NVR NVR · USD

2. Segment Information, Nature of Operations, and Certain ConcentrationsOur homebuilding operations primarily construct and sell single-family detached homes, townhomes and condominiums under three trade names: Ryan Homes, NVHomes and Heartland Homes. The Ryan Homes product is marketed primarily to first-time and first-time move-up buyers. Ryan Homes operates in thirty-seven metropolitan areas located in Maryland, Virginia, Washington, D.C., Delaware, West Virginia, Pennsylvania, Ohio, New York, New Jersey, Indiana, Illinois, North Carolina, South Carolina, Georgia, Florida, Tennessee and Kentucky. The NVHomes and Heartland Homes products are marketed primarily to move-up and luxury buyers. NVHomes operates in Delaware, New Jersey, and the Washington, D.C., Baltimore, MD and Philadelphia, PA metropolitan areas. Heartland Homes operates in the Pittsburgh, PA metropolitan area. Our mortgage banking operations primarily operate in the markets where we have homebuilding operations, as substantially all of our loan closing activity is for our homebuilding customers. Our mortgage banking business generates revenues primarily from origination fees, gains on sales of loans, and title fees. The following disclosure includes four homebuilding operating and reportable segments that aggregate geographically our homebuilding divisions, and the mortgage banking operations presented 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 PennsylvaniaMid East: New York, Ohio, Western Pennsylvania, Indiana and IllinoisSouth East: North Carolina, South Carolina, Tennessee, Florida, Georgia and KentuckyThe 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.

Commitments and Contingent LiabilitiesLitigationWe 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.Contract Land DepositsWe generally do not engage in land development. Instead, we typically acquire finished building lots from various third-party land developers under LPAs. The LPAs require deposits that may be forfeited if we fail to perform under the agreements. 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. As of December 31, 2025, assuming that contractual development milestones are met and we exercise our option, we expect to place additional forfeitable deposits with land developers under existing LPAs of approximately $733,900.Bonds and Letters of CreditDuring the ordinary course of operating the homebuilding and mortgage banking businesses, we are required to enter into bond or letter of credit arrangements with local municipalities, government agencies, or land developers to collateralize our obligations under various contracts. As of December 31, 2025, we had contingent obligations of approximately $46,300 in bonds and approximately $9,700 in letters of credit issued under the Credit Agreement. We believe we will fulfill our obligations under the related contracts and do not anticipate any material losses under these bonds or letters of credit.

DebtAs of December 31, 2025, we had the following debt instruments outstanding: Senior NotesOn May 4, 2020, we issued $600,000 of the 2030 Senior Notes. The 2030 Senior Notes were issued at a discount to yield 3.02% and have been reflected net of the unamortized discount and unamortized debt issuance costs in the accompanying consolidated balance sheet. The offering of the 2030 Senior Notes resulted in aggregate net proceeds of approximately $595,200, after deducting underwriting discount and offering expenses. The 2030 Senior Notes mature on May 15, 2030 and bear interest at 3.00%, payable semi-annually in arrears on May 15 and November 15. As of December 31, 2025 and 2024, the unamortized discount was $540 and $653, respectively, and unamortized debt issuance costs were $1,580 and $1,941, respectively.On September 9 and September 17, 2020, we issued an additional $250,000 and $50,000, respectively, of the 2030 Senior Notes (the "2030 Additional Notes" and together with the 2030 Senior Notes, the "Senior Notes"). The 2030 Additional Notes were issued at a premium to yield 2.00% and have been reflected net of the unamortized premium and unamortized debt issuance costs in the accompanying consolidated balance sheet. The offering of the 2030 Additional Notes resulted in aggregate net proceeds of approximately $323,600, including the underwriting premium, less offering expenses. As of December 31, 2025 and 2024, the 2030 Additional Notes unamortized premium was $11,929 and $14,510, respectively, and unamortized debt issuance costs were $650 and $798, respectively.The Senior Notes are senior unsecured obligations and rank equally in right of payment with any of our existing and future unsecured senior indebtedness, will rank senior in right of payment to any of our future indebtedness that is by its terms expressly subordinated to the Senior Notes and will be effectively subordinated to any of our existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness. The indenture governing the Senior Notes has, 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 December 31, 2025.

Income TaxesThe provision for income taxes consists of the following: Year Ended December 31, 202520242023Current: Federal$329,813 $326,357 $261,481 State93,746 101,428 79,023 Deferred: Federal(610)5,470 (3,986)State(833)323 244 Income tax expense$422,116 $433,578 $336,762 Deferred income taxes on our consolidated balance sheets were comprised of the following: As of December 31, 20252024Deferred tax assets: Other accrued expenses and contract land deposit allowance$79,308 $68,784 Deferred compensation4,351 4,349 Equity-based compensation expense48,518 47,467 Inventory16,727 18,468 Unrecognized tax benefit5,400 6,998 Other9,833 13,595 Total deferred tax assets164,137 159,661 Less: Deferred tax liabilities13,168 10,135 Net deferred tax asset$150,969 $149,526 Deferred tax assets arise principally as a result of various accruals required for financial reporting purposes and equity-based compensation expense, which are not currently deductible for tax return purposes. Management believes that we will have sufficient future taxable income to make it more likely than not that the net deferred tax assets will be realized. Federal taxable income is estimated to be approximately $1,588,000 for the year ended December 31, 2025, and was $1,679,957 for the year ended December 31, 2024.A reconciliation of our provision for income taxes and effective tax rate to the applicable statutory rates is as follows: Year Ended December 31, 202520242023 AmountPercentAmountPercentAmountPercentU.S. federal statutory tax rate$370,005 21.00 %$444,256 21.00 %$404,958 21.00 %State and local income taxes, net of federal income tax effect (1)79,683 4.53 %84,744 4.02 %66,379 3.44 %Federal tax credits(2,402)(0.14)%(18,443)(0.87)%(12,839)(0.67)%Changes in valuation allowances— — %— — %— — %Nontaxable or nondeductible items:Excess tax benefits from equity-based compensation(22,884)(1.30)%(76,711)(3.63)%(124,018)(6.43)%Other3,868 0.22 %4,076 0.19 %5,932 0.31 %Changes in unrecognized tax benefits(6,154)(0.35)%(4,344)(0.21)%(3,650)(0.19)%Effective tax rate$422,116 23.96 %$433,578 20.50 %$336,762 17.46 %(1)State taxes in Maryland, Pennsylvania, and Virginia made up the majority (greater than 50%) of the tax expense in this category.

LeasesWe have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have entered into finance leases for two of our production facilities and certain plant equipment. Our leases have remaining lease terms of up to 15 years, some of which include options to extend the leases for up to 20 years, and some of which include options to terminate the lease. Operating leases are reported in "Operating lease right-of-use assets" and "Operating lease liabilities" and finance leases are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying consolidated balance sheets. Our finance lease ROU assets and liabilities were $39,080 and $42,474, respectively, as of December 31, 2025 and $37,638 and $40,036, respectively, as of December 31, 2024. See Note 1 herein for additional information regarding leases.The components of lease expense were as follows:Year Ended December 31,202520242023Lease expenseOperating lease expense$43,099 $39,245 $37,262 Finance lease expense:Amortization of ROU assets5,727 3,377 2,059 Interest on lease liabilities1,866 1,071 421 Short-term lease expense33,035 33,108 30,607 Total lease expense$83,727 $76,801 $70,349 Other information related to leases was as follows:Year Ended December 31,20252024Supplemental Cash Flows Information:Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows from operating leases$32,930 $31,373 Operating cash flows from finance leases$1,866 $1,071 Financing cash flows from finance leases$4,728 $2,634 ROU assets obtained in exchange for lease obligations:Operating leases$61,901 $35,993 Finance leases$7,167 $27,705 Weighted-average remaining lease term (in years):Operating leases7.26.0Finance leases8.69.6Weighted-average discount rate:Operating leases4.8 %4.5 %Finance leases4.8 %4.7 %We are committed under multiple non-cancellable operating and finance leases involving office space, model homes, production facilities, automobiles and production equipment.

Other information related to leases was as follows:Year Ended December 31,20252024Supplemental Cash Flows Information:Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows from operating leases$32,930 $31,373 Operating cash flows from finance leases$1,866 $1,071 Financing cash flows from finance leases$4,728 $2,634 ROU assets obtained in exchange for lease obligations:Operating leases$61,901 $35,993 Finance leases$7,167 $27,705 Weighted-average remaining lease term (in years):Operating leases7.26.0Finance leases8.69.6Weighted-average discount rate:Operating leases4.8 %4.5 %Finance leases4.8 %4.

Item 1C. Cybersecurity.Risk Management and StrategyWe have implemented systems and processes intended to secure our information technology systems and prevent unauthorized access to or loss of sensitive, confidential and personal data. These processes are implemented and overseen primarily by our Chief Information Officer (CIO) and Chief Information Security Officer (CISO). Our CIO has over 35 years of experience and in his 21 years at NVR has been responsible for the implementation and modernization of many of our key technologies across the enterprise. Our CISO has over 25 years of experience in information technology architecture, including over 20 years with NVR in progressively more senior information security roles. Significant information technology processes that have been implemented include: - vulnerability management to help ensure security updates are effectively applied,- utilization of encryption and multi-factor authentication technologies to protect company data,- regular required training for all employees with systems access regarding matters such as cybersecurity threats and data protection, and utilization of simulated phishing tests to increase security awareness,- regular review of third-party service providers, including review of their system and organization controls (SOC) reports,- enhanced monitoring capabilities for early detection and rapid response to potential security incidents,- documented incident response readiness process updated annually, - completion of annual tabletop exercises on potential cybersecurity breaches with the assistance of a third-party cybersecurity consultant, and- annual review of information technology disaster recovery and business continuity processes to help ensure the ability to resume work after an incident. Review of these processes has been incorporated into our annual risk assessment and internal audits of controls performed by our Internal Audit department. Results of these audits are reported to the Audit Committee by our Vice President of Internal Audit and Corporate Governance. As previously discussed in Item 1A of this Form 10-K "Risk Factors", failure to maintain the security of the data we are required to protect could have a material adverse effect on our operations and financial results.

Fair ValueGAAP 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 InstrumentsThe estimated fair values of our Senior Notes as of December 31, 2025 and 2024 were $852,930 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 December 31, 2025 and 2024 were $909,160 and $911,118, respectively. Due to the short term nature of our cash equivalents, we believe that differences between their carrying value and fair value are insignificant.Derivative Instruments and Mortgage Loans Held for SaleIn the normal course of business, NVRM enters into contractual commitments to extend credit to homebuyers with fixed expiration dates. The commitments become effective when the borrowers “lock-in” a specified interest rate within time frames established by NVRM, and some of these commitments include a 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 sales contracts to sell whole loans and mortgage-backed securities to investors. The forward sales contracts lock-in a range of interest rates and prices 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 sales contracts to investors are undesignated derivatives and, accordingly, are marked to fair value through earnings. To calculate the fair value of rate lock commitments, 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.