NVR (NVR) 10-K risk factor changes: FY2014 vs FY2013

| [removed: | • |] [added: ●] | the availability of mortgage financing; |

| [removed: | • |] [added: ●] | actual and expected direction of interest rates, which affect our costs, the availability of construction financing, and long-term financing for potential purchasers of homes; |

| [removed: | • |] [added: ●] | the availability of adequate land in desirable locations on favorable terms; |

| [removed: | • |] [added: ●] | unexpected changes in customer preferences; and |

| [removed: | • |] [added: ●] | changes in the national economy and in the local economies of the markets in which we have operations. |

[removed: Over the past several years,] [added: During 2006 through 2011,] the homebuilding industry experienced a significant downturn as a result of low consumer confidence driven by an economic recession, high unemployment levels, affordability issues and uncertainty as to the stability of home prices.

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

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

[removed: If] [added: If] the market value of our inventory or controlled lot position declines, our profit could decrease and we may incur [removed: losses.][added: losses.]

[removed: If] [added: If] the underwriting quality of our mortgage originations is found to be deficient, our profit could decrease and we may incur [removed: losses.][added: losses.]

In the event that a substantial number of the loans that we have originated fall into default and the investors to whom we sold [added: the loans determine that we did not underwrite the 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.]

[removed: We] [added: We] may be subject to claims on mortgage loans sold to third [removed: parties.][added: 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 [removed: validity of certain borrower representations in connection with the loan.]

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 [removed: an] [added: a material] adverse effect on our results of operations.

[removed: Because] [added: Because] almost all of our customers require mortgage financing, the availability of suitable mortgage financing could impair the affordability of our homes, lower demand for our products, and limit our ability to fully deliver our [removed: backlog.][added: backlog.]

The tightening of credit standards and the availability of suitable mortgage financing could prevent customers from buying our homes and could prevent buyers of our customers’ homes from obtaining mortgages they need to complete that purchase, [removed: both] [added: either] of which could result in our potential customers’ inability to buy a home from us.

[removed: If] [added: If] our ability to sell mortgages to investors is impaired, we may be required to fund these commitments ourselves, or may not be able to originate loans at [removed: all.][added: all.]

[removed: Interest] [added: Interest] rate movements, inflation and other economic factors can negatively impact our [removed: business.][added: business.]

High interest rates not only increase the cost of borrowed funds to homebuilders but also have a significant [added: adverse] effect on housing demand and on the affordability of permanent mortgage financing to prospective purchasers.

Our operations may also be adversely affected by other economic factors within our markets such as negative changes in employment levels, job growth, [removed: and] [added: wage growth,] consumer confidence and [added: household formation and] availability of mortgage financing, one or all of which could result in reduced demand or price depression from current levels.

In particular, during [removed: 2013,] [added: 2014,] approximately [removed: 25%] [added: 26%] and [removed: 12%] [added: 11%] of our home settlements occurred in the Washington, D.C. and Baltimore, MD metropolitan areas, respectively, which accounted for approximately [removed: 31%] [added: 33%] and [removed: 15%,] [added: 13%,] respectively, of our [removed: 2013] [added: 2014] homebuilding revenues.

[removed: Our] [added: Our] inability to secure and control an adequate inventory of lots could adversely impact our [removed: operations.][added: operations.]

[removed: Volatility] [added: Volatility] in the credit and capital markets may impact our ability to access necessary [removed: financing.][added: financing.]

[removed: Our] [added: Our] current indebtedness may impact our future [removed: operations.][added: operations.]

Our existing indebtedness contains restrictive covenants and any future indebtedness may also contain [added: such] covenants.

[removed: Government] [added: Government] regulations and environmental matters could negatively affect our [removed: operations.][added: operations.]

The tighter underwriting requirements and fee restrictions [added: and increasingly complex regulatory environment] under these standards may negatively impact our mortgage loan origination [removed: business.][added: business in the form of lower demand, decreased revenue and increased operating costs.]

[removed: Increased] [added: Increased] regulation of the mortgage industry could harm our future sales and [removed: earnings.][added: earnings.]

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

| [removed: | • |] [added: ●] | for suitable and desirable lots at acceptable prices; |

| [removed: | • |] [added: ●] | from selling incentives offered by competing builders within and across developments; and |

| [removed: | • |] [added: ●] | from the existing home resale market. |

[removed: A] [added: A] shortage of building materials or labor, or increases in materials or labor costs may adversely impact our [removed: operations.][added: operations.]

[removed: We] [added: We] rely on subcontractors to construct our homes.

The failure of our subcontractors to properly construct our homes may be [removed: costly.][added: costly.]

[removed: Product] [added: Product] liability litigation and warranty claims may adversely impact our [removed: operations.][added: operations.]

[removed: We] [added: We] are subject to litigation proceedings that could harm our business if an unfavorable ruling were to [removed: occur.][added: occur.]

[removed: Our] [added: 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 [removed: operations.][added: operations.]

[removed: Weather-related] [added: Weather-related] and other events beyond our control may adversely impact our [removed: operations.][added: operations.]

| --- | --- |

| --- | --- |

| --- | --- |

| --- | --- |

| --- | --- |

The homebuilding industry experienced a significant downturn from 2006 through 2011.

Although housing industry conditions are improving, a deterioration in industry conditions could adversely affect our business and our results of operations.

Since 2011, we have experienced strengthening within the homebuilding industry with increasing sales.

validity of certain borrower representations in connection with the loan.

In addition, the new requirements integrating disclosures under the Truth In Lending Act and the Real Estate Settlement Protection Act become effective August 1, 2015.

| --- | --- |

| --- | --- |

| --- | --- |

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

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

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

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

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

The homebuilding industry experienced a significant downturn over the past several years, which could continue to adversely affect our business and our results of operations.

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

These favorable trends continued into 2013.

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

the loans determine that we did not underwrite the 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.

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

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

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

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.

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

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

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

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

[removed: Results] [added: Results] of Operations for the Years Ended December 31, [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011][added: 2012]

[removed: _Overview_][added: Overview]

[removed: Business][added: Business]

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

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

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

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

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

As a [removed: result of the changing environment,] [added: result,] 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.

Once we acquire control of any raw ground, we determine whether to sell the raw parcel to a developer and enter into a fixed price purchase agreement with the developer to purchase the finished lots, or [removed: whether we will] [added: to] hire a developer to develop the land on our behalf.

As of December 31, [removed: 2013,] [added: 2014,] we controlled approximately [removed: 58,100] [added: 62,800] lots under purchase agreements with deposits in cash and letters of credit totaling approximately [removed: $296,600] [added: $348,400] and [removed: $2,500,] [added: $1,700,] respectively.

In addition, we controlled approximately [removed: 6,000] [added: 5,500] lots through joint venture limited liability corporations with an aggregate investment of approximately [removed: $92,700.][added: $82,000.]

Further, as of December 31, [removed: 2013,] [added: 2014,] we had approximately [removed: $41,300] [added: $33,700] in land under development, that once fully developed will result in approximately [removed: 650] [added: 480] lots for use in our homebuilding operations.

Of the total finished lots expected to be developed, [removed: 125] [added: 94] lots are under contract to be sold to an unrelated party under lot purchase agreements.

Included in the number of controlled lots are approximately [removed: 9,200] [added: 7,800] lots for which we have recorded a contract land deposit impairment reserve of approximately [removed: $59,800] [added: $56,100] as of December 31, [removed: 2013.][added: 2014.]

[removed: Current] [added: Current] Business Environment and Key Financial [removed: Results][added: Results]

The housing market also continues to face challenges from [removed: tight] mortgage underwriting standards.

[removed: Our consolidated] [added: Consolidated] revenues for the year ended December 31, [removed: 2013] [added: 2014] totaled [removed: $4,211,267,] [added: $4,375,059,] an increase of [removed: 32%] [added: 6%] from [removed: $3,184,650] [added: $4,134,481] in [removed: 2012.][added: 2013.]

Net income for [removed: 2013] [added: 2014] increased [removed: 48%] [added: 6%] from [removed: the prior year] [added: 2013] to [removed: $266,477.][added: $281,630.]

Diluted earnings per share in [removed: 2013] [added: 2014] was [removed: $54.81,] [added: $63.50,] an increase of [removed: 56%] [added: 16%] from [removed: the prior year.][added: 2013.]

[removed: New Orders] [added: Our new orders, net of cancellations (“New Orders”)] for [removed: 2013] [added: 2014] increased [removed: 8%] [added: 5%] from [removed: the prior year] [added: 2013] while our average new order sales price [removed: of $360.4] [added: increased 4% to $373.7] in [removed: 2013 was 10% higher than the prior year.][added: 2014.]

We believe that [removed: the] [added: a] continuation of the housing market recovery which began in 2012 is dependent upon a sustained overall economic recovery, driven by continued improvement in [removed: unemployment] [added: job growth] and consumer confidence [removed: levels.][added: levels as well as improvement in wage growth and household formation.]

[removed: _Homebuilding Operations_][added: Homebuilding Operations]

| | | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | |

| | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Revenues | | $ | [removed: 4,134,481] [added: 4,375,059] | | | $ | [removed: 3,121,244] [added: 4,134,481] | | | $ | [removed: 2,611,195] [added: 3,121,244] | |

| Cost of sales | | $ | [removed: 3,424,204] [added: 3,568,586] | | | $ | [removed: 2,575,639] [added: 3,424,204] | | | $ | [removed: 2,165,625] [added: 2,575,639] | |

| Gross profit margin percentage | | | [removed: 17.2] [added: 18.4] | % | | | [removed: 17.5] [added: 17.2] | % | | | [removed: 17.1] [added: 17.5] | % |

| Selling, general and administrative expenses | | $ | [removed: 313,029] [added: 358,851] | | | $ | [removed: 301,184] [added: 313,029] | | | $ | [removed: 264,266] [added: 301,184] | |

| Settlements (units) | | | [removed: 11,834] [added: 11,859] | | | | [removed: 9,843] [added: 11,834] | | | | [removed: 8,487] [added: 9,843] | |

| Average settlement price | | $ | [removed: 349.1] [added: 368.5] | | | $ | [removed: 317.1] [added: 349.1] | | | $ | [removed: 307.5] [added: 317.1] | |

| New orders (units) | | | [removed: 11,800] [added: 12,389] | | | | [removed: 10,954] [added: 11,800] | | | | [removed: 9,247] [added: 10,954] | |

| Average new order price | | $ | [removed: 360.4] [added: 373.7] | | | $ | [removed: 328.8] [added: 360.4] | | | $ | [removed: 304.1] [added: 328.8] | |

| Backlog (units) | | | [removed: 4,945] [added: 5,475] | | | | [removed: 4,979] [added: 4,945] | | | | [removed: 3,676] [added: 4,979] | |

| Average backlog price | | $ | [removed: 373.2] [added: 384.6] | | | $ | [removed: 346.2] [added: 373.2] | | | $ | [removed: 315.8] [added: 346.2] | |

| New order cancellation rate | | | [removed: 14.9] [added: 14.6] | % | | | [removed: 14.5] [added: 14.9] | % | | | [removed: 13.6] [added: 14.5] | % |

[removed: _Consolidated] [added: Consolidated] Homebuilding [removed: Revenues_][added: Revenues]

Homebuilding revenues [removed: for] [added: in] 2013 increased 32% from 2012, as a result of a 20% increase in the number of homes settled and a 10% increase in the average settlement price year over year.

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

Average settlement prices in [removed: the current year] [added: 2013] were favorably impacted primarily by a 10% higher average price of homes in backlog entering 2013 compared to the average price of homes in backlog entering 2012 and a 10% higher average sales price of New Orders for the first six months of 2013 compared to 2012.

Additionally, we have certain properties under contract with land owners that are expected to yield approximately 5,700 lots, which are not included in our number of total lots controlled.

Some of these properties may require rezoning or other approvals to achieve the expected yield.

These properties are controlled with deposits and letters of credit totaling approximately $2,300 and $3,000, respectively, as of December 31, 2014, of which approximately $2,600 is refundable if we do not perform under the contract.

We generally expect to assign the raw land contracts to a land developer and simultaneously enter into a lot purchase agreement with the assignee if the project is determined to be feasible.

The housing market recovery continues to be uneven.

During 2014, the housing market experienced some weakness as existing home inventory increased and affordability decreased following increasing prices during 2013.

There has also been an increase in the number of new home communities in many markets.

These factors have resulted in weakness in housing prices in 2014.

Our gross profit margin within our homebuilding business increased to 18.4% in 2014 compared to 17.2% in 2013.

Gross profit in 2013 was negatively impacted by two previously disclosed service related accruals totaling approximately $31,600, a 76 basis point reduction to gross profit in 2013.

Diluted earnings per share was favorably impacted by our ongoing share repurchase program, under which we repurchased 507,648 shares of our stock at an aggregate purchase price of $567,544 during 2014.

We expect to face a challenging market in 2015, as a result of the weakness in new home sales prices and increased competition associated with an expected increase in new home communities in our markets.

The higher average price of homes in backlog entering 2014 was attributable to the aforementioned increasing prices in 2013.

Average sales prices were higher in each of our market segments year over year as a result of favorable market conditions in 2013, which led to higher prices entering 2014.

Gross profit margins in 2014 increased to 18.4% compared to 17.2% in 2013.

Gross profit margins were favorably impacted by our average settlement prices increasing at a higher rate than material and lot costs year over year, as well as by a relative shift in settlements to our Mid-Atlantic and North East segments which have higher average gross profit margins.

As noted in the Overview section above, gross profit margins in 2013 were negatively impacted by two service related accruals which reduced the 2013 gross profit margin by 76 basis points.

Gross profit margins were negatively impacted in 2013 by two service related accruals totaling approximately $31,600 (see Note 13 in the accompanying consolidated financial statements for additional discussion of service accruals).

SG&A expenses in 2014 increased approximately $45,800, or 15%, compared to 2013 and increased as a percentage of revenue to 8.2% from 7.6% year over year.

The increase in SG&A expenses was attributable to an approximate $26,000 increase in equity-based compensation expense and an approximate $14,100 increase in sales and marketing expenses in 2014.

Equity-based compensation expense increased primarily due to the granting of non-qualified stock options (“Options”) under the 2014 Equity Incentive Plan (the “2014 Plan”) following shareholder approval of the 2014 Plan in May 2014 and restricted share unit (“RSUs”) grants in the second quarter of 2013.

In addition, in 2013 we recorded a reversal of approximately $7,100 in equity-based compensation expense as a result of an adjustment to our stock option forfeiture rates based on our actual forfeiture experience.

Sales and marketing expenses increased due primarily to an increase in model home expenditures attributable to the 8% increase in the number of active communities.

Backlog units and dollars increased approximately 11% to 5,475 units and 14% to $2,105,635, respectively, as of December 31, 2014 compared to 4,945 units and $1,845,600, respectively, as of December 31, 2013.

that it is probable that recovery of the deposit is impaired.

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

| | | Units | | | | Average Price | | | | Units | | | | Average Price | | | | Units | | | | Average Price | | |

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

| | | 2014 | | | | 2013 | | |

| | | 2014 | | | | 2013 | | |

| (2) | The year over year increases in unsold inventory are primarily due to the transfer of costs attributable to completed lots from our land under development to unsold inventory. |

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

| | | As of December 31, | | | | | | |

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

| | | 2014 | | | | 2013 | | |

| Total | | | 68,700 | | | | 64,600 | |

| | | As of December 31, | | | | | | |

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

| | | 2014 | | | | 2013 | | |

| Mid Atlantic | | | 3,700 | | | | 4,400 | |

| --- | --- |

| | | |

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

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 and to raise equity investments to finance land development activity.

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.

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

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

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

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

The increase in the number of homes settled was attributable to an 18% increase in New Orders during the first half of 2012 compared to the same period in 2011, coupled with a 26% higher beginning backlog unit balance entering 2012 as compared to 2011.

These increases were offset partially by a lower backlog turnover rate in 2012 compared to 2011.

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

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

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.

Gross profit margins in 2012 increased to 17.5% from 17.1% in 2011.

Margins were favorably impacted in 2012 by a $2,000 recovery of contract land deposits previously determined to be uncollectible compared to an $11,200 contract land deposit impairment charge in 2011.

In addition, increased settlement volume and higher average settlement prices in 2012 allowed us to better leverage certain operating costs.

However, this favorable impact was offset by higher construction, lumber and certain other commodity costs year over year.

SG&A expenses in 2012 increased approximately $36,900, or 14%, compared to 2011, but as a percentage of revenue decreased to 9.7% in 2012 from 10.1% in the prior year.

The increase in SG&A expense was attributable to an increase of approximately $19,700 in management incentive costs driven by improved

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

financial results in 2012.

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

SG&A expenses decreased as a percentage of revenue due to the 20% increase in revenues in 2012 compared to 2011.

Backlog units and dollars increased approximately 35% to 4,979 and 49% to $1,723,914, respectively, as of December 31, 2012, compared to 3,676 and $1,160,879 as of December 31, 2011.

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

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

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

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

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

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

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

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

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

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

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

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

Advances under the Repurchase Agreement carry a Pricing Rate based on the LIBOR Rate plus the [added: LIBOR Margin, as determined under the Repurchase Agreement, provided that the Pricing Rate shall not be less than 2.825%.]

At December 31, [removed: 2013,] [added: 2014,] 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: 2013.][added: 2014.]

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

| | | [removed: 2014 | | | |] 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | | | [added: 2019 | | | |] Thereafter | | | | Total | | | | [added: Value] | | |

| [removed: Mortgage] [added: Mortgage] banking [removed: segment] [added: segment] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [removed: _Interest] [added: Interest] rate sensitive [removed: assets:_] [added: assets:] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate | | | [removed: 4.2] [added: 3.8] | % | | | — | | | | — | | | | — | | | | — | | | | — | | | | [removed: 4.2] [added: 3.8] | % | | | | |

| [removed: _Interest] [added: Interest] rate sensitive [removed: liabilities:_] [added: liabilities:] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate | | | [removed: —] [added: 0.3] | [added: %] | | | — | | | | — | | | | — | | | | — | | | | — | | | | [removed: —] [added: 0.3] | [added: %] | | | | |

| [removed: _Other:_] [added: Other:] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Forward trades of mortgage-backed securities (a) | | $ | [removed: 6,153] [added: (909)] | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | [removed: 6,153] [added: (909)] | | | $ | [removed: 6,153] [added: (909)] | |

| Forward loan commitments (a) | | $ | [removed: (2,697] [added: 2,374] | [removed: )] | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | [removed: (2,697] [added: 2,374] | [removed: )] | | $ | [removed: (2,697] [added: 2,374] | [removed: )] |

| [removed: Homebuilding segment] [added: Homebuilding segment] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [removed: _Interest] [added: Interest] rate sensitive [removed: assets:_] [added: assets:] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Interest-bearing deposits | | $ | [removed: 816,154] [added: 474,205] | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | [removed: 816,154] [added: 474,205] | | | $ | [removed: 816,154] [added: 474,205] | |

| Average interest rate | | | [removed: 0.2] [added: —] | [removed: %] | | | — | | | | — | | | | — | | | | — | | | | [removed: —] [added: 4.0] | [added: %] | | | [removed: 0.2] [added: 4.0] | % | | | | |

| Fixed rate obligations (b) | | $ | [removed: 115] [added: —] | | | [removed: $] | — | | | [removed: $] | — | | | [removed: $] | — | | | [removed: $] | — | | | $ | [removed: 600,000] [added: 600,00] | [added: 0] | | $ | [removed: 600,115] [added: 600,000] | | | $ | [removed: 575,317] [added: 622,800] | |

| (a) | Represents the fair value recorded pursuant to ASC 815, [removed: _Derivatives] [added: Derivatives] and [removed: Hedging_.] [added: Hedging.] |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair | | |

| Mortgage loans held for sale | | $ | 203,305 | | | | — | | | | — | | | | — | | | | — | | | | — | | | $ | 203,305 | | | $ | 205,664 | |

| (b) | The Senior Notes mature in 2022. |

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

LIBOR Margin, or the Default Pricing Rate, as determined under the Repurchase Agreement, provided that the Pricing Rate shall not be less than 3.00%.

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

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

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

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

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

| Variable rate repurchase agreement | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |

| _Interest rate sensitive liabilities:_ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Average interest rate | | | 4.0 | % | | | 4.0 | % | | | 4.0 | % | | | 4.0 | % | | | 4.0 | % | | | 4.0 | % | | | 4.0 | % | | | | |

| (b) | The $600,000 maturing thereafter relates to the 3.95% Senior Notes due 2022. |

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

[removed: General][added: General]

NVR, [removed: Inc. (“NVR”),] [added: Inc.,] 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.

Unless the context otherwise requires, references to “NVR”, “we”, “us” or “our” include [removed: NVR] [added: NVR, Inc.] and its consolidated subsidiaries.

During [removed: 2013,] [added: 2014,] approximately [removed: 25%] [added: 26%] and [removed: 12%] [added: 11%] of our home settlements occurred in the Washington, D.C. and Baltimore, MD metropolitan areas, respectively, which accounted for approximately [removed: 31%] [added: 33%] and [removed: 15%,] [added: 13%,] respectively, of our [removed: 2013] [added: 2014] homebuilding revenues.

[removed: In] [added: During] 2013, our average price [removed: of a settled unit] was approximately $349,100.

Instead, we typically acquire finished building lots at market prices from various development entities under fixed price purchase agreements (“purchase agreements”) that require deposits that may be forfeited if we fail to perform under the purchase [removed: agreement.][added: agreements.]

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

As a [removed: result of the changing environment,] [added: result,] 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 [added: development.]

Once we acquire control of any raw ground, we determine whether to sell the raw parcel to a developer and enter into a [removed: fixed price] purchase agreement with the developer to purchase the finished lots, or whether to hire a developer to develop the land on our behalf.

We expect, however, to continue to acquire substantially all of our finished lot inventory using [removed: fixed price] purchase agreements with forfeitable deposits.

As of December 31, [removed: 2013,] [added: 2014,] we controlled approximately [removed: 58,100] [added: 62,800] lots under purchase agreements with deposits in cash and letters of credit totaling approximately [removed: $296.6] [added: $348.4] million and [removed: $2.5] [added: $1.7] million, respectively.

Included in the number of controlled lots are approximately [removed: 9,200] [added: 7,800] lots for which we have recorded a contract land deposit impairment reserve of approximately [removed: $59.8] [added: $56.1] million as of December 31, [removed: 2013.][added: 2014.]

In addition, we had an aggregate investment totaling approximately [removed: $92.7] [added: $82.0] million in [removed: four] [added: five] separate joint venture limited liability corporations (“JVs”), expected to produce approximately [removed: 9,300] [added: 8,800] lots.

Of the lots controlled by the JVs, approximately [removed: 3,400] [added: 3,300] were not under contract with us at December 31, [removed: 2013.][added: 2014.]

Further, as of December 31, [removed: 2013,] [added: 2014,] we directly owned [removed: five] [added: four] separate raw parcels of land, zoned for their intended use, with a current cost basis, including development costs, of approximately [removed: $41.3] [added: $33.7] million [removed: that we intend to develop into approximately 650 finished lots for use in our homebuilding operations.]

Of the total finished lots expected to be developed, [removed: 125] [added: 94] lots are under contract to be sold to an unrelated party under lot purchase agreements.

[removed: Current] [added: Current] Business [removed: Environment][added: Environment]

[removed: Homebuilding][added: Homebuilding]

[removed: _Products_][added: Products]

During [removed: 2013,] [added: 2014,] the prices at which we settled homes ranged from approximately $120,000 to [removed: $2.1] [added: $1.5] million and averaged approximately [removed: $349,100.][added: $368,500.]

[removed: _Markets_][added: Markets]

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

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

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

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

[removed: _Backlog_][added: Backlog]

Backlog totaled [removed: 4,945] [added: 5,475] units and approximately [removed: $1.8] [added: $2.1] billion at December 31, [removed: 2013] [added: 2014] compared to backlog of [removed: 4,979] [added: 4,945] units and approximately [removed: $1.7] [added: $1.8] billion at December 31, [removed: 2012.][added: 2013.]

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: both] [added: each of 2014,] 2013 and [removed: 2012, and 14% in 2011.][added: 2012.]

[removed: During] [added: Additionally, during] each of [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011,] [added: 2012,] approximately 6% of a [added: reporting] quarter’s opening backlog balance cancelled during the fiscal quarter.

We can provide no assurance that our historical cancellation rates are indicative of the actual cancellation [removed: rate that may occur in future periods.]

Other than those units that are cancelled, we expect to settle substantially all of our December 31, [removed: 2013] [added: 2014] backlog during [removed: 2014.][added: 2015.]

Further discussion of settlements, new orders and backlog activity by [added: our] homebuilding reportable segment for each of the last three years can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K.

[removed: _Construction_][added: Construction]

[removed: _Sales] [added: Sales] and [removed: Marketing_][added: Marketing]

[removed: _Regulation_][added: Regulation]

[removed: _Competition] [added: Competition] and Market [removed: Factors_][added: Factors]

[removed: Mortgage Banking][added: Mortgage Banking]

In [removed: 2013,] [added: 2014,] NVRM closed approximately [removed: 8,600] [added: 9,100] loans with an aggregate principal amount of approximately [removed: $2.5] [added: $2.8] billion as compared to approximately [removed: 8,000] [added: 8,600] loans with an aggregate principal amount of approximately [removed: $2.2] [added: $2.5] billion in [removed: 2012.][added: 2013.]

[removed: _Regulation_][added: Regulation]

[removed: _Competition] [added: Competition] and Market [removed: Factors_][added: Factors]

In 2014, our average price of a settled unit was approximately $368,500.

In addition to constructing homes primarily on a pre-sold basis and utilizing what we believe is a conservative lot acquisition strategy, we focus on obtaining and maintaining a leading market position in each market we serve.

This strategy allows us to gain valuable efficiencies and competitive advantages in our markets, which we believe contributes to minimizing the adverse effects of regional economic cycles and provides growth opportunities within these markets.

that we intend to develop into approximately 480 finished lots for use in our homebuilding operations.

Additionally, we have certain properties under contract with land owners that are expected to yield approximately 5,700 lots, which are not included in our number of total lots controlled.

Some of these properties may require rezoning or other approvals to achieve the expected yield.

These properties are controlled with deposits and letters of credit totaling approximately $2.3 million and $3.0 million, respectively as of December 31, 2014, of which approximately $2.6 million is refundable if we do not perform under the contract.

We generally expect to assign the raw land contracts to a land developer and simultaneously enter into a lot purchase agreement with the assignee if the project is determined to be feasible.

The housing market recovery continues to be uneven.

During 2014, the housing market experienced some weakness as existing home inventory increased and affordability decreased following increasing prices during 2013.

There has also been an increase in the number of new home communities in many markets.

These factors have resulted in weakness in housing prices in 2014.

In addition, the housing market continues to face challenges from tightened mortgage underwriting standards.

We believe that a continuation of the housing market recovery which began in 2012 is dependent upon a sustained overall economic recovery, driven by continued improvement in job growth and consumer confidence levels as well as improvement in wage growth and household formation.

| --- | --- |

rate that may occur in future periods.

These filings are available to the public over the internet at the SEC’s website at http://www.sec.gov.

Our principal internet website can be found at http://www.nvrinc.com.

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.

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 and to raise equity investments to finance land development activity.

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

development.

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.

During 2012, our average price was approximately $317,100.

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

| | | |

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

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

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

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

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

[removed: On April 29, 2013,] [added: None of those courts have held that] the [added: claims are appropriate for class, collective, or other group treatment, and the] Western District of New York ruled [added: in April 2013] that the claims [removed: asserted] in [removed: the Tracy] [added: Mr. Tracy’s] case [removed: were] [added: could] not [removed: appropriate for class action treatment and dismissed] [added: proceed on such] a [removed: number of individuals who had filed consents to join that action from the case.][added: basis.]

In light of the points noted above, we have not recorded any associated liabilities on the accompanying [added: condensed] consolidated balance sheets in conjunction with [removed: the Anderson v.][added: any of those claims.]

[added: We were subsequently] 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.

Meetings took place in January [removed: 2012 and] [added: 2012,] August 2012 [added: and November 2014] with representatives from both the EPA and DOJ.

It is [removed: not] [added: as] yet [removed: known] [added: unclear] what next [removed: steps, if any,] [added: steps] the DOJ will take in the matter.

In October 2004, Patrick Tracy, whom we had employed as a Sales and Marketing Representative (“SMR”), filed a lawsuit against us in the U.S. District Court for the Western District of New York alleging that we had misclassified him and other SMRs as outside sales personnel exempt from certain state and federal wage laws, including overtime pay requirements.

Mr. Tracy’s attorneys subsequently filed several other lawsuits in various courts asserting substantially similar claims on behalf of various classes or groups of SMRs.

The Western District of New York reached the same conclusion in July 2014 regarding a separate case that Mr. Tracy’s attorneys brought on behalf of other SMRs.

In October 2013, Mr. Tracy’s individual claims were tried by a jury, which returned a unanimous verdict in our favor and found that we had properly classified Mr. Tracy as an exempt outside sales person.

The plaintiff has sought review in the U.S. Court of Appeals for the Second Circuit, in which he challenges the legal standard that the trial court applied in crafting its jury instructions regarding the outside sales exemption, in addition to rulings that the trial court made at earlier stages of the case.

That appeal is fully briefed, and the parties are awaiting a ruling or an oral argument date.

The remainder of the cases noted above are in various stages of pre-trial proceedings, many of them stayed or administratively closed pending a final disposition of the Tracy action.

We believe that our compensation practices in regard to SMRs are entirely lawful and have vigorously defended all claims challenging those practices.

We have continued discussions with the EPA and DOJ.

On July 18, 2007, former and current employees filed lawsuits against us in the Court of Common Pleas in Allegheny County, Pennsylvania and Hamilton County, Ohio, in Superior Court in Durham County, North Carolina, and in the Circuit Court in Montgomery County, Maryland, and on July 19, 2007 in the Superior Court in New Jersey, alleging that we incorrectly classified our sales and marketing representatives as being exempt from overtime wages.

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 York captioned Tracy v.

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

The complaints 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.

While the suits were filed as purported class actions, none of them have been certified as such.

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.

We believe that our compensation practices in regard to sales and marketing representatives are entirely lawful and in compliance with two letter rulings from the United States Department of Labor (“DOL”) issued in January 2007.

Courts that have considered similar claims against other homebuilders have acknowledged the DOL’s position that sales and marketing representatives were properly classified as exempt from overtime wages and the only court to have directly addressed the exempt status of such employees concluded that the DOL’s position was valid.

In addition, the jury verdict in the Tracy v.

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

Accordingly, we have vigorously defended and intend to continue to vigorously defend these lawsuits.

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

We were subsequently

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

[removed: 10-K 1 d638517d10k.htm] FORM 10-K

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] DC [removed: 20549][added: 20549]

| x | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the fiscal year ended December 31, [removed: 2013][added: 2014]

| ¨ | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period from [removed: to][added: to]

[removed: Commission] [added: Commission] file number [removed: 1-12378][added: 1-12378]

[removed: NVR, Inc.][added: NVR, Inc.]

[removed: (Exact] [added: (Exact] Name of Registrant as Specified in its [removed: Charter)][added: Charter)]

| [removed: Virginia] [added: Virginia] | | [removed: 54-1394360] [added: 54-1394360] |

| [removed: (State] [added: (State] or Other Jurisdiction [removed: of Incorporation] [added: of Incorporation] or [removed: Organization)] [added: Organization)] | | [removed: (IRS Employer Identification Number)] [added: (IRS Employer Identification Number)] |

| [removed: 11700] [added: 11700] Plaza America Drive, Suite [removed: 500 Reston, Virginia] [added: 500] | | [removed: 20190] |

| [removed: (Address] [added: (Address] of Principal Executive [removed: Offices)] [added: Offices)] | | [removed: (Zip Code)] [added: (Zip Code)] |

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

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] |

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

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

The aggregate market value of the voting stock held by non-affiliates of NVR, Inc. on June 30, [removed: 2013,] [added: 2014,] the last business day of NVR, Inc.’s most recently completed second fiscal quarter, was approximately [removed: $4,100,372,390.][added: $4,572,320,000.]

As of February 17, [removed: 2014] [added: 2015] there were [removed: 4,472,698] [added: 4,048,671] total shares of common stock outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

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: 2014] [added: 2015] are incorporated by reference into Part III of this report.

[removed: INDEX][added: INDEX]

| | | | | [removed: Page] [added: Page] | | | [added: | | |]

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

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

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

| Item 1B. | | [Unresolved Staff [removed: Comments](#tx638517_3)] [added: Comments](#Item_1B_Unresolved_Staff_Comments)] | | | [removed: 12] [added: 10] | | [added: | | |]

| Item 2. | | [removed: [Properties](#tx638517_4)] [added: [Properties](#Properties)] | | | [removed: 12] [added: 10] | | [added: | | |]

| Item 3. | | [Legal [removed: Proceedings](#tx638517_5)] [added: Proceedings](#Legal_Proceedings)] | | | [removed: 13] [added: 11] | | [added: | | |]

| Item 4. | | [Mine Safety [removed: Disclosures](#tx638517_6)] [added: Disclosures](#Mine_Safety_Disclosures)] | | | [removed: 14] [added: 11] | | [added: | | |]

| | | [Executive Officers of the [removed: Registrant](#tx638517_7)] [added: Registrant](#Executive_Officers_of_the_Registrant)] | | | [removed: 14] [added: 11] | | [added: | | |]

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

| Item 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#tx638517_8)] [added: Securities](#Item_5)] | | | [removed: 15] [added: 12] | | [added: | | |]

| Item 6. | | [Selected Financial [removed: Data](#tx638517_9)] [added: Data](#Selected_Financial_Data)] | | | [removed: 17] [added: 14] | | [added: | | |]

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#tx638517_10)] [added: Operations](#Managements_Discussion_and_Analysis)] | | | [removed: 17] [added: 14] | | [added: | | |]

| Item 7A. | | [Quantitative and Qualitative Disclosure About Market [removed: Risk](#tx638517_11)] [added: Risk](#Quantitative_and_Qualitative_Disclosure)] | | | [removed: 39] [added: 32] | | [added: | | |]

| Item 8. | | [Financial Statements and Supplementary [removed: Data](#tx638517_12)] [added: Data](#Financial_Statements_and_Supplementary)] | | | [removed: 42] [added: 34] | | [added: | | |]

10-K 1 nvr-10k_20141231.htm 10-K

OR

| Reston, Virginia | | 20190 |

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

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

FORM 10-K

OR

| | | |

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

| | | |

| | | |

(Check One):

| | | | | | | |

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

| | | | | | | |

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

| | | | | | | |

| | | | | | | |

| | | | | | | |

| | | | | | | |

| | | | | | | |

| | | | | | | |

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

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

The [removed: Portland lease expires in 2014, the] [added: Portland,] Thurmont and Farmington leases expire in 2019, the Kings Mountain lease expires in 2022, the Burlington County lease expires in [removed: 2023] [added: 2024] and the Darlington lease expires in 2025.

Our plant utilization was 35% of total capacity in both 2014 and 2013.

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

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

[removed: Executive] [added: Executive] Officers of the [removed: Registrant][added: Registrant]

| [removed: Name] [added: Name] | | [removed: Age] [added: Age] | | [removed: Positions] | [added: | Positions |]

| Paul C. Saville | | [removed: 58] | [added: 59] | [added: | |] President and Chief Executive Officer of NVR |

| Daniel D. Malzahn | | [removed: 44] | [added: 45] | [added: | |] Vice President, Chief Financial Officer and Treasurer of NVR |

| Robert W. Henley | | [removed: 47] | [added: 48] | [added: | |] President of NVRM |

| Eugene J. Bredow | | [removed: 44] | [added: 45] | [added: | |] Vice President and Controller of NVR |

[removed: _Paul] [added: Paul] C.

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

[removed: _Daniel] [added: Daniel] D.

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

[removed: _Robert] [added: Robert] W.

[removed: Henley_] [added: Henley] was named President of NVRM effective October 1, 2012.

[removed: _Eugene] [added: Eugene] J.

[removed: Bredow_] [added: Bredow] was named Vice President and Controller of NVR effective June 1, 2012.

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

[removed: PART II][added: PART II]

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

Mr. Saville has been employed by NVR since 1981.

Mr. Malzahn has been employed by NVR since 1994.

Mr. Henley has been employed by NVR since 1994.

Mr. Bredow has been employed by NVR since 2004.

| | | | | |

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

Prior to July 1, 2005, Mr. Saville had served as Senior Vice President Finance, Chief Financial Officer and Treasurer of NVR since September 30, 1993 and Executive Vice President from January 1, 2002 through June 30, 2005.

From January 2000 to January 31, 2004, Mr. Malzahn was Manager of Business Planning of NVR.

From May 2000 to June 30, 2005, Mr. Henley was Assistant Controller of NVR.

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

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: 2013] [added: 2014] and [removed: 2012:][added: 2013:]

| | | [removed: HIGH] [added: HIGH] | | | | [removed: LOW] [added: LOW] | | |

| [removed: Prices] [added: Prices] per [removed: Share:] [added: Share:] | | | | | | | | |

| [removed: _2013_] [added: 2013] | | | | | | | | |

As of the close of business on February 17, [removed: 2014,] [added: 2015,] there were [removed: 311] [added: 303] shareholders of record.

We had two [added: stock] repurchase authorizations outstanding during the quarter ended December 31, [removed: 2013.][added: 2014.]

On [removed: July 30, 2013 and] December 17, [removed: 2013,] [added: 2013 and July 31, 2014,] we publicly announced the Board of Directors’ approval for us to repurchase up to an aggregate of $300 million per [removed: authorization,] [added: authorization] of our common stock in one or more open market and/or privately negotiated transactions.

The repurchase authorizations do not have [added: an] expiration [removed: dates.][added: date.]

The following table provides information regarding common stock repurchases [removed: for] [added: during] the quarter ended December 31, [removed: 2013:][added: 2014:]

| [removed: Period] [added: Period] | | [removed: Total] [added: Total] Number of Shares [removed: Purchased] [added: Purchased] | | | | [removed: Average] [added: Average] Price Paid per [removed: Share] [added: Share] | | | | [removed: Total] [added: Total] Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs] [added: Programs] | | | | [removed: Maximum] [added: Maximum] Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or [removed: Programs] [added: Programs] | | |

[removed: STOCK] [added: STOCK] PERFORMANCE [removed: GRAPH][added: GRAPH]

[removed: _COMPARISON] [added: COMPARISON] OF CUMULATIVE TOTAL EQUITYHOLDER RETURN ON [removed: EQUITY_][added: EQUITY]

The following chart graphs our performance in the form of cumulative total return to holders of our [removed: Common Stock] [added: common stock] since December 31, [removed: 2008] [added: 2009] in comparison to the [removed: Dow/Home] [added: Dow Jones US Home] Construction Index and the Dow Jones [added: US] Industrial [added: Average] Index for that same period, assuming that $100 was invested in NVR stock and the indices on December 31, [removed: 2008.][added: 2009.]

[removed: ][added: ]

| 2014 | | | | | | | | |

| Fourth Quarter | | $ | 1,284.50 | | | $ | 1,050.95 | |

| Third Quarter | | $ | 1,200.00 | | | $ | 1,040.83 | |

| Second Quarter | | $ | 1,173.78 | | | $ | 1,027.00 | |

| First Quarter | | $ | 1,220.95 | | | $ | 991.05 | |

| October 1 - 31, 2014 | | | 76,663 | | | $ | 1,127.91 | | | | 76,663 | | | $ | 242,220,702 | |

| November 1 - 30, 2014 | | | — | | | $ | — | | | | — | | | $ | 242,220,702 | |

| December 1 - 31, 2014 | | | 59,258 | | | $ | 1,208.95 | | | | 59,258 | | | $ | 170,580,957 | |

| Total | | | 135,921 | | | $ | 1,163.24 | | | | 135,921 | | | | | |

The October 2014 repurchase activity included 25,332 shares purchased under the December 17, 2013 authorization, which fully utilized that authorization.

The remaining 51,331 shares were purchased under the July 31, 2014 authorization.

On February 18, 2015, the Board of Directors approved a repurchase authorization providing us authorization to repurchase up to an aggregate of $300 million of our common stock in one or more open market and/or privately negotiated transactions.

| | | For the Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | |

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

| Comparison of 5 Year Cumulative Total Return | | 2009 | | | | 2010 | | | | 2011 | | | | 2012 | | | | 2013 | | | | 2014 | | |

| NVR, Inc. | | $ | 100 | | | $ | 97 | | | $ | 97 | | | $ | 129 | | | $ | 144 | | | $ | 179 | |

| Dow Jones US Industrial Average | | $ | 100 | | | $ | 114 | | | $ | 124 | | | $ | 121 | | | $ | 177 | | | $ | 194 | |

| Dow Jones US Home Construction | | $ | 100 | | | $ | 101 | | | $ | 98 | | | $ | 179 | | | $ | 197 | | | $ | 213 | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| _2012_ | | | | | | | | |

| Fourth Quarter | | $ | 966.93 | | | $ | 830.00 | |

| Third Quarter | | $ | 879.99 | | | $ | 721.56 | |

| Second Quarter | | $ | 855.00 | | | $ | 711.75 | |

| First Quarter | | $ | 759.13 | | | $ | 667.98 | |

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

| 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 | | | | | |

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

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

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

[removed: (dollars in] [added: (in] thousands, except per share amounts)

The selected income statement and balance sheet data have been derived from our consolidated financial statements for each of the periods presented and [removed: is] [added: are] not necessarily indicative of results of future operations.

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

| | | [removed: Year] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | | | | | | | | | |

| | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| [removed: Consolidated] [added: Consolidated] Income Statement [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | | |

| [removed: _Homebuilding data:_] [added: Homebuilding data:] | | | | | | | | | | | | | | | | | | | | |

| Revenues | | $ | [removed: 4,134,481] [added: 4,375,059] | | | $ | [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] | |

| Gross profit | | | [removed: 710,277] [added: 806,473] | | | | [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: _Mortgage] [added: Mortgage] Banking [removed: data:_] [added: data:] | | | | | | | | | | | | | | | | | | | | |

| Mortgage banking fees | | | [removed: 76,786] [added: 69,509] | | | | [removed: 63,406] [added: 76,786] | | | | [removed: 47,954] [added: 63,406] | | | | [removed: 61,134] [added: 47,954] | | | | [removed: 60,381] [added: 61,134] | |

| Interest income | | | [removed: 4,983] [added: 4,940] | | | | [removed: 4,504] [added: 4,983] | | | | [removed: 5,702] [added: 4,504] | | | | [removed: 5,411] [added: 5,702] | | | | [removed: 2,979] [added: 5,411] | |

| Interest expense | | | [removed: 545] [added: 549] | | | | [removed: 546] [added: 545] | | | | [removed: 875] [added: 546] | | | | [removed: 1,126] [added: 875] | | | | [removed: 1,184] [added: 1,126] | |

| [removed: _Consolidated data:_] [added: Consolidated data:] | | | | | | | | | | | | | | | | | | | | |

| [added: Net] Income [removed: from continuing operations] | | [removed: $] | [removed: 266,477] [added: 281,630] | | | [removed: $] | [removed: 180,588] [added: 266,477] | | | [removed: $] | [removed: 129,420] [added: 180,588] | | | [removed: $] | [removed: 206,005] [added: 129,420] | | | [removed: $] | [removed: 192,180] [added: 206,005] | |

| | | [removed: December 31,] [added: December 31,] | | | | | | | | | | | | | | | | | | |

| | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| [removed: Consolidated] [added: Consolidated] Balance Sheet [removed: Data:] [added: Data:] | | | | | | | | | | | | | | | | | | | | |

| Homebuilding inventory | | $ | [removed: 738,565] [added: 869,486] | | | $ | [removed: 678,131] [added: 738,565] | | | $ | [removed: 533,150] [added: 678,131] | | | $ | [removed: 431,329] [added: 533,150] | | | $ | [removed: 418,718] [added: 431,329] | |

| Contract land deposits, net | | | [removed: 236,885] [added: 294,676] | | | | [removed: 191,538] [added: 236,885] | | | | [removed: 131,930] [added: 191,538] | | | | [removed: 100,786] [added: 131,930] | | | | [removed: 49,906] [added: 100,786] | |

| Total assets | | | [removed: 2,486,148] [added: 2,351,335] | | | | [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] | |

| Notes and loans payable [removed: (2)] [added: (1)] | | | [removed: 599,190] [added: 599,166] | | | | [removed: 599,745] [added: 599,190] | | | | [removed: 1,613] [added: 599,745] | | | | [removed: 92,089] [added: 1,613] | | | | [removed: 147,880] [added: 92,089] | |

| Shareholders’ equity | | | [removed: 1,261,352] [added: 1,124,255] | | | | [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: (2)] [added: (1)] | Balance does not include non-recourse debt related to the consolidated variable interest entity. |

| Earnings per share: | | | | | | | | | | | | | | | | | | | | |

| Basic | | $ | 65.83 | | | $ | 56.25 | | | $ | 36.04 | | | $ | 23.66 | | | $ | 34.96 | |

| Diluted | | $ | 63.50 | | | $ | 54.81 | | | $ | 35.12 | | | $ | 23.01 | | | $ | 33.42 | |

| Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | | | | | |

| Basic | | | 4,278 | | | | 4,737 | | | | 5,011 | | | | 5,469 | | | | 5,893 | |

| Diluted | | | 4,435 | | | | 4,862 | | | | 5,142 | | | | 5,624 | | | | 6,165 | |

| --- | --- |

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

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

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

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

| Income from continuing operations per diluted share (1) | | $ | 54.81 | | | $ | 35.12 | | | $ | 23.01 | | | $ | 33.42 | | | $ | 31.26 | |

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

[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

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: 2013] [added: 2014] were effective to provide reasonable assurance that information required to be disclosed in our reports under the Exchange 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.

[removed: Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting][added: Reporting]

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 [removed: _Internal] [added: Internal] Control – Integrated Framework [removed: (1992)_] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework in [removed: _Internal] [added: Internal] Control – Integrated Framework [removed: (1992)_,] [added: (2013),] our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2013.][added: 2014.]

Our internal control over financial reporting as of December 31, [removed: 2013] [added: 2014] has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report which is included herein.

[removed: PART III][added: PART III]

Item 10 is [removed: hereby] incorporated [added: herein] by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2014.][added: 2015.]

Reference is also made regarding our executive officers to “Executive Officers of the Registrant” following Item 4 of [removed: Part I of] this [removed: report.][added: Form 10-K.]

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

Item 11 is [removed: hereby] incorporated [added: herein] by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2014.][added: 2015.]

[removed: Security ownership of certain beneficial owners and management] [added: Item 12] is [removed: hereby] incorporated [added: herein] by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2014.][added: 2015.]

[removed: Equity] [added: Equity] Compensation Plan [removed: Information][added: Information]

The table below sets forth information as of the end of our [removed: 2013] [added: 2014] fiscal year for (i) all equity compensation plans approved by our shareholders and (ii) all equity compensation plans not approved by our shareholders:

| [removed: Plan category] [added: Plan category] | | [removed: Number] [added: 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 [removed: rights] [added: rights] | | | | [removed: Weighted-average exercise] [added: Weighted-average exercise] price [removed: of outstanding options, warrants] [added: of outstanding options, warrants] and [removed: rights] [added: rights] | | | | [removed: Number] [added: 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 [added: not] approved by security holders [removed: (1)] | | | [removed: 500,955] [added: 169,658] | | | $ | [removed: 717.52] [added: 651.15] | | | | [removed: 79,730] [added: —] | |

| Equity compensation plans [removed: not] approved by security holders [added: (1)] | | | [removed: 211,090] [added: 1,086,851] | | | $ | [removed: 636.12] [added: 945.26] | | | | [removed: —] [added: 362,123] | |

| (1) | This category includes the 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: 2013,] [added: 2014,] there are [removed: 45,009] [added: 55,494] RSUs outstanding, issued at a $0 exercise price. Of the total [removed: 79,730] [added: 362,123] shares remaining available for future issuance, up to [removed: 48,476] [added: 33,106] may be issued as RSUs. The weighted-average exercise price of outstanding options under security holder approved plans excluding outstanding RSUs was [removed: $788.36.] [added: $996.12.] |

Equity compensation plans approved by our shareholders include the NVR, Inc. [removed: Management Long-Term Stock Option Plan; the NVR, Inc.] 1998 Management Long-Term Stock Option Plan; the 1998 Directors’ Long-Term Stock Option Plan; [removed: and] the 2010 Equity Incentive [added: Plan; and the 2014 Equity Incentive] Plan.

| Total | | | 1,256,509 | | | $ | 905.54 | | | | 362,123 | |

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

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

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

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

Item 13 is [removed: hereby] incorporated [added: herein] by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2014.][added: 2015.]

Item 14 is [removed: hereby] incorporated [added: herein] by reference to our Proxy Statement expected to be filed with the Securities and Exchange Commission on or prior to April 30, [removed: 2014.][added: 2015.]

[removed: PART IV][added: PART IV]

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

| [removed: 1.] [added: 1.] | [removed: Financial Statements] [added: Financial Statements] |

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

| [removed: 2.] [added: 2.] | [removed: Exhibits] [added: Exhibits] |

| [removed: Exhibit Number] [added: Exhibit Number] | | [removed: Description] [added: Description] |

| 4.1 | | Indenture dated as of April 14, 1998 between NVR, 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 [added: on] April 23, 1998 and incorporated herein by reference. |

| 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 [added: on] June 13, 1997 and incorporated herein by reference. |

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

| 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 [added: on] June 4, 1999 and incorporated herein by reference. |

| 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 [added: on] June 4, 1999 and incorporated herein by reference. |

| 10.12* | | NVR, Inc. [removed: Management Long-Term] [added: 2000 Broadly-Based] Stock Option Plan. Filed as Exhibit [removed: 99.3] [added: 99.1] to NVR’s Registration Statement on Form S-8 (No. [removed: 333-04975)] [added: 333-56732)] filed [removed: May 31, 1996] [added: on March 8, 2001] and incorporated herein by reference. |

| [removed: 10.13*] [added: 10.25*] | | [added: The Form of Non-Qualified Stock Option Agreement under the] NVR, Inc. 2000 [removed: Broadly-Based] [added: Broadly Based] Stock Option Plan. Filed as Exhibit [removed: 99.1] [added: 10.1] to NVR’s [removed: Registration Statement on] Form [removed: S-8 (No. 333-56732)] [added: 8-K] filed [removed: March 8, 2001] [added: on January 3, 2008] and incorporated herein by reference. |

| [removed: 10.14*] [added: 10.13*] | | 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: 10.15*] [added: 10.14*] | | Description of the Board of Directors’ compensation arrangement. Filed as Exhibit 10.27 to NVR’s Annual Report on Form 10-K for the [removed: period] [added: year] ended December 31, 2004 and incorporated herein by reference. |

| [removed: 10.16*] [added: 10.20*] | | NVR, Inc. 2010 Equity Incentive Plan. Filed as [removed: exhibit] [added: Exhibit] 10.1 to NVR’s Form S-8 (No. 333-166512) filed on May 4, 2010 and incorporated herein by reference. |

| [removed: 10.17*] [added: 10.21*] | | The Form of Non-Qualified Stock Option Agreement (Management grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as [removed: exhibit] [added: Exhibit] 10.1 to NVR’s Form 10-Q filed on July 30, 2013 and incorporated herein by reference. |

| [removed: 10.18*] [added: 10.22*] | | The Form of Non-Qualified Stock Option Agreement (Director grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as [removed: exhibit] [added: Exhibit] 10.2 to NVR’s Form 8-K filed on May 6, 2010 and incorporated herein by reference. |

| [removed: 10.19*] [added: 10.23*] | | The Form of Restricted Share Units Agreement (Management grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as [removed: exhibit] [added: Exhibit] 10.2 to NVR’s Form 10-Q filed on July 30, 2013 and incorporated herein by reference. |

| [removed: 10.20*] [added: 10.24*] | | The Form of Restricted Share Units Agreement (Director grants) under the NVR, Inc. 2010 Equity Incentive Plan. Filed as [removed: exhibit] [added: Exhibit] 10.4 to NVR’s Form 8-K filed on May 6, 2010 and incorporated herein by reference. |

| [removed: 10.21*] [added: 10.16*] | | The Form of Non-Qualified Stock Option Agreement [added: (Management time-based grants)] under the NVR, Inc. [removed: 2000 Broadly Based Stock Option] [added: 2014 Equity Incentive] Plan. Filed as Exhibit 10.1 to NVR’s Form 8-K filed [removed: January 3, 2008] [added: on May 7, 2014] and incorporated herein by reference. |

| [removed: 10.22*] [added: 10.26*] | | 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 [removed: period] [added: year] ended December 31, 2007 and incorporated herein by reference. |

| [removed: 10.23*] [added: 10.27*] | | Summary of [removed: 2014] [added: 2015] Named Executive Officer annual incentive compensation plan. Filed herewith. |

[removed: SIGNATURES][added: SIGNATURES]

| [removed: NVR, Inc.] [added: NVR, Inc.] | | |

| | | [removed: _President] [added: President] and Chief Executive [removed: Officer_] [added: Officer] |

| [removed: Signature] [added: Signature] | | [removed: Title] [added: Title] | | [removed: Date] [added: Date] |

| /s/ Dwight C. Schar | | Chairman | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ C. E. Andrews | | Director | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ Robert C. Butler | | Director | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ Timothy M. Donahue | | Director | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ Thomas D. Eckert | | Director | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ Alfred E. Festa | | Director | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ Ed Grier | | Director | | February [removed: 20, 2014] [added: 19, 2015] |

| /s/ Manuel H. Johnson | | Director | | February [removed: 20, 2014] [added: 19, 2015] |