Toll Brothers, Inc.

Previous wording

Unless otherwise stated in this report, net contracts signed represents a number or value equal to the gross number or value of contracts for the sale of homes signed during the relevant period, less the number or value of contracts canceled during the relevant period (irrespective of whether the contract was signed during the relevant period or in a prior period). Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”). Backlog conversion represents the percentage of homes delivered in the period from backlog at the beginning of the period (“backlog conversion”).

Current wording

Unless otherwise stated in this report, net contracts signed represents a number or value equal to the gross number or value of contracts signed during the relevant period, less the number or value of contracts canceled during the relevant period (irrespective of whether the contract was signed during the relevant period or in a prior period). Backlog consists of homes under contract but not yet delivered to our home buyers (“backlog”). Backlog conversion represents the percentage of homes delivered in the period from backlog at the beginning of the period (“backlog conversion”).

Previous wording

In the three months ended January 31, 2026, we signed 2,303 net contracts for an aggregate value of $2.38 billion, relatively flat in units but an increase of 3.1% in dollars compared to the prior year period, as our average sales price in the quarter increased by 3.3%. On a per-community basis, contracts were down 8% year-over-year. In our first quarter, overall housing demand remained soft due primarily to ongoing affordability challenges, which continued to disproportionately impact the entry-level market, and weak consumer confidence. We continued to respond to these market conditions by strategically managing our pricing, including by increasing incentives where necessary, to appropriately balance sales price and margin with pace, and to align our inventory levels with local sales environments. We anticipate that in the near term the overall housing market may remain subdued due to the factors noted above, although normal seasonal trends should lift demand in our fiscal second quarter. Persistent softer conditions would likely result in a continuation of the elevated incentive levels and slower sales paces that characterized most of fiscal 2025 and the first quarter of fiscal 2026. However, overall economic conditions and the near-term trajectory of new home demand remain uncertain and subject to a variety of unpredictable factors. Over the longer term, we continue to believe the 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 wealth built up from years of stock market and home price appreciation.

Current wording

In the three months ended April 30, 2026, we signed 2,834 net contracts for an aggregate value of $2.81 billion, a 6.9% increase in units and 7.8% increase in dollars compared to the prior year period, which was attributable in part to a 9% year-over-year increase in community count. On a per-community basis, net signed contracts saw a modest year-over-year decline of 2.0%. In the second quarter of fiscal 2026, demand for our homes remained generally consistent with the demand we experienced in the second quarter of fiscal 2025. Factors that negatively impacted demand in the quarter included an overall housing environment that remained challenged due to ongoing affordability pressures and weak consumer confidence, which were exacerbated by an increase in geopolitical volatility starting in March. However, because we serve an affluent customer base with higher incomes and greater accumulated wealth, the affordability pressures that have impacted the lower end of the market have had less of an impact on our business. We anticipate that in the near term, softer overall demand for new homes may persist, which would likely result in a continuation of the elevated incentive levels and slower sales paces that characterized most of fiscal 2025 and the first half of fiscal 2026. In this environment, we continue to strategically manage our pricing, including by adjusting incentive levels where appropriate, to effectively balance sales price and margin with pace, and to align our inventory levels with local sales environments. While the near-term trajectory of new home demand remains uncertain and subject to a variety of unpredictable factors, over the longer term we continue to believe the outlook for thenew home market remains positive, as it is supported by strong fundamentals including favorable demographics, a structural undersupply of homes, the aging stock of existing homes, and an increase in upper income households over the past several decades.

Previous wording

While 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 we start without a buyer (“spec homes”). In fiscal 2025, approximately 50% of our homebuilding revenues were derived from build-to-order homes and the remaining 50% from spec homes. In general, we are able to build our spec homes faster and more efficiently than build-to-order homes, and spec homes allow us to attract buyers who are looking for a quicker move-in schedule, although the gross margin on spec homes is generally lower than build-to-order homes. We determine how many spec homes to start within each community based on local market conditions, our current and planned sales pace, and our backlog and construction cadence for the community. We continue to monitor demand and other factors on a community-by-community basis and will make appropriate adjustments to our spec starts as market conditions evolve over time.

Current wording

While 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 we start without a buyer (“spec homes”). In general, we are able to build our spec homes faster and more efficiently than build-to-order homes, and spec homes allow us to attract buyers who are looking for a quicker move-in schedule, although the gross margin on spec homes is generally lower than build-to-order homes. We determine how many spec homes to start within each community based on local market conditions, our current and planned sales pace, and our backlog and construction cadence for the community. We continue to monitor demand and other factors on a community-by-community basis and make appropriate adjustments to our spec starts as market conditions evolve over time.

Previous wording

In the three-month period ended January 31, 2026, we recognized $2.15 billion of revenues, consisting of $1.85 billion of home sales revenue and $290.6 million of land sales and other revenue, and net income of $210.9 million, as compared to $1.86 billion of revenues, consisting of $1.84 billion of home sales revenue and $18.4 million of land sales and other revenue, and net income of $177.7 million in the three-month period ended January 31, 2025.

Current wording

In the three-month period ended April 30, 2026, we recognized $2.53 billion of revenues, consisting of $2.51 billion of home sales revenues and $18.8 million of land sales and other revenues, and net income of $260.6 million, as compared to $2.74 billion of revenues, consisting of $2.71 billion of home sales revenues and $32.6 million of land sales and other revenues, and net income of $352.4 million in the three-month period ended April 30, 2025.

Previous wording

The value of our backlog at January 31, 2026 was $6.02 billion (5,051 homes), as compared to our backlog at January 31, 2025 of $6.94 billion (6,312 homes). Our backlog at October 31, 2025 was $5.49 billion (4,647 homes), as compared to backlog of $6.47 billion (5,996 homes) at October 31, 2024.

Current wording

The value of our backlog at April 30, 2026 was $6.32 billion (5,394 homes), as compared to our backlog at April 30, 2025 of $6.84 billion (6,063 homes). Our backlog at October 31, 2025 was $5.49 billion (4,647 homes), as compared to backlog of $6.47 billion (5,996 homes) at October 31, 2024.

Previous wording

At January 31, 2026, we had $1.20 billion of cash and cash equivalents and we had approximately $2.20 billion of borrowing capacity of the $2.35 billion available under our revolving credit facility (the “Revolving Credit Facility”) on such date. At January 31, 2026, we had no borrowings and we had approximately $155.0 million of outstanding letters of credit under the Revolving Credit Facility.

Current wording

At April 30, 2026, we had $1.11 billion of cash and cash equivalents and we had approximately $2.24 billion of borrowing capacity of the $2.38 billion available under our revolving credit facility (the “Revolving Credit Facility”) on such date. At April 30, 2026, we had no borrowings and we had approximately $136.5 million of outstanding letters of credit under the Revolving Credit Facility.

Previous wording

At January 31, 2026, we owned or controlled through options approximately 75,000 home sites, as compared to approximately 76,100 at October 31, 2025; and approximately 74,700 at October 31, 2024. Of the approximately 75,000 home sites that we owned or controlled through options at January 31, 2026, we owned approximately 33,600 and controlled approximately 41,400 through options. Of the 33,600 home sites owned, approximately 18,900 were substantially improved. In addition, as of January 31, 2026, we expect to purchase approximately 8,700 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, 2026, we owned or controlled through options approximately 76,800 home sites, as compared to approximately 76,100 at October 31, 2025; and approximately 74,700 at October 31, 2024. Of the approximately 76,800 home sites that we owned or controlled through options at April 30, 2026, we owned approximately 32,000 and controlled approximately 44,800 through options. Of the 32,000 home sites owned, approximately 18,400 were substantially improved. In addition, as of April 30, 2026, we expect to purchase approximately 8,900 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, 2026, we were selling from 445 communities, compared to 446 at October 31, 2025; and 406 at January 31, 2025.

Current wording

At April 30, 2026, we were selling from 459 communities, compared to 446 at October 31, 2025 and 421 at April 30, 2025.

Previous wording

At January 31, 2026, our total stockholders’ equity and our debt to total capitalization ratio were $8.41 billion and 0.24 to 1.00, respectively.

Current wording

At April 30, 2026, our total stockholders’ equity and our debt to total capitalization ratio were $8.48 billion and 0.25 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, 2026 and 2025 ($ 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, 2026 and 2025 ($ amounts in millions, unless otherwise stated). For more information regarding results of operations by segment, see “Segments” in this MD&A.

Previous wording

The increase in home sale revenues for thethree months ended January 31, 2026, as compared to thethree months ended January 31, 2025, was primarily attributable to a 6% increase in the average price of homes delivered offset by a 5% decrease in the number of homes delivered. The decrease in the number of homes delivered in the three months ended January 31, 2026 was primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024 offset, in part, by an increase in the number of spec homes sold and delivered within the current period. The increase in the average delivered home price was mainly due to the mix of deliveries in the quarter, primarily as a result of the increase in deliveries in our higher priced North and Pacific regions.

Current wording

The decrease in home sale revenues for thethree months ended April 30, 2026, as compared to thethree months ended April 30, 2025, was primarily attributable to a 14% decrease in the number of homes delivered, offset in part, by an 8% increase in the average price of homes delivered. The decrease in the number of homes deliveredwas primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024 and fewer spec home deliveries offset, in part, by faster construction cycle times. The increase in the average delivered home price was mainly due to the mix of deliveries in the quarter, primarily in our Pacific and Mid-Atlantic regions.

Previous wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, in thethree months ended January 31, 2026, as compared to thethree months ended January 31, 2025, was princip ally due to an increase in sales incentives, partially offset by lower inventory impairment charges in the fiscal 2026 period.

Current wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, in thethree months ended April 30, 2026, as compared to thethree months ended April 30, 2025, was princip ally due to an increase in sales incentives and higher inventory impairment charges in the fiscal 2026 period.

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. The increase in land sales and other revenues during the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was primarily due to the inclusion of raw land and rental properties in the sale of approximately half of our Apartment Living assets. As a result of the sale of these rental properties and land parcels, we recognized $284.1 million of land sales and other revenues, $265.3 million of costs of land sales and other revenues, and a pre-tax net land sale gain of $18.8 million.

Current wording

The increase in land sales and other revenues during the six months ended April 30, 2026 compared to the six months ended April 30, 2025 was primarily due to the inclusion of undeveloped land and rental properties in the sale of approximately half of our Apartment Living assets. As a result of the sale of these rental properties and land parcels, we recognized $284.1 million of land sales and other revenues, $265.3 million of costs of land sales and other revenues, and a pre-tax net land sale gain of $18.8 million in the six months ended April 30, 2026. In addition, during the six-month periods ended April 30, 2026 and 2025, we recognized $3.7 million and $1.8 million, respectively, of impairment charges in connection with planned land sales.

Previous wording

SG&A expenditures increased by $17.5 million in the three-month period ended January 31, 2026, as compared to the three-month period ended January 31, 2025. As a percentage of home sales revenues, SG&A expenditures were 13.9% of home sales revenues in the three months ended January 31, 2026, as compared to 13.1% in the three months ended January 31, 2025. The dollar increase in SG&A expenditures was due primarily to higher payroll and commissions. In addition, we had higher sales center operating costs due to the increase in the number of selling communities.

Current wording

SG&A expenditures increased by $2.5 million in the three-month period ended April 30, 2026 compared to the three-month period ended April 30, 2025. As a percentage of home sales revenues, SG&A expenditures were 10.3% of home sales revenues in the three months ended April 30, 2026, as compared to 9.5% in the three months ended April 30, 2025. The dollar increase in SG&A expenditures was due primarily to higher payroll costs offset, in part, by reduced commissions and advertising spend.

Previous wording

In the three-month period ended January 31, 2026, we recognized a gain from unconsolidated entities of $35.4 million as compared to a loss of $8.7 million in the prior year period. The $35.4 million gain was primarily comprised of $69.0 million of gains related to the sale of our ownership interests in Land Development and Rental Property Joint Ventures, including interests sold to Kennedy Wilson, as well as $21.4 million of gains recognized in connection with asset sales by other Rental Property Joint Ventures in the quarter. These gains were offset by other-than-temporary impairment charges of $44.3 million related to two retained Rental Property Joint Ventures. No similar impairment charges were recognized in the three-month period ended January 31, 2025.

Current wording

In the six-month period ended April 30, 2026, we recognized a gain from unconsolidated entities of $18.7 million as compared to a loss of $2.7 million in the prior year period. The $18.7 million gain was primarily comprised of $69.0 million of gains related to the sale of our ownership interests in Land Development and Rental Property Joint Ventures, as well as $21.4 million of gains recognized in connection with asset sales by other Rental Property Joint Ventures in the period. These gains were offset by other-than-temporary impairment charges of $57.8 million related to several Rental Property Joint Ventures. No similar impairment charges were recognized in the six-month period ended April 30, 2025.

Previous wording

The increase in income from ancillary businesses in the three-month period ended January 31, 2026 was mainly due to increased management fees recognized by our Apartment Living operations as a result of the sale of approximately half of the business. In the three-month period ended January 31, 2026, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations that totaled $14.5 million, and which included $10.0 million of previously deferred management fees that were accelerated due to the sale of Apartment Living assets. In the three-month period ended January 31, 2025, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations that totaled $7.1 million. Additionally, in the prior year period, we recognized $4.4 million of net write-offs in our Apartment Living operations related to previously incurred costs that we believed not to be recoverable. No similar charges were recognized in the three-month period ended January 31, 2026.

Current wording

The increase in income from ancillary businesses in the six-month period ended April 30, 2026 was mainly due to a $3.9 million gain from a bulk sale of security monitoring accounts by our smart home technology business in addition to an increase in management fees recognized by our Apartment Living operations in the period. In the six-month period ended April 30, 2026, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations that totaled $15.2 million, and which included $10.0 million of previously deferred management fees that were accelerated due to the sale of Apartment Living assets. In the six-month period ended April 30, 2025, income from ancillary businesses included management fees earned on our apartment rental development, high-rise urban luxury condominium, and other unconsolidated entities and operations that totaled $13.2 million. Additionally, in the prior year period, we recognized $4.4 million of net write-offs in our Apartment Living operations related to previously incurred costs that were not believed to be recoverable. No similar charges were recognized in the six-month period ended April 30, 2026.

Previous wording

For the three-month period ended January 31, 2026, we reported income before income taxes of $273.6 million, as compared to $221.4 million in the three-month period ended January 31, 2025.

Current wording

For the three-month period ended April 30, 2026, we reported income before income taxes of $350.4 million, as compared to $477.5 million in the three-month period ended April 30, 2025.

Previous wording

We recognized income tax provisions of $62.6 million and $43.7 million in the three-month periods ended January 31, 2026 and 2025, respectively. The effective tax rate was 22.9% for the three months ended January 31, 2026, compared to 19.7% for the three months ended January 31, 2025. The increase in the income tax provision and effective tax rate for the three months ended January 31, 2026 compared to the three months ended January 31, 2025 was primarily due to lower excess tax benefits related to stock-based compensation recognized in the current year period. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $57.5 million and $46.5 million in the three-month periods ended January 31, 2026 and 2025, 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.

Current wording

We recognized income tax provisions of $152.4 million and $168.7 million in the six-month periods ended April 30, 2026 and 2025, respectively. The effective tax rate was 24.4% for the six months ended April 30, 2026, compared to 24.1% for the six months ended April 30, 2025. The increase in the effective tax rate for the six months ended April 30, 2026 was primarily due to lower excess tax benefits related to stock-based compensation recognized in the current year period. Based upon the federal statutory rate of 21.0% for each period, our federal tax provisions would have been $131.0 million and $146.8 million in the six-month periods ended April 30, 2026 and 2025, respectively. The difference between the tax provisions recognized and the tax provisions based on the federal statutory rate was mainly due to the provisions for state income taxes, offset, in part, by excess tax benefits related to stock-based compensation.

Previous wording

The value of our backlog at January 31, 2026 decreased 13% to $6.02 billion (5,051 homes), as compared to $6.94 billion (6,312 homes) at January 31, 2025. Our backlog at October 31, 2025 and 2024 was $5.49 billion (4,647 homes) and $6.47 billion (5,996 homes), respectively. The decrease in the value of our backlog at January 31, 2026 as compared to January 31, 2025, was due to a 20% 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, as a much larger percentage of spec homes are contracted for and delivered within a quarter (and therefore are not included in our quarter-end backlog) as compared to build- to-order homes. The increase in the average contracted price per home was primarily due to the mix of backlog from higher margin products/areas.

Current wording

The value of our backlog at April 30, 2026 decreased 8% to $6.32 billion (5,394 homes), as compared to $6.84 billion (6,063 homes) at April 30, 2025. Our backlog at October 31, 2025 and 2024 was $5.49 billion (4,647 homes) and $6.47 billion (5,996 homes), respectively. The decrease in the value of our backlog at April 30, 2026 as compared to April 30, 2025, was due to an 11% decrease in the number of homes in backlog partially 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, as a much larger percentage of spec homes are contracted for and delivered within a quarter (and therefore are not included in our quarter-end backlog) as compared to build-to-order homes. The increase in the average contracted price per home was primarily due to the mix of backlog from higher price products/areas.

Previous wording

At January 31, 2026, we had $1.20 billion of cash and cash equivalents on hand and approximately $2.20 billion available for borrowing under our Revolving Credit Facility. Prior to its amendment on February 5, 2026, the Revolving Credit Facility was scheduled to mature on February 7, 2030 and provided committed borrowing capacity of $2.35 billion. As amended, the maturity date is February 5, 2031 and the committed borrowing capacity is $2.38 billion. We continue to have the ability to increase the borrowing capacity under the Revolving Credit Facility to up to $3.00 billion by adding a new lender or obtaining the consent of any existing lender agreeing to a commitment increase. Under the Revolving Credit Facility, up to 50% of the commitment is available for letters of credit. 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. As a result of the February 5, 2026 amendment, of the $650.0 million of outstanding loans under our Term Loan Facility, $548.4 million is scheduled to mature on February 7, 2031 with the remaining $101.6 million due February 7, 2030. Our Term Loan Facility is also guaranteed by Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries.

Current wording

At April 30, 2026, we had $1.11 billion of cash and cash equivalents on hand and approximately $2.24 billion available for borrowing under our Revolving Credit Facility. On February 5, 2026, we amended the Revolving Credit Facility to extend its maturity date to February 5, 2031 and increase its borrowing capacity to $2.38 billion. We have the ability to further increase the borrowing capacity under the Revolving Credit Facility to up to $3.00 billion by adding additional lenders or obtaining the consent of any existing lender agreeing to a commitment increase. Under the Revolving Credit Facility, up to 50% of the commitment is available for letters of credit. 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. On February 5, 2026, we also amended our Term Loan Facility to extend the maturity date of $548.4 million of the $650.0 million of outstanding loans to February 7, 2031, with the remaining $101.6 million due February 7, 2030. Our Term Loan Facility is also guaranteed by Toll Brothers, Inc. and substantially all of its 100%-owned home building subsidiaries.

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 also includes interest and principal payments on current and future debt. 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.

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 also includes interest and principal payments on current and future debt (including our $450.0 million 4.875% Senior Notes due March 15, 2027). 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, 2026, we had investments in these entities of $956.5 million and were committed to invest or advance up to an additional $288.0 million to these entities if they required additional funding at such date. At January 31, 2026, we had agreed to terms for the acquisition of 652 home sites from four joint ventures for an estimated aggregate purchase price of $71.2 million. We also expect to purchase approximately 8,700 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, 2026, we had investments in these entities of $955.5 million and were committed to invest or advance up to an additional $278.0 million to these entities if they required additional funding at such date. At April 30, 2026, we had agreed to terms for the acquisition of 653 home sites from four joint ventures for an estimated aggregate purchase price of $72.3 million. We also expect to purchase approximately 8,900 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 or agreed upon share. We believe that, as of January 31, 2026, 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, 2026, we had guaranteed the debt of certain unconsolidated entities that had loan commitments aggregating $1.92 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $573.6 million to have been our maximum exposure related to repayment and carry cost guarantees at such date. At January 31, 2026, the unconsolidated entities had borrowed an aggregate of $1.55 billion, of which we estimate $570.9 million to have been our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 7.9 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 or agreed upon share. We believe that, as of April 30, 2026, 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, 2026, we had guaranteed the debt of certain unconsolidated entities that had loan commitments aggregating $1.83 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $417.2 million to have been our maximum exposure related to repayment and carry cost guarantees at such date. At April 30, 2026, the unconsolidated entities had borrowed an aggregate of $1.50 billion, of which we estimate $417.2 million to have been our maximum exposure related to repayment and carry cost guarantees. The terms of these guarantees generally range from 1 month to 7.7 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, 2026 and October 31, 2025, we had $1.28 billion and $1.34 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the three-month period ended January 31, 2026 was $7.3 million. Cash provided by operating activities during the fiscal 2026 period was primarily related to net income (adjusted for depreciation and amortization, impairments, stock-based compensation, income and distributions of earnings from unconsolidated entities, and deferred taxes); a decrease in receivables, prepaid expenses, and other assets, including rental and commercial properties; mortgage loans sold, net of mortgage loans originated; and a decrease in customer deposits – net. This activity was offset, in part, by an increase in inventory; a decrease in accounts payable and accrued expenses; and a decrease in current income taxes – net.

Current wording

At April 30, 2026 and October 31, 2025, we had $1.17 billion and $1.34 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the six-month period ended April 30, 2026 was $141.7 million. Cash provided by operating activities during the fiscal 2026 period was primarily related to net income (adjusted for depreciation and amortization, impairments, stock-based compensation, income and distributions of earnings from unconsolidated entities, and deferred taxes); a decrease in receivables, prepaid expenses, and other assets, including rental and commercial properties; mortgage loans sold, net of mortgage loans originated; and an increase in customer deposits – net. This activity was offset, in part, by an increase in inventory; a decrease in accounts payable and accrued expenses; and a decrease in current income taxes – net.

Previous wording

At January 31, 2025 and October 31, 2024, we had $653 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

Previous wording

In the three-month period ended January 31, 2026, cash provided by investing activities was $187.7 million, which was primarily related to $204.3 million of proceeds related to the sale of ownership interests in unconsolidated entities, and $65.1 million of cash received as returns from our investments in unconsolidated entities. This activity was offset, in part, by $61.9 million used to fund our investments in unconsolidated entities and $18.9 million used for the purchase of property and equipment.

Current wording

In the six-month period ended April 30, 2026, cash provided by investing activities was $142.8 million, which was primarily related to $204.3 million of proceeds related to the sale of ownership interests in unconsolidated entities and $88.4 million of cash received as returns from our investments in unconsolidated entities. This activity was offset, in part, by $105.6 million used to fund our investments in unconsolidated entities and $43.3 million used for the purchase of property and equipment, net.

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

Previous wording

We used $257.3 million of cash in financing activities in the three-month period ended January 31, 2026, primarily for payments of $182.1 million of loans payable, net of borrowings, repurchase of $50.4 million of our common stock, the payment of dividends on our common stock of $25.0 million, $15.1 million of payments related to stock-based benefit plans - net and $4.5 million of payments related to non-controlling interest - net. This activity was offset, in part, by $19.8 million of proceeds related to sales to land bank programs.

Current wording

We used $451.4 million of cash in financing activities in the six-month period ended April 30, 2026, primarily for payments of $158.6 million of loans payable, net of borrowings, repurchase of $230.0 million of our common stock, the payment of dividends on our common stock of $49.4 million, $12.1 million of payments related to stock-based benefit plans - net and $4.4 million of payments related to non-controlling interest - net. This activity was offset, in part, by $9.6 million of proceeds related to sales to land bank programs, net of payments.

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 $363.1 million of cash in financing activities in the six-month period ended April 30, 2025, primarily for the

Previous wording

The increase in the number of homes delivered in the fiscal 2026 period was mainly due to faster construction cycle times and increased demand, offset, in part, by a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024. The average price of homes delivered in the fiscal 2026 period decreased compared to the fiscal 2025 period primarily due to an increase in the mix of homes delivered in less expensive areas and/or products.

Current wording

The decrease in the number of homes delivered in the fiscal 2026 three-month period was mainly due to a decrease in the number of spec home deliveries. The increase in the number of homes delivered in the fiscal 2026 six-month period was mainly due to faster construction cycle times offset, in part, by a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024 and fewer spec home deliveries. The average price of homes delivered in the fiscal 2026 periods increased compared to the fiscal 2025 periods primarily due to an increase in the mix of homes delivered in more expensive areas and/or products.

Previous wording

The increase in the number of net contracts signed in the fiscal 2026 period was primarily due to an increase in the number of selling communities with demand remaining stable year over year. The average value of each contract signed in the fiscal 2026 period was relatively flat compared to the prior year period.

Current wording

The increase in the number of net contracts signed in the fiscal 2026 periods was primarily due to a greater number of selling communities, with demand remaining stable year over year. The average value of each contract signed in the fiscal 2026 periods was relatively flat compared to the prior year periods.

Previous wording

The number of homes delivered in the fiscal 2026 three-month period decreased from the prior comparable period, due primarily to a lower starting backlog at October 31, 2025 compared to October 31, 2024. The average price of homes delivered in the fiscal 2026 three-month period increased compared to the fiscal 2025 period primarily due to a shift in the number of homes delivered to more expensive areas and/or products.

Current wording

The number of homes delivered in the fiscal 2026 three-month and six-month periods increased from the prior year periods primarily due to faster construction cycle times, offset, in part, by the decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024 and a decrease in the number of spec home deliveries. The average price of homes delivered in the fiscal 2026 periods increased compared to the fiscal 2025 periods primarily due to a shift in the number of homes delivered to more expensive areas and/or products.

Previous wording

The decrease in the number of net contracts signed in the fiscal 2026 period was mainly due to softer demand, offset, in part by an increase in the average number of selling communities. The average value of signed contracts in the fiscal 2026 period decreased compared to the prior year period primarily due to a shift in the number of contracts signed to less expensive areas and/or products, coupled with increased sales incentives.

Current wording

The decrease in the number of net contracts signed in the fiscal 2026 periods was mainly due to continued soft demand conditions, offset, in part by an increase in the average number of selling communities. The average value of signed contracts in the fiscal 2026 periods decreased compared to the prior years period primarily due to a shift in the number of contracts signed to less expensive areas and/or products, coupled with increased sales incentives.

Previous wording

The increase in income before income taxes in the fiscal 2026 three-month period was mainly due to a decrease in home sales cost of revenues, as a percentage of home sales revenues, and higher income from unconsolidated entities and other income-net. These increases are offset, in part, by higher SG&A costs. The percentage decrease in home sales cost of revenues was principally due to a shift in the number of homes delivered to less expensive areas and/or products and lower inventory impairment charges.

Current wording

The increase in income before income taxes in the fiscal 2026 periods was mainly due to higher earnings from increased revenues, partially offset by an increase in home sales cost of revenues as a percentage of home sale revenues and higher SG&A costs. The increase in home sales cost of revenues as a percentage of revenues was principally due to a shift in the number of homes delivered to less expensive areas and/or products and higher inventory impairment charges. Inventory impairment charges were $8.7 million and $0.3 million during the three months ended April 30, 2026 and 2025, respectively, and $9.4 million and $4.1 million during the six months ended April 30, 2026 and 2025, respectively.

Previous wording

The decrease in income before income taxes in the fiscal 2026 period was due mainly to lower earnings from decreased revenues and higher home sales cost of revenues, as a percentage of home sale revenues. The percentage increase in home sales cost of revenues in the fiscal 2026 period was primarily due to a shift in product mix/areas to lower margin areas.

Current wording

The decrease in income before income taxes in the fiscal 2026 periods was principally due to lower earnings from decreased revenues, higher home sales cost of revenues, as a percentage of home sale revenues, and lower income (loss) from unconsolidated entities. The percentage increase in home sales cost of revenues in the fiscal 2026 periods was primarily due to mix shifts to lower margin products/areas.

Previous wording

The decrease in the number of homes delivered in the fiscal 2026 period was primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024. The average price of homes delivered in the fiscal 2026 three-month period increased compared with the fiscal 2025 period primarily due to a shift in the number of homes delivered in more expensive areas.

Current wording

The decrease in the number of homes delivered in the fiscal 2026 periods was primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024. The average price of homes delivered in the fiscal 2026 periods was relatively flat compared with the fiscal 2025 periods.

Previous wording

The decrease in income before income taxes in the fiscal 2026 three-month period was principally due to lower earnings from decreased revenues and higher home sales cost of revenues, as a percentage of home sale revenues, and lower income (loss) from unconsolidated entities. The percentage increase in home sales cost of revenues in the fiscal 2026 period was primarily due to mix shifts to lower margin products/areas, partially offset by lower inventory impairment charges. Inventory impairment charges were $1.3 million and $4.4 million during the three months ended January 31, 2026 and 2025, respectively.

Current wording

The decrease in income before income taxes in the fiscal 2026 periods was due mainly to lower earnings from decreased revenues and higher home sales cost of revenues, as a percentage of home sale revenues, offset, in part by reduced SG&A costs. The percentage increase in home sales cost of revenues in the fiscal 2026 periods was primarily due to a shift in product mix/areas to lower margin areas, partially offset by lower inventory impairment charges. Inventory impairment charges were $3.4 million and $7.3 million during the three months ended April 30, 2026 and 2025, respectively, and $9.4 million and $14.8 million during the six months ended April 30, 2026 and 2025, respectively.

Previous wording

The increase in the number of homes delivered in the fiscal 2026 period was mainly due to a greater number of spec homes that were sold and delivered within the quarter, as the starting backlog at October 31, 2025 was lower in both units and dollars compared to the number of homes in backlog at October 31, 2024. The average price of homes delivered increased in the fiscal 2026 period primarily due to a shift in the number of homes delivered to more expensive areas and/or product types.

Current wording

The decrease in the number of homes delivered in the fiscal 2026 periods was primarily due to a decrease in the number of homes in backlog at October 31, 2025, as compared to the number of homes in backlog at October 31, 2024. The average price of homes delivered increased in the fiscal 2026 periods primarily due to a shift in the number of homes delivered to more expensive areas and/or product types.

Previous wording

The modest decrease in the number of net contracts signed in the fiscal 2026 period was due primarily to softness in certain markets in the Pacific Northwest offset, in part, by an increase in the number of selling communities in the fiscal 2026 period. The increase in the average value of each contract signed in the fiscal 2026 period was primarily due to a shift in the number of contracts signed to more expensive areas and/or product types.

Current wording

The decrease in the number of net contracts signed in the fiscal 2026 periods was due primarily to continued soft demand conditions in certain markets offset, in part, by an increase in the number of selling communities in the fiscal 2026 periods. The increase in the average value of each contract signed in the fiscal 2026 periods was primarily due to a shift in the number of contracts signed to more expensive areas and/or product types.

Previous wording

The increase in income before income taxes in the fiscal 2026 period was mainly due to higher earnings from increased revenues, lower home sales cost of revenues, as a percentage of home sales revenues, and lower SG&A expenses. The decrease in home sales cost of revenues as a percentage of home sale revenues was primarily due to a shift in product mix/areas to higher-margin areas, partially offset by an increase in inventory impairment charges in the fiscal 2026 period. Inventory impairment charges were $3.7 million and $0.6 million during the three months ended January 31, 2026 and 2025, respectively.

Current wording

The increase in income before income taxes in the fiscal 2026 six-month period was mainly due to higher earnings from increased revenues and lower home sales cost of revenues, as a percentage of home sales revenues. The decrease in home sales cost of revenues as a percentage of home sale revenues was primarily due to a mix shift to higher-margin products and/or areas, partially offset by an increase in inventory impairment charges in the fiscal 2026 period. Inventory impairment charges were $20.6 million and $1.6 million during the six months ended April 30, 2026 and 2025, respectively.