Toll Brothers, Inc.

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 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.

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 nine months ended July 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.

Previous 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.

Current wording

In the three months ended July 31, 2026, we signed 2,508 net contracts for an aggregate value of $2.52 billion, a 5% increase in units and 4% increase in dollars compared to the prior year period, which was primarily attributable to a 12% year-over-year increase in quarter-end community count. On a per-community basis, net signed contracts declined approximately 5% year-over-year, continuing to reflect challenging demand conditions and a housing market impacted by elevated mortgage rates, weak consumer confidence, and geopolitical volatility. 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 have persisted over the course 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

The decrease in home sale revenues for thesix months ended April 30, 2026, as compared to thesix months ended April 30, 2025, was primarily attributable to a 10% decrease in the number of homes delivered, offset in part, by a 7% 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 period, primarily in our Pacific and Mid-Atlantic regions.

Current wording

Home sales revenues for thethree months ended July 31, 2026 were $2.65 billion, as compared to $2.88 billion inthe three months ended July 31, 2025, a decrease primarily attributable to a 10% decrease in the number of homes delivered, offset in part, by a 2% 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, partially offset by faster construction cycle times. The increase in the average delivered home price was mainly due to positive mix, 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 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.

Current wording

The increase in home sales cost of revenues, as a percentage of home sales revenues, in the three months ended July 31, 2026, as compared to the three months ended July 31, 2025, was principally due to an increase in sales incentives on spec homes.

Previous 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.

Current wording

Home sales revenues for thenine months ended July 31, 2026 were $7.02 billion, as compared to$7.43 billion inthe nine months ended July 31, 2025, a decrease primarily attributable to a 10% decrease in the number of homes delivered, offset, in part, by a 5% 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, partially offset by faster construction cycle times. The increase in the average delivered home price was mainly due to positive mix, primarily in our Pacific and Mid-Atlantic regions.

Previous 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.

Current wording

Income from land sales and other revenues was $13.4 million for the nine-month period ended July 31, 2026 compared to $4.6 million for the nine-month period ended July 31, 2025. The increase in land sales and other revenues during the nine months ended July 31, 2026 compared to the nine months ended July 31, 2025 was primarily due to the inclusion of undeveloped land and rental properties in the sale of approximately half of our Apartment Living assets. This increase was partially offset by higher land impairment charges. In connection with such sale, 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 nine months ended July 31, 2026. In addition, during the nine-month periods ended July 31, 2026 and 2025, we recognized $13.7 million and $2.6 million, respectively, of impairment charges in connection with land sales. This gain on sale of Apartment Living assets, partially offset by higher impairment charges on land, resulted in land sales and other cost of revenues, as a percentage of land sales and other revenues during the nine months ended July 31, 2026, being relatively flat with the nine months ended July 31, 2025.

Previous 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.

Current wording

SG&A expenditures increased by $12.4 million in the three-month period ended July 31, 2026 compared to the three-month period ended July 31, 2025. As a percentage of home sales revenues, SG&A expenditures were 10.0% of home sales revenues in the three months ended July 31, 2026, as compared to 8.8% in the three months ended July 31, 2025. The dollar increase in SG&A expenditures was due primarily to higher payroll, commissions and sales center operating costs related to an increase in selling communities.

Previous wording

SG&A expenditures increased by $20.0 million in the six-month period ended April 30, 2026 compared to the six-month period ended April 30, 2025. As a percentage of home sales revenues, SG&A expenditures were 11.8% of home sales revenues in the fiscal 2026 period, as compared to 10.9% in the fiscal 2025 period. The dollar increase in SG&A expenditures was due primarily to higher payroll and sales center operating costs resulting from an increase in the number of selling communities offset, in part, by reduced advertising and marketing costs.

Current wording

SG&A expenditures increased by $32.4 million in the nine-month period ended July 31, 2026 compared to the nine-month period ended July 31, 2025. As a percentage of home sales revenues, SG&A expenditures were 11.1% of home sales revenues in the fiscal 2026 period, as compared to 10.1% in the fiscal 2025 period. The dollar increase in SG&A expenditures was due primarily to higher payroll, commissions and sales center operating costs related to an increase in selling communities offset, in part, by reduced advertising and marketing spend.

Previous wording

In the three-month period ended April 30, 2026, we recognized a loss from unconsolidated entities of $16.7 million as compared to income of $11.5 million in the prior year period. The decrease was primarily due to a $15.5 million gain we recognized in the fiscal 2025 period related to an asset sale by one of our Rental Property Joint Ventures, which did not recur in the current year period, as well as other-than-temporary impairment charges of $13.5 million related to several Rental Property Joint Ventures recognized in the current period. No similar impairment charges were recognized in the three-month period ended April 30, 2025.

Current wording

In the three-month period ended July 31, 2026, we recognized a loss from unconsolidated entities of $3.1 million as compared to a loss of $1.0 million in the prior year period. During the three-month period ended July 31, 2026, we recognized gains of $3.1 million related to the sale of our ownership interest in a Rental Property Joint Venture and $35.3 million in connection with an asset sale by a Rental Property Joint Venture, which was offset by other-than-temporary impairment charges of $39.6 million related to several Rental Property Joint Ventures recognized in the current period. No similar transactions or impairment charges were recognized in the three-month period ended July 31, 2025.

Previous 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.

Current wording

In the nine-month period ended July 31, 2026, we recognized a gain from unconsolidated entities of $15.6 million as compared to a gain of $1.7 million in the prior year period. The $15.6 million gain was primarily comprised of $72.1 million of gains related to the sale of our ownership interests in Land Development and Rental Property Joint Ventures, as well as $56.7 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 $97.4 million related to several Rental Property Joint Ventures. No similar impairment charges were recognized in the nine-month period ended July 31, 2025. In the nine-month period ended July 31, 2025, we recognized a gain of $2.7 million related to the sale of our ownership interest in a Rental Property Joint Venture and a gain of $18.2 million in connection with asset sales by other Rental Property Joint Ventures in the period.

Previous wording

The increase in income from ancillary businesses in the three-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.

Current wording

The increase in income from ancillary businesses in the three-month and nine-month periods ended July 31, 2026 was mainly due to increased revenues from our mortgage operations and reduced costs resulting from the partial sale of our Apartment Living business. The nine-month period ended July 31, 2026 also benefitted from a $3.9 million gain on a bulk sale of security monitoring accounts by our smart home technology business.

Previous wording

The decrease in “Other” during the three-month and six-month periods ended April 30, 2026 was primarily due to higher directly expensed interest costs. The six-month period ended April 30, 2025 was also impacted by higher referral fee income.

Current wording

The decrease in “Other” during the nine-month period ended July 31, 2026 was primarily due to higher directly expensed interest costs and lower referral fee income compared to the nine-month period ended July 31, 2025.

Previous 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.

Current wording

For the three-month period ended July 31, 2026, we reported income before income taxes of $374.8 million, as compared to $499.5 million in the three-month period ended July 31, 2025.

Previous wording

For the six-month period ended April 30, 2026, we reported income before income taxes of $623.9 million, as compared to $698.9 million in the six-month period ended April 30, 2025.

Current wording

For the nine-month period ended July 31, 2026, we reported income before income taxes of $998.7 million, as compared to $1.20 billion in the nine-month period ended July 31, 2025.

Previous wording

In the three-month periods ended April 30, 2026 and 2025, we recognized income tax provisions of $89.8 million and $125.1 million, respectively. The effective tax rate was 25.6% for the three months ended April 30, 2026, compared to 26.2% for the three months ended April 30, 2025. The decrease in the effective tax rate for the three months ended April 30, 2026 was primarily due to higher 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 provision would have been $73.6 million and $100.3 million in the three-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.

Current wording

In the three-month periods ended July 31, 2026 and 2025, we recognized income tax provisions of $94.6 million and $129.9 million, respectively. The effective tax rate was 25.3% for the three months ended July 31, 2026, compared to 26.0% for the three months ended July 31, 2025. The decrease in the effective tax rate for the three months ended July 31, 2026 was primarily due to higher 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 provision would have been $78.7 million and $104.9 million in the three-month periods ended July 31, 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.

Previous 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.

Current wording

We recognized income tax provisions of $247.1 million and $298.6 million in the nine-month periods ended July 31, 2026 and 2025, respectively. The effective tax rate was 24.7% for the nine months ended July 31, 2026, compared to 24.9% for the nine months ended July 31, 2025. The decrease in the effective tax rate for the nine months ended July 31, 2026 was primarily due to higher 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 $209.7 million and $251.7 million in the nine-month periods ended July 31, 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

In the three-month periods ended April 30, 2026 and 2025, the value of net contracts signed was $2.81 billion (2,834 homes) and $2.60 billion (2,650 homes), respectively. The increase of $202.9 million, or 8%, in the aggregate value of net contracts signed was primarily due to an increase in the number of net contracts signed in our North and South regions.

Current wording

In the three-month periods ended July 31, 2026 and 2025, the value of net contracts signed was $2.52 billion (2,508 homes) and $2.41 billion (2,388 homes), respectively. The increase of $103.3 million, or 4%, in the aggregate value of net contracts signed was primarily due to a 5% increase in the number of net contracts signed, primarily in our North, South, and Mountain regions, offset by a reduction of 1% in the average contracted price. In the three-month period ended July 31, 2026, the average value of each contract signed was $1.00 million, as compared to $1.01 million at July 31, 2025, with the slight decline attributable to mix.

Previous wording

In the six-month periods ended April 30, 2026 and 2025, the value of net contracts signed was $5.19 billion (5,137 homes) and $4.91 billion (4,957 homes), respectively. The increase of $275.0 million, or 6%, in the aggregate value of net contracts signed was primarily due to an increase in the number of net contracts signed in our North and South regions, in addition to a shift in the mix to higher price products in our Pacific region.

Current wording

In the nine-month periods ended July 31, 2026 and 2025, the value of net contracts signed was $7.70 billion (7,645 homes) and $7.32 billion (7,345 homes), respectively. The increase of $378.2 million, or 5%, in the aggregate value of net contracts signed was primarily due to a 4% increase in the number of net contracts signed, primarily in our North, South, and Mountain regions, in addition to a 1% increase in the average contracted price. In the nine-month period ended July 31, 2026, the average value of each contract signed was $1.01 million, as compared to $1.00 million in the prior year period, with the slight increase attributable to mix.

Previous 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.

Current wording

The value of our backlog at July 31, 2026 decreased 2% to $6.24 billion (5,312 homes), as compared to $6.38 billion (5,492 homes) at July 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 July 31, 2026 as compared to July 31, 2025, was due to a 3% decrease in the number of homes in backlog partially offset by a 1% 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 mix.

Previous wording

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

Current wording

At July 31, 2026, we were selling from 471 communities, compared to 446 at October 31, 2025 and 420 at July 31, 2025.

Previous 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.

Current wording

At July 31, 2026, we owned or controlled through options approximately 75,500 home sites, as compared to approximately 76,100 at October 31, 2025; and approximately 74,700 at October 31, 2024. Of the approximately 75,500 home sites that we owned or controlled through options at July 31, 2026, we owned approximately 31,800 and controlled approximately 43,700 through options. Of the 31,800 home sites owned, approximately 18,100 were substantially improved. In addition, as of July 31, 2026, we expect to purchase approximately 8,600 additional home sites over several years from certain of the joint ventures in which we have interests, at prices to be determined.

Previous wording

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

Current wording

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

Previous wording

At 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.

Current wording

At July 31, 2026, we had $1.06 billion of cash and cash equivalents on hand, restricted cash of $72.4 million, and approximately $2.24 billion available for borrowing under our Revolving Credit Facility. At July 31, 2026, we had no borrowings and we had approximately $130.1 million of outstanding letters of credit under the 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 5, 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

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.

Current wording

At July 31, 2026, our total stockholders’ equity and our debt to total capitalization ratio were $8.53 billion and 0.24 to 1.00, respectively.

Previous wording

Over the longer term, to the extent the sources of capital described above are insufficient to meet our needs, we may also conduct additional public offerings of our securities, refinance debt or dispose of certain assets to fund our operating activities and debt service. We expect these resources will be adequate to fund our ongoing operating activities as well as provide capital for investment in future land purchases, and related development activities and future joint ventures.

Current wording

Over the longer term, to the extent the sources of capital described above are insufficient to meet our needs, we may also conduct additional public offerings of our securities, refinance or incur additional debt or dispose of certain assets to fund our operating activities and debt service. We expect these resources will be adequate to fund our ongoing operating activities as well as provide capital for investment in future land purchases, and related development activities and future joint ventures.

Previous 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.

Current wording

We also operate through a number of joint ventures and have undertaken various commitments as a result of those arrangements. At July 31, 2026, we had investments in these entities of $907.1 million and were committed to invest or advance up to an additional $269.0 million to these entities if they required additional funding at such date. At July 31, 2026, we had agreed to terms for the acquisition of 707 home sites from four joint ventures for an estimated aggregate purchase price of $76.1 million. We also expect to purchase approximately 8,600 additional home sites over a number of years from several joint ventures in which we have interests. The purchase price of these home sites will be determined at a future date.

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 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.

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 July 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 July 31, 2026, we had guaranteed the debt of certain unconsolidated entities that had loan commitments aggregating $1.73 billion, of which, if the full amount of the debt obligations were borrowed, we estimate $388.9 million to have been our maximum exposure related to repayment and carry cost guarantees at such date. At July 31, 2026, the unconsolidated entities had borrowed an aggregate of $1.44 billion, of which we estimate $388.9 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 7.4 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 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.

Current wording

At July 31, 2026 and October 31, 2025, we had $1.13 billion and $1.34 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the nine-month period ended July 31, 2026 was $392.1 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 current income taxes – net; and a decrease in accounts payable and accrued expenses.

Previous 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

Current wording

At July 31, 2025 and October 31, 2024, we had $938.3 million and $1.37 billion, respectively, of cash, cash equivalents, and restricted cash. Cash provided by operating activities during the nine-month period ended July 31, 2025 was $312.4 million. Cash provided by operating activities during the fiscal 2025 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); an increase in accounts payable and accrued expenses; an increase in current income taxes - net and mortgage loans sold, net of mortgage loans originated. This activity was offset, in part, by an increase in inventory; an increase in receivables, prepaid expenses and other assets, and a decrease in customer deposits - net.

Previous 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.

Current wording

In the nine-month period ended July 31, 2026, cash provided by investing activities was $116.3 million, which was primarily related to $219.5 million of proceeds related to the sale of ownership interests in unconsolidated entities and $104.2 million of cash received as returns from our investments in unconsolidated entities. This activity was offset, in part, by $129.1 million used to fund our investments in unconsolidated entities and $74.0 million used for the purchase of property and equipment, net.

Previous 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.

Current wording

We used $717.1 million of cash in financing activities in the nine-month period ended July 31, 2026, primarily for repurchase of $434.9 million of our common stock, payments of $182.1 million of loans payable, net of borrowings, the payment of dividends on our common stock of $73.5 million, payments of $8.0 million related to stock-based benefit plans - net, payments of $7.8 million related to sales to land bank programs, net of proceeds, and payments of $4.4 million related to non-controlling interest - net.

Previous wording

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

Current wording

We used $504.4 million of cash in financing activities in the nine-month period ended July 31, 2025, primarily for the repurchase of $404.3 million of our common stock, $350.0 million for the redemption of senior notes, payments of $100.9 million of loans payable, net of borrowings, the payment of dividends on our common stock of $73.3 million, $62.3 million of payments related to repurchases from land bank programs, $21.3 million of payments related to stock-based benefit plans - net and $13.1 million of debt issuance costs. This activity was offset, in part, by $498.2 million of proceeds from the issuance of senior notes and $22.1 million of proceeds related to sales to land bank programs.

Previous wording

•The South region: Florida, South Carolina and Texas;

Current wording

•The South region: Arkansas, Florida, South Carolina and Texas;

Previous wording

The decrease in income before income taxes in the fiscal 2026 three-month period was attributable to higher home sales cost of revenues as a percentage of home sale revenues, an increase in SG&A costs due to increased community openings, and decreased income (loss) from unconsolidated entities. Income before income taxes in the fiscal 2026 six-month period was relatively flat with the comparable prior period.

Current wording

The decrease in income before income taxes in each fiscal 2026 period was primarily attributable to increased home sales cost of revenues, as a percentage of home sales revenues, an increase in SG&A costs due to increased community openings, and decreased income (loss) from unconsolidated entities.

Previous 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.

Current wording

Despite an increase in selling communities during each period, the number of net signed contracts decreased in each fiscal 2026 period, mainly due to continued soft demand conditions. The average value of net signed contracts in each fiscal 2026 period decreased compared to the corresponding prior year period primarily due to mix shifts.

Previous 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.

Current wording

The decrease in income before income taxes in the three-month fiscal 2026 period was mainly due to lower earnings from decreased revenues, increased home sales cost of revenues, as a percentage of home sales revenues, higher land impairment charges and higher SG&A costs. Land impairment charges were $6.6 million and $9.6 million for the three-month and nine-month fiscal 2026 periods and there were no similar charges in the fiscal 2025 periods. The increase in home sales cost of revenues, as a percentage of home sales revenues, during the fiscal 2026 periods was principally due to a shift in the number of homes delivered to less expensive areas and/or products and higher inventory impairment charges during the nine-month fiscal 2026 period. Inventory impairment charges were $8.2 million and $8.5 million during the three months ended July 31, 2026 and 2025, respectively, and $17.6 million and $12.6 million during the nine months ended July 31, 2026 and 2025, respectively.

Previous 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.

Current wording

The decrease in income before income taxes in each fiscal 2026 period was principally due to lower earnings from decreased revenues, increased home sales cost of revenues, as a percentage of home sales revenues, and lower income (loss) from unconsolidated entities. The increase in home sales cost of revenues, as a percentage of home sales revenues, in each fiscal 2026 period was primarily due to mix shifts, partially offset by lower inventory impairment charges in the fiscal 2026 periods. Inventory impairment charges were $4.0 million and $8.5 million during the three months ended July 31, 2026 and 2025, respectively, and $8.2 million and $13.5 million during the nine months ended July 31, 2026 and 2025, respectively.

Previous wording

The increase in the number of net contracts signed in the fiscal 2026 periods was due primarily to improving demand and an increase in the average number of selling communities. The modest increase in the average value of each contract signed in the fiscal 2026 three-month period was primarily due to a shift in the number of contracts signed in more expensive areas and/or product types. The average value of each contract signed in the six-month 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 improving demand and an increase in the average number of selling communities. The increase in the average value of each contract signed in each of the fiscal 2026 periods was due to a shift in the number of contracts signed in more expensive areas and/or product types.

Previous 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.

Current wording

The decrease in income before income taxes in each fiscal 2026 period was due mainly to lower earnings from decreased revenues and higher home sales cost of revenues, offset, in part by reduced SG&A costs. The increase in home sales cost of revenues, as a percentage of home sales revenues, in the fiscal 2026 periods was primarily due to mix shifts. During the nine-month fiscal 2026 period, the decrease was partially offset by lower inventory impairment charges. Inventory impairment charges were $1.6 million and $0.5 million during the three months ended July 31, 2026 and 2025, respectively, and $11.1 million and $15.3 million during the nine months ended July 31, 2026 and 2025, respectively.

Previous 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.

Current wording

The decrease in the number of homes delivered in each fiscal 2026 period was primarily due to a lower backlog of homes at October 31, 2025 compared to October 31, 2024, as well as fewer spec home deliveries. The average price of homes delivered increased in each fiscal 2026 period primarily due to positive mix, primarily in California.