NVR (NVR) 8-K NVR, Inc. Announces a 52% Increase In Earnings Per Share and a 9% Increase In New Orders for the Third Quarter of 2004

Exhibit 99.1

NVR, INC. ANNOUNCES A 52% INCREASE IN EARNINGS PER SHARE AND A 9% INCREASE IN NEW ORDERS FOR THE THIRD QUARTER OF 2004

FOR IMMEDIATE RELEASE	CONTACT: Dan Malzahn
	OFFICE: 703-761-2137

October 18, 2004 — McLean, VA — NVR, Inc. (AMEX: NVR), one of the nation’s largest homebuilding and mortgage banking companies, today announced that diluted earnings per share for its third quarter ended September 30, 2004 exceeded the 2003 third quarter by 52% and net income increased 35%. Net income for the 2004 third quarter was $147,679,000, $19.04 per diluted share, compared to net income of $109,403,000, $12.55 per diluted share, for the same period of 2003. Total revenues increased 19% to $1,168,550,000 for the quarter when compared to $980,380,000 for the same period of 2003. In addition, the Company reported that new orders for the quarter ended September 2004 increased by 9% when compared to the third quarter of 2003. Backlog at the end of the period increased 6% to 7,775 units when compared to the same time last year. The dollar value of the backlog units totaled $2,939,665,000 at the end of the September 2004 quarter, a 22% increase from a year earlier.

Homebuilding revenues for the three months ended September 30, 2004 totaled $1,146,271,000, 20% higher than the year earlier period. Income before tax from the homebuilding segment totaled $231,344,000, an increase of 37% when compared to the third quarter of the previous year. Gross profit margins improved to 26.0% for the third quarter of 2004 when compared to 24.8% for the same quarter of 2003. The margin improvement primarily resulted from the ability to raise prices in certain markets that more than off-set rising land and material costs.

The Company reported that closed loan production from the mortgage banking segment increased 18% during the September 2004 quarter when compared to the third quarter of 2003. Pre-tax income for the 2004 third quarter decreased to $14,787,000, 4% lower than the same period of 2003. This decrease is primarily attributed to a shift away from fixed rate mortgages to adjustable rate and brokered mortgages, both of which are generally less profitable than fixed rate mortgages.

For the nine months ended September 30, 2004, total revenues for NVR, Inc. were $3,050,393,000, 19% higher than the $2,572,455,000 reported for the same period of 2003. Net income for the nine months ended September 30, 2004 was $364,266,000, $46.36 per diluted share, compared to $292,301,000, $33.53 per diluted share, for the comparable period of 2003, increases of 25% and 38%, respectively.

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Looking forward, the Company anticipates full year 2004 net income to be ahead of the prior year by approximately 22% to 24%. In addition, the Company reported that during the first nine months of 2004 it repurchased approximately 615,000 shares of its common stock.

Some of the statements in this release made by the Company constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “believes,” “expects,” “may,” “will,” “should” or “anticipates” or the negative thereof or other variations thereof or comparable terminology, or by discussion of strategies, each of which involves risks and uncertainties. All statements other than those of historical facts included herein, including those regarding market trends, NVR’s financial position, business strategy, projected plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to, general economic and business conditions (on both a national and regional level), interest rate changes, access to suitable financing, competition, the availability and cost of land and other raw materials used by NVR in its homebuilding operations, shortages of labor, weather related slow downs, building moratoria, governmental regulation, the ability of NVR to integrate any acquired business, fluctuation and volatility of stock and other financial markets and other factors over which NVR has little or no control. The Company has no obligation to update such forward-looking statements.

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NVR, Inc.

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,
	2004			2003
Homebuilding:
Revenues	$	1,146,271		$	956,848
Other income		675			998
Cost of sales		(848,195	)		(719,507	)
Selling, general and administrative		(64,482	)		(57,002	)
Operating income		234,269			181,337
Loss from extinguishment of 8% Senior Notes due 2005		—			(8,503	)
Interest expense		(2,925	)		(3,425	)
Homebuilding income		231,344			169,409
Mortgage Banking:
Mortgage banking fees		20,248			20,844
Interest income		1,035			1,393
Other income		321			297
General and administrative		(6,555	)		(6,869	)
Interest expense		(262	)		(282	)
Mortgage banking income		14,787			15,383
Income before taxes		246,131			184,792
Income tax expense		(98,452	)		(75,389	)
Net income	$	147,679		$	109,403
Basic earnings per share	$	23.16		$	15.30
Diluted earnings per share	$	19.04		$	12.55
Basic average shares outstanding		6,377			7,151
Diluted average shares outstanding		7,758			8,716

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NVR, Inc.

Condensed Consolidated Statements of Income

(in thousands, except per share data)

(unaudited)

	Nine Months Ended September 30,
	2004			2003
Homebuilding:
Revenues	$	2,991,789		$	2,508,786
Other income		2,002			2,522
Cost of sales		(2,227,184	)		(1,882,154	)
Selling, general and administrative		(187,305	)		(168,401	)
Operating income		579,302			460,753
Loss from extinguishment of 8% Senior Notes due 2005		—			(8,503	)
Interest expense		(8,878	)		(10,486	)
Homebuilding income		570,424			441,764
Mortgage Banking:
Mortgage banking fees		52,899			56,483
Interest income		2,937			3,960
Other income		766			704
General and administrative		(19,037	)		(17,196	)
Interest expense		(879	)		(1,091	)
Mortgage banking income		36,686			42,860
Income before taxes		607,110			484,624
Income tax expense		(242,844	)		(192,323	)
Net income	$	364,266		$	292,301
Basic earnings per share	$	56.21		$	41.06
Diluted earnings per share	$	46.36		$	33.53
Basic average shares outstanding		6,481			7,118
Diluted average shares outstanding		7,858			8,718

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NVR, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except per share and share data)

	September 30, 2004		December 31, 2003
	(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents	$	256,141	$	228,589
Receivables		16,001		9,550
Inventory:
Lots and housing units, covered under sales agreements with customers		659,103		480,492
Unsold lots and housing units		35,456		32,888
Manufacturing materials and other		11,747		10,393
		706,306		523,773
Assets not owned, consolidated per FIN 46		66,477		12,807
Property, plant and equipment, net		24,435		24,531
Reorganization value in excess of amounts allocable to identifiable assets, net		41,580		41,580
Goodwill, net		6,379		6,379
Contract land deposits		335,660		284,432
Other assets		109,461		117,575
		1,562,440		1,249,216
Mortgage Banking:
Cash and cash equivalents		4,749		3,630
Mortgage loans held for sale, net		127,468		96,772
Mortgage servicing rights, net		147		181
Property and equipment, net		1,041		875
Reorganization value in excess of amounts allocable to identifiable assets, net		7,347		7,347
Other assets		3,252		5,084
		144,004		113,889
Total assets	$	1,706,444	$	1,363,105

(Continued)

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NVR, Inc.

Condensed Consolidated Balance Sheets (Continued)

(in thousands, except per share and share data)

	September 30, 2004			December 31, 2003
	(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Homebuilding:
Accounts payable	$	224,550		$	185,913
Accrued expenses and other liabilities		257,705			243,223
Liabilities related to assets not owned, consolidated per FIN 46		43,453			12,071
Customer deposits		212,136			157,005
Other term debt		4,205			4,519
Senior notes		200,000			200,000
		942,049			802,731
Mortgage Banking:
Accounts payable and other liabilities		14,047			12,166
Notes payable		102,368			53,340
		116,415			65,506
Total liabilities		1,058,464			868,237
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,597,709 shares issued as of September 30, 2004 and December 31, 2003, respectively		206			206
Additional paid-in-capital		375,207			335,346
Deferred compensation trust – 492,118 and 510,118 shares as of September 30, 2004 and December 31, 2003, respectively, of NVR, Inc. common stock		(63,877	)		(64,725	)
Deferred compensation liability		63,877			64,725
Retained earnings		1,752,131			1,387,865
Less treasury stock at cost – 14,196,128 and 13,870,368 shares at September 30, 2004 and December 31, 2003, respectively		(1,479,564	)		(1,228,549	)
Total shareholders’ equity		647,980			494,868
Total liabilities and shareholders’ equity	$	1,706,444		$	1,363,105

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NVR, Inc.

Operating Activity

(unaudited)

(dollars in thousands)

	Three Months Ended September 30,
	2004			2003
Homebuilding data:
New orders (units)
Washington		779			639
Baltimore		312			431
North (1)		1,102			933
South (2)		525			489
Total		2,718			2,492
Average new order price	$	374.3		$	320.0
Settlements (units)
Washington		938			821
Baltimore		420			403
North (1)		1,403			1,256
South (2)		672			709
Total		3,433			3,189
Average settlement price	$	332.9		$	299.2
Community count (average)		440			424
Mortgage banking data:
Loan closings	$	739,834		$	624,637
Capture rate		85	%		82	%
Common stock information:
Weighted average basic shares outstanding		6,377,000			7,151,000
Weighted average diluted shares outstanding		7,758,000			8,716,000
Number of shares repurchased		63,570			293,700
Aggregate cost of shares repurchased	$	29,858		$	124,812

(1) Delaware, New Jersey, New York, Ohio and Pennsylvania

(2) North Carolina, South Carolina, Tennessee and Richmond, VA

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NVR, Inc.

Operating Activity

(unaudited)

(dollars in thousands)

	Nine Months Ended September 30,
	2004				2003
Homebuilding data:
New orders (units)
Washington		2,945				2,572
Baltimore		1,218				1,410
North (1)		3,878				3,558
South (2)		1,996				1,971
Total		10,037				9,511
Average new order price	$	358.5			$	309.0
Settlements (units)
Washington		2,425				2,405
Baltimore		1,314				1,161
North (1)		3,692				3,230
South (2)		1,721				1,752
Total		9,152				8,548
Average settlement price	$	325.9			$	292.6
Backlog (units)
Washington		2,803				2,401
Baltimore		961				1,192
North (1)		2,692				2,523
South (2)		1,319				1,204
Total		7,775				7,320
Average backlog price	$	378.1			$	328.0
Lots controlled at end of period		76,000				64,000
Mortgage banking data:
Loan closings	$	1,891,771			$	1,719,191
Capture rate		84	%			84	%
Common stock information:
Shares outstanding at end of period		6,401,581				7,083,297
Weighted average basic shares outstanding		6,481,000				7,118,000
Weighted average diluted shares outstanding		7,858,000				8,718,000
Number of shares repurchased		615,189				643,985
Aggregate cost of shares repurchased	$	275,715		��	$	240,264

(1) Delaware, New Jersey, New York, Ohio and Pennsylvania

(2) North Carolina, South Carolina, Tennessee and Richmond, VA

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