Toll Brothers, Inc.

Previous wording

In the three months ended January 31, 2025, we signed 2,307 net contracts for an aggregate value of $2.31 billion, an increase of 13.0% in units and 12.0% in dollars compared to the prior-year period, and a 2.0% increase on a per-community basis. Although we experienced solid demand in our first quarter, as reflected in the year-over-year increase in net signed contracts, more recent demand trends coinciding with the start of the traditional spring selling season have been mixed, due in part to mortgage rates that have remained elevated despite 100 basis points of cuts to the Federal Reserve’s benchmark interest rate since September 2024. In addition, general price inflation and significant increases in the cost of home ownership have created challenges for many buyers, especially at the lower end of the market. However, demand in many markets has remained healthy, especially at the higher end where affordability concerns are less impactful. We continue to strategically manage our pricing, incentives and home starts on a community-by-community basis to align inventory levels with local sales environments and to balance our sales pace and price. Notwithstanding the mixed near-term outlook, we believe the long-term outlook for thenew home market remains positive, as it is supported by strong fundamentals including favorable demographics, the structural undersupply of homes in the U.S. caused by over a decade of underproduction, the aging stock of existing homes, and accumulated wealth built up from years of stock market and home price appreciation.

Current wording

In the three months ended April 30, 2025, we signed 2,650 net contracts for an aggregate value of $2.60 billion, a decrease of 13% in units and 11% in dollars compared to the prior-year period, and a 21% decrease on a per-community basis. Demand in the second quarter of fiscal 2025 was softer compared to the prior year period due in part to ongoing affordability challenges caused by elevated mortgage rates and higher housing costs, as well as increased economic uncertainty and a decline in consumer confidence in the quarter. We continue to strategically manage our pricing, incentives and home starts on a community-by-community basis to appropriately balance sales price and margin with pace, and to align our inventory levels with local sales environments. Notwithstanding a softer near-term demand outlook, we believe the long-term outlook for thenew home market remains positive, as it is supported by strong fundamentals including favorable demographics, the structural undersupply of homes in the U.S. caused by over a decade of underproduction, the aging stock of existing homes, and accumulated wealth built up from years of stock market and home price appreciation.

Previous wording

In the three months ended January 31, 2025, we delivered 1,991 homes with an average delivered price of $924,600, as compared to 1,927 delivered homes at an average price of $1,002,500 in the three months ended January 31, 2024. The year-over-year increase in the number of homes delivered was primarily the result of the year-over-year increase in the number of communities we were operating from during the first quarter of fiscal 2025, and a higher backlog conversion ratio due to a reduction in our construction cycle times. The year-over-year decline in average delivered price was due primarily to changes in the mix of products and locations of delivered homes, reflecting our strategy of expanding our geographies and product types to include more affordable homes. The reduction in our construction cycle time was due to the continued normalization of our operations post-pandemic and an increase in the number of quick move-in (or “spec”) homes in our inventory. Historically most of our homes have been sold on a build-to-order basis, where we do not begin construction of the home until we have a signed contract with a customer. However, in recent years we have increased the number of homes that we start without a buyer (a spec home), which we generally build faster than build-to-order homes. In the first quarter of fiscal 2025, 55% of net signed contracts were spec homes and the remainder were build-to-order. Spec homes allow us to compete more effectively with existing homes available in the market, especially for homebuyers that wish to take delivery within a short time frame. We sell our spec homes at various stages of construction - from shortly after construction starts with the pouring of the foundation through to finished home. We determine how many such homes to start within each community based on local market conditions, our current and planned sales pace, and construction cadence for the community. In light of the mixed demand trends we have experienced to date in our second fiscal quarter, we expect to reduce the pace of our overall spec home starts in the near term.

Current wording

In the three months ended April 30, 2025, we delivered 2,899 homes with an average delivered price of $933,600, as compared to 2,641 delivered homes at an average price of $1,002,300 in the three months ended April 30, 2024. The year-over-year increase in the number of homes delivered was primarily the result of the increase in the number of communities we were operating from during the second quarter of fiscal 2025, and a higher backlog conversion ratio due in part to reductions in our construction cycle times. The year-over-year decline in average delivered price was due primarily to changes in the mix of products and locations of delivered homes, reflective of our strategy in recent years to expand our geographies, price points and product types and to increase spec home production. Historically, most of our homes have been sold on a build-to-order basis, where we do not begin construction of the home until we have a signed contract with a customer. In recent years we have increased the number of homes that we start without a buyer (a spec home), which we generally build faster than build-to-order homes and which allow us to attract buyers who are looking for quicker move-in homes. We determine how many such homes to start within each community based on local market conditions, our current and planned sales pace, and construction cadence for the community. In light of recent demand trends, we expect to reduce the pace of our overall spec home starts in the near term.

Previous wording

In the three-month period ended January 31, 2025, we recognized $1.86 billion of revenues, consisting of $1.84 billion of home sales revenues and $18.4 million of land sales and other revenues, and net income of $177.7 million, as compared to $1.95 billion of revenues, consisting of $1.93 billion of home sales revenues and $16.0 million of land sales and other revenues, and net income of $239.6 million in the three-month period ended January 31, 2024.

Current wording

In the six-month period ended April 30, 2025, we recognized $4.60 billion of revenues, consisting of $4.55 billion of home sales revenues and $51.0 million of land sales and other revenues, and net income of $530.2 million, as compared to $4.79 billion of revenues, consisting of $4.58 billion of home sales revenues and $206.5 million of land sales and other revenues, and net income of $721.2 million in the six-month period ended April 30, 2024. Land sales and other revenue and net income in the fiscal 2024 period included $185.0 million and $124.1 million, respectively, related to the sale of a single parcel of land in northern Virginia to a commercial developer.

Previous wording

The value of our backlog at January 31, 2025 was $6.94 billion (6,312 homes), as compared to our backlog at January 31, 2024 of $7.08 billion (6,693 homes). Our backlog at October 31, 2024 was $6.47 billion (5,996 homes), as compared to backlog of $6.95 billion (6,578 homes) at October 31, 2023.

Current wording

The value of our backlog at April 30, 2025 was $6.84 billion (6,063 homes), as compared to our backlog at April 30, 2024 of $7.38 billion (7,093 homes). Our backlog at October 31, 2024 was $6.47 billion (5,996 homes), as compared to backlog of $6.95 billion (6,578 homes) at October 31, 2023.

Previous wording

At January 31, 2025, we had $574.8 million of cash and cash equivalents and approximately $1.77 billion available under our $1.96 billion revolving credit facility (the “Revolving Credit Facility”). At January 31, 2025, we had no borrowings and we had approximately $182.7 million of outstanding letters of credit under the Revolving Credit Facility.

Current wording

At April 30, 2025, we had $686.5 million of cash and cash equivalents and approximately $2.19 billion available under our $2.35 billion revolving credit facility (the “Revolving Credit Facility”). At April 30, 2025, we had no borrowings and we had approximately $159.0 million of outstanding letters of credit under the Revolving Credit Facility.

Previous wording

At January 31, 2025, we owned or controlled through options approximately 77,700 home sites, as compared to approximately 74,700 at October 31, 2024; and approximately 70,700 at October 31, 2023. Of the approximately 77,700 total home sites that we owned or controlled through options at January 31, 2025, we owned approximately 33,900 and controlled approximately 43,800 through options. Of the 33,900 home sites owned, approximately 20,300 were substantially improved. In addition, as of January 31, 2025, we expect to purchase approximately 10,600 additional home sites over several years from certain of the joint ventures in which we have interests, at prices to be determined.

Current wording

At April 30, 2025, we owned or controlled through options approximately 78,600 home sites, as compared to approximately 74,700 at October 31, 2024; and approximately 70,700 at October 31, 2023. Of the approximately 78,600 total home sites that we owned or controlled through options at April 30, 2025, we owned approximately 32,800 and controlled approximately 45,800 through options. Of the 32,800 home sites owned, approximately 19,300 were substantially improved. In addition, as of April 30, 2025, we expect to purchase approximately 10,500 additional home sites over several years from certain of the joint ventures in which we have interests, at prices to be determined.

Previous wording

At January 31, 2025, we were selling from 406 communities, compared to 408 at October 31, 2024; and 377 at January 31, 2024.

Current wording

At April 30, 2025, we were selling from 421 communities, compared to 408 at October 31, 2024; and 386 at April 30, 2024.

Previous wording

At January 31, 2025, our total stockholders’ equity and our debt-to-total capitalization ratio were $7.80 billion and 0.26 to 1.00, respectively.

Current wording

At April 30, 2025, our total stockholders’ equity and our debt to total capitalization ratio were $7.95 billion and 0.26 to 1.00, respectively.

Previous wording

The following table compares certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income and other supplemental information for the three months ended January 31, 2025 and 2024 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

Current wording

The following table compares certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income and other supplemental information for the three months and six months ended April 30, 2025 and 2024 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

Previous wording

The decrease in home sale revenues for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024, was primarily attributable to an 8% decrease in the average price of homes delivered offset by a 3% increase in the number of homes delivered. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions, including spec homes, most notably from fewer deliveries in the Pacific region and greater deliveries in the Mountain region. The increase in the number of homes delivered in the three months ended January 31, 2025 was primarily due to an increase in operating communities, more deliveries of spec homes, and a higher backlog conversion in the three months ended January 31, 2025 compared to the three months ended January 31, 2024, primarily as a result of improvement in build times. These factors were offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023, most significantly in the North, Mid-Atlantic, and South regions.

Current wording

Home sale revenues for the six months ended April 30, 2025 were flat when compared to the six months ended April 30, 2024. In the period, a 7% increase in the number of homes delivered was offset by a 7% decrease in the average price of homes delivered. The increase in the number of homes delivered in the six months ended April 30, 2025 was primarily due to an increase in operating communities, more deliveries of spec homes, and a higher backlog conversion in the six months ended April 30, 2025, primarily as a result of improvement in build times. These factors were offset, in part, by a decrease in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023, most significantly in the North, Mid-Atlantic, and South regions. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions, including spec homes, most notably from fewer deliveries in the Pacific region and greater deliveries in the Mountain region.

Previous wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, for the three months ended January 31, 2025, as compared to the three months ended January 31, 2024, was principally due toa shift in the mix of revenues to lower margin products/areas and higher inventory impairment charges in the fiscal 2025 period, partially offset by lower interest expense as a percentage of home sales revenues. In the three months ended January 31, 2025 and 2024, interest expense, as a percentage of home sales revenues, was 1.1% and 1.2%, respectively.

Current wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, for the six months ended April 30, 2025, as compared to the six months ended April 30, 2024, was principally due toa shift in the mix of revenues to lower margin products/areas, partially offset by lower inventory impairment charges in the fiscal 2025 period and lower interest expense as a percentage of home sales revenues. In the six months ended April 30, 2025 and 2024, interest expense, as a percentage of home sales revenues, was 1.1% and 1.3%, respectively.

Previous wording

Our revenues from land sales and other generally consist of the following: (1) land sales to joint ventures in which we retain an interest; (2) lot sales to third-party builders within our master-planned communities; (3) bulk sales to third parties of land we have decided no longer meets our development criteria; (4) sales of land parcels to third parties (typically because there is a superior economic use of the property); and (5) sales of commercial and retail properties generally located at our urban luxury condominium communities. Land sales to joint ventures in which we retain an interest are generally sold at our land basis and therefore little to no gross margin is earned on these sales.

Current wording

Our revenues from land sales and other generally consist of the following: (1) land sales to joint ventures in which we retain an interest; (2) lot sales to third-party builders within our master-planned communities; (3) bulk sales to third parties of land we have decided no longer meets our development criteria; (4) sales of land parcels to third parties (typically because there is a superior economic use of the property); and (5) sales of commercial and retail properties generally located at our urban luxury condominium communities. Land sales to joint ventures in which we retain an interest are generally sold at our land basis and therefore little to no gross margin is earned on these sales. The decreases in land sales and other revenues during the three and six months ended April 30, 2025 compared to the three and six months ended April 30, 2024 were primarily due to the sale of a land parcel in the fiscal 2024 periods to a commercial developer for net cash proceeds of $180.7 million which resulted in a pre-tax gain of $175.2 million, and which did not recur in the fiscal 2025 periods.

Previous wording

Land sales and other cost of revenues as a percentage of land sales and other revenues can vary period to period depending on the mix of sales to joint ventures versus third parties.

Current wording

Land sales and other cost of revenues as a percentage of land sales and other revenues can vary period to period depending on the mix of sales to joint ventures versus third parties. The increase in land sales and other cost of revenues, as a percentage of land sales and other revenues, in the three and six months ended April 30, 2025 was primarily impacted by the $180.7 million land parcel sale in the fiscal 2024 periods described above, which carried a low basis. In addition, we recognized $1.8 million of impairment charges in the six-month period ended April 30, 2025 in connection with planned land sales. This compares to $0.6 million of land sales and other impairment charges recognized in the three and six months ended April 30, 2024. No impairment charges on land sales and other were recognized in the three months ended April 30, 2025.

Previous wording

SG&A expenditures increased by $10.4 million in the fiscal 2025 three-month period, as compared to the fiscal 2024 three-month period. As a percentage of home sales revenues, SG&A expense was 13.1% in the fiscal 2025 period, as compared to 11.9% in the fiscal 2024 period. The dollar increase in SG&A expenditures was primarily due to higher commissions and marketing spend from greater sales volume and increased community count. The increase in SG&A expense as a percentage of revenues was due to revenues decreasing 5% year-over-year in the fiscal 2025 period, while SG&A expenditures increased 5%.

Current wording

SG&A expenditures increased by $28.4 million in the fiscal 2025 six-month period, as compared to the fiscal 2024 six-month period. As a percentage of home sales revenues, SG&A expense was 10.9% in the fiscal 2025 period versus 10.2% in the fiscal 2024 period. The dollar increase in SG&A expenditures was primarily due to higher internal commissions, marketing spend from increased community count and higher payroll costs. These increases were offset, in part, by reduced external broker commissions. The increase in SG&A expense as a percentage of revenues was due to revenues decreasing 1% year-over-year in the fiscal 2025 period, while SG&A expenditures increased 6%.

Previous wording

The decrease in interest income in the three-month period ended January 31, 2025 was primarily due to lower average cash balances in the fiscal 2025 period.

Current wording

The decreases in interest income in the three-month and six-month periods ended April 30, 2025 was primarily due to lower average cash balances in the fiscal 2025 periods.

Previous wording

The decrease in (loss) income from ancillary businesses in the three-month period ended January 31, 2025, was mainly due to $4.4 million of net write-offs related to previously incurred costs that we believed not to be recoverable related to our apartment living operations in the three-month period ended January 31, 2025.

Current wording

The increases in income from ancillary businesses were mainly due to increased earnings from our mortgage operations due to higher closing volume and $5.0 million of net write-offs related to our Apartment Living operations in both the three-month and six-month periods ended April 30, 2024 compared to $4.4 million of net write-offs related to our Apartment Living operations in the six-month period ended April 30, 2025. No similar net write-offs were incurred in the three-month period ended April 30, 2025. Furthermore, the fiscal 2024 periods included a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business that did not recur in fiscal 2025.

Previous wording

For the three-month period ended January 31, 2025, we reported income before income taxes of $221.4 million, as compared to $311.2 million in the three-month period ended January 31, 2024.

Current wording

For the three-month period ended April 30, 2025, we reported income before income taxes of $477.5 million, as compared to $649.8 million in the three-month period ended April 30, 2024.

Previous wording

We recognized income tax provisions of $43.7 million and $71.6 million in the three-month periods ended January 31, 2025 and 2024, respectively. The effective tax rate was 19.7% for the three months ended January 31, 2025, compared to 23.0% for the three months ended January 31, 2024. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $46.5 million and $65.3 million, in the three-month periods ended January 31, 2025 and 2024, respectively. The difference between the tax provisions recognized and the tax provision based on the federal statutory rate was mainly due to excess tax benefits related to stock-based compensation, offset, in part, by the provision for state income taxes and permanent differences. The decrease in the effective tax rate for the three months ended January 31, 2025 compared to the three months ended January 31, 2024 was primarily due to an increase in excess tax benefits related to stock-based compensation.

Current wording

We recognized income tax provisions of $168.7 million and $239.8 million in the six-month periods ended April 30, 2025 and 2024, respectively. The effective tax rate was 24.1% for the six months ended April 30, 2025, compared to 25.0% for the six months ended April 30, 2024. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $146.8 million and $201.8 million, in the six-month periods ended April 30, 2025 and 2024, respectively. The difference between the tax provisions recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes and other permanent differences, offset, in part, by excess tax benefits related to stock-based compensation. The decrease in the effective tax rate for the six months ended April 30, 2025 compared to the six months ended April 30, 2024 was primarily due to an increase in excess tax benefits related to stock-based compensation.

Previous wording

In the three-month periods ended January 31, 2025 and 2024, the value of net contracts signed was $2.31 billion (2,307 homes) and $2.06 billion (2,042 homes), respectively. The aggregate value of net contracts signed increased $242.4 million, or 11.7%, in the three-month period ended January 31, 2025, as compared to the three-month period ended January 31, 2024. The increase in the aggregate value of net contracts signed was due to a 13.0% increase in the number of net contracts signed offset by a 1.1% decrease in the average value attributed to each signed contract. The increase in the number of net contracts signed primarily reflects the year-over-year increase in the number of communities from which we were operating during the period. The decrease in the average value of each signed contract in the three months ended January 31, 2025 was primarily due to a net increase inthe mix of contracts from lower margin products/areas.

Current wording

In the three-month periods ended April 30, 2025 and 2024, the value of net contracts signed was $2.60 billion (2,650 homes) and $2.94 billion (3,041 homes), respectively. The aggregate value of net contracts signed decreased $336.6 million, or 11.4%, in the three-month period ended April 30, 2025, as compared to the three-month period ended April 30, 2024. The decrease in the aggregate value of net contracts signed was due to a 12.9% decrease in the number of net contracts signed partially offset by a 1.6% increase in the average value attributed to each signed contract. The decrease in the number of net contracts signed was primarily due to a softer overall demand environment in fiscal 2025 compared to fiscal 2024. The average value of each signed contract in the three-months ended April 30, 2025 was essentially flat compared to the prior year period.

Previous wording

The value of our backlog at January 31, 2025 decreased 2% to $6.94 billion (6,312 homes), as compared to $7.08 billion (6,693 homes) at January 31, 2024. Our backlog at October 31, 2024 and 2023 was $6.47 billion (5,996 homes) and $6.95 billion (6,578 homes), respectively. The decrease in the value of our backlog at January 31, 2025 as compared to January 31, 2024, was due to a 6% decrease in the number of homes in backlog offset by a 4% increase in the average contracted price per home. The decrease in the number of homes in backlog was primarily attributable to spec homes representing a larger portion of our net signed contracts and homes delivered.

Current wording

The value of our backlog at April 30, 2025 decreased 7% to $6.84 billion (6,063 homes), as compared to $7.38 billion (7,093 homes) at April 30, 2024. Our backlog at October 31, 2024 and 2023 was $6.47 billion (5,996 homes) and $6.95 billion (6,578 homes), respectively. The decrease in the value of our backlog at April 30, 2025 as compared to April 30, 2024, was due to a 15% decrease in the number of homes in backlog partially offset by an 8% increase in the average contracted price per home. The decrease in the number of homes in backlog was primarily attributable to spec homes representing a larger portion of our net signed contracts and homes delivered.

Previous wording

Our cash flows from operations generally provide us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our short-term borrowings and long-term debt, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our Company. Our primary uses of cash include inventory additions in the form of land acquisitions and deposits to obtain control of land, land development, working capital to fund day-to-day operations, and investments in existing and future unconsolidated joint ventures. We may also use cash to fund capital expenditures such as investments in our information technology systems. We also use cash to pay dividends on our common stock, to repay debt and make share repurchases with cash flows from operations and other sources. We believe our sources of cash and liquidity will continue to be adequate to fund operations, finance our strategic operating initiatives, repay debt, fund our share repurchases and pay dividends for the foreseeable future.

Current wording

Our cash flows from operations generally provide us with a significant source of liquidity. Our cash flows provided by operating activities, supplemented with our short-term borrowings and long-term debt, have been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our Company. Our primary uses of cash include inventory additions in the form of land acquisitions and deposits to obtain control of land, land development, working capital to fund day-to-day operations, and investments in existing and future unconsolidated joint ventures. We may also use cash to fund capital expenditures such as investments in our information technology systems. We also use cash flows from operations and other sources to pay dividends on our common stock, to repay debt and make share repurchases. We believe our sources of cash and liquidity will continue to be adequate to fund operations, finance our strategic operating initiatives, repay debt, fund our share repurchases and pay dividends for the foreseeable future.

Previous wording

At January 31, 2025, we had $574.8 million of cash and cash equivalents on hand and approximately $1.77 billion available for borrowing under our Revolving Credit Facility. At quarter-end, the Revolving Credit Facility provided us with a committed borrowing capacity of $1.96 billion, which we had the ability to increase to up to $3.00 billion with the consent of lenders, and was scheduled to mature on February 14, 2028. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility. We are also a party to a $650.0 million unsecured Term Loan Facility. At quarter-end, $487.5 million was scheduled to mature on February 14, 2028, $101.6 million was scheduled to mature on November 1, 2025, and the remaining $60.9 million was scheduled to mature on November 1, 2026.

Current wording

At April 30, 2025, we had $686.5 million of cash and cash equivalents on hand and approximately $2.19 billion available for borrowing under our Revolving Credit Facility. At quarter-end, the Revolving Credit Facility provided us with a committed borrowing capacity of $2.35 billion, which we had the ability to increase to up to $3.00 billion with the consent of lenders, and was scheduled to mature on February 7, 2030. Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries are guarantors of the borrower’s obligations under the Revolving Credit Facility. We are also a party to a $650.0 million unsecured Term Loan Facility which matures February 7, 2030.

Previous wording

For the next twelve months, we expect our principal demand for funds will be for inventory additions (in the form of land acquisition, land development, home construction costs, and deposits to control land, which could occur directly or indirectly through builder acquisitions), operating expenses, including our selling, general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community-level borrowings, common stock repurchases, and dividend payments. Demand for funds include interest and principal payments on current and future debt financing (including our $350.0 million 4.875% Senior Notes due November 15, 2025). We expect to meet our short-term liquidity requirements primarily through our cash and cash equivalents on hand and net cash flows provided by operations. Additional sources of funds include distributions from our unconsolidated joint ventures, borrowing capacity under our Revolving Credit Facility, and other borrowings from banks and other lenders.

Current wording

For the next twelve months, we expect our principal demand for funds will be for inventory additions (in the form of land acquisition, land development, home construction costs, and deposits to control land, which could occur directly or indirectly through builder acquisitions), operating expenses, including our selling, general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community-level borrowings, common stock repurchases, and dividend payments. Demand for funds include interest and principal payments on current and future debt, including $350.0 million of 4.875% Senior Notes due November 15, 2025. We expect to meet our short-term liquidity requirements primarily through our cash and cash equivalents on hand and net cash flows provided by operations, although we may from time to time access other sources. Additional sources of funds include distributions from our unconsolidated joint ventures, borrowing capacity under our Revolving Credit Facility, and other borrowings from banks and other lenders.

Previous wording

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At January 31, 2025, we had investments in these entities of $1.11 billion and were committed to invest or advance up to an additional $370.3 million to these entities if they require additional funding. At January 31, 2025, we had agreed to terms for the acquisition of 659 home sites from four joint ventures for an estimated aggregate purchase price of $68.9 million. We also expect to purchase approximately 10,600 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

Current wording

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At April 30, 2025, we had investments in these entities of $1.17 billion and were committed to invest or advance up to an additional $349.3 million to these entities if they require additional funding. At April 30, 2025, we had agreed to terms for the acquisition of 705 home sites from four joint ventures for an estimated aggregate purchase price of $76.1 million. We also expect to purchase approximately 10,500 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

Previous wording

In situations where we have joint and several guarantees with our joint venture partner, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed-upon share of the guarantee; however, we are not always successful. In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate share. We believe that, as of January 31, 2025, in the event we become legally obligated to perform under a guarantee of the obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay all or a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the entity. At January 31, 2025, we had guaranteed the debt of certain unconsolidated entities that have loan commitments aggregating $2.98 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $599.9 million to be our maximum exposure related to repayment and carry cost guarantees. At January 31, 2025, the unconsolidated entities had borrowed an aggregate of $2.16 billion, of which we estimate $523.4 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 4.9 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners, nor do they include any potential exposures related to project completion guarantees or the other (non-carry cost/repayment) indemnities noted above, which are not estimable.

Current wording

In situations where we have joint and several guarantees with our joint venture partner, we generally seek to implement a reimbursement agreement with our partner that provides that neither party is responsible for more than its proportionate share or agreed-upon share of the guarantee; however, we are not always successful. In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate share. We believe that, as of April 30, 2025, in the event we become legally obligated to perform under a guarantee of the obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay all or a significant portion of the obligation. If it is not, we and our partners would need to contribute additional capital to the entity. At April 30, 2025, we had guaranteed the debt of certain unconsolidated entities that have loan commitments aggregating $2.68 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $581.8 million to be our maximum exposure related to repayment and carry cost guarantees. At April 30, 2025, the unconsolidated entities had borrowed an aggregate of $1.92 billion, of which we estimate $523.0 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 8.7 years. These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners, nor do they include any potential exposures related to project completion guarantees or the other (non-carry cost/repayment) indemnities noted above, which are not estimable.

Previous wording

At January 31, 2025 and October 31, 2024, we had $653.0 million and $1.37 billion, respectively, of cash, cash equivalents, and restricted cash. Cash used in operating activities during the three-month period ended January 31, 2025 was $420.8 million. Cash used in operating activities during the fiscal 2025 period was primarily related to an increase in inventory and a decrease in current income taxes – net. This activity was offset, in part, by net income (adjusted for depreciation and amortization, impairments, stock-based compensation, losses and distributions of earnings from unconsolidated entities, and deferred taxes);

Current wording

At April 30, 2025 and October 31, 2024, we had $761.7 million and $1.37 billion, respectively, of cash, cash equivalents, and restricted cash. Cash used in operating activities during the six-month period ended April 30, 2025 was $57.9 million. Cash used in operating activities during the fiscal 2025 period was primarily related to an increase in inventory. This activity was offset, in part, by net income (adjusted for depreciation and amortization, impairments, stock-based compensation, losses and distributions of earnings from unconsolidated entities, and deferred taxes); an increase in accounts payable and accrued expenses; an increase in current income taxes – net; and an increase in customer deposits – net.

Previous wording

At January 31, 2024 and October 31, 2023, we had $800.0 million and $1.34 billion, respectively, of cash, cash equivalents and restricted cash. Cash used in operating activities during the three-month period ended January 31, 2024 was $307.0 million. Cash used in operating activities during the fiscal 2024 period was primarily related to an increase in inventory; decreases in accounts payable and accrued expenses, current income taxes – net, and customer deposits – net; and an increase in receivables, prepaid expenses, and other assets. This activity was offset, in part, by net income (adjusted for stock-based compensation, depreciation and amortization, income and distributions of earnings from unconsolidated entities, deferred taxes and impairments); and mortgage loans sold, net of mortgage loans originated.

Current wording

At April 30, 2024 and October 31, 2023, we had $1.09 billion and $1.34 billion, respectively, of cash and cash equivalents, and restricted cash. Cash provided by operating activities during the six-month period ended April 30, 2024 was $152.0 million. Cash provided by operating activities during the fiscal 2024 period was primarily related to net income (adjusted for stock-based compensation, depreciation and amortization, losses and distributions of earnings from unconsolidated entities, deferred taxes, impairments and gain on sale of assets); increases in accounts payable and accrued expenses, and current income taxes – net. This activity was offset, in part, by an increase in inventory; mortgage loans originated, net of mortgage loans sold, a decrease in customer deposits – net; and an increase in receivables, prepaid expenses, and other assets.

Previous wording

In the three-month period ended January 31, 2025, cash used in investing activities was $119.5 million, which was primarily related to $118.7 million used to fund our investments in unconsolidated entities and $17.3 million used for the purchase of property and equipment. This activity was offset, in part, by $18.4 million of cash received as returns from our investments in unconsolidated entities.

Current wording

In the six-month period ended April 30, 2025, cash used in investing activities was $187.8 million, which was primarily related to $179.9 million used to fund our investments in unconsolidated entities and $32.9 million used for the purchase of property and equipment. This activity was offset, in part, by $28.2 million of cash received as returns from our investments in unconsolidated entities.

Previous wording

In the three-month period ended January 31, 2024, cash used in investing activities was $59.4 million, which was primarily related to $58.9 million used to fund our investments in unconsolidated entities and $13.6 million used for the purchase of property and equipment. This activity was offset, in part, by $13.1 million of cash received as returns from our investments in unconsolidated entities.

Current wording

In the six-month period ended April 30, 2024, cash used in investing activities was $100.7 million, which was primarily related to $99.6 million used to fund our investments in unconsolidated entities and $29.7 million used for the purchase of property and equipment. This activity was offset, in part, by $29.3 million of cash received as returns from our investments in unconsolidated entities.

Previous wording

We used $178.0 million of cash in financing activities in the three-month period ended January 31, 2024, primarily for the payments of $145.6 million of loans payable, net of borrowings, the payment of dividends on our common stock of $23.3 million, and $9.3 million of payments related to stock-based benefit plans - net.

Current wording

We used $363.1 million of cash in financing activities in the six-month period ended April 30, 2025, primarily for the repurchase of $204.9 million of our common stock, payments of $66.3 million of loans payable, net of borrowings, the payment of dividends on our common stock of $49.0 million, $35.0 million of payments related to repurchases from land bank programs, and $22.2 million of payments related to stock-based benefit plans - net. This activity was offset, in part, by $22.1 million of proceeds related to sales to land bank programs.

Previous wording

We used $177.2 million of cash in financing activities in the three-month period ended January 31, 2025, primarily for the payments of $106.5 million of loans payable, net of borrowings, the payment of dividends on our common stock of $24.4 million, the repurchase of $23.7 million of our common stock, and $22.9 million of payments related to stock-based benefit plans - net.

Current wording

We used $308.2 million of cash in financing activities in the six-month period ended April 30, 2024, primarily for the repurchase of $180.1 million of our common stock, the payments of $77.7 million of loans payable, net of borrowings, the payment of dividends on our common stock of $47.1 million, and $3.5 million of payments related to stock-based benefit plans - net.

Previous wording

The decrease in the number of net contracts signed in the three-month period ended January 31, 2025, compared to the prior year period, was due to a decrease in the average number of selling communities offset by improved demand. The increase in the average value of each contract signed in the fiscal 2025 period was mainly due to a shift in the number of contracts signed to more expensive areas and/or products partially offset by increased sales incentives.

Current wording

The decreases in the number of net contracts signed in fiscal 2025 periods, compared to the prior year periods, were due to a decline in demand, offset, in part, by an increase in the number of selling communities. The increases in the average value of each contract signed in the fiscal 2025 periods were mainly due to a shift in the number of contracts signed to more expensive areas and/or products partially offset by increased sales incentives.

Previous wording

The increase in the number of net contracts signed in the fiscal 2025 periods was due principally to an increase in the average number of selling communities. The increase in the average value of each contract signed in the fiscal 2025 period was primarily due to a shift in the number of contracts signed to more expensive areas or product types partially offset by increased sales incentives.

Current wording

The decreases in the number of net contracts signed in the fiscal 2025 periods were due primarily to softer demand, offset, in part, by an increase in the average number of selling communities. The increases in the average value of each contract signed in the fiscal 2025 periods were primarily due to a shift in the number of contracts signed to more expensive areas or product types, partially offset by increased sales incentives.

Previous wording

The decrease in income before income taxes in the fiscal 2025 period was principally due to lower earnings from decreased revenues and higher SG&A costs, partially offset by lower home sales cost of revenues, as a percentage of home sale revenues, and increased income from unconsolidated entities. The decrease in home sales cost of revenues, as a percentage of home sales revenues, in the fiscal 2025 period was primarily due to a shift in product mix/areas to higher-margin areas and lower interest expense as a percentage of home sales revenues, partially offset by an increase in inventory impairment charges. Inventory impairment charges were $4.4 million and $0.1 million during the three months ended January 31, 2025 and 2024, respectively.

Current wording

The increases in income before income taxes in the fiscal 2025 periods were principally due to higher earnings from increased revenues and lower home sales cost of revenues, as a percentage of home sale revenues, offset, in part by higher SG&A costs and lower other income - net. The decreases in home sales cost of revenues, as a percentage of home sales revenues, in the fiscal 2025 periods were primarily due to a shift in product mix/areas to higher-margin areas and lower interest expense as a percentage of home sales revenues.

Previous wording

The increase in the number of homes delivered in the three-month period ended January 31, 2025 was mainly due to higher backlog conversion, an increase in spec homes delivered in the fiscal 2025 period and an increase in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023. The decrease in the average price of homes delivered in the fiscal 2025 period was primarily due to a shift in the number of contracts delivered to less expensive areas or product types.

Current wording

The increases in the number of homes delivered in the fiscal 2025 periods were mainly due to higher backlog conversion, an increase in spec homes delivered in the fiscal 2025 periods and an increase in the number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023. The average price of homes delivered in the fiscal 2025 three-month period was relatively flat with the fiscal 2024 period. The decrease in the average price of homes delivered in the fiscal 2025 six-month period was primarily due to a shift in the number of contracts delivered to less expensive areas or product types.

Previous wording

The increase in the number of net contracts signed in the fiscal 2025 period was primarily due to improved demand partially offset by a decrease in the number of selling communities. The decrease in the average value of each contract signed in the fiscal 2025 period was mainly due to a shift in the number of contracts signed to less expensive areas or product types and increased sales incentives.

Current wording

The decreases in the number of net contracts signed in the fiscal 2025 periods were primarily due to softer demand and a decrease in the number of selling communities. The increase in the average value of each contract signed in the fiscal 2025 three-month period was mainly due to a shift in the number of contracts signed to more expensive areas or product types, partially offset by increased sales incentives. The decrease in the average value of each contract signed in the fiscal 2025 six-month period was mainly due to a shift in the number of contracts signed to less expensive areas or product types and increased sales incentives.

Previous wording

The decrease in the number of homes delivered in the three-month period ended January 31, 2025 was mainly due to the lower number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023 and lower backlog conversion. The average price of homes delivered decreased in the three-month fiscal 2025 period compared to the prior-year period primarily due to a shift in the number of contracts delivered to less expensive areas or product types.

Current wording

The decreases in the number of homes delivered in the fiscal 2025 periods were mainly due to the lower number of homes in backlog at October 31, 2024, as compared to the number of homes in backlog at October 31, 2023 and lower backlog conversion. The average price of homes delivered decreased in the fiscal 2025 periods compared to the prior-year periods primarily due to a shift in the number of contracts delivered to less expensive areas or product types.

Previous wording

The decrease in the number of net contracts signed in the three-month fiscal 2025 period was primarily due to lower demand, offset, in part, by an increase in the number of selling communities in the fiscal 2025 period. The increase in the average value of each contract signed in the fiscal 2025 period was primarily due to a shift in the number of contracts signed to more expensive areas or product types and decreased sales incentives.

Current wording

The decreases in the number of net contracts signed in the fiscal 2025 periods were primarily due to softer demand, offset, in part, by an increase in the number of selling communities in the fiscal 2025 periods. The increases in the average value of each contract signed in the fiscal 2025 periods were primarily due to a shift in the number of contracts signed to more expensive areas or product types and decreased sales incentives.

Previous wording

The decrease in income before income taxes in the three-month fiscal 2025 period was mainly due to lower earnings from decreased revenues in the fiscal 2025 period and higher home sales cost of revenues, as a percentage of home sales revenues. The increase in home sales cost of revenues, as a percentage of home sales revenues, was primarily due to a shift in product mix/areas to lower-margin areas, offset, in part, by lower interest expense as a percentage of home sales revenues. The three-month fiscal 2024 period was also impacted by higher land impairment charges.

Current wording

The decreases in income before income taxes in the fiscal 2025 periods were mainly due to lower earnings from decreased revenues in the fiscal 2024 periods and higher home sales cost of revenues, as a percentage of home sales revenues. The increases in home sales cost of revenues, as a percentage of home sales revenues, was primarily due to a shift in product mix/areas to lower-margin areas, offset, in part, by lower interest expense as a percentage of home sales revenues. The six-month fiscal 2025 period was also impacted by higher SG&A costs.

Previous wording

Our principal Internet address is www.tollbrothers.com, and our Investor Relations website is located at investors.tollbrothers.com. We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available through our Investor Relations website, free of charge, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Current wording

Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available through our Investor Relations website, free of charge, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.