredow | | | | |

February 20, 2014

February 20, 2014

| | | 2013 | | | | 2012 | | |

| | | | 738,565 | | | | 678,131 | |

| | | | 2,225,380 | | | | 2,382,270 | |

| | | | 260,768 | | | | 222,572 | |

| | | 2013 | | | | 2012 | | |

| | | | 1,203,022 | | | | 1,103,679 | |

| | | | 21,774 | | | | 20,686 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | | — | | | | — | | | | 266,477 | | | | — | | | | — | | | | — | | | | 266,477 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| _Balance, December 31, 2013_ | | $ | 206 | | | $ | 1,212,050 | | | $ | 4,605,557 | | | $ | (4,556,461 | ) | | $ | (17,741 | ) | | $ | 17,741 | | | $ | 1,261,352 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Distributions to partner in consolidated variable interest entity | | | (1,250 | ) | | | — | | | | — | |

_Reclassifications_

Field

The Company completed its annual assessment for

impairment of goodwill and management determined that there was no impairment.

As of December 31, 2013, the goodwill value was $441.

As of December 31, 2013, finite-lived intangible assets attributable to the Heartland Homes, Inc. acquisition totaled $6,306.

The

| | | |

| 10.5* | | Amendment No. 2 to the Employment Agreement between NVR, Inc. and Robert W. Henley dated December 21, 2010. Filed herewith. |

| | | | | |

| --- | --- | --- | --- | --- |

| /s/ John M. Toups John M. Toups | | Director | | February 19, 2013 |

February 19, 2013

| | | | 678,131 | | | | 533,150 | |

| Goodwill | | | 441 | | | | — | |

| | | | 2,382,270 | | | | 1,501,318 | |

| | | | 222,572 | | | | 278,167 | |

(Continued)

| | | | 1,103,679 | | | | 378,291 | |

| | | | 20,686 | | | | 26,395 | |

| _Balance, December 31, 2009_ | | $ | 206 | | | $ | 830,531 | | | $ | 3,823,067 | | | $ | (2,896,542 | ) | | $ | (40,799 | ) | | $ | 40,799 | | | $ | 1,757,262 | |

| Net income | | | — | | | | — | | | | 206,005 | | | | — | | | | — | | | | — | | | | 206,005 | |

| Purchase of marketable securities | | | — | | | | — | | | | (150,000 | ) |

| Redemption of marketable securities at maturity | | | — | | | | — | | | | 369,535 | |

| Redemption of Senior Notes due 2010 | | | — | | | | — | | | | (133,370 | ) |

| Investment in newly formed consolidated joint venture | | $ | — | | | $ | — | | | $ | (25,214 | ) |

Both the rate lock commitments to

The expense is based on the grant-date fair value of the

| (2) | The increase in equity-based compensation expense in 2011 compared to 2010 was due to recognizing a full year of expense in 2011 related to non-qualified stock options and restricted share units granted in the second quarter of 2010 under the 2010 Equity Incentive Plan. In addition, equity based compensation in 2010 was reduced as a result of an adjustment to option forfeiture estimates based on our actual forfeiture experience (see Note 10 herein for further discussion). |

| (5) | The increase in corporate interest expense in 2012 from 2011 was attributable to the issuance of 3.95% Senior Notes due 2022 in the third quarter of 2012. The decrease in corporate interest expense in 2011 from 2010 was attributable to the redemption upon maturity of the outstanding 5% Senior Notes due 2010 in the second quarter of 2010 and the termination of the working capital credit facility in the fourth quarter of 2010. |

active development of finished lots.

Further, during 2010, NVR also purchased a zoned, unimproved raw parcel of land from Elm Street for a total purchase price of approximately $49,000 which is expected to produce approximately 600 finished lots.

As of December 31, 2012, approximately $48,000 in costs related to the purchase and development of this property were recorded in “Land under development” on the accompanying consolidated balance sheet.

| Manufacturing facilities | | | 35,983 | | | | 33,373 | |

| | | | 76,329 | | | | 68,883 | |

| | | $ | 27,016 | | | $ | 23,243 | |

| | | $ | 2,465 | | | $ | 1,694 | |

The following schedule provides future minimum lease payments under the capital lease together with the present value as of December 31, 2012:

| 2013 | | $ | 703 | |

| 2014 | | | 117 | |

| | | | 820 | |

| Amount representing interest | | | (63 | ) |

| | | $ | 757 | |

| 2013 | | $ | 642 | |

The Company repurchased 285,495 shares at an aggregate purchase price of approximately $227,300 during 2012.

The Company repurchased 1,017,588 shares at an aggregate purchase price of approximately $689,300 during 2011 and repurchased 644,562 shares at an aggregate purchase price of approximately $417,100 during 2010.

| | | $ | 94,489 | | | $ | 78,156 | | | $ | 116,388 | |