0000794170false8-K00007941702024-05-212024-05-21

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 21, 2024
Toll Brothers, Inc.
(Exact Name of Registrant as Specified in Charter)
 
Delaware 001-09186 23-2416878
(State or Other Jurisdiction
of Incorporation)		 (Commission
File Number)		 (IRS Employer
Identification No.)
1140 Virginia DriveFort WashingtonPA19034
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number, including area code: (215) 938-8000
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
    ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareTOLThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 21, 2024, Toll Brothers, Inc. issued a press release which contained its results of operations for its three-month and six-month periods ended April 30, 2024, a copy of which is attached hereto as Exhibit 99.1, to this report.
The information hereunder shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d). Exhibits
The following Exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit
No.                            Item 


104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed electronically herewith

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  TOLL BROTHERS, INC.
Dated:May 21, 2024 By: /s/ Michael J. Grubb
  Michael J. Grubb
Senior Vice President,
Chief Accounting Officer

2

EXHIBIT 99.1             
FOR IMMEDIATE RELEASECONTACT: Frederick N. Cooper (215) 938-8312
May 21, 2024fcooper@tollbrothers.com
        
Toll Brothers Reports FY 2024 2nd Quarter Results

FORT WASHINGTON, PA, May 21, 2024 -- Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation’s leading builder of luxury homes, today announced results for its second quarter ended April 30, 2024.

FY 2024’s Second Quarter Financial Highlights (Compared to FY 2023’s Second Quarter):
•Net income and earnings per share were $481.6 million and $4.55 per diluted share, compared to net income of $320.2 million and $2.85 per diluted share in FY 2023’s second quarter.
•Net income and earnings per share included $124.1 million and $1.17, respectively, related to the sale of a parcel of land to a commercial developer. Excluding these gains, net income and earnings per share were $357.5 million and $3.38 per diluted share in FY 2024’s second quarter.
•Pre-tax income was $649.8 million, compared to $430.6 million in FY 2023’s second quarter.
•Home sales revenues were $2.65 billion, up 6% compared to FY 2023’s second quarter; delivered homes were 2,641, also up 6%.
•Net signed contract value was $2.94 billion, up 29% compared to FY 2023’s second quarter; contracted homes were 3,041, up 30%.
•Backlog value was $7.38 billion at second quarter end, down 12% compared to FY 2023’s second quarter; homes in backlog were 7,093, down 6%.
•Home sales gross margin was 25.8%, compared to FY 2023’s second quarter home sales gross margin of 26.4%.
•Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.2%, compared to FY 2023’s second quarter adjusted home sales gross margin of 28.3%.
•SG&A, as a percentage of home sales revenues, was 9.0%, compared to 9.1% in FY 2023’s second quarter.
•Income from operations was $623.5 million.
•Other income, income from unconsolidated entities, and gross margin from land sales and other was $203.7 million, which includes $175.2 million from the land sale referred to above.
Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our second quarter results. We delivered 2,641 homes at an average price of $1.0 million, generating home sales revenues of $2.65 billion, a 6% increase compared to last year’s second quarter. Our adjusted gross margin was 28.2%, 60 basis points better than guidance, and our SG&A expense, as a percentage of home sales revenues was 9.0%, 70 basis points better than guidance. These strong home building results, together with a previously disclosed $175 million pre-tax land sale gain, contributed to record second quarter earnings of $4.55 per diluted share, up 60% compared to last year. In addition, we signed 3,041 net contracts for $2.9 billion in the quarter, up 30% in units and 29% in dollars compared to the second quarter of 2023. Based on these outstanding results, and with continued solid demand as we start our third quarter, we are increasing our full year revenue and earnings guidance. We now expect to earn approximately $14.00 per diluted share in fiscal 2024 with a return on beginning equity of approximately 22%.
“Demand for new homes continues to be driven by a resilient economy, favorable demographics and a lack of supply that reflects both the chronic underproduction of housing in the U.S. and the historically low levels of resale inventory caused by the lock-in effect of higher rates. Our strategy of widening our price points to include more affordable luxury homes and increasing our supply of spec homes has helped us grow market share. It also enables us to reduce cycle times, improve inventory turns and leverage our fixed costs, driving revenue growth and higher operating margins. With these strategies firmly in place and producing results, and with our more capital efficient land strategy, we are confident that we can continue to generate attractive returns well into the future.
“We have a healthy balance sheet with low net debt and ample liquidity, and we continue to generate significant operating cash flows. In the second quarter, we repurchased $181 million of common stock and increased our quarterly dividend by


10%. Our solid financial position, more efficient operations and strong cash flow generation should allow us to continue investing in growth while also returning cash to stockholders.”
Third Quarter and FY 2024 Financial Guidance:
Third QuarterFull Fiscal Year 2024
Deliveries
2,750 to 2,850 units
10,400 to 10,800 units
Average Delivered Price per Home
$950,000 - $960,000
$960,000 - $970,000
Adjusted Home Sales Gross Margin27.7 %28.0 %
SG&A, as a Percentage of Home Sales Revenues9.2 %9.6 %
Period-End Community Count400410
Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other
$—
$260 million
Tax Rate26.0 %25.5 %
Financial Highlights for the three months ended April 30, 2024 and 2023 (unaudited):
20242023
Net Income
$481.6 million, or $4.55 per share diluted
$320.2 million, or $2.85 per share diluted
Pre-Tax Income
$649.8 million
$430.6 million
Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues
$28.4 million
$11.1 million
Home Sales Revenues
$2.65 billion and 2,641 units
$2.49 billion and 2,492 units
Net Signed Contracts
$2.94 billion and 3,041 units
$2.28 billion and 2,333 units
Net Signed Contracts per Community
8.0 units
7.0 units
Quarter-End Backlog
$7.38 billion and 7,093 units
$8.38 billion and 7,574 units
Average Price per Home in Backlog
$1,040,200
$1,105,900
Home Sales Gross Margin25.8 %26.4 %
Adjusted Home Sales Gross Margin28.2 %28.3 %
Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues1.3 %1.5 %
SG&A, as a percentage of Home Sales Revenues9.0 %9.1 %
Income from Operations
$623.5 million, or 22.0% of total revenues
$425.7 million, or 17.0% of total revenues
Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other
$203.7 million
$0.9 million
Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues
$0.6 million
$4.7 million
Quarterly Cancellations as a Percentage of Beginning-Quarter Backlog2.8 %3.9 %
Quarterly Cancellations as a Percentage of Signed Contracts in Quarter5.7 %11.5 %
2

Financial Highlights for the six months ended April 30, 2024 and 2023 (unaudited):
20242023
Net Income
$721.2 million, or $6.80 per share diluted
$511.7 million, or $4.56 per share diluted
Pre-Tax Income
$960.9 million
$684.4 million
Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues
$29.9 million
$19.1 million
Home Sales Revenues
$4.58 billion and 4,568 units
$4.24 billion and 4,318 units
Net Signed Contracts
$5.01 billion and 5,083 units
$3.73 billion and 3,794 units
Home Sales Gross Margin26.6 %26.1 %
Adjusted Home Sales Gross Margin28.5 %28.0 %
Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues1.3 %1.5 %
SG&A, as a percentage of Home Sales Revenues10.2 %10.4 %
Income from Operations
$931.9 million, or 19.5% of total revenues
$651.0 million, or 15.2% of total revenues
Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other
$212.3 million
$17.7 million
Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues
$0.6 million
$17.7 million
Additional Information:
•The Company ended its FY 2024 second quarter with approximately $1.03 billion in cash and cash equivalents, compared to $1.30 billion at FYE 2023 and $754.8 million at FY 2024’s first quarter end. At FY 2024 second quarter end, the Company also had $1.7 billion available under its $1.9 billion revolving credit facility, which is scheduled to mature in February 2028.
•On March 12, 2024, the Company announced a 10% increase in its quarterly cash dividend from $0.21 to $0.23 per share. On April 19, 2024, the Company paid its quarterly dividend of $0.23 per share to shareholders of record at the close of business on April 5, 2024.
•Stockholders’ Equity at FY 2024 second quarter end was $7.31 billion, compared to $6.80 billion at FYE 2023.
•FY 2024’s second quarter-end book value per share was $70.98 per share, compared to $65.49 at FYE 2023.
•The Company ended its FY 2024’s second quarter with a debt-to-capital ratio of 28.0%, compared to 28.0% at FY 2024’s first quarter end and 29.6% at FYE 2023. The Company ended FY 2024’s second quarter with a net debt-to-capital ratio(1) of 18.7%, compared to 21.4% at FY 2024’s first quarter end, and 17.7% at FYE 2023.
•The Company ended FY 2024’s second quarter with approximately 71,800 lots owned and optioned, compared to 70,400 one quarter earlier, and 71,300 one year earlier. Approximately 52% or 37,000, of these lots were owned, of which approximately 18,500 lots, including those in backlog, were substantially improved.
•In the second quarter of FY 2024, the Company spent approximately $472.0 million on land to purchase approximately 3,470 lots.
•The Company ended FY 2024’s second quarter with 386 selling communities, compared to 377 at FY 2024’s first quarter end and 350 at FY 2023’s second quarter end.
•The Company repurchased approximately 1.5 million shares at an average price of $120.60 per share for a total purchase price of approximately $181.2 million.
(1)    See “Reconciliation of Non-GAAP Measures” below for more information on the calculation of the Company’s net debt-to-capital ratio.
3

Toll Brothers will be broadcasting live via the Investor Relations section of its website, investors.TollBrothers.com, a conference call hosted by chairman and chief executive officer Douglas C. Yearley, Jr. at 8:30 a.m. (ET) Wednesday, May 22, 2024, to discuss these results and its outlook for the third quarter and FY 2024. To access the call, enter the Toll Brothers website, click on the Investor Relations page, and select “Events & Presentations.” Participants are encouraged to log on at least fifteen minutes prior to the start of the presentation to register and download any necessary software.
The call can be heard live with an online replay which will follow.
ABOUT TOLL BROTHERS
Toll Brothers, Inc., a Fortune 500 Company, is the nation’s leading builder of luxury homes. The Company was founded 57 years ago in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves first-time, move-up, empty-nester, active-adult, and second-home buyers, as well as urban and suburban renters. Toll Brothers builds in over 60 markets in 24 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia. The Company operates its own architectural, engineering, mortgage, title, land development, insurance, smart home technology, and landscape subsidiaries. The Company also develops master-planned and golf course communities as well as operates its own lumber distribution, house component assembly, and manufacturing operations.
In 2024, Toll Brothers marked 10 years in a row being named to the Fortune World’s Most Admired Companies™ list. Toll Brothers has also been named Builder of the Year by Builder magazine and is the first two-time recipient of Builder of the Year from Professional Builder magazine. For more information visit TollBrothers.com.
Toll Brothers discloses information about its business and financial performance and other matters, and provides links to its securities filings, notices of investor events, and earnings and other news releases, on the Investor Relations section of its website (investors.TollBrothers.com).
From Fortune, ©2024 Fortune Media IP Limited. All rights reserved. Used under license.

4

FORWARD-LOOKING STATEMENTS
Information presented herein for the second quarter ended April 30, 2024 is subject to finalization of the Company’s regulatory filings, related financial and accounting reporting procedures and external auditor procedures.
This release contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events. These statements contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should,” “likely,” “will,” and other words or phrases of similar meaning. Such statements may include, but are not limited to, information and statements regarding: expectations regarding inflation and interest rates; the markets in which we operate or may operate; our strategic priorities; our land acquisition, land development and capital allocation priorities; market conditions; demand for our homes; our build-to-order and spec home strategy; anticipated operating results and guidance; home deliveries; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues, including expected labor and material costs; selling, general, and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; sales paces and prices; effects of home buyer cancellations; growth and expansion; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire or dispose of land and pursue real estate opportunities; our ability to gain approvals and open new communities; our ability to market, construct and sell homes and properties; our ability to deliver homes from backlog; our ability to secure materials and subcontractors; our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities; and the outcome of legal proceedings, investigations, and claims.
Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:
•the effect of general economic conditions, including employment rates, housing starts, inflation rates, interest and mortgage rates, availability of financing for home mortgages and strength of the U.S. dollar;
•market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
•the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such land;
•access to adequate capital on acceptable terms;
•geographic concentration of our operations;
•levels of competition;
•the price and availability of lumber, other raw materials, home components and labor;
•the effect of U.S. trade policies, including the imposition of tariffs and duties on home building products and retaliatory measures taken by other countries;
•the effects of weather and the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, unavailability of insurance, and shortages and price increases in labor or materials associated with such natural disasters;
•risks arising from acts of war, terrorism or outbreaks of contagious diseases, such as Covid-19;
•federal and state tax policies;
•transportation costs;
•the effect of land use, environment and other governmental laws and regulations;
•legal proceedings or disputes and the adequacy of reserves;
5

•risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, indebtedness, financial condition, losses and future prospects;
•the effect of potential loss of key management personnel;
•changes in accounting principles;
•risks related to unauthorized access to our computer systems, theft of our and our homebuyers’ confidential information or other forms of cyber-attack; and
•other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended October 31, 2023 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).
Many of the factors mentioned above or in other reports or public statements made by us will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.
Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.
For a further discussion of factors that we believe could cause actual results to differ materially from expected and historical results, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K filed with the SEC and in subsequent reports filed with the SEC. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.
6

TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

April 30,
2024		October 31,
2023
(Unaudited)
ASSETS
Cash and cash equivalents$1,030,530 $1,300,068 
Inventory9,926,939 9,057,578 
Property, construction and office equipment - net321,166 323,990 
Receivables, prepaid expenses and other assets724,399 691,256 
Mortgage loans held for sale136,346 110,555 
Customer deposits held in escrow108,521 84,530 
Investments in unconsolidated entities1,002,458 959,041 
$13,250,359 $12,527,018 
LIABILITIES AND EQUITY
Liabilities:
Loans payable$1,113,126 $1,164,224 
Senior notes1,596,644 1,596,185 
Mortgage company loan facility127,541 100,058 
Customer deposits542,877 540,718 
Accounts payable694,422 597,582 
Accrued expenses1,636,722 1,548,781 
Income taxes payable214,833 166,268 
Total liabilities5,926,165 5,713,816 
Equity:
Stockholders’ Equity
Common stock, 112,937 shares issued at April 30, 2024 and October 31, 20231,129 1,129 
Additional paid-in capital689,259 698,548 
Retained earnings7,350,235 6,675,719 
Treasury stock, at cost — 9,974 and 9,146 shares at April 30, 2024 and October 31, 2023, respectively(772,476)(619,150)
Accumulated other comprehensive income39,827 40,910 
Total stockholders’ equity
7,307,974 6,797,156 
Noncontrolling interest16,220 16,046 
Total equity7,324,194 6,813,202 
$13,250,359 $12,527,018 


7


TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data and percentages)
(Unaudited)

Three Months Ended
April 30,		Six Months Ended
April 30,
 2024202320242023
$%$%$%$%
Revenues:
Home sales$2,647,020 $2,490,098 $4,578,856 $4,239,520 
Land sales and other190,466 16,881 206,478 47,628 
2,837,486 2,506,979 4,785,334 4,287,148 
Cost of revenues:
Home sales1,963,283 74.2 %1,832,878 73.6 %3,362,509 73.4 %3,133,801 73.9 %
Land sales and other12,979 6.8 %20,850 123.5 %23,140 11.2 %63,285 132.9 %
1,976,262 1,853,728 3,385,649 3,197,086 
Gross margin - home sales683,737 25.8 %657,220 26.4 %1,216,347 26.6 %1,105,719 26.1 %
Gross margin - land sales and other177,487 93.2 %(3,969)(23.5)%183,338 88.8 %(15,657)(32.9)%
Selling, general and administrative expenses237,698 9.0 %227,537 9.1 %467,744 10.2 %439,034 10.4 %
Income from operations623,526 425,714 931,941 651,028 
Other:
Income (loss) from unconsolidated entities5,887 (5,302)(3,285)(9,735)
Other income - net20,366 10,180 32,284 43,095 
Income before income taxes649,779 430,592 960,940 684,388 
Income tax provision168,162 110,376 239,765 172,642 
Net income$481,617 $320,216 $721,175 $511,746 
Per share:
Basic earnings$4.60 $2.88 $6.87 $4.60 
Diluted earnings$4.55 $2.85 $6.80 $4.56 
Cash dividend declared$0.23 $0.21 $0.44 $0.41 
Weighted-average number of shares:
Basic104,794 111,214 104,958 111,306 
Diluted105,803 112,184 106,034 112,260 
Effective tax rate25.9%25.6%25.0%25.2%

8

TOLL BROTHERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
(Amounts in thousands)
(unaudited)

Three Months Ended
April 30,		Six Months Ended
April 30,
 2024202320242023
Inventory impairments and write-offs included in home sales cost of revenues:
Pre-development costs and option write offs
$1,288 $5,844 $2,759 $8,448 
Land owned for future communities— 325 — 325 
Land owned for operating communities
27,140 4,900 27,140 10,300 
$28,428 $11,069 $29,899 $19,073 
Land and other impairments included in land sales and other cost of revenues$600 $4,700 $600 $17,700 
Depreciation and amortization$19,590 $18,611 $35,283 $34,093 
Interest incurred$27,405 $33,581 $56,164 $66,628 
Interest expense:
Charged to home sales cost of revenues$34,740 $37,558 $58,318 $62,638 
Charged to land sales and other cost of revenues726 1,350 1,020 4,827 
$35,466 $38,908 $59,338 $67,465 
Home sites controlled:April 30,
2024		April 30,
2023
Owned36,985 36,348 
Optioned34,779 34,947 
71,764 71,295 

Inventory at April 30, 2024 and October 31, 2023 consisted of the following (amounts in thousands):
April 30,
2024		October 31,
2023
Land deposits and costs of future communities$509,981 $549,035 
Land and land development costs2,952,101 2,631,147 
Land and land development costs associated with homes under construction3,203,677 2,916,334 
Total land and land development costs6,665,759 6,096,516 
Homes under construction2,782,555 2,515,484 
Model homes (1)
478,625 445,578 
$9,926,939 $9,057,578 
(1)    Includes the allocated land and land development costs associated with each of our model homes in operation.

9

Toll Brothers operates in the following five geographic segments, with current operations generally located in the states listed below:
•North: Connecticut, Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York and Pennsylvania
•Mid-Atlantic: Georgia, Maryland, North Carolina, Tennessee and Virginia
•South: Florida, South Carolina and Texas
•Mountain: Arizona, Colorado, Idaho, Nevada and Utah
•Pacific: California, Oregon and Washington

Three Months Ended
April 30,
Units$ (Millions)Average Price Per Unit $
202420232024202320242023
REVENUES
North349 408 $335.2 $381.3 $960,500 $934,600 
Mid-Atlantic378 274 376.1 309.6 $995,000 $1,129,900 
South804 659 658.4 519.4 $818,900 $788,100 
Mountain686 767 603.6 674.2 $879,800 $879,100 
Pacific424 384 674.7 605.9 $1,591,200 $1,577,800 
Home Building2,641 2,492 2,648.0 2,490.4 $1,002,600 $999,300 
Corporate and other(1.0)(0.3)
Total home sales2,641 2,492 2,647.0 2,490.1 $1,002,300 $999,200 
Land sales and other190.5 16.9 
Total Consolidated$2,837.5 $2,507.0 
CONTRACTS
North412 396 $422.1 $366.1 $1,024,600 $924,400 
Mid-Atlantic376 316 348.9 325.4 $928,000 $1,029,700 
South892 749 746.8 590.9 $837,200 $789,000 
Mountain944 529 814.6 449.4 $862,900 $849,500 
Pacific417 343 608.6 543.5 $1,459,400 $1,584,600 
Total Consolidated3,041 2,333 $2,941.0 $2,275.3 $967,100 $975,300 
BACKLOG
North1,055 1,081 $1,108.0 $1,097.6 $1,050,300 $1,015,300 
Mid-Atlantic912 969 900.8 1,052.3 $987,700 $1,085,900 
South2,344 2,539 2,120.2 2,362.4 $904,500 $930,400 
Mountain1,891 2,037 1,836.2 2,161.1 $971,000 $1,060,900 
Pacific891 948 1,412.8 1,702.9 $1,585,600 $1,796,300 
Total Consolidated7,093 7,574 $7,378.0 $8,376.3 $1,040,200 $1,105,900 


10

Six Months Ended
April 30,
Units$ (Millions)Average Price Per Unit $
202420232024202320242023
REVENUES
North638 765 $607.9 $704.1 $952,800 $920,400 
Mid-Atlantic655 440 640.3 498.7 $977,600 $1,133,400 
South1,435 1,148 1,191.3 912.3 $830,200 $794,700 
Mountain1,171 1,315 1,056.9 1,154.4 $902,600 $877,900 
Pacific669 650 1,083.7 970.6 $1,619,900 $1,493,200 
Home Building4,568 4,318 4,580.1 4,240.1 $1,002,600 $982,000 
Corporate and other(1.2)(0.6)
Total home sales4,568 4,318 4,578.9 4,239.5 $1,002,400 $981,800 
Land sales and other206.5 47.6 
Total Consolidated$4,785.3 $4,287.1 
CONTRACTS
North737 724 $751.0 $681.3 $1,019,000 $941,000 
Mid-Atlantic622 567 587.6 589.5 $944,700 $1,039,700 
South1,467 1,164 1,216.7 919.4 $829,400 $789,900 
Mountain1,485 828 1,313.4 713.3 $884,400 $861,500 
Pacific772 511 1,137.1 826.0 $1,472,900 $1,616,400 
Total Consolidated5,083 3,794 $5,005.8 $3,729.5 $984,800 $983,000 

Note: Due to rounding, amounts may not add.

Unconsolidated entities:
Information related to revenues and contracts of entities in which we have an interest for the three-month and six-month periods ended April 30, 2024 and 2023, and for backlog at April 30, 2024 and 2023 is as follows:
Units$ (Millions)Average Price Per Unit $
202420232024202320242023
Three months ended April 30,
Revenues40 3 $40.9 $8.6 $1,021,400 $2,864,500 
Contracts33 29 $43.9 $37.3 $1,328,900 $1,286,000 
Six months ended April 30,
Revenues40 6 $40.9 $23.4 $1,021,400 $3,906,700 
Contracts55 52 $65.4 $70.2 $1,189,700 $1,350,300 
Backlog at April 30,164 127 $184.5 $143.4 $1,125,200 $1,128,800 

11

RECONCILIATION OF NON-GAAP MEASURES
This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s adjusted home sales gross margin, adjusted net income, adjusted diluted earnings per share and the Company’s net debt-to-capital ratio.
These four measures are non-GAAP financial measures which are not calculated in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures should not be considered a substitute for, or superior to, the comparable GAAP financial measures, and may be different from non-GAAP measures used by other companies in the home building business.
The Company’s management considers these non-GAAP financial measures as we make operating and strategic decisions and evaluate our performance, including against other home builders that may use similar non-GAAP financial measures. The Company’s management believes these non-GAAP financial measures are useful to investors in understanding our operations and leverage and may be helpful in comparing the Company to other home builders to the extent they provide similar information.
Adjusted Home Sales Gross Margin
The following table reconciles the Company’s home sales gross margin as a percentage of home sales revenues (calculated in accordance with GAAP) to the Company’s adjusted home sales gross margin (a non-GAAP financial measure). Adjusted home sales gross margin is calculated as (i) home sales gross margin plus interest recognized in home sales cost of revenues plus inventory write-downs recognized in home sales cost of revenues divided by (ii) home sales revenues.
Adjusted Home Sales Gross Margin Reconciliation
(Amounts in thousands, except percentages)
Three Months Ended
April 30,		Six Months Ended
April 30,
2024202320242023
Revenues - home sales$2,647,020 $2,490,098 $4,578,856 $4,239,520 
Cost of revenues - home sales1,963,283 1,832,878 3,362,509 3,133,801 
Home sales gross margin683,737 657,220 1,216,347 1,105,719 
Add:Interest recognized in cost of revenues - home sales34,740 37,558 58,318 62,638 
Inventory impairments and write-offs in cost of revenues - home sales28,428 11,069 29,899 19,073 
Adjusted home sales gross margin$746,905 $705,847 $1,304,564 $1,187,430 
Home sales gross margin as a percentage of home sale revenues25.8 %26.4 %26.6 %26.1 %
Adjusted home sales gross margin as a percentage of home sale revenues28.2 %28.3 %28.5 %28.0 %

The Company’s management believes adjusted home sales gross margin is a useful financial measure to investors because it allows them to evaluate the performance of our home building operations without the often varying effects of capitalized interest costs and inventory impairments. The use of adjusted home sales gross margin also assists the Company’s management in assessing the profitability of our home building operations and making strategic decisions regarding community location and product mix.


12

Forward-looking Adjusted Home Sales Gross Margin
The Company has not provided projected third quarter and full FY 2024 home sales gross margin or a GAAP reconciliation for forward-looking adjusted home sales gross margin because such measure cannot be provided without unreasonable efforts on a forward-looking basis, since inventory write-downs are based on future activity and observation and therefore cannot be projected for the third quarter and full FY 2024. The variability of these charges may have a potentially unpredictable, and potentially significant, impact on our third quarter and full FY 2024 home sales gross margin.

Adjusted Net Income and Diluted Earnings Per Share Reconciliation

The following table reconciles the Company’s net income and earnings per share (calculated in accordance with GAAP) to the Company’s adjusted net income and diluted earnings per share (a non-GAAP financial measure).
Adjusted Net Income and Diluted Per Share Reconciliation
(Amounts in thousands, except per share data)

Three Months Ended
April 30,		Six Months Ended
April 30,
2024202320242023
Net income$481,617 $320,216 $721,175 $511,746 
Subtract:Net income resulting from the sale of a parcel of land to a commercial developer (124,119)— (124,119)— 
Adjusted net income$357,498 $320,216 $597,056 $511,746 
Diluted earnings per share$4.55 $2.85 $6.80 $4.56 
Subtract:Diluted earnings per share resulting from the sale of a parcel of land to a commercial developer(1.17)— (1.17)— 
Adjusted diluted earnings per share$3.38 $2.85 $5.63 $4.56 
13



Net Debt-to-Capital Ratio
The following table reconciles the Company’s ratio of debt to capital (calculated in accordance with GAAP) to the Company’s net debt-to-capital ratio (a non-GAAP financial measure). The net debt-to-capital ratio is calculated as (i) total debt minus mortgage warehouse loans minus cash and cash equivalents divided by (ii) total debt minus mortgage warehouse loans minus cash and cash equivalents plus stockholders’ equity.

Net Debt-to-Capital Ratio Reconciliation
(Amounts in thousands, except percentages)
April 30, 2024January 31, 2024October 31, 2023
Loans payable$1,113,126 $1,064,149 $1,164,224 
Senior notes1,596,644 1,596,414 1,596,185 
Mortgage company loan facility127,541 63,194 100,058 
Total debt2,837,311 2,723,757 2,860,467 
Total stockholders’ equity
7,307,974 7,019,271 6,797,156 
Total capital$10,145,285 $9,743,028 $9,657,623 
Ratio of debt-to-capital28.0 %28.0 %29.6 %
Total debt$2,837,311 $2,723,757 $2,860,467 
Less:Mortgage company loan facility(127,541)(63,194)(100,058)
Cash and cash equivalents (1,030,530)(754,793)(1,300,068)
Total net debt1,679,240 1,905,770 1,460,341 
Total stockholders’ equity
7,307,974 7,019,271 6,797,156 
Total net capital$8,987,214 $8,925,041 $8,257,497 
Net debt-to-capital ratio18.7 %21.4 %17.7 %

The Company’s management uses the net debt-to-capital ratio as an indicator of its overall leverage and believes it is a useful financial measure to investors in understanding the leverage employed in the Company’s operations.
###

14
v3.24.1.1.u2
Document Type Document
May 21, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 21, 2024
Entity Registrant Name Toll Brothers, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-09186
Entity Tax Identification Number 23-2416878
Entity Address, Address Line One 1140 Virginia Drive
Entity Address, City or Town Fort Washington
Entity Address, State or Province PA
Entity Address, Postal Zip Code 19034
City Area Code 215
Local Phone Number 938-8000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per share
Trading Symbol TOL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000794170
Amendment Flag false
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