United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-12378
NVR, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1394360
- ----------------------------- ----------------------------
(State or other jurisdiction of (IRS employer identification
incorporation or organization) number)
7601 Lewinsville Road, Suite 300
McLean, Virginia 22102
(703) 761-2000
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
(Not Applicable)
- --------------------------------------------------------------------------------
(Former name, former address, and former fiscal
year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
As of April 15, 2002 there were 7,212,856 total shares of common stock
outstanding.
NVR, Inc.
Form 10-Q
INDEX
===============================================================================================================
Page
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Part I FINANCIAL INFORMATION
------
Item 1. NVR, Inc. Condensed Consolidated Financial Statements
-----------------------------------------------------
Condensed Consolidated Balance Sheets at March 31, 2002
(unaudited) and December 31, 2001 ................................ 3
Condensed Consolidated Statements of Income for the Three
Months Ended March 31, 2002 (unaudited) and
March 31, 2001 (unaudited) ....................................... 5
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2002 (unaudited) and
March 31, 2001 (unaudited) ....................................... 6
Notes to Condensed Consolidated Financial Statements ............. 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .............................. 11
Part II OTHER INFORMATION
-------
Item 4. Submission of Matters to a Vote of Security Holders .............. 14
Item 6. Exhibits and Reports on Form 8-K ................................. 14
Exhibit Index .................................................... 14
Signature ........................................................ 15
2
PART I. FINANCIAL INFORMATION
- -------
Item 1. Financial Statements
- -------
NVR, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands, except per share data)
March 31, 2002 December 31, 2001
-------------- -----------------
(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $ 73,621 $ 134,181
Receivables 6,387 5,745
Inventory:
Lots and housing units, covered under
sales agreements with customers 389,590 356,275
Unsold lots and housing units 32,723 37,265
Manufacturing materials and other 6,996 8,835
------------ -----------
429,309 402,375
Property, plant and equipment, net 15,030 15,397
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill, net 6,379 6,379
Contract land deposits 165,547 155,652
Other assets 84,081 76,556
------------ -----------
821,934 837,865
------------ -----------
Mortgage Banking:
Cash and cash equivalents 3,893 4,430
Mortgage loans held for sale, net 136,103 142,059
Mortgage servicing rights, net 5,306 1,328
Property and equipment, net 776 781
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 1,238 1,237
------------ -----------
154,663 157,182
------------ -----------
Total assets $ 976,597 $ 995,047
============ ===========
(Continued)
See notes to condensed consolidated financial statements.
3
NVR, Inc.
Condensed Consolidated Balance Sheets (Continued)
(dollars in thousands, except per share data)
March 31, 2002 December 31, 2001
-------------- -----------------
(unaudited)
LIABILITIES AND SHAREHOLDERS'
EQUITY
Homebuilding:
Accounts payable $ 129,049 $ 127,658
Accrued expenses and other liabilities 132,241 114,781
Obligations under incentive plans 55,008 72,241
Customer deposits 98,698 81,924
Other term debt 5,181 5,259
Senior notes 115,000 115,000
------------ -----------
535,177 516,863
------------ -----------
Mortgage Banking:
Accounts payable and other liabilities 12,423 10,355
Notes payable 116,207 118,711
------------ -----------
128,630 129,066
------------ -----------
Total liabilities 663,807 645,929
------------ -----------
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000
shares authorized; 20,614,365 shares
issued as of March 31, 2002 and December 31,
2001 206 206
Additional paid-in-capital 210,560 193,757
Deferred compensation trust-371,788 and
393,955 shares as of March 31, 2002
and December 31, 2001, respectively, of
NVR, Inc. common stock (23,157) (24,201)
Deferred compensation liability 23,157 24,201
Retained earnings 713,317 636,604
Less treasury stock at cost-13,426,743 and
13,139,332 shares at March 31, 2002 and
December 31, 2001, respectively (611,293) (481,449)
------------ ---------
Total shareholders' equity 312,790 349,118
------------ -----------
Total liabilities and shareholders'
equity $ 976,597 $ 995,047
============ ===========
See notes to condensed consolidated financial statements.
4
NVR, Inc.
Condensed Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended Three Months Ended
March 31, 2002 March 31, 2001
---------------------- ---------------------
Homebuilding:
Revenues $ 674,982 $ 519,249
Other income 758 1,058
Cost of sales (513,231) (407,165)
Selling, general and administrative (47,417) (34,516)
Amortization of reorganization value
in excess of amounts allocable to
identifiable assets/goodwill - (1,813)
----------- -----------
Operating income 115,092 76,813
Interest expense (3,064) (2,771)
----------- -----------
Homebuilding income 112,028 74,042
----------- -----------
Mortgage Banking:
Mortgage banking fees 14,861 9,990
Interest income 1,526 1,258
Other income 128 141
General and administrative (5,081) (4,918)
Amortization of reorganization value
in excess of amounts allocable to
identifiable assets/goodwill - (272)
Interest expense (327) (374)
----------- -----------
Operating income 11,107 5,825
----------- -----------
Total segment income 123,135 79,867
Income tax expense (46,422) (31,947)
----------- -----------
Net income $ 76,713 $ 47,920
=========== ===========
Basic earnings per share $ 10.37 $ 5.74
=========== ===========
Diluted earnings per share $ 8.17 $ 4.84
=========== ===========
See notes to condensed consolidated financial statements.
5
NVR, Inc.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
Three Months Ended Three Months Ended
March 31, 2002 March 31, 2001
--------------------- ------------------
Cash flows from operating activities:
Net income $ 76,713 $ 47,920
Adjustments to reconcile net income to
net cash (used) provided by operating activities:
Depreciation and amortization 1,777 3,240
Mortgage loans closed (477,737) (359,475)
Proceeds from sales of mortgage loans 489,140 363,696
Gain on sales of mortgage servicing rights (316) (378)
Gain on sale of loans (10,761) (6,445)
Net change in assets and liabilities
Increase in inventories (26,934) (39,035)
Increase in contract land deposits (9,895) (15,588)
Increase in receivables (645) (3,272)
Increase in accounts payable and accrued expenses 60,260 34,324
Decrease in obligations under incentive plans (17,233) (19,481)
Other, net (5,496) (3,042)
------------- -------------
Net cash provided by operating activities 78,873 2,464
------------- -------------
Cash flows from investing activities:
Purchase of property, plant and equipment (985) (633)
Principal payments on mortgage loans held for sale 688 187
Proceeds from sales of mortgage servicing rights, net 456 4,474
Other, net 22 (1)
------------- -------------
Net cash provided by investing activities 181 4,027
------------- -------------
Cash flows from financing activities:
Purchase of NVR common stock for
funding of deferred compensation plan (37,469) (3,542)
Net (repayments) borrowings under notes payable and other
term debt (2,582) 52,537
Payment of senior note consent fees (2,125) (4,928)
Redemption of mortgage-backed bonds - (186)
Purchase of treasury stock (103,339) (82,798)
Proceeds from exercise of stock options 5,364 3,996
------------- -------------
Net cash used by financing activities (140,151) (34,921)
------------- -------------
Net decrease in cash and cash equivalents (61,097) (28,430)
Cash and cash equivalents, beginning of the period 138,611 137,708
------------- -------------
Cash and cash equivalents, end of period $ 77,514 $ 109,278
============= =============
Supplemental disclosures of cash flow information:
Interest paid during the period $ 648 $ 845
============= =============
Income taxes paid, net of refunds $ 12,344 $ 10,119
============= =============
See notes to condensed consolidated financial statements.
6
NVR, Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share and share data)
1. Basis of Presentation
The accompanying unaudited, condensed consolidated financial statements
include the accounts of NVR, Inc. ("NVR" or the "Company") and its subsidiaries.
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 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 accounting principles generally accepted in the United States of America for
complete financial statements. Because the accompanying condensed consolidated
financial statements do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America, they should be read in conjunction with the financial statements and
notes thereto included in the Company's 2001 Annual Report on Form 10-K. In the
opinion of management, all adjustments (consisting only of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002.
For the quarters ended March 31, 2002 and 2001, comprehensive income
equaled net income; therefore, a separate statement of comprehensive income is
not included in the accompanying financial statements.
2. Shareholders' Equity
A summary of changes in shareholders' equity is presented below:
Additional Deferred Deferred
Common Paid-In Retained Treasury Comp. Comp.
Stock Capital Earnings Stock Trust Liability
-------- ---------- ------------- ----------- ---------- ------------
Balance, December 31, 2001 $ 206 $193,757 $ 636,604 $(481,449) $ (24,201) $ 24,201
Net income - - 76,713 - - -
Deferred compensation activity - - - - 1,044 (1,044)
Purchase of common stock
for treasury - - - (103,339) - -
Purchase of common stock
for deferred compensation plan - - - (37,469) -
Option activity - 5,364 - - - -
Tax benefit from stock-based
compensation activity - 22,403 - - - -
Treasury shares issued
upon option exercise - (10,964) - 10,964 - -
--------- ---------- ----------- ----------- ---------- ---------
Balance, March 31, 2002 $ 206 $ 210,560 $ 713,317 $(611,293) $ (23,157) $ 23,157
========= ========== =========== =========== ========== =========
Approximately 263,400 options were exercised during the first quarter
of 2002, with NVR receiving $5,364 in aggregate equity proceeds.
7
NVR, Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share and share data)
The Company repurchased approximately 380,000 shares of its common
stock at an aggregate purchase price of $103,339 during the three months ended
March 31, 2002. In addition, 170,732 shares of the Company's common stock were
purchased at an aggregate purchase price of $37,469 by the Company's Rabbi
Trust, which holds the investments for the Deferred Compensation Plan. These
shares are recorded in the Company's treasury stock account until such shares
are vested under the respective compensation plan (see footnote 4).
3. Segment Disclosures
NVR operates in two business segments: homebuilding and mortgage
banking. Corporate general and administrative expenses are fully allocated to
the homebuilding and mortgage banking segments in the information presented
below.
For the Three Months Ended March 31, 2002
- -----------------------------------------
Homebuilding Mortgage Banking Totals
------------ ---------------- ------
Revenues from external customers $ 674,982 $ 14,861 $ 689,843 (a)
Segment profit 112,028 11,107 123,135 (a)
Segment assets 773,975 147,316 921,291 (b)
(a) Total amounts for the reportable segments equal the respective amounts for
the consolidated enterprise.
(b) The following reconciles segment assets to the respective amounts for the
consolidated enterprise:
Homebuilding Mortgage Banking Totals
------------ ---------------- ------
Segment assets $ 773,975 $ 147,316 $ 921,291
Add: Excess reorganization value
and goodwill 47,959 7,347 55,306
-------------- -------------- -------------
Total consolidated assets $ 821,934 $ 154,663 $ 976,597
============== ============== =============
For the Three Months Ended March 31, 2001
- -----------------------------------------
Homebuilding Mortgage Banking Totals
------------ ---------------- ------
Revenues from external customers $ 519,249 $ 9,990 $ 529,239 (c)
Segment profit 75,855 6,097 81,952 (d)
Segment assets 675,163 137,367 812,530 (d)
(c) Total amounts for the reportable segments equal the respective amounts for
the consolidated enterprise.
(d) The following reconciles segment profit and segment assets to the
respective amounts for the consolidated enterprise:
Homebuilding Mortgage Banking Totals
------------ ---------------- ------
Segment profit $ 75,855 $ 6,097 $ 81,952
Less: amortization of excess
reorganization value and goodwill (1,813) (272) (2,085)
-------------- -------------- -------------
Consolidated income before income
taxes $ 74,042 $ 5,825 $ 79,867
============== ============== =============
Segment assets $ 675,163 $ 137,367 $ 812,530
Add: Excess reorganization value
and goodwill 53,400 8,162 61,562
-------------- -------------- -------------
Total consolidated assets $ 728,563 $ 145,529 $ 874,092
============== ============== =============
8
NVR, Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share and share data)
4. Deferred Incentive Compensation Plan
In January 2002, the Company amended the High Performance Compensation
Plan (the "HP Plan") to require executive officers to defer receipt of
compensation earned under the HP Plan for the three-year measurement period
ended December 31, 2001 into the Deferred Compensation Plan until the officer's
separation of service from the Company. The effect of this amendment is
estimated to produce a $7,975 deferred tax benefit for compensation expense
recognized for the HP Plan from inception through December 31, 2001. Amounts
deferred into the Deferred Compensation Plan are invested in shares of NVR
common stock, which, if vested, will be distributed to the executive officer
upon the officer's separation of service. Shares held in the Deferred
Compensation Plan for participants terminating prior to full vesting revert back
to the Company, and any related compensation expense previously recognized will
be reversed in the period of termination.
The Company recognizes compensation expense using a graded vesting
method over the six-year period from inception of the measurement period of the
HP Plan through final vesting. During the first quarter of 2002 and 2001, the
Company recognized compensation expense of $3,645 and $1,949, respectively,
under the HP Plan covering the three-year measurement period ended December 31,
2001.
During the first quarter of 2002, the Company contributed $37,469 to a
Rabbi Trust, which holds the investment for the Deferred Compensation Plan, to
fund the total obligations earned by the executive officers under the HP Plan
for the three-year measurement period ended December 31, 2001. The Rabbi Trust
in turn purchased 170,732 shares of NVR common stock in the open market. In
accordance with Emerging Issue Task Force Abstract 97-14, Accounting for
Deferred Compensation Arrangements Where Amounts Earned are Held in a Rabbi
Trust and Invested, the shares purchased by the Rabbi Trust will be initially
classified as treasury stock in the equity section of the accompanying balance
sheet. At each vesting date, the historical basis of the vested shares will be
reclassified to the deferred compensation trust caption in the equity section of
the balance sheet. Additionally, the portion of the accrued compensation
obligation previously expensed relative to the vested shares will be
reclassified from obligations under incentive plans within the liability section
of the balance sheet to the deferred compensation liability caption in the
equity section. The deferred compensation trust and deferred compensation
liability accounts will be relieved upon distribution of the shares.
In accordance with Financial Accounting Standards Board Statement No.
128, Earnings per Share ("SFAS 128"), for purposes of calculating basic and
diluted earnings per share, the Company classifies the vested shares held in the
deferred compensation trust as outstanding shares, weighted to reflect the
portion of the period during which the shares were vested. Unvested shares held
in the deferred compensation trust are considered outstanding only for purposes
of calculating diluted earnings per share. The dilutive effect of such shares is
computed using the treasury stock method as defined in SFAS 128.
5. Excess Reorganization Value and Goodwill
The Company has adopted Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets ("SFAS 142"), which changed the
accounting for goodwill and reorganization value in excess of amounts allocable
to identifiable assets ("excess reorganization value") from an amortization
approach to an impairment-only approach. SFAS 142 requires goodwill and excess
reorganization value, which is no longer subject to amortization, to be tested
for impairment as of the beginning of the fiscal year in which SFAS 142 is
adopted. The Company has completed the assessment of impairment during the first
quarter of 2002 and determined that there is no impairment of either goodwill or
excess reorganization value. Following is the pro forma effect of adoption of
SFAS 142 on the three month period ended March 31, 2001:
9
NVR, Inc.
Notes to Condensed Consolidated Financial Statements
(dollars in thousands, except per share and share data)
For the Three Months Ended March 31,
2002 2001
--------- --------
Net income $ 76,713 $ 47,920
Add back:
Goodwill, net of tax - 165
Excess reorganization value - 1,812
---------- ----------
Adjusted net income $ 76,713 $ 49,897
========== ==========
Basic earnings per share:
Net income $ 10.37 $ 5.74
Goodwill amortization - 0.02
Excess reorganization value amortization - 0.22
---------- ----------
Adjusted net income $ 10.37 $ 5.98
========== ==========
Diluted earnings per share:
Net income $ 8.17 $ 4.84
Goodwill amortization - 0.02
Excess reorganization value amortization - 0.18
---------- ----------
Adjusted net income $ 8.17 $ 5.04
========== ==========
10
Item 2. Management's Discussion and Analysis of Financial Condition and
- ------- Results of Operations
Forward-Looking Statements
Some of the statements in this Form 10-Q, as well as statements made by
NVR in periodic press releases and other public communications, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1834. 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 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 any 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.
Results of Operations for the Three Months Ended March 31, 2002 and 2001
NVR, Inc. ("NVR") operates in two business segments: homebuilding and
mortgage banking. Corporate general and administrative expenses are fully
allocated to the homebuilding and mortgage banking segments in the information
presented below. Unless otherwise indicated, all references to dollars in this
Item 2 are in thousands, except per share and other share data.
Homebuilding Segment
Three Months Ended March 31, 2002 and 2001
During the first quarter of 2002, homebuilding operations generated
revenues of $674,982 compared to revenues of $519,249 in the first quarter of
2001. The change in revenues was due primarily to a 19% increase in the number
of units settled to 2,628 units in 2002 from 2,206 units in 2001 and to a 9%
increase in the average selling price to $256.3 in 2002 from $234.7 in 2001. The
increase in settlements is a result of higher backlog at the beginning of the
2002 period as compared to the beginning of the same 2001 period and an improved
backlog turn partially due to the mild winter conditions experienced in most of
NVR's markets during the first quarter of 2002. The increase in the average
selling price is attributable to a larger percentage of settlements of single
family detached homes, which, in comparison, are generally higher priced than
NVR's single family attached homes, and to price increases in certain of NVR's
markets. New orders increased 6% during the first quarter of 2002 to 2,989 units
compared with the 2,823 new orders generated during the same period in 2001.
Gross profit margins in the first quarter of 2002 increased to 24.0% as
compared to 21.6% for the quarter ended March 31, 2001. The increase in gross
margins was due to continuing favorable market conditions, which provided NVR
the opportunity to increase selling prices in certain of its markets,
11
relatively stable costs for lumber and certain other commodities and to NVR's
ongoing focus on controlling construction costs.
Selling, general and administrative ("SG&A") expenses for the first
quarter of 2002 increased $12,901 from the first quarter of 2001, and increased
as a percentage of revenues to 7.0% in 2002 from 6.6% in the first quarter of
2001. The increase in SG&A dollars and as a percentage of revenues is primarily
attributable to the aforementioned increase in revenues, an increase in
personnel to facilitate continued growth in existing markets and increased costs
for management incentive plans.
Backlog units and dollars were 5,919 and $1,699,214, respectively, at
March 31, 2002 compared to 5,765 and $1,490,932, respectively, at March 31, 2001
The increase in backlog dollars is primarily due to a 13% increase in the
average selling price for the six-month period ended March 31, 2002 as compared
to the same 2001 period.
Mortgage Banking Segment
Three Months Ended March 31, 2002 and 2001
The mortgage banking segment had operating income of $11,107 during the
quarter ended March 31, 2002 compared to operating income of $6,097 for the
three months ended March 31, 2001. Loan closings were $477,737 and $359,475 for
the three months ended March 31, 2002 and March 31, 2001, respectively, an
increase of 33%. The $118,262 increase in the dollar volume of loan closings is
primarily attributable to a 22% increase in the number of loans closed, and to a
9% increase in the average loan amount. The improvement in operating income is
primarily the result of higher mortgage banking fees due to the increased closed
loan volume, and to the segment's focus on controlling general and
administrative costs. The mortgage banking segment continues to focus almost
exclusively on serving NVR's homebuilding operations. This focus has resulted in
the mortgage segment capturing an increased percentage of the loans and title
work associated with the growing homebuilding segment's customer base. As noted
above, the homebuilding segment's settlements increased to 2,628 in the first
quarter of 2002 from 2,206 in the first quarter of 2001.
Liquidity and Capital Resources
NVR has $255,000 available for issuance under a shelf registration
statement filed with the Securities and Exchange Commission on January 20, 1998.
The shelf registration statement, as declared effective on February 27, 1998,
provides that securities may be offered from time to time in one or more series
and in the form of senior or subordinated debt.
NVR's homebuilding segment generally provides for its working capital
cash requirements using cash generated from operations and a short-term
unsecured working capital revolving credit facility (the "Facility"). The
Facility expires on May 31, 2004. The Facility provides for unsecured borrowings
of up to $85,000, subject to certain borrowing base limitations. Up to
approximately $40,000 of the Facility is currently available for issuance in the
form of letters of credit of which $18,844 was outstanding at March 31, 2002.
There were no direct borrowings outstanding under the Facility as of March 31,
2002. At March 31, 2002, there were no borrowing base limitations reducing the
amount available to NVR for borrowings.
NVR's mortgage banking segment provides for its mortgage origination
and other operating activities using cash generated from operations as well as a
short-term credit facility. NVR's mortgage banking segment has available a
mortgage warehouse facility with an aggregate available borrowing limit of
$125,000 to fund its mortgage origination activities. There was $110,440
outstanding under this facility at March 31, 2002. NVR's mortgage banking
segment also currently has available an aggregate of $75,000 of borrowing
capacity in various uncommitted gestation and repurchase agreements. There was
an aggregate of $5,603 outstanding under such gestation and repurchase
agreements at March 31, 2002.
12
On March 14, 2002, NVR successfully completed a solicitation of
consents from holders of its 8% Senior Notes due 2005 ("Notes") to amend the
Indenture governing the Notes. The amendment to the Indenture allows for NVR to
repurchase up to an aggregate $100 million of its capital stock, in addition to
that otherwise provided under the Company's Indenture, in one or more open
market and/or privately negotiated transactions through June 1, 2003. On March
19, 2002, NVR paid to each holder of the Notes who provided a consent, an amount
equal to 2.0% of the principal amount of such holder's Notes. The aggregate fee
paid was deferred and will be amortized as an adjustment to interest expense
over the remaining life of the Notes.
The Company repurchased approximately 380,000 shares of its common
stock at an aggregate purchase price of $103,339 during the three months ended
March 31, 2002. In addition, the Company's Rabbi Trust, which holds the
investments for the Deferred Compensation Plan, purchased 170,732 shares of the
Company's common stock at an aggregate purchase price of $37,469. The Rabbi
Trust shares are recorded in the Company's treasury stock account until such
shares are vested under the respective compensation plan (see footnote 4). The
Company may, from time to time, repurchase additional shares of its common
stock, pursuant to repurchase authorizations by the Board of Directors and
subject to the restrictions contained within the Company's debt agreements.
Management believes that internally generated cash and borrowings
available under credit facilities will be sufficient to satisfy near and long
term cash requirements for working capital in both its homebuilding and mortgage
banking operations.
13
Part II. OTHER INFORMATION
- --------
Item 4. Submission of Matters to a Vote of Security Holders
- -------
During the first quarter of 2002, NVR commenced a
consent solicitation of the holders of its 8% Senior Notes due
2005 (the "Notes") to amend the Indenture governing the Notes.
The amendment to the Indenture allows for NVR to repurchase up
to an aggregate $100 million of its capital stock, in addition
to that otherwise provided under the Company's Indenture, in
one or more open market and/or privately negotiated
transactions through June 1, 2003. NVR paid to each holder of
the Notes who provided a consent, an amount equal to 2.0% of
the principal amount of such holder's Notes. The consent was
successfully completed on March 14, 2002.
Item 6. Exhibits and Reports on Form 8-K
- -------
(a) Exhibits:
11. Computation of Earnings per Share.
(b) Reports on Form 8-K
Form 8-K filed March 4, 2002, announcing the
solicitation of consents from holders of NVR's 8% Senior
Notes due 2005 (the "Notes") to amend the Indenture governing
the Notes.
Form 8-K filed March 15, 2002, announcing the
successful completion of the solicitation of consents from
holders of the Notes to amend the Indenture governing the
Notes.
Exhibit Index
Exhibit
Number Description Page
- ------- ----------- ----
11 Computation of Earnings per Share 16
14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
April 22, 2002 NVR, Inc.
By: /s/ Paul C. Saville
------------------------------------
Paul C. Saville
Executive Vice President Finance and
Chief Financial Officer
15