Item 1. Financial Statements

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Item 1. Financial Statements

NVR, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
March 31, 2025December 31, 2024
ASSETS
Homebuilding:
Cash and cash equivalents$2,176,902$2,561,339
Restricted cash64,26442,172
Receivables36,54332,622
Inventory:
Lots and housing units, covered under sales agreements with customers1,774,2871,727,243
Unsold lots and housing units242,217237,177
Land under development70,05065,394
Building materials and other23,81828,893
2,110,3722,058,707
Contract land deposits, net757,197726,675
Property, plant and equipment, net98,03895,619
Operating lease right-of-use assets84,79178,340
Reorganization value in excess of amounts allocable to identifiable assets, net41,58041,580
Other assets264,138251,178
5,633,8255,888,232
Mortgage Banking:
Cash and cash equivalents34,20449,636
Restricted cash12,54011,520
Mortgage loans held for sale, net391,914355,209
Property and equipment, net7,2867,373
Operating lease right-of-use assets22,68623,482
Reorganization value in excess of amounts allocable to identifiable assets, net7,3477,347
Other assets85,73138,189
561,708492,756
Total assets$6,195,533$6,380,988

See notes to condensed consolidated financial statements.

NVR, Inc.
Condensed Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(unaudited)
March 31, 2025December 31, 2024
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable$364,929$332,772
Accrued expenses and other liabilities455,369441,300
Customer deposits315,746322,926
Operating lease liabilities90,48983,939
Senior notes910,633911,118
2,137,1662,092,055
Mortgage Banking:
Accounts payable and other liabilities79,00953,433
Operating lease liabilities24,69425,428
103,70378,861
Total liabilities2,240,8692,170,916
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both March 31, 2025 and December 31, 2024206206
Additional paid-in capital3,057,0373,031,637
Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of both March 31, 2025 and December 31, 2024(16,710)(16,710)
Deferred compensation liability16,71016,710
Retained earnings15,346,52915,046,953
Less treasury stock at cost – 17,610,715 and 17,543,686 shares as of March 31, 2025 and December 31, 2024, respectively(14,449,108)(13,868,724)
Total shareholders' equity3,954,6644,210,072
Total liabilities and shareholders' equity$6,195,533$6,380,988

See notes to condensed consolidated financial statements.

NVR, Inc.

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

Three Months Ended March 31,
20252024
Homebuilding:
Revenues$2,350,445$2,286,177
Other income26,71240,866
Cost of sales(1,835,375)(1,726,213)
Selling, general and administrative(165,117)(152,503)
Operating income376,665448,327
Interest expense(7,181)(6,649)
Homebuilding income369,484441,678
Mortgage Banking:
Mortgage banking fees52,58747,286
Interest income3,8064,092
Other income1,0931,171
General and administrative(24,693)(23,358)
Interest expense(273)(177)
Mortgage banking income32,52029,014
Income before taxes402,004470,692
Income tax expense(102,428)(76,423)
Net income$299,576$394,269
Basic earnings per share$100.41$123.76
Diluted earnings per share$94.83$116.41
Basic weighted average shares outstanding2,9843,186
Diluted weighted average shares outstanding3,1593,387

See notes to condensed consolidated financial statements.

NVR, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended March 31,
20252024
Cash flows from operating activities:
Net income$299,576$394,269
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization5,7824,381
Equity-based compensation expense18,52717,141
Contract land deposit impairments (recoveries), net8,118(7,466)
Gain on sale of loans, net(42,987)(37,432)
Mortgage loans closed(1,433,354)(1,378,231)
Mortgage loans sold and principal payments on mortgage loans held for sale1,416,6561,313,298
Distribution of earnings from unconsolidated joint ventures—1,500
Net change in assets and liabilities:
Increase in inventory(51,665)(166,884)
Increase in contract land deposits(38,640)(25,390)
(Increase) decrease in receivables(18,167)57,637
Increase (decrease) in accounts payable and accrued expenses55,502(46,915)
(Decrease) increase in customer deposits(7,180)20,890
Other, net(4,387)(340)
Net cash provided by operating activities207,781146,458
Cash flows from investing activities:
Investments in and advances to unconsolidated joint ventures(8,167)—
Purchase of property, plant and equipment(7,059)(8,979)
Proceeds from the sale of property, plant and equipment2102,246
Net cash used in investing activities(15,016)(6,733)
Cash flows from financing activities:
Purchase of treasury stock(583,394)(496,936)
Principal payments on finance lease liabilities(1,066)(462)
Proceeds from the exercise of stock options14,93867,022
Net cash used in financing activities(569,522)(430,376)
Net decrease in cash, restricted cash, and cash equivalents(376,757)(290,651)
Cash, restricted cash, and cash equivalents, beginning of the period2,664,6673,215,444
Cash, restricted cash, and cash equivalents, end of the period$2,287,910$2,924,793
Supplemental disclosures of cash flow information:
Interest paid during the period, net of interest capitalized$651$421
Income taxes paid during the period, net of refunds$3,863$6,891

See notes to condensed consolidated financial statements.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

1. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements include the accounts of NVR, Inc. and its subsidiaries (“NVR”, the “Company”, "we", "us" or "our") and certain other entities in which the Company is deemed to be the primary beneficiary (see Notes 2 and 3 to the accompanying condensed consolidated financial statements). Intercompany accounts and transactions have been eliminated in consolidation. The statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Because the accompanying condensed consolidated financial statements do not include all of the information and footnotes required by GAAP, they should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments (consisting only of normal recurring accruals except as otherwise noted herein) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

For the three months ended March 31, 2025 and 2024, comprehensive income equaled net income; therefore, a separate statement of comprehensive income is not included in the accompanying condensed consolidated financial statements.

Revenue Recognition

Homebuilding revenue is recognized on the settlement date at the contract sales price, when control is transferred to our customers. Our contract liabilities, which consist of deposits received from customers on homes not settled, were $315,746 and $322,926 as of March 31, 2025 and December 31, 2024, respectively. We expect that substantially all of the customer deposits held as of December 31, 2024 will be recognized in revenue in 2025. Our contract assets consist of prepaid sales compensation and totaled approximately $20,700 and $21,700 as of March 31, 2025 and December 31, 2024, respectively. Prepaid sales compensation is included in homebuilding “Other assets” on the accompanying condensed consolidated balance sheets.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses," requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes - Improvements to Income Tax Disclosures." The amendments in the ASU require disclosure of specific categories in the rate reconciliation and for the entity to provide additional information for reconciling items that meet a quantitative threshold. The ASU will be effective for annual periods beginning with our fiscal year ending December 31, 2025. The amendments in the ASU are to be applied on a prospective basis and early adoption is permitted. We are currently evaluating the

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

impact of the adoption of ASU 2023-09 and do not expect it to have a material impact on our consolidated financial statements and related disclosures.

2. Variable Interest Entities ("VIEs")

Lot Purchase Agreements (“LPAs”)

We generally do not engage in land development. Instead, we typically acquire finished building lots at market prices from various third party land development entities under LPAs. The LPAs require deposits that may be forfeited if we fail to perform under the LPAs. The deposits required under the LPAs are in the form of cash or letters of credit in varying amounts, and typically range up to 10% of the aggregate purchase price of the finished lots.

The deposit placed by us pursuant to the LPA is deemed to be a variable interest in the respective development entities. Those development entities are deemed to be VIEs. Therefore, the development entities with which we enter into LPAs, including the joint venture limited liability corporations discussed below, are evaluated for possible consolidation by us. We have concluded that we are not the primary beneficiary of the development entities with which we enter into LPAs, and therefore, we do not consolidate any of these VIEs.

As of March 31, 2025, we controlled approximately 159,000 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $792,600 and $4,600, respectively. Our sole legal obligation and economic loss for failure to perform under these LPAs is limited to the amount of the deposit pursuant to the liquidated damage provisions contained in the LPAs and, in very limited circumstances, specific performance obligations. For the three months ended March 31, 2025, we incurred pre-tax impairment charges on lot deposits of approximately $8,100. For the three months ended March 31, 2024, we recorded a net expense reversal of approximately $7,500 related to previously impaired lot deposits based on market conditions. Our contract land deposit asset is shown net of a $66,700 and $58,597 impairment allowance as of March 31, 2025 and December 31, 2024, respectively.

In addition, we have certain properties under contract with land owners that are expected to yield approximately 40,300 lots, which are not included in the 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 cash deposits totaling approximately $31,300 as of March 31, 2025, of which approximately $7,600 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible.

Our total risk of loss related to contract land deposits is limited to the amount of the deposits pursuant to the liquidated damages provision of the LPAs. As of March 31, 2025 and December 31, 2024, our total risk of loss was as follows:

March 31, 2025December 31, 2024
Contract land deposits$823,897$785,272
Allowance for losses on contract land deposits(66,700)(58,597)
Contract land deposits, net757,197726,675
Contingent obligations in the form of letters of credit4,6268,722
Total risk of loss$761,823$735,397

3. Joint Ventures

On a limited basis, we obtain finished lots using joint venture limited liability corporations (“JVs”). The JVs are typically structured such that we are a non-controlling member and are at risk only for the amount we have

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

invested, or have committed to invest, in addition to any deposits placed under LPAs with the joint venture. We are not a borrower, guarantor or obligor on any debt of the JVs, as applicable. We enter into LPAs to purchase lots from these JVs, and as a result have a variable interest in these JVs. We determined that we are not the primary beneficiary in any of the JVs because we and the other JV partner either share power or the other JV partner has the controlling financial interest.

As of March 31, 2025, we had an aggregate investment totaling approximately $37,700 in four JVs that are expected to produce approximately 6,050 finished lots, of which approximately 5,700 lots were controlled by us and the remaining approximately 350 lots were either under contract with unrelated parties or not currently under contract. We had additional JV funding commitments totaling approximately $12,400 as of March 31, 2025. As of December 31, 2024, our aggregate investment in JVs totaled approximately $29,300. Investments in JVs for the respective periods are reported in the homebuilding “Other assets” line item on the accompanying condensed consolidated balance sheets. None of the JVs had any indicators of impairment as of March 31, 2025.

We recognize income from the JVs as a reduction to the lot cost of the lots purchased from the respective JVs when the homes are settled, based on the expected total profitability and the total number of lots expected to be produced by the respective JVs.

We classify distributions received from unconsolidated JVs using the cumulative earnings approach. As a result, distributions received up to the amount of cumulative earnings recognized by us are reported as distributions of earnings and those in excess of that amount are reported as a distribution of capital. These distributions are classified within the accompanying condensed consolidated statements of cash flows as cash flows from operating activities and investing activities, respectively.

4. Land Under Development

On a limited basis, we directly acquire raw land parcels already zoned for its intended use to develop into finished lots. Land under development includes the land acquisition costs, direct improvement costs, capitalized interest, where applicable, and real estate taxes.

As of March 31, 2025, we owned land with a carrying value of $70,050 that we intend to develop into approximately 2,900 finished lots. As of December 31, 2024, the carrying value of land under development was $65,394. None of the raw parcels had any indicators of impairment as of March 31, 2025.

5. Capitalized Interest

We capitalize interest costs to land under development during the active development of finished lots. In addition, we capitalize interest costs to our joint venture investments while the investments are considered qualified assets pursuant to ASC Topic 835-20 - Interest. Capitalized interest is transferred to inventory as the development of finished lots is completed, then charged to cost of sales upon our settlement of homes and the respective lots. Interest incurred in excess of the interest capitalizable based on the level of qualified assets is expensed in the period incurred.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

The following table reflects the changes in our capitalized interest during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,
20252024
Interest capitalized, beginning of period$333$151
Interest incurred7,7316,879
Interest charged to interest expense(7,454)(6,826)
Interest charged to cost of sales(3)(22)
Interest capitalized, end of period$607$182

6. Earnings per Share

The following weighted average shares and share equivalents were used to calculate basic and diluted earnings per share ("EPS") for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,
20252024
Weighted average number of shares outstanding used to calculate basic EPS2,983,5023,185,664
Dilutive securities:
Stock options and restricted share units175,507201,282
Weighted average number of shares and share equivalents outstanding used to calculate diluted EPS3,159,0093,386,946

The following non-qualified stock options ("Options") and restricted share units ("RSUs") issued under equity incentive plans were outstanding during the three months ended March 31, 2025 and 2024, but were not included in the computation of diluted EPS because the effect would have been anti-dilutive.

Three Months Ended March 31,
20252024
Anti-dilutive securities6,6004,670

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

7. Shareholders’ Equity

A summary of changes in shareholders’ equity for the three months ended March 31, 2025 is presented below:

Common StockAdditional Paid-In CapitalRetained EarningsTreasury StockDeferred Compensation TrustDeferred Compensation LiabilityTotal
Balance, December 31, 2024$206$3,031,637$15,046,953$(13,868,724)$(16,710)$16,710$4,210,072
Net income——299,576———299,576
Purchase of common stock for treasury———(588,449)——(588,449)
Equity-based compensation—18,527————18,527
Proceeds from Options exercised—14,938————14,938
Treasury stock issued upon Option exercise and RSU vesting—(8,065)—8,065———
Balance, March 31, 2025$206$3,057,037$15,346,529$(14,449,108)$(16,710)$16,710$3,954,664

A summary of changes in shareholders’ equity for the three months ended March 31, 2024 is presented below:

Common StockAdditional Paid-In CapitalRetained EarningsTreasury StockDeferred Compensation TrustDeferred Compensation LiabilityTotal
Balance, December 31, 2023$206$2,848,528$13,365,025$(11,849,034)$(16,710)$16,710$4,364,725
Net income——394,269———394,269
Purchase of common stock for treasury———(498,776)——(498,776)
Equity-based compensation—17,141————17,141
Proceeds from Options exercised—67,022————67,022
Treasury stock issued upon Option exercise and RSU vesting—(26,984)—26,984———
Balance, March 31, 2024$206$2,905,707$13,759,294$(12,320,826)$(16,710)$16,710$4,344,381

We repurchased 77,120 and 66,858 shares of our outstanding common stock during the three months ended March 31, 2025 and 2024, respectively. We settle Option exercises and vesting of RSUs by issuing shares of treasury stock. We issued 10,091 and 38,977 shares from the treasury account during the three months ended March 31, 2025 and 2024, respectively, in settlement of Option exercises and vesting of RSUs. Shares are relieved from the treasury account based on the weighted average cost basis of treasury shares.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

8. Product Warranties

We establish warranty and product liability reserves (“Warranty Reserve”) to provide for estimated future expenses as a result of construction and product defects, product recalls and litigation incidental to our homebuilding business. Liability estimates are determined based on management’s judgment, considering such factors as historical experience, the estimated current cost of corrective action, manufacturers’ and subcontractors’ participation in sharing the cost of corrective action, consultations with third party experts such as engineers, and discussions with our general counsel and outside counsel retained to handle specific product liability cases. The warranty reserve for the respective periods is reported in the homebuilding “Accrued expenses and other liabilities” line item on the accompanying condensed consolidated balance sheets.

The following table reflects the changes in our Warranty Reserve during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,
20252024
Warranty reserve, beginning of period$133,095$146,283
Provision17,23418,948
Payments(20,537)(22,102)
Warranty reserve, end of period$129,792$143,129

9. Segment Disclosures

We disclose four homebuilding operating and reportable segments that aggregate geographically our homebuilding divisions, and we present our mortgage banking operations as a single reportable segment. The homebuilding reportable segments are comprised of divisions in the following geographic areas:

Mid Atlantic:Maryland, Virginia, West Virginia, Delaware and Washington, D.C.
North East:New Jersey and Eastern Pennsylvania
Mid East:New York, Ohio, Western Pennsylvania, Indiana and Illinois
South East:North Carolina, South Carolina, Tennessee, Florida, Georgia and Kentucky

The Company's Chief Operating Decision Maker ("CODM"), identified as the Chief Executive Officer, utilizes segment profit to evaluate the performance of the Company's homebuilding and mortgage banking operating segments against the annual plan to make resource allocation decisions.

Homebuilding segment profit includes all revenues and income generated from the sale of homes, less the cost of homes sold, selling, general and administrative expenses and a corporate capital allocation charge. The corporate capital allocation charge is eliminated in consolidation and is based on the segment’s average net assets employed. The corporate capital allocation charged to the operating segment allows the CODM to determine whether the operating segment’s results are providing the desired rate of return after covering our cost of capital.

Assets not allocated to the operating segments are not included in either the operating segment’s corporate capital allocation charge or the CODM’s evaluation of the operating segment’s performance. We record charges on contract land deposits when it is determined that it is probable that recovery of the deposit is impaired. For segment reporting purposes, impairments on contract land deposits are charged to the operating segment upon the termination of an LPA with the developer, or the restructuring of an LPA resulting in the forfeiture of the deposit.

Mortgage banking segment profit consists of revenues generated from mortgage financing, title insurance and closing services, less the costs of such services and general and administrative costs, including certain corporate overhead functions. Mortgage banking operations are not charged a corporate capital allocation charge.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

In addition to the corporate capital allocation and contract land deposit impairments discussed above, the other reconciling items between segment profit and consolidated profit before taxes include unallocated corporate overhead (including all management incentive compensation), equity-based compensation expense, consolidation adjustments and external corporate interest income and expense. Our overhead functions such as accounting, treasury and human resources are centrally performed and the costs are not allocated to our operating segments. Consolidation adjustments consist of such items necessary to convert the reportable segments’ results, which are predominantly maintained on a cash basis, to a full accrual basis for external financial statement presentation purposes, and are not allocated to our operating segments. External corporate interest expense primarily consists of interest charges on our 3.00% Senior Notes due 2030 (the “Senior Notes”), which are not charged to the operating segments because the charges are included in the corporate capital allocation discussed above.

The following tables present certain segment financial data, with reconciliations to the amounts reported for the consolidated company, where applicable:

Three Months Ended March 31,
20252024
Revenues:
Homebuilding Mid Atlantic$1,082,235$1,017,471
Homebuilding North East288,826255,669
Homebuilding Mid East412,409416,951
Homebuilding South East566,975596,086
Mortgage Banking52,58747,286
Total consolidated revenues$2,403,032$2,333,463
Three Months Ended March 31,
20252024
Segment cost of sales:
Homebuilding Mid Atlantic$(821,126)$(755,841)
Homebuilding North East(212,548)(188,330)
Homebuilding Mid East(328,090)(322,541)
Homebuilding South East(455,274)(450,250)
Three Months Ended March 31,
20252024
Segment selling, general & administrative expense:
Homebuilding Mid Atlantic$(37,556)$(38,183)
Homebuilding North East(10,701)(11,024)
Homebuilding Mid East(19,696)(18,291)
Homebuilding South East(37,985)(31,233)
Mortgage Banking(23,507)(22,716)

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

Three Months Ended March 31,
20252024
Corporate capital allocation charge:
Homebuilding Mid Atlantic$(37,143)$(33,919)
Homebuilding North East(10,602)(9,580)
Homebuilding Mid East(11,207)(9,865)
Homebuilding South East(28,675)(23,697)
Three Months Ended March 31,
20252024
Other segment items, net
Homebuilding Mid Atlantic$424$436
Homebuilding North East136123
Homebuilding Mid East193147
Homebuilding South East689499
Mortgage Banking (1)4,6265,086

(1)This item relates primarily to interest income received on mortgage loans closed and mortgage loans held for sale.

Three Months Ended March 31,
20252024
Segment profit:
Homebuilding Mid Atlantic$186,834$189,964
Homebuilding North East55,11146,858
Homebuilding Mid East53,60966,401
Homebuilding South East45,73091,405
Mortgage Banking33,70629,656
Total segment profit374,990424,284
Reconciling items:
Contract land deposit allowance adjustment (2)(8,117)7,466
Equity-based compensation expense (3)(18,527)(17,141)
Corporate capital allocation (4)87,62777,061
Unallocated corporate overhead(55,969)(51,705)
Consolidation adjustments and other (5)3,932(2,271)
Corporate interest income25,19939,593
Corporate interest expense(7,131)(6,595)
Reconciling items sub-total27,01446,408
Consolidated profit before taxes$402,004$470,692

(2) This item represents changes to the contract land deposit impairment allowance, which are not allocated to the reportable segments. See further discussion of lot deposit impairment charges in Note 2.

(3) This item represents compensation expense for all Option and RSU grants.

(4) This item represents the elimination of the corporate capital allocation charge included in the respective homebuilding reportable segments. The corporate capital allocation charge is based on the segment’s monthly average asset balance.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

(5) The consolidation adjustments and other in each period are primarily attributable to changes in units under construction period over period, and any significant changes in material costs, primarily lumber. Our reportable segments' results include the intercompany profits of our production facilities for home packages delivered to our homebuilding divisions. Costs related to homes not yet settled are reversed through the consolidation adjustment and recorded in inventory. These costs are subsequently recorded through the consolidation adjustment when the respective homes are settled.

March 31, 2025December 31, 2024
Assets:
Homebuilding Mid Atlantic$1,326,436$1,337,659
Homebuilding North East376,644368,300
Homebuilding Mid East413,047396,854
Homebuilding South East998,773914,318
Mortgage Banking554,361485,409
Total segment assets3,669,2613,502,540
Reconciling items:
Cash and cash equivalents2,176,9022,561,339
Deferred taxes146,367142,192
Reorganization value and goodwill49,36849,368
Operating lease right-of-use assets84,79178,340
Finance lease right-of-use assets38,73237,638
Contract land deposit allowance(66,700)(58,597)
Consolidation adjustments and other96,81268,168
Reconciling items sub-total2,526,2722,878,448
Consolidated assets$6,195,533$6,380,988

10. Fair Value

GAAP assigns a fair value hierarchy to the inputs used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs.

Financial Instruments

The estimated fair values of our Senior Notes as of March 31, 2025 and December 31, 2024 were $825,561 and $811,161, respectively. The estimated fair value is based on recent market prices of similar transactions, which is classified as Level 2 within the fair value hierarchy. The carrying values as of March 31, 2025 and December 31, 2024 were $910,633 and $911,118, respectively.

Due to the short term nature of our cash equivalents, we believe that the differences between their carrying value and fair value are insignificant.

Derivative Instruments and Mortgage Loans Held for Sale

In the normal course of business, our wholly-owned mortgage subsidiary, NVR Mortgage Finance, Inc. (“NVRM”), enters into contractual commitments to extend credit to our homebuyers with fixed expiration dates. The commitments become effective when the borrowers "lock-in" a specified interest rate within time frames

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

established by NVRM, and some of these commitments include a prepaid float down option. All borrowers are evaluated for credit worthiness prior to the extension of the commitment. Market risk arises if interest rates move adversely between the time of the "lock-in" of rates by the borrower and the sale date of the loan to an investor. To mitigate the effect of the interest rate risk inherent in providing rate lock commitments to borrowers, NVRM enters into optional or mandatory delivery forward sale contracts to sell whole loans and mortgage-backed securities to investors. The forward sales contracts lock-in a range of interest rates and price for the sale of loans similar to the specific rate lock commitments. NVRM does not engage in speculative or trading derivative activities. Both the rate lock commitments to borrowers and the forward sale contracts to investors are undesignated derivatives and, accordingly, are marked to fair value through earnings. As of March 31, 2025, there were contractual commitments to extend credit to borrowers aggregating $2,151,993 and open forward delivery contracts aggregating $2,176,644, which hedge both the rate lock commitments and closed loans held for sale.

The fair value of NVRM’s rate lock commitments to borrowers and the related input levels include, as applicable:

i)the assumed gain/loss of the expected resultant loan sale (Level 2);

ii)the effects of interest rate movements between the date of the rate lock and the balance sheet date (Level 2); and

iii)the value of the servicing rights associated with the loan (Level 2).

The assumed gain/loss considers the excess servicing to be received or buydown fees to be paid upon securitization of the loan. The excess servicing and buydown fees are calculated pursuant to contractual terms with investors. To calculate the effects of interest rate movements, NVRM utilizes applicable published mortgage-backed security prices, and multiplies the price movement between the rate lock date and the balance sheet date by the notional loan commitment amount. NVRM sells its loans primarily on a servicing released basis, and receives a servicing released premium upon sale. Thus, the value of the servicing rights is included in the fair value measurement and is based upon contractual terms with investors and varies depending on the loan type. NVRM assumes a fallout rate when measuring the fair value of rate lock commitments. Fallout is defined as locked loan commitments for which NVRM does not close a mortgage loan and is based on historical experience and market conditions.

The fair value of NVRM’s forward sales contracts to investors solely considers the market price movement of the same type of security between the trade date and the balance sheet date (Level 2). The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.

Mortgage loans held for sale are recorded at fair value when closed, and thereafter are carried at the lower of cost or fair value, net of deferred origination costs, until sold. Fair value is measured using Level 2 inputs. As of March 31, 2025, the fair value of loans held for sale of $391,914 included on the accompanying condensed consolidated balance sheet was increased by $7,403 from the aggregate principal balance of $384,511. As of December 31, 2024, the fair value of loans held for sale of $355,209 was increased by $2,720 from the aggregate principal balance of $352,489.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

The fair value measurement of NVRM's undesignated derivative instruments was as follows:

March 31, 2025December 31, 2024
Rate lock commitments:
Gross assets$49,730$34,935
Gross liabilities2,57225,739
Net rate lock commitments$47,158$9,196
Forward sales contracts:
Gross assets$100$6,822
Gross liabilities9,7191,122
Net forward sales contracts$(9,619)$5,700

As of March 31, 2025, the net rate lock commitments are reported in mortgage banking "Other assets" and the net forward sales contracts are reported in mortgage banking "Accounts payable and other liabilities" on the accompanying condensed consolidated balance sheets. As of December 31, 2024, the net rate lock commitments and the net forward sales contracts are reported in mortgage banking "Other assets".

The fair value measurement as of March 31, 2025 was as follows:

Notional or Principal AmountAssumed Gain From Loan SaleInterest Rate Movement EffectServicing Rights ValueSecurity Price ChangeTotal Fair Value Measurement Gain/(Loss)
Rate lock commitments$2,151,993$5,708$10,665$30,785$—$47,158
Forward sales contracts$2,176,644———(9,619)(9,619)
Mortgages held for sale$384,5111,551(14)5,866—7,403
Total fair value measurement$7,259$10,651$36,651$(9,619)$44,942

The total fair value measurement as of December 31, 2024 was a net gain of $17,616. NVRM recorded a fair value adjustment to income of $27,326 and a fair value adjustment to expense of $4,171 for the three months ended March 31, 2025 and March 31, 2024, respectively. Unrealized gains/losses from the change in the fair value measurements are included in earnings as a component of mortgage banking fees in the accompanying condensed consolidated statements of income. The fair value measurement will be impacted in the future by the change in the value of the servicing rights, interest rate movements, security price fluctuations, and the volume and product mix of NVRM’s closed loans and locked loan commitments.

11. Debt

As of March 31, 2025, we had the following debt instruments outstanding:

Senior Notes

Our outstanding Senior Notes have an aggregate principal balance of $900,000, mature on May 15, 2030 and bear interest at 3.00%, payable semi-annually in arrears on May 15 and November 15. The Senior Notes are senior unsecured obligations and rank equally in right of payment with any of our existing and future unsecured senior indebtedness. The Senior Notes were issued in three separate issuances, $600,000 issued at a discount to yield 3.02%, and the two additional issuances totaling $300,000 issued at a premium to yield 2.00%. The Senior Notes have been reflected net of the unamortized discount or premium, as applicable, and the unamortized debt issuance costs in the accompanying condensed consolidated balance sheet.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

The indenture governing the Senior Notes does not contain any financial covenants; however, it does contain, among other items, and subject to certain exceptions, covenants that restrict our ability to create, incur, assume or guarantee secured debt, enter into sale and leaseback transactions and conditions related to mergers and/or the sale of assets. We were in compliance with all covenants under the Senior Notes as of March 31, 2025.

Credit Agreement

On March 11, 2025, we entered into the Second Amended and Restated Credit Agreement ("Amended Credit Agreement") providing for a $300,000 senior unsecured revolving credit facility among the lenders and Bank of America, N.A. as Administrative Agent. The Amended Credit Agreement replaced the Company's previous credit agreement dated February 12, 2021 and most recently amended December 9, 2022, that contained substantially similar terms, and extends the maturity date from February 11, 2026 to March 11, 2030. The Amended Credit Agreement has an uncommitted accordion feature allowing the Company to increase the commitment by an additional $300,000, subject to certain conditions and availability of additional Lender commitments. Additionally, the Amended Credit Agreement provides for a $100,000 sublimit for the issuance of letters of credit, of which approximately $10,700 was outstanding as of March 31, 2025.

The Amended Credit Agreement contains financial covenants that are substantially similar to those set forth in the prior Credit Agreement, including a maximum leverage ratio, interest coverage ratio/minimum liquidity and a minimum tangible net worth. There were no borrowings outstanding under the Facility as of March 31, 2025.

Repurchase Agreement

NVRM provides for its mortgage origination and other operating activities using cash generated from its operations, borrowings from its parent company, NVR, as well as a revolving mortgage repurchase agreement (the “Repurchase Agreement”), which is non-recourse to NVR. The Repurchase Agreement provides for loan purchases up to $150,000, subject to certain sub-limits. Amounts outstanding under the Repurchase Agreement are collateralized by the Company’s mortgage loans held for sale.

The Repurchase Agreement expires on July 14, 2025. As of March 31, 2025, there were no borrowing base limitations reducing the amount available under the Repurchase Agreement and there were no borrowings outstanding.

12. Commitments and Contingencies

We are involved in various litigation arising in the ordinary course of business. In the opinion of management, and based on advice of legal counsel, this litigation is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Legal costs incurred in connection with outstanding litigation are expensed as incurred.

13. Leases

We have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have finance leases for certain production equipment and facilities which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our finance lease ROU assets and finance lease liabilities were $38,732 and $41,397, respectively, as of March 31, 2025, and $37,638 and $40,036, respectively, as of December 31, 2024. Our leases have remaining lease terms of up to 15.4 years, some of which include options to extend the lease for up to 20 years, and some of which include options to terminate the lease.

We recognize operating lease expense on a straight-line basis over the lease term. We have elected to use the portfolio approach for certain equipment leases which have similar lease terms and payment schedules. Additionally, for certain equipment we account for the lease and non-lease components as a single lease component. Our sublease income is de minimis.

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

We have certain leases, primarily the leases of model homes, which have initial lease terms of twelve months or less ("Short-term leases"). We elected to exclude these leases from the recognition requirements under Topic 842, and these leases have not been included in our recognized ROU assets and lease liabilities.

The components of lease expense were as follows:

Three Months Ended March 31,
20252024
Lease expense
Operating lease expense$10,316$9,347
Finance lease expense:
Amortization of ROU assets1,333562
Interest on lease liabilities452113
Short-term lease expense8,3077,900
Total lease expense$20,408$17,922

Other information related to leases was as follows:

Three Months Ended March 31,
20252024
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$8,230$7,511
Operating cash flows from finance leases452113
Financing cash flows from finance leases1,066462
ROU assets obtained in exchange for lease obligations:
Operating leases$13,071$1,390
Finance leases$2,427$1,846
March 31, 2025December 31, 2024
Weighted-average remaining lease term (in years):
Operating leases5.96.0
Finance leases9.39.6
Weighted-average discount rate:
Operating leases4.6%4.5%
Finance leases4.7%4.7%

14. Income Taxes

Our effective tax rate for the three months ended March 31, 2025 was 25.5% compared to 16.2% for the three months ended March 31, 2024. The increase in the effective tax rate quarter over quarter is primarily attributable to recognizing a lower income tax benefit related to excess tax benefits from stock option exercises in the first quarter

NVR, Inc.

Notes to Condensed Consolidated Financial Statements

(dollars in thousands, except per share data)

(unaudited)

of 2025. For the three months ended March 31, 2025 and 2024, we recognized $2,664 and $43,793, respectively, in such income tax benefits.

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