Toll Brothers, Inc.

Previous wording

We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached, attached, master-planned, resort-style golf, and urban low-, mid-, and high-rise communities, principally on land we develop and improve. In recent years, we have pursued a strategy of broadening our product lines, price points and geographic footprint, as well as increasing the number of spec homes that we sell relative to our traditional build-to-order homes. We cater to luxury first-time, move-up, empty-nester (move-down), active-adult, and second-home buyers in the United States, as well as urban and suburban renters. We also design, build, market, and sell high-density, high-rise urban luxury condominiums with third-party joint venture partners. At October 31, 2024, we were operating in 24 states and in the District of Columbia.

Current wording

We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached, attached, master-planned, resort-style golf, and urban low-, mid-, and high-rise communities, principally on land we develop and improve. In recent years, we have pursued a strategy of broadening our product lines, price points and geographic footprint, as well as increasing the number of spec homes that we sell relative to our traditional build-to-order homes. We cater to luxury first-time, move-up, empty-nester (move-down), active-adult, and second-home buyers in the United States. From time to time, we also design, build, market, and sell high-density, high-rise urban luxury condominiums, which we endeavor to do with third-party joint venture partners. At October 31, 2025, we were operating in 24 states and in the District of Columbia.

Previous wording

In the five years ended October 31, 2024, we delivered 49,407 homes from 986 communities, including 10,813 homes from 527 communities in fiscal 2024. At October 31, 2024, we had 1,041 communities in various stages of planning, development or operations containing approximately 74,700 home sites that we owned or controlled through options. At fiscal year-end, we were selling from 408 of these communities.

Current wording

In the five years ended October 31, 2025, we delivered 52,203 homes from 1,061 communities, including 11,292 homes from 556 communities in fiscal 2025. At October 31, 2025, we had 1,137 communities in various stages of planning, development or operations containing approximately 76,100 home sites that we owned or controlled through options. At fiscal year-end, we were selling from 446 of these communities.

Previous wording

In addition to our residential for-sale business, we also develop and, in some cases operate, for-rent apartments generally through joint ventures. See the section entitled “Toll Brothers Apartment Living/Toll Brothers Campus Living” below.

Current wording

In addition to our residential for-sale business, we have also developed and, in some cases operated, for-rent apartments generally through joint ventures. In September 2025, we announced plans to exit this business over time. See the section entitled “Apartment Living” below.

Previous wording

In fiscal 2024, we recognized $10.85 billion of revenues, consisting of $10.56 billion of home sales revenues and $283.4 million of land sales and other revenues, and net income of $1.57 billion, as compared to $9.99 billion of revenues, consisting of $9.87 billion of home sales revenues and $128.9 million of land sales and other revenues, and net income of $1.37 billion in fiscal 2023. Land sales and other revenue, pre-tax income and net income in fiscal 2024 included $185.0 million, $175.2 million and $124.1 million, respectively, related to the sale of a single parcel of land in northern Virginia to a commercial developer.

Current wording

In fiscal 2025, we recognized $10.97 billion of revenues, consisting of $10.84 billion of home sales revenues and $124.5 million of land sales and other revenues, and net income of $1.35 billion, as compared to $10.85 billion of revenues, consisting of $10.56 billion of home sales revenues and $283.4 million of land sales and other revenues, and net income of $1.57 billion in fiscal 2024. Land sales and other revenue, pre-tax income and net income in fiscal 2024 included $185.0 million, $175.2 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

In fiscal 2024 and 2023, the value of net contracts signed was $10.07 billion (10,231 homes) and $7.91 billion (8,077 homes), respectively. The value of our backlog at October 31, 2024 was $6.47 billion (5,996 homes), as compared to our backlog at October 31, 2023 of $6.95 billion (6,578 homes).

Current wording

In fiscal 2025 and 2024, the value of net contracts signed was $9.85 billion (9,943 homes) and $10.07 billion (10,231 homes), respectively. The value of our backlog at October 31, 2025 was $5.49 billion (4,647 homes), as compared to our backlog at October 31, 2024 of $6.47 billion (5,996 homes).

Previous wording

At October 31, 2024, we had $1.30 billion of cash and cash equivalents and approximately $1.77 billion available for borrowing under our $1.955 billion revolving credit facility (the “Revolving Credit Facility”). At October 31, 2024, we had no outstanding borrowings under the Revolving Credit Facility and had outstanding letters of credit of approximately $180.0 million.

Current wording

At October 31, 2025, we had $1.26 billion of cash and cash equivalents and approximately $2.19 billion available for borrowing under our $2.35 billion revolving credit facility (the “Revolving Credit Facility”). At October 31, 2025, we had no outstanding borrowings under the Revolving Credit Facility and had outstanding letters of credit of approximately $155.9 million.

Previous wording

At October 31, 2024, our total equity and our debt to total capitalization ratio were $7.69 billion and 0.27 to 1.00, respectively.

Current wording

At October 31, 2025, our total equity and our debt to total capitalization ratio were $8.29 billion and 0.25 to 1.00, respectively.

Previous wording

The home building business is highly competitive and fragmented. We compete with numerous home builders of varying sizes, ranging from local to national in scope, some of which have greater sales and financial resources than we do. Sales of existing homes, whether by a homeowner or by a financial institution that may have acquired a home through a foreclosure or otherwise, also provide competition. We compete primarily based on price, location, design, quality, service, and reputation. We believe our size and financial stability, relative to many others in our industry, provides us with a competitive advantage.

Current wording

The home building business is highly competitive and fragmented. We compete with numerous home builders of varying sizes, ranging from local to national in scope, some of which have greater sales and financial resources than we do. Sales of existing homes also provide competition. We compete primarily based on price, location, design, quality, service, and reputation. We believe our size and financial stability, relative to many others in our industry, provides us with a competitive advantage.

Previous wording

During fiscal 2024 and 2023, we acquired control of approximately 14,900 and 4,200 home sites, respectively, net of options terminated and land sales. In each of fiscal 2024 and 2023 we forfeited control of approximately optioned 4,000 lots primarily because the planned community no longer met our development criteria. At October 31, 2024, we controlled approximately 74,700 home sites, as compared to approximately 70,700 home sites at October 31, 2023, and approximately 76,000 home sites at October 31, 2022. In addition, at October 31, 2024, we expected to purchase approximately 9,000 additional home sites from several Land Development Joint Ventures in which we have an interest, at prices to be determined.

Current wording

During fiscal 2025 and 2024, we acquired control of approximately 12,700 and 14,900 home sites, respectively, net of options terminated and land sales. In fiscal 2025 and 2024 we forfeited control of approximately 5,900 and 4,000 optioned lots, respectively, primarily because the planned community no longer met our development criteria. At October 31, 2025, we controlled approximately 76,100 home sites, as compared to approximately 74,700 home sites at October 31, 2024, and approximately 70,700 home sites at October 31, 2023. In addition, at October 31, 2025, we expected to purchase approximately 8,800 additional home sites from several Land Development Joint Ventures in which we have an interest, at prices to be determined.

Previous wording

Of the approximately 74,700 total home sites that we owned or controlled through options at October 31, 2024, we owned approximately 34,000 and controlled approximately 40,800 through options. Of the 74,700 home sites, approximately 19,000 were substantially improved.

Current wording

Of the approximately 76,100 total home sites that we owned or controlled through options at October 31, 2025, we owned approximately 33,000 and controlled approximately 43,100 through options. Of the 76,100 home sites, approximately 18,300 were substantially improved.

Previous wording

In addition, at October 31, 2024, our Land Development Joint Ventures owned approximately 22,700 home sites (including 316 home sites included in the 40,800 controlled through options).

Current wording

In addition, at October 31, 2025, our Land Development Joint Ventures owned approximately 28,900 home sites (including 832 home sites included in the 43,100 controlled through options).

Previous wording

At October 31, 2024, we were selling from 408 communities, compared to 370 communities at October 31, 2023, and 348 communities at October 31, 2022.

Current wording

At October 31, 2025, we were selling from 446 communities, compared to 408 communities at October 31, 2024, and 370 communities at October 31, 2023.

Previous wording

In fiscal 2024, three of our Rental Property Joint Ventures sold their assets or we sold a portion of our ownership interest to unrelated parties, resulting in aggregate gains of $176.1 million recognized by the joint ventures. From our investments in these joint ventures we received cash and recognized our share of the gains of $24.1 million in fiscal 2024. In fiscal 2023, two of our Rental Property Joint Ventures sold their assets to unrelated parties, resulting in aggregate gains of $106.2 million recognized by the joint ventures. From our investments in these joint ventures, we received cash and recognized gains of $50.9 million in fiscal 2023. In addition, in fiscal 2023, we sold our ownership interest in one of our Rental Property Joint Ventures and recognized a gain of $16.0 million. The gains recognized from these sales are included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income included in Item 15(a)1 of this Form 10-K.

Current wording

In addition to our residential for-sale business, we have also developed and in some cases operated for-rent apartments and student housing projects generally through joint ventures. In fiscal 2025, three of our Rental Property Joint Ventures sold their assets to unrelated parties, resulting in aggregate gains of $146.1 million recognized by the joint ventures. From our investments in these joint ventures we received cash and recognized our share of the gains of $45.1 million in fiscal 2025. In fiscal 2024, three of our Rental Property Joint Ventures sold their assets, or we sold a portion of our ownership interest to unrelated parties, resulting in aggregate gains of $176.1 million recognized by the joint ventures. From our investments in these joint ventures we received cash and recognized our share of the gains of $24.1 million in fiscal 2024. In fiscal 2023, two of our Rental Property Joint Ventures sold their assets to unrelated parties, resulting in aggregate gains of $106.2 million recognized by the joint ventures. From our investments in these joint ventures, we received cash and recognized gains of $50.9 million in fiscal 2023. In addition, in fiscal 2023, we sold our ownership interest in one of our Rental Property Joint Ventures and recognized a gain of $16.0 million. The gains recognized from these sales are included in “Income (loss) from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income included in Item 15(a)1 of this Form 10-K.

Previous wording

The value of our backlog at October 31, 2024, 2023, and 2022 was $6.47 billion (5,996 homes), $6.95 billion (6,578 homes), and $8.87 billion (8,098 homes), respectively. Approximately 97% of the homes in backlog at October 31, 2024 are expected to be delivered by October 31, 2025. The 7% decrease in the value of homes in backlog at October 31, 2024, as compared to October 31, 2023, was due to the delivery of more homes out of backlog than were added during fiscal 2024, and a decrease in the average value of each contract signed.

Current wording

The value of our backlog at October 31, 2025, 2024, and 2023 was $5.49 billion (4,647 homes), $6.47 billion (5,996 homes), and $6.95 billion (6,578 homes), respectively. Approximately 98% of the homes in backlog at October 31, 2025 are expected to be delivered by October 31, 2026. The 15% decrease in the value of homes in backlog at October 31, 2025, as compared to October 31, 2024, was due to the delivery of more homes out of backlog than were added during fiscal 2025, and a relatively flat average value of each contract signed.

Previous wording

Warranty: We provide all of our home buyers with a limited warranty as to workmanship and mechanical equipment. We also provide many of our home buyers with a limited 10-year warranty as to structural integrity. We accrue for expected warranty costs at the time each home is closed and title and possession are transferred to the home buyer. Warranty costs are accrued based upon historical experience related to product type, geographic location and other community specific factors. Adjustments to our warranty liabilities related to homes delivered in prior years are recorded in the period in which a change in our estimate occurs. Over the past decade, we have had a significant number of warranty claims related to water intrusion issues primarily impacting homes built in Pennsylvania and Delaware. Our review process for these claims includes an analysis of many factors to determine the estimated costs to resolve such claims, including: the closing dates of the homes; the number of claims received; our inspection of homes; an estimate of the number of homes we expect to repair; the type and cost of repairs that have been performed in each community; the estimated costs to remediate pending and future claims; and the previously recorded amounts related to these claims. We also monitor legal developments relating to these types of claims and review the volume, relative merits and adjudication of claims in litigation or arbitration.

Current wording

Warranty: We provide all of our home buyers with a limited warranty as to workmanship and mechanical equipment. We also provide many of our home buyers with a limited 10-year warranty as to structural integrity. We accrue for expected warranty costs at the time each home is closed and title and possession are transferred to the home buyer. Warranty costs are accrued based upon historical experience related to product type, geographic location and other community specific factors. Adjustments to our warranty liabilities related to homes delivered in prior years are recorded in the period in which a change in our estimate occurs.

Previous wording

The increase in home sales revenues in fiscal 2024, as compared to fiscal 2023, was attributable to a 13% increase in the number of homes delivered, offset, in part, by a 5% decrease in the average price of homes delivered. The increase in the number of homes delivered in fiscal 2024, as compared to fiscal 2023, was principally due to higher backlog conversion and an increase in the number of spec homes delivered in fiscal 2024, offset, in part, by a decrease in the number of homes in backlog at October 31, 2023, as compared to the number of homes in backlog at October 31, 2022. The decrease in the average delivered home price was mainly due to increase in homes delivered in less expensive product types/geographic regions.

Current wording

The increase in home sales revenues in fiscal 2025, as compared to fiscal 2024, was attributable to a 4% increase in the number of homes delivered, offset, in part, by a 2% decrease in the average price of homes delivered. The increase in the number of homes delivered in fiscal 2025, as compared to fiscal 2024, was principally due to higher backlog conversion and an increase in the number of spec homes delivered in fiscal 2025, 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. The decrease in the average delivered home price was mainly due to an increase in homes delivered in less expensive product types/geographic regions and an increase in the number of spec homes closed.

Previous wording

Home sales cost of revenues, as a percentage of homes sales revenues, in fiscal 2024 was 73.4%, as compared to 73.1% in fiscal 2023. The increase in fiscal 2024 was principally due to a shift in the mix of revenues to lower margin products/areas and increased inventory impairment charges, offset, in part, by lower interest expense as a percentage of home sales revenues. We recognized inventory impairments and write-offs of $59.4 million, or 0.6% of home sales revenues, and $30.7 million, or 0.3% of home sales revenues, in fiscal 2024 and fiscal 2023, respectively. Interest cost in fiscal 2024 was $129.0 million, or 1.2% of home sales revenues, as compared to $139.4 million, or 1.4% of home sales revenues in fiscal 2023.

Current wording

Home sales cost of revenues, as a percentage of homes sales revenues, in fiscal 2025 was 74.4%, as compared to 73.4% in fiscal 2024. The increase in fiscal 2025 was principally due to an increase in incentives as a result of soft market conditions, as well as shifts in the mix of revenues to lower margin products/areas, offset, in part, by lower interest expense as a percentage of home sales revenues. We recognized inventory impairments and write-offs of $65.9 million, or 0.6% of home sales revenues, and $59.4 million, or 0.6% of home sales revenues, in fiscal 2025 and fiscal 2024, respectively. Interest cost in fiscal 2025 was $118.1 million, or 1.1% of home sales revenues, as compared to $129.0 million, or 1.2% of home sales revenues in fiscal 2024.

Previous wording

The increase in land sales and other cost of revenues as a percentage of land sales and other revenues in fiscal 2024 compared to fiscal 2023 was primarily due to the sale of a single land parcel to a commercial developer in our second quarter for net cash proceeds of $180.7 million, which resulted in a pre-tax gain of $175.2 million. In addition, we incurred lower impairment charges in fiscal 2024. We recognized $4.4 million of impairment charges in fiscal 2024 in connection with planned land sales. This compares to $30.6 million of land sales and other impairment charges recognized in fiscal 2023.

Current wording

The increase in land sales and other cost of revenues as a percentage of land sales and other revenues in fiscal 2025 compared to fiscal 2024 was primarily due to the sale of a single land parcel to a commercial developer for net cash proceeds of $180.7 million, which resulted in a pre-tax gain of $175.2 million in fiscal 2024. In addition, we had higher impairment charges in fiscal 2025. We recognized $26.9 million of land sales and other impairment charges in fiscal 2025 in connection with planned land sales compared to $4.4 million of land sales and other impairment charges recognized in fiscal 2024.

Previous wording

SG&A spending increased by $72.8 million in fiscal 2024, as compared to fiscal 2023. As a percentage of home sales revenues, SG&A was 9.3% and 9.2% in fiscal 2024 and 2023, respectively. The dollar increase in SG&A was primarily due to an increase in variable spending such as selling expenses associated with increased home sales revenues. The increase in SG&A as a percentage of home sales revenues was primarily due to general cost inflation.

Current wording

SG&A spending increased by $51.3 million in fiscal 2025 compared to fiscal 2024. As a percentage of home sales revenues, SG&A was 9.5% and 9.3% in fiscal 2025 and 2024, respectively. The dollar increase in SG&A was primarily due to an increase in payroll, marketing and insurance costs. These increases were offset, in part, by modestly lower selling commissions.

Previous wording

For our Rental Property Joint Ventures specifically, these entities typically generate operating losses until the related property reaches stabilization. For the fiscal years 2024 and 2023, our earnings related to the Rental Property Joint Ventures include approximately $50.3 million and $32.9 million, respectively, of our share of net operating losses incurred by these joint ventures, of which approximately $29.8 million and $26.1 million, respectively, was our share of the depreciation expense recognized by these joint ventures.

Current wording

For our Rental Property Joint Ventures specifically, these entities typically generate operating losses until the related property reaches stabilization. For fiscal years 2025 and 2024, our earnings related to the Rental Property Joint Ventures include approximately $68.0 million and $50.3 million, respectively, representing our share of net operating losses incurred by these joint ventures, of which approximately $38.3 million and $29.8 million, respectively, was our share of the depreciation expense recognized by these joint ventures.

Previous wording

We recognized a loss from unconsolidated entities of $23.8 million in fiscal 2024, as compared to income of $50.1 million in fiscal 2023. This decrease was mainly due to $50.9 million of gains recognized in fiscal 2023 related to property sales compared to $24.1 million of such gains in fiscal 2024. We also recognized a $16.0 million gain as the result of the sale of our ownership interest in a Rental Property Joint Venture in fiscal 2023. No similar sales occurred in fiscal 2024. Fiscal 2024 was also impacted by higher losses incurred by various Rental Property Joint Ventures, reduced income at one Home Building Joint Venture due to its underlying assets being sold out, lower earnings from a Land Development Joint Venture due to reduced sales volume, and an increase in other-than-temporary impairment charges recognized. We recognized other-than-temporary impairment charges in fiscal 2024 of $6.6 million related to two investments in Rental Property Joint Ventures. No similar impairment charges were recognized in fiscal 2023.

Current wording

We recognized a gain from unconsolidated entities of $19.1 million in fiscal 2025, as compared to a loss of $23.8 million in fiscal 2024. This increase was mainly due to $45.1 million of gains recognized in fiscal 2025 related to property sales by our joint ventures compared to $24.1 million of such gains in fiscal 2024, increased earnings by certain Home Building Joint Ventures and lower other-than-temporary impairment charges. We recognized other-than-temporary impairment charges in fiscal 2025 of $2.1 million related to one investment in a Rental Property Joint Venture compared to $6.6 million related to two investments in Rental Property Joint Ventures in fiscal 2024. These increases were offset, in part, by higher losses from certain Rental Property Joint Ventures.

Previous wording

The increase in income from ancillary businesses in fiscal 2024, as compared to fiscal 2023, was principally due to higher earnings from our mortgage and title operations due to increased closing volume and a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business, offset, in part, by higher operating losses incurred in our apartment living operations. In fiscal 2024 and fiscal 2023, we also recognized $8.9 million and $8.4 million, respectively, of write-offs related to previously incurred costs that we believed not to be recoverable in our apartment living operations.

Current wording

The decrease in income from ancillary businesses in fiscal 2025, as compared to fiscal 2024, was principally due to a $4.4 million gain from a bulk sale of security monitoring accounts by our smart home technology business in fiscal 2024 and higher operating losses incurred in our Apartment Living operations, offset, in part, by higher earnings from our mortgage and title operations due to increased closing volume and a higher capture rate by our mortgage operations. In fiscal 2025 and fiscal 2024, we also recognized $7.3 million and $8.9 million, respectively, of write-offs related to previously incurred costs that we believed not to be recoverable in our Apartment Living operations.

Previous wording

In fiscal 2024 and 2023, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations totaling $35.7 million and $34.7 million, respectively.

Current wording

In fiscal 2025 and 2024, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations totaling $20.4 million and $35.7 million, respectively.

Previous wording

The increase in “other” in fiscal 2024 was principally due to a $5.0 million gain related to an investment we held in a privately held company that sold substantially all of its assets to a third party during the year.

Current wording

The decrease in “other” was principally due to a $5.0 million gain in fiscal 2024 related to an investment we held in a privately held company that sold substantially all of its assets to a third party.

Previous wording

In fiscal 2024, we reported income before income taxes of $2.09 billion, or 19.2% of revenues, as compared to $1.84 billion, or 18.4% of revenues, in fiscal 2023.

Current wording

In fiscal 2025, we reported income before income taxes of $1.79 billion, or 16.3% of revenues, as compared to $2.09 billion, or 19.2% of revenues, in fiscal 2024.

Previous wording

We recognized a $470.3 million income tax provision in fiscal 2023. Based upon the federal statutory rate of 21.0% for fiscal 2023, our federal tax provision would have been $386.9 million. The difference between the tax provision recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes of $90.7 million and a $2.2 million increase in unrecognized tax benefits, offset, in part, by a benefit of $7.3 million from excess tax benefits related to stock-based compensation, $2.8 million of other permanent differences, and a $2.3 million benefit of federal energy efficient home credits.

Current wording

We recognized a $444.9 million income tax provision in fiscal 2025. Based upon the federal statutory rate of 21.0% for fiscal 2025, our federal tax provision would have been $376.2 million. The difference between the tax provision recognized and the tax provision based on the federal statutory rate was mainly due to the provision for state income taxes of $85.6 million and a $2.6 million increase in unrecognized tax benefits, offset, in part, by a benefit of $15.2 million from excess tax benefits related to stock-based compensation, $2.7 million of miscellaneous and other deferred tax adjustments, and $1.7 million of reversals of accruals for uncertain tax positions.

Previous wording

At October 31, 2024, we had $1.30 billion of cash and cash equivalents on hand and approximately $1.77 billion available for borrowing under our Revolving Credit Facility. The Revolving Credit Facility provides us with a committed borrowing capacity of $1.955 billion, which we have the ability to increase up to $3.00 billion with the consent of lenders, and is 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, of which $487.5 million matures February 14, 2028, $101.6 million matures on November 1, 2025 and the remaining $60.9 million matures on November 1, 2026.

Current wording

At October 31, 2025, we had $1.26 billion of cash and cash equivalents on hand and approximately $2.19 billion available for borrowing under our Revolving Credit Facility. The Revolving Credit Facility provides us with a committed borrowing capacity of $2.35 billion, which we have the ability to increase up to $3.00 billion with the consent of lenders, and is 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. Our $650.0 million unsecured Term Loan Facility is also scheduled to mature on February 7, 2030 and is also guaranteed by Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries.

Previous wording

In fiscal 2025, 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 general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community level debt, common stock repurchases, and dividend payments. Demand for funds include interest and principal payments on current and future debt financing. 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 borrowings from banks and other lenders.

Current wording

In fiscal 2026, 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 general and administrative expenses, investments and funding of capital improvements, investments in existing and future unconsolidated joint ventures, repayment of community level debt, common stock repurchases, and dividend payments. Demand for funds include interest and principal payments on current and future debt financing. 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, proceeds from the sale of a portion of our Apartment Living portfolio to Kennedy Wilson, borrowing capacity under our Revolving Credit Facility and borrowings from banks and other lenders.

Previous wording

Beyond fiscal 2025, our principal demands for funds will be for the payments of the principal amount of our long-term debt as it becomes due or matures, land purchases and inventory additions needed to grow our business, long-term capital investments and investments in unconsolidated joint ventures, common stock repurchases, and dividend payments.

Current wording

Beyond fiscal 2026, our principal demands for funds will be for the payments of the principal amount of our long-term debt as it becomes due or matures, land purchases and inventory additions needed to maintain and grow our business, long-term capital investments and investments in unconsolidated joint ventures, common stock repurchases, and dividend payments.

Previous wording

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At October 31, 2024, we had investments in these entities of $1.01 billion, and were committed to invest or advance up to an additional $312.8 million to these entities if they require additional funding. At October 31, 2024, we had agreed to terms for the acquisition of 316 home sites from four joint ventures for an estimated aggregate purchase price of $26.8 million. In addition, we expect to purchase approximately 9,000 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 October 31, 2025, we had investments in these entities of $1.03 billion, and were committed to invest or advance up to an additional $331.2 million to these entities if they require additional funding. At October 31, 2025, we had agreed to terms for the acquisition of 832 home sites from five joint ventures for an estimated aggregate purchase price of

Previous wording

In these 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 October 31, 2024, in the event we had 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 October 31, 2024, we had guaranteed the debt of certain unconsolidated entities that have loan commitments aggregating $3.03 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $646.9 million to be our maximum exposure related to repayment and carry cost guarantees. At October 31, 2024, the unconsolidated entities had borrowed an aggregate of $2.20 billion, of which we estimate $560.4 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 3.0 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 indemnities noted above, which are not estimable.

Current wording

In these 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 October 31, 2025, in the event we had 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 October 31, 2025, we had guaranteed the debt of certain unconsolidated entities that have loan commitments aggregating $1.92 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $414.8 million to be our maximum exposure related to repayment and carry cost guarantees. At October 31, 2025, the unconsolidated entities had borrowed an aggregate of $1.46 billion, of which we estimate $413.5 million to be our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 8.2 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 indemnities noted above, which are not estimable.

Previous wording

Cash provided by operating activities during fiscal 2023 was $1.27 billion. Cash provided by operating activities was generated primarily from: (1) $1.37 billion of net income plus the following non-cash activities: $76.5 million of depreciation and amortization, $69.5 million of impairments and write-offs, $24.8 million of stock-based compensation, $50.1 million of income earned from unconsolidated entities; and a net deferred tax expense of $36.2 million and (2) $88.4 million of distributions received from unconsolidated entities and $78.9 million in mortgage loan sales, net of originations. This activity was offset, in part, by a decrease of $162.6 million in current income taxes, net; an increase of $135.9 million in receivables, prepaid assets, and other assets; a decrease of $88.3 million in net customer deposits; a decrease of $23.7 million in accounts payable and accrued expenses; and an increase of $22.2 million in inventory.

Current wording

Cash provided by operating activities during fiscal 2025 was $1.11 billion. Cash provided by operating activities was generated primarily from: (1) $1.35 billion of net income plus the following non-cash activities: $82.1 million of depreciation and amortization, a net deferred tax expense of $86.7 million, $100.0 million of impairments and write-offs, $30.8 million of stock-based compensation, offset by $19.1 million of income from unconsolidated entities; and (2) $61.4 million of distributions received from unconsolidated entities and an increase of $64.6 million in accounts payable and accrued expenses. This activity was offset, in part, by an increase of $521.2 million in inventory, a decrease of $66.7 million in net customer deposits; a $24.8 million increase in receivables, prepaid expenses and other assets, $21.1 million in current income taxes, net, and $7.6 million in mortgage loan originations, net of sales.

Previous wording

Cash used in investing activities during fiscal 2023 was $150.6 million, primarily related to $216.4 million used to fund our investments in unconsolidated entities and $73.0 million for the purchase of property and equipment. This activity was offset, in part, by $112.7 million of cash received as returns from our investments in unconsolidated entities and $26.0 million of cash proceeds from the sale of assets, including ownership interests in unconsolidated entities.

Current wording

Cash used in investing activities during fiscal 2025 was $310.0 million, primarily related to $309.7 million used to fund our investments in unconsolidated entities and $86.2 million for the purchase of property and equipment. This activity was offset, in part, by $82.2 million of cash received as returns from our investments in unconsolidated entities.

Previous wording

We used $1.17 billion of cash from financing activities in fiscal 2023, primarily for the repurchase of $561.6 million of our common stock; the redemption of $400.0 million of senior notes; payments of $160.3 million of loans payable, net of new borrowings; the payment of dividends on our common stock of $91.1 million and $5.4 million of payments for debt issuance costs. This activity was offset by $48.3 million of proceeds from stock-based benefit plans.

Current wording

We used $833.9 million of cash from financing activities in fiscal 2025, primarily for the repurchase of $651.0 million of our common stock; $350.0 million for the redemption of senior notes; payments of $162.2 million of loans payable, net of new borrowings; the payment of dividends on our common stock of $97.1 million; $39.4 million of payments related to repurchases from land bank programs, net of proceeds; $19.9 million of payments related to stock-based benefit plans - net

Previous wording

At October 31, 2024, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), had issued and outstanding $1.60 billion aggregate principal amount of senior notes maturing on various dates between November 15, 2025 and November 1, 2029 (the “Senior Notes”). For further information regarding the Senior Notes, see Note 6 to our Consolidated Financial Statements under the caption “Senior Notes.”

Current wording

At October 31, 2025, our 100%-owned subsidiary, Toll Brothers Finance Corp. (the “Subsidiary Issuer”), had issued and outstanding $1.75 billion aggregate principal amount of senior notes maturing on various dates between March 15, 2027 and June 15, 2035 (the “Senior Notes”). For further information regarding the Senior Notes, see Note 5 to our Consolidated Financial Statements under the caption “Senior Notes.”

Previous wording

The decrease in the number of homes delivered in fiscal 2024, as compared to fiscal 2023, was mainly due to a decrease in the number of homes in backlog at October 31, 2023, as compared to the number of homes in backlog at October 31, 2022, offset, in part by a higher backlog conversion in fiscal 2024 and an increase in the number of spec homes delivered. The increase in the average delivered price in fiscal 2024 was primarily due to a shift in the number of homes delivered to more expensive areas and/or products, as well as sales price increases.

Current wording

The increase in the number of homes delivered in fiscal 2025, as compared to fiscal 2024, was mainly due to an increase in the number of spec homes delivered, 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. The increase in the average delivered price in fiscal 2025 was primarily due to a shift in the number of homes delivered to more expensive areas and/or products, offset, in part by an increase in incentives as a result of soft market conditions.

Previous wording

The increase in the number of net contracts signed in fiscal 2024, as compared to fiscal 2023, was principally due to an increase in the number of selling communities in fiscal 2024. The increase in the average value of each contract signed in the fiscal 2024 period was primarily due to a shift in the number of contracts signed to more expensive areas and/or products and a decrease in average sales incentives in fiscal 2024.

Current wording

The increase in the number of net contracts signed in fiscal 2025, as compared to fiscal 2024, was due to a continuation of favorable demand conditions, as well as an increase in the number of selling communities in the fourth quarter of fiscal 2025. The increase in the average value of each contract signed in the fiscal 2025 period was primarily due to favorable demand conditions, as well as a shift in the number of contracts signed to more expensive areas and/or products, partially offset by a modest increase in sales incentives.

Previous wording

The increase in the number of homes delivered in fiscal 2024, as compared to fiscal 2023, was mainly due to an increase in the number of homes in backlog at October 31, 2023, as compared to the number of homes in backlog at October 31, 2022, higher backlog conversion, and an increase in the number of spec homes delivered in fiscal 2024. The decrease in the average price of homes delivered in fiscal 2024 was primarily due to a shift in the number of homes delivered to less expensive areas and/or products, as well as an increase in the number of spec homes delivered.

Current wording

The number of homes delivered in fiscal 2025 increased as compared to fiscal 2024. This was primarily due to an increase in the number of spec homes delivered in the region, as the number of homes in backlog at October 31, 2024 was lower than the number of homes in backlog at October 31, 2023. The decrease in the average price of homes delivered in fiscal 2025 was primarily due to a shift in the number of homes delivered to less expensive areas and/or products, as well as the increase in spec home deliveries with higher sales incentives in fiscal 2025.

Previous wording

The increase in the number of net contracts signed in fiscal 2024, as compared to fiscal 2023, was principally due to an increase in the number of selling communities, partially offset by a modestly lower community sales pace. The decrease in the average value of each contract signed in fiscal 2024 was mainly due to shifts in the number of contracts signed to less expensive areas and/or products and an increase in average sales incentives.

Current wording

The increase in the number of net contracts signed in fiscal 2025, as compared to fiscal 2024, was principally due to an increase in the number of selling communities, offset, in part, by moderately softer demand. The average value of each contract signed in fiscal 2025 decreased primarily due to shifts in the number of contracts signed to less expensive areas and/or products and increased sales incentives.

Previous wording

The increase in income before income taxes in fiscal 2024, as compared to fiscal 2023, was mainly due the sale of a land parcel to a commercial developer that resulted in a pre-tax gain of $175.2 million and higher earnings from increased revenues, offset, in part, with higher home sales costs of revenues, as a percentage of home sale revenues, and increased SG&A spend. The increase in home sales costs of revenues, as a percentage of home sale revenues, in fiscal 2024 was primarily due to a shift in product mix/areas to lower-margin areas.

Current wording

The decrease in income before income taxes in fiscal 2025, as compared to fiscal 2024, was mainly due to the fiscal 2024 sale of a land parcel to a commercial developer that resulted in a pre-tax gain of $175.2 million, which did not recur in fiscal 2025. In addition, fiscal 2025 was impacted by higher home sales costs of revenues, as a percentage of home sale revenues, higher land impairment charges, and increased SG&A spend. The increase in home sales costs of revenues, as a percentage of home sale revenues, was primarily due to a shift in the number of homes delivered to less expensive areas and/or products. Inventory impairment charges were $16.8 million and $15.2 million in fiscal 2025 and 2024, respectively. In addition, in fiscal 2025 and 2024 we recognized $12.1 million and $0.6 million, respectively, in land impairment charges included in land sales and other cost of revenues in connection with planned land sales on future communities which we no longer intend to develop.