10 unchanged sentences
Management’s Annual Report on Internal Control Over Financial Reporting and the attestation report of our independent registered public accounting firm on internal control over financial reporting on pages F-1 and F-2, respectively, are incorporated herein by reference.
−Removed: The Company is in the process of evaluating the existing controls and procedures of each of Sharp Residential, LLC and Sabal Homes LLC and integrating their controls into the Company’s internal control over financial reporting.
−Removed: In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, we have excluded each of Sharp Residential, LLC and Sabal Homes LLC from the Company’s assessment of the effectiveness of internal control over financial reporting as of October 31, 2019.
−Removed: These companies represented less than 2% of the Company’s total assets as of October 31, 2019 and less than 1% of the Company’s revenues for the fiscal year ended October 31, 2019.
+Added: The Company is in the process of evaluating the existing controls and procedures of each of The Thrive Group, LLC and Keller Homes, Inc.
+Added: and integrating their controls into the Company’s internal control over financial reporting.
+Added: In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, we have excluded each of The Thrive Group, LLC and Keller Homes, Inc.
+Added: from the Company’s assessment of the effectiveness of internal control over financial reporting as of October 31, 2020.
+Added: These companies represented approximately 1% of the Company’s total assets as of October 31, 2020 and less than 1% of the Company’s revenues for the fiscal year ended October 31, 2020.
The Company's acquisition of each of these companies is discussed in Note 2 to its Consolidated Financial Statements for fiscal 2020.
10 unchanged sentences
All executive officers serve at the pleasure of our Board of Directors.
+Added: Name Age Positions
60 Chairman of the Board, President and Chief Executive Officer
−Removed: Executive Vice President and Co-Chief Operating Officer
−Removed: Robert Parahus
−Removed: Executive Vice President and Co-Chief Operating Officer
−Removed: Senior Vice President and Chief Financial Officer
+Added: Boyd 64 Executive Vice President and Co-Chief Operating Officer
+Added: Robert Parahus 57 Executive Vice President and Co-Chief Operating Officer
+Added: Connor 56 Senior Vice President and Chief Financial Officer
joined us in 1990 as assistant to the Chief Executive Officer with responsibility for land acquisitions.
5 unchanged sentences
Prior to his appointment to Executive Vice President and Co-Chief Operating Officer, Mr.
−Removed: Boyd oversaw the Company’s homebuilding operations in California, Nevada and Idaho.
+Added: Boyd oversaw the Company’s home building operations in California, Nevada and Idaho.
Robert Parahus joined us in 1986 and served in various positions with us, including Regional President from 2006 through October 31, 2019.
1 unchanged sentence
Prior to his appointment to Executive Vice President and Co-Chief Operating Officer, Mr.
−Removed: Parahus oversaw the Company’s homebuilding operations in New Jersey, New York, Connecticut, Massachusetts and Florida, and had oversight responsibility for Toll Integrated Systems, the Company’s building component manufacturing operations.
+Added: Parahus oversaw the Company’s home building operations in New Jersey, New York, Connecticut, Massachusetts and Florida, and had oversight responsibility for Toll Integrated Systems, the Company’s building component manufacturing operations.
Connor joined us as Vice President and Assistant Chief Financial Officer in December 2008 and was appointed a Senior Vice President in December 2009.
6 unchanged sentences
During the period from 1998 to 2005, he served on the Toll Brothers, Inc.
+Added: audit engagement.
The other information required by this item will be included in the “Election of Directors” and “Corporate Governance” sections of our Proxy Statement for the 2021 Annual Meeting of Stockholders (the “2021 Proxy Statement”).
27 unchanged sentences
The following exhibits are included with this report or incorporated herein by reference:
−Removed: Exhibit Number
+Added: Exhibit Number Description
3.1 Second Restated Certificate of Incorporation of the Registrant, dated September 8, 2005, is hereby incorporated by reference to Exhibit 3.1 of the Registrant’s Form 10-Q for the quarter ended July 31, 2005.
3.2 Certificate of Amendment of the Second Restated Certificate of Incorporation of the Registrant, filed with the Secretary of State of the State of Delaware, is hereby incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 22, 2010.
−Removed: Exhibit Number
3.3 Certificate of Amendment of the Second Restated Certificate of Incorporation of the Registrant, dated as of March 16, 2011, is hereby incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2011.
3.4 Certificate of Amendment of the Second Restated Certificate of Incorporation of the Registrant, dated as of March 8, 2016, is hereby incorporated by reference to Annex B to the Registrant’s definitive proxy statement on Schedule 14A its 2016 Annual Meeting of Stockholders filed with the Securities and Exchange Commission on February 2, 2016.
+Added: Exhibit Number Description
3.5 Bylaws of the Registrant, as Amended and Restated June 11, 2008, are hereby incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 13, 2008.
3 unchanged sentences
3.9 Amendment to the By-laws of the Registrant, dated as of September 20, 2016, is hereby incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 20, 2016.
−Removed: Specimen Stock Certificate is hereby incorporated by reference to Exhibit 4.1 of the Registratant’s Form 10-K for the year ended October 31, 2017.
+Added: 4.1 Specimen Stock Certificate is hereby incorporated by reference to Exhibit 4.1 of the Registrant’s Form 10-K for the year ended October 31, 2017.
4.2 Indenture, dated as of February 7, 2012, among Toll Brothers Finance Corp., the Registrant and the other guarantors named therein and The Bank of New York Mellon, as trustee, is hereby incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2012.
10 unchanged sentences
guaranteed on a senior basis by the Registrant and certain of its subsidiaries, is hereby incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2013.
−Removed: Exhibit Number
4.9 Form of Global Note for Toll Brothers Finance Corp.’s 5.625% Senior Notes due 2024 is hereby incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2013.
1 unchanged sentence
guaranteed on a senior basis by the Registrant and certain of its subsidiaries, is hereby incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2015.
+Added: Exhibit Number Description
4.11 Form of Global Note for Toll Brothers Finance Corp.’s 4.875% Senior Notes due 2025 is hereby incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2015.
14 unchanged sentences
4.22 Third Supplemental Indenture dated as of April 30, 2014, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.1 of the Registrant’s Form 10-Q for the quarter ended April 30, 2014.
−Removed: Exhibit Number
4.23 Fourth Supplemental Indenture dated as of July 31, 2014, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.1 of the Registrant’s Form 10-Q for the quarter ended July 31, 2014.
4.24 Fifth Supplemental Indenture dated as of October 31, 2014, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.55 of the Registrant’s Form 10-K for the year ended October 31, 2014.
+Added: Exhibit Number Description
4.25 Sixth Supplemental Indenture dated as of January 30, 2015, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.3 of the Registrant’s Form 10-Q for the quarter ended January 31, 2015.
9 unchanged sentences
4.35 Sixteenth Supplemental Indenture dated as of October 31, 2017, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.55 of the Registrant’s Form 10-K for the year ended October 31, 2017.
−Removed: Exhibit Number
4.36 Seventeenth Supplemental Indenture dated as of October 31, 2017, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.56 of the Registrant’s Form 10-K for the year ended October 31, 2017.
4.37 Eighteenth Supplemental Indenture dated as of April 13, 2018, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.3 of the Registrant’s Form 10-Q for the quarter ended April 30, 2018.
+Added: Exhibit Number Description
4.38 Nineteenth Supplemental Indenture dated as of April 30, 2018, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.4 of the Registrant’s Form 10-Q for the quarter ended April 30, 2018.
4.39 Twentieth Supplemental Indenture dated as of October 31, 2018, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.62 of the Registrant’s Form 10-K for the year ended October 31, 2018.
−Removed: Twenty-First Supplemental Indenture dated as of January 31, 2019, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.2 on the Registrant’s Form 10-Q fro the quarter ended January 31, 2019.
−Removed: Twenty-Second Supplemental Indenture dated as of October 30, 2019, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee.**
−Removed: Twenty-third Supplemental Indenture dated as of October 30, 2019, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee.**
−Removed: Description of Certain of Registrant’s Securities**
+Added: 4.40 Twenty-First Supplemental Indenture dated as of January 31, 2019, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.2 of the Registrant’s Form 10-Q for the quarter ended January 31, 2019.
+Added: 4.41 Twenty-Second Supplemental Indenture dated as of October 30, 2019, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.41 of the Registrant’s Form 10-K for the year ended October 31, 2019.
+Added: 4.42 Twenty-third Supplemental Indenture dated as of October 30, 2019, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.42 of the Registrant’s Form 10-K for the year ended October 31, 2019.
+Added: 4.43 Twenty-fourth Supplemental Indenture dated as of April 30, 2020, to the Indenture dated as of February 7, 2012 by and among the parties listed on Twenty-fourth Supplemental Indenture dated as of April 30, 2020, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.1 of the Registrant’s Form 10-Q for the quarter ended April 30, 2020.
+Added: A thereto, and The Bank of New York Mellon, as successor Trustee, is hereby incorporated by reference to Exhibit 4.1 on the Registrant’s Form 10-Q for the quarter ended April 30, 2020.
+Added: 4.44 Twenty-fifth Supplemental Indenture dated as of October 30, 2020, to the Indenture dated as of February 7, 2012 by and among the parties listed on Schedule A thereto, and The Bank of New York Mellon, as successor Trustee.
+Added: 4.45 Description of Certain of Registrant’s Securities is hereby incorporated by reference to Exhibit 4.43 of the Registrant’s Form 10-K for the year ended October 31, 2019.
10.1 Amended and Restated Credit Agreement, dated as of October 31,2019, among the First Huntingdon Finance Corp., Toll Brothers, Inc., and the lenders party thereto and Citibank, N.A., as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2019.
+Added: 10.2 Revolving Extension Agreements, effective as of October 31, 2020, with respect to the Amended and Restated Credit Agreement, dated as of October 31, 2019, among the Borrower, the Registrant, the lenders party thereto and Citibank, N.A., as Administrative Agent is hereby incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2020.
10.3 Credit Agreement by and among First Huntingdon Finance Corp., Toll Brothers, Inc., the lenders party thereto and SunTrust Bank, as Administrative Agent dated February 3, 2014, is hereby incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed with the Securities and Exchange Commission on February 5, 2014
3 unchanged sentences
2, dated August 2, 2016, to Credit Agreement dated as of February 3, 2014, as amended, by and among First Huntingdon Finance Corp., Toll Brothers, Inc., the designated guarantors party thereto, the lenders party thereto and SunTrust Bank, as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed with the Securities and Exchange Commission on August 4, 2016.
+Added: Exhibit Number Description
10.6 Amendment No.
3, dated November 1, 2018, to Credit Agreement dated as of February 3, 2014, as amended, by and among First Huntingdon Finance Corp., Toll Brothers, Inc., the designated guarantors party thereto, the lenders party thereto and SunTrust Bank, as Administrative Agent, is hereby incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 2, 2018.
−Removed: Exhibit Number
10.7 Amendment No.
4, dated as of October 31, 2019, to the Credit Agreement, dated as of February 3, 2014,as amended, by and First Huntingdon Finance Corp., Toll Brothers, Inc., the designated guarantors party thereto, the lenders party thereto and SunTrust Bank, as Administrative Agent, is hereby incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K filed with the Securities and Exchange Commission on November 1, 2019.
+Added: 10.8 Term Loan Extension Agreements, effective as of October 31, 2020, with respect to the Term Loan Credit Agreement dated as of February 3, 2014 (as amended by Amendment No.
+Added: 1, dated as of May 19, 2016, Amendment No.
+Added: 2, dated as of August 2, 2016, Amendment No.
+Added: 3, dated as of November 1, 2018, and Amendment No.
+Added: 4, dated as of November 1, 2019) among the Registrant, the Borrower, the lenders party thereto and SunTrust Bank, as Administrative Agent is hereby incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 31, 2020.
10.9* Toll Brothers, Inc.
23 unchanged sentences
10.19* Form of Non-Qualified Stock Option Grant, is hereby incorporated by reference to Exhibit 10.18 of the Registrant’s Form 10-K for the year ended October 31, 2016.
+Added: Exhibit Number Description
10.20* Form of Restricted Stock Unit Agreement (Performance Based), is hereby incorporated by reference to Exhibit 10.19 of the Registrant’s Form 10-K for the year ended October 31, 2016.
6 unchanged sentences
Stock Incentive Plan for Non-Employee Directors (2007) is hereby incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 19, 2007.
−Removed: Exhibit Number
10.24* Form of Addendum to Non-Qualified Stock Option Grant pursuant to the Toll Brothers, Inc.
9 unchanged sentences
10.30* Form of Non-Qualified Stock Option Grant pursuant to the Toll Brothers, Inc.
−Removed: 2019 Omnibus Incentive Plan.**
+Added: 2019 Omnibus Incentive Plan, is hereby incorporated by reference to Exhibit 10.28 of the Registrant’s Form 10-K for the year ended October 31, 2019.
10.31* Form of Restricted Stock Unit Agreement pursuant to the Toll Brothers, Inc.
−Removed: 2019 Omnibus Incentive Plan.**
+Added: 2019 Omnibus Incentive Plan, is hereby incorporated by reference to Exhibit 10.29 of the Registrant’s Form 10-K for the year ended October 31, 2019.
10.32* Form of Restricted Stock Unit Agreement (Performance Based) pursuant to the Toll Brothers, Inc.
−Removed: 2019 Omnibus Incentive Plan.**
+Added: 2019 Omnibus Incentive Plan, is hereby incorporated by reference to Exhibit 10.30 of the Registrant’s Form 10-K for the year ended October 31, 2019.
10.33* Form of Restricted Stock Unit Agreement (Total Shareholder Return Performance Based), pursuant to the Toll Brothers, Inc.
−Removed: 2019 Omnibus Incentive Plan.**
+Added: 2019 Omnibus Incentive Plan, is hereby incorporated by reference to Exhibit 10.31 of the Registrant’s Form 10-K for the year ended October 31, 2019.
10.34* Toll Brothers, Inc.
5 unchanged sentences
Non-Qualified Deferred Compensation Plan, amended and restated as of November 1, 2008, is incorporated by reference to Exhibit 10.45 of the Registrant’s Form 10-K for the period ended October 31, 2008.
+Added: Exhibit Number Description
10.37* Amendment Number 1 dated November 1, 2010 to the Toll Bros., Inc.
9 unchanged sentences
Executive Severance Plan, is hereby incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2019.
−Removed: Exhibit Number
10.42* Form of Indemnification Agreement between the Registrant and the members of its Board of Directors, is hereby incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 17, 2009.
3 unchanged sentences
Toll, dated as of October 29, 2019, is hereby incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2019.
+Added: 10.45* Advisory and Non-Competition Agreement Extension between the Registrant and Robert I.
+Added: Toll, dated as of October 16.2020**
21** Subsidiaries of the Registrant.
−Removed: Consent of Ernst & Young LLP, Independent Registered Public Accountant.
+Added: 22** List of guarantor subsidiaries
+Added: 23** Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
31.1** Certification of Douglas C.
7 unchanged sentences
101 The following financial statements from Toll Brothers, Inc.
−Removed: Annual Report on Form 10-K for the year ended October 31, 2019, filed on [December XX, 2019], formatted in iXBRL (Inline eXtensible Business Reporting Language):
+Added: Annual Report on Form 10-K for the year ended October 31, 2020, filed on December 22, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language):
(i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.
−Removed: XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
+Added: 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
4 unchanged sentences
In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
−Removed: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the Township of Horsham, Commonwealth of Pennsylvania, on December 26, 2019 .
+Added: FORM 10-K SUMMARY
+Added: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on December 22, 2020.
TOLL BROTHERS, INC.
3 unchanged sentences
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
+Added: Signature Title Date
/s/ Douglas C.
−Removed: Chairman of the Board and Chief Executive
−Removed: December 26, 2019
+Added: Chairman of the Board and Chief Executive December 22, 2020
Officer (Principal Executive Officer)
/s/ Martin P.
−Removed: Senior Vice President and Chief Financial Officer
−Removed: December 26, 2019
−Removed: (Principal Financial Officer)
+Added: Connor Senior Vice President and Chief Financial Officer December 22, 2020
+Added: Connor (Principal Financial Officer)
/s/ Michael J.
−Removed: Senior Vice President and Chief Accounting
−Removed: December 26, 2019
−Removed: Officer (Principal Accounting Officer)
+Added: Grubb Senior Vice President and Chief Accounting December 22, 2020
+Added: Grubb Officer (Principal Accounting Officer)
/s/ Edward G.
−Removed: December 26, 2019
+Added: Boehne Director December 22, 2020
/s/ Richard J.
−Removed: December 26, 2019
+Added: Braemer Director December 22, 2020
+Added: /s/ Stephen F.
+Added: East Director December 22, 2020
/s/ Christine N.
−Removed: December 26, 2019
−Removed: December 26, 2019
−Removed: December 26, 2019
−Removed: December 26, 2019
+Added: Garvey Director December 22, 2020
+Added: Grimes Director December 22, 2020
+Added: Marbach Director December 22, 2020
+Added: McLean Director December 22, 2020
/s/ Stephen A.
−Removed: December 26, 2019
+Added: Director December 22, 2020
+Added: Signature Title Date
/s/ Wendell E.
−Removed: December 26, 2019
−Removed: December 26, 2019
+Added: Pritchett Director December 22, 2020
+Added: Shapiro Director December 22, 2020
/s/ Robert I.
−Removed: December 26, 2019
+Added: Toll Director December 22, 2020
Management’s Annual Report on Internal Control Over Financial Reporting
9 unchanged sentences
Based on this evaluation under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of October 31, 2020.
−Removed: During fiscal 2019, we completed the acquisitions of each of Sharp Residential, LLC (“Sharp”) and Sabal Homes LLC (“Sabal”).
−Removed: In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, we have excluded each of Sharp and Sabal from the Company’s assessment of the effectiveness of internal control over financial reporting as of October 31, 2019.
−Removed: These companies represented less than 2% of the Company’s total assets as of October 31, 2019 and less than 1% of the Company’s revenues for the fiscal year ended October 31, 2019.
+Added: During fiscal 2020, we completed the acquisitions of each of The Thrive Group, LLC (“Thrive”) and Keller Homes, Inc.
+Added: In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, we have excluded each of Thrive and Keller from the Company’s assessment of the effectiveness of internal control over financial reporting as of October 31, 2020.
+Added: These companies represented approximately 1% of the Company’s total assets as of October 31, 2020 and less than 1% of the Company’s revenues for the fiscal year ended October 31, 2020.
Our independent registered public accounting firm, Ernst & Young LLP, has issued its report, which is included herein, on the effectiveness of our internal control over financial reporting.
5 unchanged sentences
(the Company) maintained, in all material respects, effective internal control over financial reporting as of October 31, 2020, based on the COSO criteria.
−Removed: As indicated in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Sharp Residential, LLC or Sabal Homes, LLC, which are included in the 2019 consolidated financial statements of the Company and constitute less than 2% of total assets as of October 31, 2019 and less than 1% of revenues for the year then ended.
−Removed: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Sharp Residential, LLC or Sabal Homes, LLC.
+Added: As indicated in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of The Thrive Group, LLC and Keller Homes, Inc., which are included in the 2020 consolidated financial statements of the Company and constitute approximately 1% of total assets as of October 31, 2020 and less than 1% of revenues for the year then ended.
+Added: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of The Thrive Group, LLC and Keller Homes, Inc.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2020 consolidated financial statements of the Company and our report dated December 22, 2020 expressed an unqualified opinion thereon.
29 unchanged sentences
2014-09, Revenue from Contracts with Customers (Topic 606) , and related Subtopic ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers.
+Added: Adoption of ASU No.
+Added: As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases in 2020 due to the adoption of ASU No.
+Added: 2016-02, Leases.
Basis for Opinion
14 unchanged sentences
Water Intrusion Reserves
−Removed: Description of the Matter
−Removed: As described in Note 7 of the consolidated financial statements, the Company accrues for the estimated repair costs to be incurred for known and unknown water intrusion claims from owners of certain homes built in Pennsylvania and Delaware.
+Added: Description of the Matter As described in Note 7 of the consolidated financial statements, the Company accrues for the estimated repair costs to be incurred for known and unknown water intrusion claims from owners of certain homes built in Pennsylvania and Delaware.
At October 31, 2020, the Company had an accrued liability for water intrusion claims of $79.5 million, representing its best estimate of the expected costs related to known and future water intrusion claims.
1 unchanged sentence
Due to the degree of judgment required in making these assumptions and the inherent uncertainty of certain outcomes, it is reasonably possible that the actual costs will differ from the amount accrued.
−Removed: If it is reasonably
−Removed: possible that such additional costs may be incurred and the effect on the financial statements is material, the Company discloses an estimate of the amount or range of additional costs or a statement that such an estimate cannot be made within the notes to the financial statements.
+Added: If it is reasonably possible that such additional costs may be incurred and the effect on the financial statements is material, the Company discloses an estimate of the amount or range of additional costs or a statement that such an estimate cannot be made within the notes to the financial statements.
Auditing the Company’s accounting for water intrusion claims, and the related disclosures, was especially challenging as evaluating the likelihood and amount of cost was highly subjective and required significant judgment.
10 unchanged sentences
Insurance Receivable
−Removed: Description of the Matter
−Removed: As described in Note 7 of the consolidated financial statements, the Company recorded a receivable for expected recoveries from insurance carriers.
+Added: Description of the Matter As described in Note 7 of the consolidated financial statements, the Company recorded a receivable for expected recoveries from insurance carriers.
At October 31, 2020, the Company recorded an estimated insurance receivable of $68.4 million, inclusive of amounts that are subject to dispute with the Company’s insurance carriers.
1 unchanged sentence
Evaluating the likelihood and amount of recoveries from insurance carriers was highly subjective and required significant judgment.
−Removed: In particular, as stated in Note 7.
−Removed: of the consolidated financial statements, management’s estimates were sensitive to assumptions about the amount of losses that the Company will incur on warranty related repairs by policy year and management’s conclusions about the legal merits that support the pending and future insurance claims.
+Added: In particular, as stated in Note 7 of the consolidated financial statements, management’s estimates were sensitive to assumptions about the amount of losses that the Company will incur on warranty related repairs by policy year and management’s conclusions about the legal merits that support the pending and future insurance claims.
How We Addressed the Matter in Our Audit
5 unchanged sentences
Inventory Impairment
−Removed: Description of the Matter
−Removed: As described in Note 1 of the consolidated financial statements, the Company states its inventory at cost unless an impairment exists, in which case the inventory is written down to fair value.
+Added: Description of the Matter As described in Note 1 of the consolidated financial statements, the Company states its inventory at cost unless an impairment exists, in which case the inventory is written down to fair value.
For the year ended October 31, 2020, the Company recorded inventory impairment charges of $32.3 million.
3 unchanged sentences
Auditing management’s accounting for inventory impairment, its tests for recoverability and, when applicable, its measurement of impairment losses, was especially challenging and involved a high degree of subjectivity as a result of the assumptions and estimates inherent in these evaluations.
−Removed: In particular, management’s assumptions and estimates included future sales prices, the pace of future sales, and the applicable discount rates, which were sensitive to expectations about future demand, operations and economic factors.
+Added: In particular, management’s assumptions and estimates included future home and/or land sales prices, the pace of future sales, and the applicable discount rates, which were sensitive to expectations about future demand, operations and economic factors.
Additionally, the fair value of certain communities was highly sensitive to relatively small changes in one or more of those assumptions.
2 unchanged sentences
For example, we tested controls over management’s review of the significant assumptions and data inputs utilized in the calculation of future undiscounted and discounted cash flows.
−Removed: To test the Company’s estimated future cash flows used to test for the recoverability of a community and, if applicable, the measurement of an impairment loss, we performed audit procedures that included, among others, testing the significant assumptions discussed above and the underlying data used by the Company in its impairment analyses, evaluating the methodologies applied by management, and recalculating the total undiscounted and discounted cash flows in each analysis.
+Added: To test the Company’s estimated future cash flows used to test for the recoverability of a community and, if applicable, the measurement of an impairment loss, we performed audit procedures that included, among others, testing the significant assumptions discussed above and the underlying data used by the Company in its impairment analyses, evaluating the methodologies applied by management, and recalculating the total undiscounted and discounted cash flows, if applicable, for each analysis.
In certain cases, we involved our internal real estate valuation specialists to assist in performing these procedures.
8 unchanged sentences
Cash and cash equivalents $ 1,370,944 $ 1,286,014
+Added: Inventory 7,658,906 7,873,048
Property, construction, and office equipment, net 316,125 273,412
4 unchanged sentences
Income taxes receivable 23,675 20,791
+Added: $ 11,065,733 $ 10,828,138
LIABILITIES AND EQUITY
Loans payable $ 1,147,955 $ 1,111,449
+Added: Senior notes 2,661,718 2,659,898
Mortgage company loan facility 148,611 150,000
6 unchanged sentences
Preferred stock, none issued — —
−Removed: Common stock, 152,937 and 177,937 shares issued at October 31, 2019 and 2018, respectively
+Added: Common stock, 152,937 shares issued at October 31, 2020 and 2019 1,529 1,529
Additional paid-in capital 717,272 726,879
1 unchanged sentence
Treasury stock, at cost — 26,410 and 11,999 shares at October 31, 2020 and 2019, respectively ( 1,000,454 ) ( 425,183 )
−Removed: Accumulated other comprehensive (loss) income
+Added: Accumulated other comprehensive loss ( 7,198 ) ( 5,831 )
Total stockholders’ equity 4,875,235 5,071,816
Noncontrolling interest 52,241 46,877
+Added: Total equity 4,927,476 5,118,693
+Added: $ 11,065,733 $ 10,828,138
(1) As of October 31, 2020 and 2019, receivables, prepaid expenses, and other assets include $ 163.0 million and $ 145.8 million, respectively, of assets related to consolidated variable interest entities ("VIEs").
4 unchanged sentences
Year ended October 31,
+Added: 2020 2019 2018
+Added: Home sales $ 6,937,357 $ 7,080,379 $ 7,143,258
+Added: Land sales and other 140,302 143,587 —
+Added: 7,077,659 7,223,966 7,143,258
Cost of revenues:
+Added: Home sales 5,534,103 5,534,217 5,536,812
+Added: Land sales and other 125,854 129,704 —
+Added: 5,659,957 5,663,921 5,536,812
Selling, general and administrative 867,442 879,245 820,230
4 unchanged sentences
Income tax provision 140,277 197,163 185,765
+Added: Net income $ 446,624 $ 590,007 $ 748,151
Other comprehensive (loss) income, net of tax ( 1,367 ) ( 6,525 ) 2,926
3 unchanged sentences
Weighted-average number of shares:
+Added: Basic 130,095 145,008 151,984
+Added: Diluted 131,247 146,501 154,201
See accompanying notes.
1 unchanged sentence
(Amounts in thousands)
−Removed: Stock-holders’ Equity
−Removed: Non-controlling Interest
−Removed: Balance, November 1, 2016
+Added: Capital Retained
+Added: Earnings Treasury
+Added: hensive Loss Stock-holders’ Equity Non-controlling Interest Total
+Added: Shares $ $ $ $ $ $ $ $
+Added: Balance, 11/1/2017 177,937 1,779 720,115 4,474,064 ( 662,854 ) ( 1,910 ) 4,531,194 5,896 4,537,090
+Added: Cumulative effect adjustment upon adoption of ASU 2016-09 and ASU 2018-02 372 1,413 ( 322 ) 1,463 1,463
+Added: Net income 748,151 748,151 748,151
Purchase of treasury stock ( 503,159 ) ( 503,159 ) ( 503,159 )
Exercise of stock options and stock based compensation issuances
+Added: ( 21,789 ) 33,969 12,180 12,180
Employee stock purchase plan issuances
+Added: 43 1,166 1,209 1,209
Stock-based compensation 28,312 28,312 28,312
Dividends declared
+Added: ( 62,077 ) ( 62,077 ) ( 62,077 )
Other comprehensive income
+Added: 2,926 2,926 2,926
Loss attributable to non-controlling interest
−Removed: Balance, October 31, 2017
−Removed: Cumulative effect adjustment upon adoption of ASU 2016-09 and ASU 2018-02
+Added: — ( 15 ) ( 15 )
+Added: Capital contribution — 2,832 2,832
+Added: Balance, 10/31/2018 177,937 1,779 727,053 5,161,551 ( 1,130,878 ) 694 4,760,199 8,713 4,768,912
+Added: Cumulative effect adjustment upon adoption of ASC 606, net of tax ( 17,987 ) ( 17,987 ) ( 17,987 )
+Added: Net income 590,007 590,007 590,007
Purchase of treasury stock ( 233,523 ) ( 233,523 ) ( 233,523 )
Exercise of stock options and stock based compensation issuances
+Added: ( 26,368 ) 42,392 16,024 16,024
Employee stock purchase plan issuances
+Added: 14 1,309 1,323 1,323
Stock-based compensation 26,180 26,180 26,180
+Added: Cancellation of treasury stock ( 25,000 ) ( 250 ) ( 895,267 ) 895,517 — —
Dividends declared
−Removed: Other comprehensive income
+Added: ( 63,882 ) ( 63,882 ) ( 63,882 )
+Added: Other comprehensive loss ( 6,525 ) ( 6,525 ) ( 6,525 )
Loss attributable to non-controlling interest
−Removed: Capital contribution
−Removed: Balance, October 31, 2018
−Removed: Cumulative effect adjustment upon adoption of ASC 606, net of tax
+Added: — ( 19 ) ( 19 )
+Added: Capital contributions — 38,183 38,183
+Added: Balance, 10/31/2019 152,937 1,529 726,879 4,774,422 ( 425,183 ) ( 5,831 ) 5,071,816 46,877 5,118,693
+Added: Net income 446,624 446,624 446,624
Purchase of treasury stock ( 634,057 ) ( 634,057 ) ( 634,057 )
Exercise of stock options and stock based compensation issuances
+Added: ( 33,263 ) 56,702 23,439 23,439
Employee stock purchase plan issuances
+Added: ( 670 ) 2,084 1,414 1,414
Stock-based compensation 24,326 24,326 24,326
−Removed: Cancellation of treasury stock
Dividends declared ( 56,960 ) ( 56,960 ) ( 56,960 )
Other comprehensive loss
+Added: ( 1,367 ) ( 1,367 ) ( 1,367 )
Loss attributable to non-controlling interest
+Added: — ( 10 ) ( 10 )
Capital contributions — 5,374 5,374
−Removed: Balance, October 31, 2019
+Added: Balance, 10/31/2020 152,937 1,529 717,272 5,164,086 ( 1,000,454 ) ( 7,198 ) 4,875,235 52,241 4,927,476
See accompanying notes.
2 unchanged sentences
Year ended October 31,
+Added: 2020 2019 2018
Cash flow provided by operating activities:
+Added: Net income $ 446,624 $ 590,007 $ 748,151
Adjustments to reconcile net income to net cash provided by operating activities:
5 unchanged sentences
Deferred tax provision (benefit) 97,780 102,764 ( 21,930 )
−Removed: Change in deferred tax valuation allowances
Inventory impairments and write-offs 55,883 42,360 35,156
−Removed: Gain on sales of golf club properties and an office building
+Added: Gain on the sale of golf club properties and an office building ( 12,970 ) ( 36,277 ) —
+Added: Other ( 3,151 ) ( 1,042 ) 3,111
Changes in operating assets and liabilities
−Removed: (Increase) decrease in inventory
+Added: Decrease (increase) in inventory 352,858 ( 40,236 ) ( 143,598 )
Origination of mortgage loans ( 1,815,824 ) ( 1,611,496 ) ( 1,449,494 )
3 unchanged sentences
Increase (decrease) in customer deposits – net 70,423 14,041 ( 718 )
−Removed: (Decrease) increase in accounts payable and accrued expenses
+Added: Increase (decrease) in accounts payable and accrued expenses 71,835 ( 64,518 ) 57,927
Decrease in income taxes payable ( 1,306 ) ( 22,147 ) ( 4,296 )
2 unchanged sentences
Purchase of property, construction, and office equipment – net ( 109,564 ) ( 86,971 ) ( 28,232 )
−Removed: Sale and redemption of marketable securities and restricted investments — net
Investments in unconsolidated entities ( 71,650 ) ( 56,560 ) ( 27,491 )
2 unchanged sentences
Return of investments in foreclosed real estate and distressed loans 1,808 3,147 4,765
−Removed: Proceeds from sales of golf club properties and an office building
−Removed: Acquisitions of businesses
+Added: Proceeds from the sale of golf club properties and an office building 15,617 79,647 —
+Added: Business acquisitions ( 60,349 ) ( 162,373 ) —
Net cash (used in) provided by investing activities ( 177,845 ) ( 75,914 ) 81,266
8 unchanged sentences
Dividends paid ( 56,588 ) ( 63,641 ) ( 61,704 )
−Removed: Receipts related to noncontrolling interest, net
+Added: (Payments) receipts related to noncontrolling interest, net ( 1,718 ) 49 30
Net cash used in financing activities ( 753,311 ) ( 258,514 ) ( 214,301 )
−Removed: Net increase (decrease) in cash, cash equivalents, and restricted cash
+Added: Net increase in cash, cash equivalents, and restricted cash 76,961 103,233 455,176
Cash, cash equivalents, and restricted cash, beginning of period 1,319,643 1,216,410 761,234
10 unchanged sentences
Use of Estimates
−Removed: The preparation of financial statements in conformity with U.S.
−Removed: generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
−Removed: Actual results could differ from those estimates.
+Added: The preparation of financial statements in accordance with U.S.
+Added: generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes.
+Added: In times of economic disruption when uncertainty regarding future economic conditions is heightened, these estimates and assumptions are subject to greater variability.
+Added: The Company is currently subject to risks and uncertainties resulting from the COVID-19 pandemic, which adversely impacted our results of operations in the second quarter of fiscal 2020, and is likely to continue to impact our results of operations as well as our business operations.
+Added: As a result, actual results could differ from the estimates and assumptions we make that affect the amounts reported in the Consolidated Financial Statements and accompanying notes, and such differences may be material.
+Added: Reclassifications
+Added: Effective October 31, 2020, we reclassified sales commissions paid to third-party brokers from home sales cost of revenues to selling, general and administrative expense in our Consolidated Statements of Operations and Comprehensive Income.
+Added: The reclassification aligns the treatment of sales commissions paid to third-party brokers with the treatment of sales commissions paid to in-house salespersons, and is consistent with the manner in which the majority of the Company’s peers treat such commissions.
+Added: The reclassification had the effect of lowering home sales cost of revenues (and increasing home sales gross margin) and increasing selling, general and administrative expense by the amount of third-party broker commissions, which totaled $ 138.6 million, $ 144.7 million and $ 136.2 million, or 2.0 %, 2.0 % and 1.9 % of home sales revenues, for the years ended October 31, 2020, 2019 and 2018, respectively.
+Added: All prior period amounts have been reclassified to conform to the 2020 presentation.
Cash and Cash Equivalents
3 unchanged sentences
however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets.
−Removed: To date, we have experienced no loss or lack of access to cash in its operating accounts.
+Added: To date, we have experienced no loss or lack of access to cash in our operating accounts.
Inventory is stated at cost unless an impairment exists, in which case it is written down to fair value in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment” (“ASC 360”).
5 unchanged sentences
Interest incurred on home building indebtedness in excess of qualified inventory, as defined in ASC 835-20, is charged to the Consolidated Statements of Operations and Comprehensive Income in the period incurred.
−Removed: Once a parcel of land has been approved for development and we open one of our typical communities, it may take 4 or more years to fully develop, sell, and deliver all the homes in such community.
−Removed: Longer or shorter time periods are possible depending on the number of home sites in a community and the sales and delivery pace of the homes in a community.
+Added: Once a parcel of land has been approved for development and we open one of our typical communities, it may take four or more years to fully develop, sell, and deliver all the homes in such community.
+Added: Longer or shorter time periods are possible
+Added: depending on the number of home sites in a community and the sales and delivery pace of the homes in a community.
Our master planned communities, consisting of several smaller communities, may take up to 10 years or more to complete.
8 unchanged sentences
(iii) costs expended to date and expected to be incurred in the future, including, but not limited to, land and land development, home construction, interest, and overhead costs;
−Removed: (iv) alternative product offerings that may be offered in a
−Removed: community that will have an impact on sales pace, sales price, building cost, or the number of homes that can be built on a particular site;
+Added: (iv) alternative product offerings that may be offered in a community that will have an impact on sales pace, sales price, building cost, or the number of homes that can be built on a particular site;
and (v) alternative uses for the property such as the possibility of a sale of the entire community to another builder or the sale of individual home sites.
13 unchanged sentences
Our variable interest in VIEs may be in the form of equity ownership, contracts to purchase assets, management services and development agreements between us and a VIE, loans provided by us to a VIE or other member, and/or guarantees provided by members to banks and other parties.
−Removed: We have a significant number of land purchase contracts and investments in unconsolidated entities which we evaluate in accordance with ASC 810.
−Removed: We analyze our land purchase contracts and the unconsolidated entities in which we have an investment to determine whether the land sellers and unconsolidated entities are VIEs and, if so, whether we are the primary beneficiary.
+Added: We have a significant number of land purchase contracts and financial interests in other entities which we evaluate in accordance with ASC 810.
+Added: We analyze our land purchase contracts and the entities in which we have an investment to determine whether the land sellers and entities are VIEs and, if so, whether we are the primary beneficiary.
We examine specific criteria and use our judgment when determining if we are the primary beneficiary of a VIE.
3 unchanged sentences
Property, construction, and office equipment are recorded at cost and are stated net of accumulated depreciation of $ 266.7 million and $ 252.5 million at October 31, 2020 and 2019, respectively.
−Removed: Depreciation is recorded using the straight-line method over the estimated useful lives of the assets.
+Added: For property and equipment related to onsite sales offices, depreciation is recorded using the units of production method as homes are delivered.
+Added: For all other property and equipment, depreciation is recorded using a straight-line method over the estimated useful lives of the related assets.
In fiscal 2020, 2019, and 2018, we recognized $ 67.6 million, $ 67.6 million, and $ 21.0 million of depreciation expense, respectively.
+Added: Subsequent events
+Added: In November 2020, we closed on the sale of a parking garage at one of our City Living properties in Hoboken, New Jersey for $ 34.7 million and we expect to recognize a gain of approximately $ 24.0 million during our first quarter of fiscal 2021 as a result of this sale.
Mortgage Loans Held for Sale
4 unchanged sentences
We recognize the difference between the fair value and the unpaid principal balance of mortgage loans held for sale as a gain or loss.
−Removed: In addition, we recognize the fair value of our forward loan
−Removed: commitments as a gain or loss.
+Added: In addition, we recognize the change in fair value of our forward loan commitments as a gain or loss.
Interest income on mortgage loans held for sale is calculated based upon the stated interest rate of each loan.
4 unchanged sentences
A series of operating losses of an investee, the inability to recover our invested capital, or other factors may indicate that a loss in value of our investment in the unconsolidated entity has occurred.
−Removed: If a loss exists, we further review the investment to determine if the loss is other than temporary, in which case we write down the investment to its fair value.
+Added: If a loss exists, we further review the investment to determine if the loss is other than temporary, in which case we write down the investment to its estimated fair value.
The evaluation of our investment in unconsolidated entities entails a detailed cash flow analysis using many estimates, including, but not limited to, expected sales pace, expected sales prices, expected incentives, costs incurred and anticipated, sufficiency of financing and capital, competition, market conditions, and anticipated cash receipts, in order to determine projected future distributions from the unconsolidated entity.
−Removed: In addition, for rental properties, we review rental trends, expected future expenses, and expected cash flows to determine estimated fair values of the properties.
+Added: In addition, for in vestments in rental properties, we review rental trends, expected future expenses, and expected cash flows to determine estimated fair values of the properties.
Our unconsolidated entities that develop land or develop for-sale homes and condominiums evaluate their inventory in a similar manner as we do.
See “Inventory” above for more detailed disclosure on our evaluation of inventory.
−Removed: For our unconsolidated entities that own, develop, and manage for-rent residential apartments, we review rental trends, expected future expenses, and expected future cash flows to determine estimated fair values of the properties.
+Added: For our unconsolidated entities that own, develop, and manage for-rent residential apartments, we review rental trends, expected future expenses, and expected future cash flows to determine estimated fair values of the underlying properties.
If a valuation adjustment is recorded by an unconsolidated entity related to its assets, our proportionate share is reflected in income from unconsolidated entities with a corresponding decrease to our investment in unconsolidated entities.
28 unchanged sentences
Of the outstanding customer deposits held as of October 31, 2019, we recognized $ 332.8 million in home sales revenues during the fiscal year ended October 31, 2020.
+Added: Of the outstanding customer deposits held as of October 31, 2018, we recognized $ 367.8 million in home sales revenues during the fiscal year ended October 31, 2019.
For our standard attached and detached homes, land, land development, and related costs, both incurred and estimated to be incurred in the future, are amortized to the cost of homes closed based upon the total number of homes to be constructed in each community.
5 unchanged sentences
Any changes resulting from a change in the estimated total costs or revenues of the project are allocated to the remaining units to be delivered.
−Removed: Land sales revenues:
−Removed: Our revenues from land sales generally consist of:
+Added: Land sales and other revenues:
+Added: Our revenues from land sales and other generally consist of:
(1) lot sales to third-party builders within our master planned communities;
24 unchanged sentences
We maintain, and require the majority of our subcontractors to maintain, general liability insurance (including construction defect and bodily injury coverage) and workers’ compensation insurance.
−Removed: These insurance policies protect us against a portion of our risk of loss from claims related to our home building activities, subject to certain self-insured
−Removed: retentions, deductibles and other coverage limits (“self-insured liability”).
+Added: These insurance policies protect us against a portion of our risk of loss from claims related to our home building activities, subject to certain self-insured retentions, deductibles and other coverage limits (“self-insured liability”).
We also provide general liability insurance for our subcontractors in Arizona, California, Colorado, Nevada, Washington, and certain areas of Texas, where eligible subcontractors are enrolled as insureds under our general liability insurance policies in each community in which they perform work.
8 unchanged sentences
The projection of losses related to these liabilities requires actuarial assumptions that are subject to variability due to uncertainties regarding construction defect claims relative to our markets and the types of product we build, insurance industry practices, and legal or regulatory actions and/or interpretations, among other factors.
−Removed: Key assumptions used in these estimates include claim frequencies, severities, and settlement patterns, which can occur over an extended period of time.
+Added: Key assumptions used in these estimates include claim frequencies, severity, and settlement patterns, which can occur over an extended period of time.
In addition, changes in the frequency and severity of reported claims and the estimates to settle claims can impact the trends and assumptions used in the actuarial analysis, which could be material to our consolidated financial statements.
3 unchanged sentences
We use a lattice model for the valuation of our stock option grants.
−Removed: The option pricing models used are designed to estimate the value of options that, unlike employee stock options and restricted stock units, can be traded at any time and are transferable.
+Added: The option pricing models used are designed to estimate the value of options that, unlike employee stock options and restricted stock units, can be traded at any time and are
+Added: transferable.
In addition to restrictions on trading, employee stock options and restricted stock units may include other restrictions such as vesting periods.
41 unchanged sentences
traditional home building and urban infill.
−Removed: We build and sell homes for detached and attached homes in luxury residential communities located in affluent suburban markets and cater to move-up, empty-nester, active-adult, and second-home buyers in the United States (“Traditional Home Building”).
+Added: We build and sell homes for detached and attached homes in luxury residential communities located in affluent suburban markets and cater to move-up, empty-nester, active-adult, affordable luxury and second-home buyers in the United States (“Traditional Home Building”).
We also build and sell homes in urban infill markets through Toll Brothers City Living ® (“City Living”).
We have determined that our Traditional Home Building operations operate in five geographic segments.
−Removed: North, Mid-Atlantic, South, West, and California.
−Removed: The states comprising each geographic segment are as follows:
+Added: In the first quarter of fiscal 2020, we made certain changes to our Traditional Home Building regional management structure and realigned certain of the states falling among our five geographic segments, as follows:
+Added: Eastern Region:
+Added: • The North region:
+Added: Connecticut, Delaware, Illinois, Massachusetts, Michigan, Pennsylvania, New Jersey and New York;
+Added: • The Mid-Atlantic region:
+Added: Georgia, Maryland, North Carolina, Tennessee and Virginia;
+Added: • The South region:
+Added: Florida, South Carolina and Texas;
+Added: Western Region:
+Added: • The Mountain region:
+Added: Arizona, Colorado, Idaho, Nevada and Utah;
+Added: • The Pacific region:
+Added: California, Oregon and Washington.
+Added: Previously, our geographic segments were:
Connecticut, Illinois, Massachusetts, Michigan, New Jersey and New York;
3 unchanged sentences
Arizona, Colorado, Idaho, Nevada, Oregon, Utah and Washington;
+Added: • California :
+Added: Our geographic reporting segments are consistent with how our chief operating decision makers are assessing operating performance and allocating capital following the realignment of the regional management structure.
+Added: The realignment did not have any impact on our consolidated financial position, results of operations, earnings per share or cash flows.
+Added: Prior period segment information was restated to conform to the new reporting structure.
In fiscal 2018, we acquired land and commenced development activities in the Salt Lake City, Utah and Portland, Oregon markets.
We opened communities in these markets in fiscal 2019.
−Removed: In addition, as a result of two acquisitions, we commenced operations in Georgia and South Carolina in fiscal 2019.
−Removed: In fiscal 2018, we discontinued the sale of homes in Minnesota.
−Removed: Our operations in Minnesota were immaterial to the North geographic segment.
−Removed: Related Party Transactions
−Removed: See Note 4, “Investments in Unconsolidated Entities - Rental Property Joint Ventures” for information regarding Toll Brothers Realty Trust.
+Added: In addition, as a result of recent acquisitions, we commenced operations in Georgia and South Carolina in fiscal 2019 and Tennessee in fiscal 2020.
Recent Accounting Pronouncements
+Added: In March 2020, the Securities and Exchange Commission (SEC) adopted amendments to the financial disclosure requirements applicable to registered debt offerings that include credit enhancements, such as subsidiary guarantees, in Rule 3-10 of Regulation S-X.
+Added: The amended rule focuses on providing material, relevant and decision-useful information regarding guarantees and other credit enhancements, while eliminating certain prescriptive requirements.
+Added: The Company adopted these amendments on October 31, 2020.
+Added: Accordingly, summarized financial information has been presented only for the issuers and guarantors of the Company's registered securities for the most recent fiscal year and as permitted, this information is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
+Added: In October 2020, the FASB issued ASU 2020-09, “Debt (Topic 470) - Amendments to SEC Paragraphs Pursuant to SEC Release No.
+Added: 33-10762,” to reflect the SEC’s new disclosure rules on guaranteed debt securities offerings adopted by the Company.
+Added: In February 2016, the FASB issued ASU No.
+Added: 2016-02, “Leases” (“ASU 2016-02”), which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures.
+Added: In July 2018, the FASB issued ASU No.
+Added: 2018-11, “Leases:
+Added: Targeted Improvements” (“ASU 2018-11”), which provides an entity with the option to apply the transition provisions of the new standard at its adoption date instead of at its earliest comparative period presented.
+Added: ASU 2018-11 also provides an entity with a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met.
+Added: ASU 2016-02, as amended by ASU 2018-11, became effective for our fiscal year beginning November 1, 2019, and we adopted the new standard using a modified retrospective approach.
+Added: The prior year period was not recast and our Consolidated Balance Sheet as of October 31, 2019 does not reflect any changes resulting from the adoption of the new standard.
+Added: We elected to apply the transition provisions that allow us to carry forward our historical assessment of (1) whether contracts are or contain leases, (2) lease classification, and (3) initial direct costs.
+Added: In addition, we elected the practical expedient that allows lessees the option to account for lease and non-lease components together as a single component for all classes of underlying assets.
+Added: As a result of the adoption, we recorded a
+Added: right-of-use (“ROU”) asset and lease liability of $ 114.5 million and $ 118.5 million, respectively, as of November 1, 2019.
+Added: The ROU asset is included in “Receivables, prepaid expenses, and other assets” and the corresponding lease liability is included in “Accrued expenses” in our Consolidated Balance Sheet.
+Added: The adoption of ASU 2016-02 had no impact on retained earnings and did not materially impact our Consolidated Statements of Operations and Comprehensive Income or Consolidated Statements of Cash Flows.
+Added: In June 2016, the FASB issued ASU No.
+Added: 2016-13, “Financial Instruments - Credit Losses (Topic 326):
+Added: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).
+Added: ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses.
+Added: ASU 2016-13 will be effective for our fiscal year beginning November 1, 2020.
+Added: We believe that the adoption of ASU 2016-13 will not have a material impact on our consolidated financial statements or disclosures.
+Added: We also do not expect significant changes to our business processes, systems, or internal controls as a result of implementing the standard.
In May 2014, the FASB created ASC 606 with the issuance ASU No.
13 unchanged sentences
• Prior to adoption of ASC 606, we capitalized certain costs related to our marketing efforts, including sales offices and model home upgrades and furnishings within “Inventory” on our Consolidated Balance Sheets and amortized such costs through “Selling, general, and administrative” on our Consolidated Statements of Operations and Comprehensive Income.
−Removed: As of November 1, 2018, we reclassified $ 104.8 million to “Property, construction, and office equipment, net” on our Consolidated Balance Sheets, primarily related to sales offices and model home improvement costs.
+Added: As of November 1, 2018, we reclassifi ed $ 104.8 million to “Property, construction, and office equipment, net” on our Consolidated Balance Sheets, primarily related to sales offices and model home improvement costs.
The amortization of such costs will remain unchanged and will continue to be included in “Selling, general, and administrative” on our Consolidated Statements of Operations and Comprehensive Income.
7 unchanged sentences
Prior period balances for retained customer deposits have not been reclassified and are not material to our consolidated financial statements.
−Removed: In February 2017, the FASB issued ASU No.
−Removed: 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20):
−Removed: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets” (“ASU 2017-05”).
−Removed: ASU 2017-05 is meant to clarify the scope of the original guidance within Subtopic
−Removed: 610-20 that was issued in connection with ASC 606, which provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers.
−Removed: ASU 2017-05 also added guidance for partial sales of nonfinancial assets.
−Removed: ASU 2017-05 became effective for our fiscal year beginning November 1, 2018 and we adopted ASU 2017-05 concurrent with our adoption of ASC 606.
−Removed: The adoption of ASU 2017-05 did not have a material effect on our consolidated financial statements and disclosures.
−Removed: In November 2016, the FASB issued ASU No.
−Removed: 2016-18, “Statement of Cash Flows (Topic 230):
−Removed: Restricted Cash” (“ASU 2016-18”), which provides guidance on the classification of restricted cash in the statement of cash flows.
−Removed: ASU 2016-18 became effective for our fiscal year beginning November 1, 2018 and resulted in a change in the presentation to our Consolidated Statement of Cash Flows but did not have a material effect on our other consolidated financial statements or disclosures.
−Removed: As a result of the adoption of ASU No.
−Removed: 2016-18, net cash provided by operations on the Consolidated Statement of Cash Flows for the years ended October 31, 2018 and 2017, decreased by $ 14.2 million and $ 103.4 million , respectively.
−Removed: In August 2016, the FASB issued ASU No.
−Removed: 2016-15, “Statement of Cash Flows (Topic 230):
−Removed: Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which is intended to reduce diversity in practice in how certain transactions are classified and makes eight targeted changes to how cash receipts and cash payments are presented in the statement of cash flows.
−Removed: ASU 2016-15 became effective for our fiscal year beginning November 1, 2018 and did not have a material effect on our consolidated financial statements and disclosures.
−Removed: In February 2016, the FASB issued ASU No.
−Removed: 2016-02, “Leases” (“ASU 2016-02”), which requires an entity to recognize assets and liabilities on the balance sheet for the rights and obligations created by leased assets and provide additional disclosures.
−Removed: In July 2018, the FASB issued ASU No.
−Removed: 2018-11, “Leases:
−Removed: Targeted Improvements” (“ASU 2018-11”), which provides an entity with the option to apply the transition provisions of the new standard at its adoption date instead of at its earliest comparative period presented.
−Removed: ASU 2018-11 also provides an entity with a practical expedient that permits lessors to not separate nonlease components from the associated lease component if certain conditions are met.
−Removed: ASU 2016-02, as amended by ASU 2018-11, is effective for our fiscal year beginning November 1, 2019, at which time we will adopt the new standard using a modified retrospective approach.
−Removed: We expect to elect the package of transition practical expedients, which allows us to carry forward our historical assessment of (1) whether contracts are or contain leases, (2) lease classification, and (3) initial direct costs.
−Removed: In addition, we expect to elect the practical expedient that allows lessees the option to account for lease and non-lease components together as a single component for all classes of underlying assets.
−Removed: Upon adoption, we currently estimate the increase to our balance sheet will be approximately 1 % of assets and approximately 2 % of liabilities.
−Removed: While the recognition of such lease assets and liabilities will impact our Consolidated Balance Sheet and require additional disclosure, we do not expect that the new standard will have a material impact on our other consolidated financial statements.
−Removed: We also do not expect significant changes to our business processes, systems, or internal controls as a result of implementing the standard.
−Removed: In June 2016, the FASB issued ASU No.
−Removed: 2016-13, “Financial Instruments - Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”).
−Removed: ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate credit losses.
−Removed: ASU 2016-13 is effective for our fiscal year beginning November 1, 2020, with early adoption permitted as of November 1, 2019.
−Removed: We are currently evaluating the impact that the adoption of ASU 2016-13 may have on our consolidated financial statements and disclosures.
+Added: In fiscal 2020, we acquired substantially all of the assets and operations of The Thrive Group, LLC (“Thrive”), an urban infill builder with operations in Atlanta, Georgia and Nashville, Tennessee, and Keller Homes, Inc.
+Added: (“Keller”), a builder with operations in Colorado Springs, Colorado.
+Added: The aggregate purchase price for these acquisitions was approximately $ 79.2 million in cash.
+Added: The assets acquired were primarily inventory, including approximately 1,100 home sites owned or controlled through land purchase agreements.
+Added: One of these acquisitions was accounted for as a business combination and neither were material to our results of operations or financial condition.
In fiscal 2019, we acquired substantially all of the assets and operations of Sharp Residential, LLC (“Sharp”) and Sabal Homes LLC (“Sabal”), for approximately $ 162.4 million in cash.
1 unchanged sentence
Sabal operates in the Charleston, Greenville, and Myrtle Beach, South Carolina markets.
−Removed: The assets acquired, based on our preliminary purchase price allocations, were primarily inventory, including approximately 2,550 home sites owned or controlled through land purchase agreements.
+Added: The assets acquired, were primarily inventory, including approximately 2,550 home sites owned or controlled through land purchase agreements.
In connection with these acquisitions, we assumed contracts to deliver 204 homes with an aggregate value of $ 96.1 million.
1 unchanged sentence
As a result of these acquisitions, our selling community count increased by 22 communities.
−Removed: In November 2016, we acquired all of the assets and operations of Coleman Real Estate Holdings, LLC (“Coleman”) for approximately $ 83.1 million in cash.
−Removed: The assets acquired were primarily inventory, including approximately 1,750 home sites owned or controlled through land purchase agreements.
−Removed: As part of the acquisition, we assumed contracts to deliver 128 homes with an aggregate value of $ 38.8 million .
−Removed: The average price of the undelivered homes at the date of acquisition was approximately $ 303,000 .
−Removed: As a result of this acquisition, our selling community count increased by 15 communities at the acquisition date.
−Removed: The acquisitions discussed above were accounted for as a business combination and were not material to our results of operations or financial condition.
+Added: These acquisitions were accounted for as a business combination and were not material to our results of operations or financial condition.
Inventory at October 31, 2020 and 2019 consisted of the following (amounts in thousands):
2 unchanged sentences
Operating communities 6,398,538 6,821,917
+Added: $ 7,658,906 $ 7,873,048
Operating communities include communities offering homes for sale, communities that have sold all available home sites but have not completed delivery of the homes, communities that were previously offering homes for sale but are temporarily closed due to business conditions or non-availability of improved home sites and that are expected to reopen within 12 months of the end of the fiscal year being reported on, and communities preparing to open for sale.
3 unchanged sentences
Information regarding the classification, number, and carrying value of these temporarily closed communities at October 31, 2020, 2019, and 2018, is provided in the table below ($ amounts in thousands):
+Added: 2020 2019 2018
Land owned for future communities:
5 unchanged sentences
We provided for inventory impairment charges and the expensing of costs that we believed not to be recoverable in each of the three fiscal years ended October 31, 2020, 2019, and 2018, as shown in the table below (amounts in thousands):
+Added: 2020 2019 2018
Land controlled for future communities $ 23,539 $ 11,285 $ 2,820
1 unchanged sentence
Operating communities 675 31,075 30,151
+Added: $ 55,883 $ 42,360 $ 35,156
See Note 12, “Fair Value Disclosures,” for information regarding (1) the number of operating communities that we tested for potential impairment, the number of operating communities in which we recognized impairment charges, the amount of impairment charges recognized, and the fair value of those communities, net of impairment charges.
+Added: and (2) the number of future communities impaired, the amount of impairment charges recognized, and the fair value of those communities, net of impairment charges.
See Note 15, “Commitments and Contingencies,” for information regarding land purchase commitments.
6 unchanged sentences
Interest incurred, capitalized, and expensed in each of the three fiscal years ended October 31, 2020, 2019, and 2018, was as follows (amounts in thousands):
+Added: 2020 2019 2018
Interest capitalized, beginning of year $ 311,323 $ 319,364 $ 352,049
1 unchanged sentence
Interest expensed to home sales cost of revenues ( 174,375 ) ( 185,045 ) ( 190,734 )
−Removed: Interest expensed to land sales cost of revenues
−Removed: Interest expensed in other income
−Removed: Interest reclassified to property, construction and office equipment
+Added: Interest expensed to land sales and other cost of revenues ( 5,443 ) ( 1,787 ) —
+Added: Interest expensed in other income – net ( 2,440 ) — ( 3,760 )
Interest capitalized on investments in unconsolidated entities ( 3,835 ) ( 4,571 ) ( 7,220 )
−Removed: Previously capitalized interest transferred to investments in unconsolidated entities
Previously capitalized interest on investments in unconsolidated entities transferred to inventory 215 5,327 3,052
Interest capitalized, end of year $ 297,975 $ 311,323 $ 319,364
−Removed: During fiscal 2017, we reclassified 9.0 million of inventory related to two golf courses to property, construction, and office equipment and such amount was net of $ 3.5 million transferred to accrued liabilities related to deferred golf membership fees.
−Removed: The amounts were reclassified due to the completion of construction of the facilities and the substantial completion of the master planned communities of which the golf facilities are a part.
Investments in Unconsolidated Entities
−Removed: We have investments in various unconsolidated entities.
+Added: We have investments in various unconsolidated entities and our ownership interest in these investments range from 15.8 % to 50 %.
These entities, which are structured as joint ventures (i) develop land for the joint venture participants and for sale to outside builders (“Land Development Joint Ventures”);
4 unchanged sentences
The table below provides information as of October 31, 2020, regarding active joint ventures that we are invested in, by joint venture category ($ amounts in thousands):
−Removed: Joint Ventures
−Removed: Home Building
−Removed: Joint Ventures
−Removed: Rental Property
−Removed: Joint Ventures
−Removed: Joint Ventures
+Added: Joint Ventures Home Building
+Added: Joint Ventures Rental Property
+Added: Joint Ventures Gibraltar
+Added: Joint Ventures Total
Number of unconsolidated entities
2 unchanged sentences
Company’s remaining funding commitment to unconsolidated entities
+Added: $ 33,045 $ — $ 24,343 $ 17,601 $ 74,989
Certain joint ventures in which we have investments obtained debt financing to finance a portion of their activities.
The table below provides information at October 31, 2020, regarding the debt financing obtained by category ($ amounts in thousands):
−Removed: Joint Ventures
−Removed: Home Building
−Removed: Joint Ventures
−Removed: Rental Property
−Removed: Joint Ventures
+Added: Joint Ventures Home Building
+Added: Joint Ventures Rental Property
+Added: Joint Ventures Total
Number of joint ventures with debt financing
1 unchanged sentence
Amounts borrowed under commitments
+Added: $ 118,071 $ 30,953 $ 1,217,614 $ 1,366,638
More specific and/or recent information regarding our investments in and future commitments to these entities is provided below.
−Removed: Land Development Joint Ventures
−Removed: In fiscal 2019 , our Land Development Joint Ventures sold approximately 934 lots and recognized revenues of $ 261.7 million .
−Removed: We acquired 293 of these lots for $ 137.1 million .
−Removed: Our share of the joint venture income from the lots we acquired was insignificant.
−Removed: We recognized a charge in connection with one Land Development Joint Venture of $ 1.0 million in fiscal 2019 .
−Removed: In fiscal 2018 , our Land Development Joint Ventures sold approximately 986 lots and recognized revenues of $ 351.4 million .
−Removed: We acquired 259 of these lots for $ 153.2 million .
−Removed: Our share of the income from the lots we acquired of $ 1.7 million was deferred by reducing our basis in those lots acquired.
−Removed: We recognized charges in connection with two Land Development Joint Ventures of $ 6.0 million in fiscal 2018 .
−Removed: In the fourth quarter of fiscal 2019, we entered into a joint venture with an unrelated party to purchase and develop a parcel of land located in Houston, Texas.
−Removed: The joint venture expects to develop approximately 263 home sites on this land in multiple phases.
−Removed: We have a 50 % interest in this joint venture.
−Removed: The joint venture intends to sell approximately 50 % of the value of the home sites to each of the members of the joint venture.
−Removed: At October 31, 2019 , we had an investment of $ 5.9 million in this joint venture.
−Removed: The joint venture expects to secure third-party financing at a later date.
−Removed: Home Building Joint Ventures
−Removed: Our Home Building Joint Ventures are delivering homes in New York City and Jupiter, Florida.
−Removed: In fiscal 2019 and 2018 , our Home Building Joint Ventures delivered 186 homes with a sales value of $ 374.6 million , and 100 homes with a sales value of $ 148.0 million , respectively.
−Removed: Subsequent event
−Removed: In November 2019, one of our Home Building Joint Ventures refinanced its existing $ 236.5 million construction loan with a $ 76.6 million post-construction loan that matures November 2021.
−Removed: We and an affiliate of our partner provided certain guarantees under the loan agreement.
−Removed: We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $ 76.6 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.
−Removed: Rental Property Joint Ventures
−Removed: As of October 31, 2019 , our Rental Property Joint Ventures owned 25 for-rent apartment projects and a hotel, which are located in multiple metropolitan areas throughout the country.
−Removed: At October 31, 2019 , these joint ventures had approximately 2,000 units that were occupied or ready for occupancy, 1,700 units in the lease-up stage, and 4,100 units in the design phase or under development.
−Removed: In addition, we either own or have under contract, approximately 10,900 units, of which 800 units are under active development;
−Removed: we intend to develop these units in joint ventures with unrelated parties in the future.
−Removed: In fiscal 2019, we entered into five separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in Harrison, New York, Frisco, Texas, Atlanta, Georgia, Orange, California, and Dallas, Texas.
−Removed: Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $ 145.1 million of land and land development costs.
−Removed: Our partners acquired interests in these entities ranging from 63.5 % to 75 % for an aggregate amount of $ 110.0 million and we recognized a gain on land sales of $ 9.3 million in fiscal 2019.
−Removed: At October 31, 2019 , we had an aggregate investment of $ 48.8 million in these joint ventures.
−Removed: Concurrent with their formation, these joint ventures entered into construction loan agreements for an aggregate amount of $ 340.1 million .
−Removed: At October 31, 2019 , the joint ventures had $ 39.3 million outstanding borrowings under these construction loan facilities.
−Removed: In addition, in fiscal 2019, we entered into four separate joint ventures with unrelated parties to develop luxury for-rent residential apartment projects and student housing communities located in Boston, Massachusetts, San Diego, California, Tempe, Arizona and Miami, Florida.
−Removed: We contributed an aggregate of $ 79.6 million for our initial ownership interests in these joint ventures, which ranged from 50 % to 98 % .
−Removed: Due to our controlling financial interest, our power to direct the activities that most significantly impact each joint venture’s performance, and/or our obligation to absorb expected losses or receive benefits from these joint ventures, we consolidated these joint ventures at October 31, 2019 .
−Removed: The carrying value of these joint ventures’ assets totaling $ 125.0 million are reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet as of October 31, 2019 .
−Removed: Our partners’ interests aggregating $ 37.9 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019 .
−Removed: These joint ventures intend to obtain additional equity investors and secure third-party financing at a later date.
−Removed: At such time, it is expected that these entities would no longer be consolidated.
−Removed: In the second quarter of fiscal 2019, we entered into a joint venture with unrelated parties to develop, build, and operate single-family rental communities.
−Removed: As of October 31, 2019 , we have committed to invest up to $ 60.0 million in this joint venture, of which $ 1.0 million has been invested.
−Removed: In fiscal 2019, one of our Rental Property Joint Ventures, in which we had a 25 % interest, sold its assets to an unrelated party for $ 77.8 million .
−Removed: The joint venture had owned, developed, and operated a multifamily residential community in Phoenixville, Pennsylvania.
−Removed: In connection with the sale, the joint venture repaid its entire $ 47.0 million loan.
−Removed: We received cash of $ 7.4 million and recognized a gain of $ 3.8 million , which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income.
−Removed: We have an investment in a joint venture in which we have a 50 % interest that developed a luxury hotel in conjunction with a high-rise luxury condominium project in New York City developed by a related Home Building Joint Venture.
−Removed: The hotel commenced operations in February 2017.
−Removed: At October 31, 2019 , we had an investment of $ 21.0 million in this joint venture.
−Removed: In the fourth quarter of fiscal 2019, the joint venture refinanced its existing $ 80.0 million , three -year term loan with a three -year, $ 120.0 million term loan, of which $ 110.0 million was advanced to the joint venture at closing.
−Removed: The proceeds from the refinancing were distributed to the members.
−Removed: In fiscal 2018, we entered into four joint ventures with unrelated parties to develop luxury for-rent residential apartment projects located in suburban Atlanta, Georgia;
−Removed: Belmont, Massachusetts;
−Removed: and Washington, D.C.
−Removed: Prior to the formation of these joint ventures, we acquired the properties and incurred approximately $ 140.0 million of land and land development costs.
−Removed: Our partners acquired interests in these entities ranging from 50 % to 75 % for an aggregate amount of $ 80.3 million .
−Removed: At October 31, 2019 , we had an investment of $ 65.6 million in these joint ventures.
−Removed: In fiscal 2018, several of these joint ventures entered into construction loan agreements for an aggregate amount of $ 166.1 million to finance the development of these projects.
−Removed: At October 31, 2019 , the joint ventures had $ 156.1 million of outstanding borrowings under the construction loan facilities.
−Removed: In addition, in fiscal 2018 we entered into a joint venture with an unrelated party to develop a luxury for-rent residential apartment project in a suburb of Boston, Massachusetts.
−Removed: We contributed cash of $ 15.9 million for our initial 85 % ownership interest in this joint venture.
−Removed: Due to our controlling financial interest, our power to direct the activities that most significantly impact the joint venture’s performance, and our obligation to absorb expected losses or receive benefits from the joint venture, we consolidated this joint venture at October 31, 2019 .
−Removed: The carrying value of the joint venture’s assets totaling $ 20.8 million are reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet at October 31, 2019 .
−Removed: Our partner’s 15 % interest of $ 3.1 million in the joint venture is reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019 .
−Removed: The joint venture expects to admit an additional investor and secure third-party financing at a later date.
−Removed: In fiscal 2018, three of our Rental Property Joint Ventures sold their assets to unrelated parties for $ 477.5 million .
−Removed: These joint ventures had owned, developed, and operated multifamily rental properties located in suburban Washington, D.C.
−Removed: and Westborough, Massachusetts, and a student housing community in College Park, Maryland.
−Removed: In connection with these sales, the joint ventures’ aggregate outstanding loan balance of $ 239.6 million was repaid.
−Removed: From our investment in these joint ventures, we received cash of $ 79.1 million and recognized gains from these sales of $ 67.2 million in fiscal 2018, which is included in “Income from unconsolidated entities” in our Consolidated Statement of Operations and Comprehensive Income.
−Removed: In fiscal 2017, we sold one-half of our 50 % interest in two of our Rental Property Joint Ventures to an unrelated party.
−Removed: In connection with these sales, we, along with our partners, recapitalized the joint ventures and refinanced the existing $ 166.3 million in construction loans with 10 -year fixed rate loans totaling $ 189.0 million .
−Removed: As a result of these transactions, we received cash of $ 54.9 million and recognized gains of $ 26.7 million in fiscal 2017, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income.
−Removed: At October 31, 2019 , we had a 25 % interest in each of these joint ventures.
−Removed: In 1998, we formed the Trust to invest in commercial real estate opportunities.
−Removed: The Trust is effectively owned one-third by us;
−Removed: one-third by current and former members of our senior management;
−Removed: and one-third by an unrelated party.
−Removed: As of October 31, 2019 , our investment in the Trust was zero as cumulative distributions received from the Trust have been in excess of the carrying amount of our net investment.
−Removed: We provide development, finance, and management services to the Trust and recognized fees under the terms of various agreements in the amounts of $ 1.0 million , $ 2.0 million , and $ 2.0 million in fiscal 2019 , 2018 and 2017 , respectively.
−Removed: In fiscal 2019 and 2018, we received distributions of $ 3.9 million and $ 27.7 million , respectively, from the Trust, of which the full amount was recognized as income and included in “Income from unconsolidated entities” in our fiscal 2019 and 2018 Consolidated Statements of Operations and Comprehensive Income.
−Removed: No distributions were received from the Trust in fiscal 2017.
−Removed: Subsequent events
−Removed: In November 2019, we entered into a joint venture with an unrelated party to develop a for-rent residential apartment project in Dallas, Texas.
−Removed: Prior to the formation of this joint venture, we acquired the property and incurred approximately $ 19.0 million of land and land development costs.
−Removed: Our partner acquired a 50 % interest in this entity for approximately $ 9.2 million , of which $ 7.7 million was distributed to us.
−Removed: Our initial investment is $ 11.9 million .
−Removed: Concurrent with its formation, the joint venture
−Removed: entered into a $ 42.0 million construction loan agreement to finance the development of this project.
−Removed: We and an affiliate of our partner provided certain guarantees under the construction loan agreement.
−Removed: We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $ 42.0 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.
−Removed: In December 2019, we sold all of our ownership interest in one of our Rental Property Joint Ventures to our partner for cash of $ 16.8 million , net of closing costs.
−Removed: The joint venture had owned, developed, and operated multifamily residential apartments in northern New Jersey.
−Removed: In connection with the sale, the joint venture’s existing $ 76.0 million loan was assumed by our partner.
−Removed: We expect to recognize a gain of approximately $ 10.0 million in the first quarter of fiscal 2019 from the sale.
−Removed: In December 2019, we entered into a joint venture with an unrelated party to develop a for-rent student housing community in State College, Pennsylvania.
−Removed: Prior to the formation of this joint venture, we acquired the property and incurred approximately $ 32.0 million of land and land development costs.
−Removed: Our partner acquired a 70 % interest in this entity for approximately $ 22.2 million , of which $ 17.9 million was distributed to us.
−Removed: Our initial investment is $ 12.9 million .
−Removed: Concurrent with its formation, the joint venture entered into a $ 79.5 million construction loan agreement to finance the development of this project.
−Removed: We and an affiliate of our partner provided certain guarantees under the construction loan agreement.
−Removed: We estimate that our maximum exposure under these guarantees, if the full amount of the loan commitment was borrowed, would be $ 79.5 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.
−Removed: Gibraltar Joint Ventures
−Removed: We, through our wholly owned subsidiary, Gibraltar Capital and Asset Management, LLC (“Gibraltar”), have entered into eight ventures with an institutional investor to provide builders and developers with land banking and venture capital, two of which were formed in fiscal 2019.
−Removed: These ventures will finance builders’ and developers’ acquisition and development of land and home sites and pursue other complementary investment strategies.
−Removed: We are also a member in a separate venture with the same institutional investor, which purchased, from Gibraltar, certain foreclosed real estate owned and distressed loans in fiscal 2016.
−Removed: Our ownership interest in these ventures is approximately 25 % .
−Removed: We may invest up to $ 100.0 million in these ventures.
−Removed: As of October 31, 2019 , we had an investment of $ 20.5 million in these ventures.
+Added: New Joint Ventures
+Added: The table below provides information on joint ventures entered into during fiscal 2020 ($ amounts in thousands):
+Added: Land Development Joint Ventures Rental Property Joint Ventures
+Added: Number of unconsolidated joint ventures entered into during the period 1 7
+Added: Investment balance at October 31, 2020 $ 24,602 $ 80,448
+Added: The table below provides information on joint ventures entered into during fiscal 2019 ($ amounts in thousands):
+Added: Land Development Joint Ventures Rental Property Joint Ventures
+Added: Number of unconsolidated joint ventures entered into during the period 1 10
+Added: Investment balance at October 31, 2019 $ 5,913 $ 49,691
+Added: Number of consolidated joint ventures entered into during the period — 4
+Added: Carrying value of consolidated joint ventures’ assets at October 31, 2019 $ — $ 124,988
+Added: Noncontrolling interests in consolidated joint ventures at October 31, 2019 $ — $ 37,832
+Added: Results of Operations and Intra-entity Transactions
+Added: In fiscal 2020, 2019 and 2018, certain of our rental property joint ventures sold their underlying assets to unrelated parties or to our joint venture partner.
+Added: In connection with these sales, we recognized gains of $ 10.7 million, $ 3.8 million, and $ 67.2 million, respectively, which is included in “Income from unconsolidated entities” in our Consolidated Statements of Operations and Comprehensive Income.
+Added: In fiscal 2020, we recognized other-than-temporary impairment charges on a Home Building Joint Venture of $ 6.0 million.
+Added: In fiscal 2019 and 2018, we recognized an other-than-temporary impairment charge on certain Land Development Joint Ventures of $ 1.0 million and $ 6.0 million, respectively.
+Added: In fiscal 2020, 2019 and 2018, purchases from unconsolidated entities principally related to our acquisition of lots from our Land Development Joint Ventures and were $ 17.6 million, $ 137.1 million, and $ 153.2 million, respectively.
+Added: Our share of income from the lots we acquired was insignificant in each period.
+Added: Sales to unconsolidated entities principally related to land
+Added: sales to our Rental Property Joint Ventures for which we recognized gains in land sales and other revenues of $ 1.2 million, $ 9.4 million and $ 1.0 million in our fiscal 2020, 2019 and 2018, Consolidated Statements of Operations and Comprehensive Income, respectively.
The unconsolidated entities in which we have investments generally finance their activities with a combination of partner equity and debt financing.
−Removed: In some instances, we and our partners have guaranteed debt of certain unconsolidated entities.
+Added: In some instances, we have guaranteed debt of unconsolidated entities.
These guarantees may include any or all of the following:
4 unchanged sentences
and (v) indemnification of the lender from “bad boy acts” of the unconsolidated entity.
−Removed: In some instances, the guarantees provided in connection with loans to an unconsolidated entity are joint and several.
−Removed: In these situations, we generally have 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;
−Removed: however, if the joint venture partner does not have adequate financial resources to meet its obligations under the reimbursement agreement, we may be liable for more than our proportionate share.
+Added: In some instances, we and our joint venture partner have provided joint and several guarantees in connection with loans to unconsolidated entities.
+Added: In these situations, 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;
+Added: however, we are not always successful.
+Added: In addition, if the joint venture partner does not have adequate financial resources to meet its obligations under such a reimbursement agreement, we may be liable for more than our proportionate share.
We believe that, as of October 31, 2020, in the event we become legally obligated to perform under a guarantee of an obligation of an unconsolidated entity due to a triggering event, the collateral in such entity should be sufficient to repay a significant portion of the obligation.
If it is not, we and our partners would need to contribute additional capital to the venture.
−Removed: At October 31, 2019 , certain unconsolidated entities have loan commitments aggregating $ 1.53 billion , of which, if the full amount of the debt obligations were borrowed, we estimate $ 299.1 million to be our maximum exposure related solely to repayment and carry cost guarantees.
−Removed: At October 31, 2019 , the unconsolidated entities had borrowed an aggregate of $ 1.14 billion , of which we estimate $ 239.6 million to be our maximum exposure related solely to repayment and carry cost guarantees.
−Removed: The terms of these guarantees generally range from 2 months to 9.7 years .
−Removed: These maximum exposure estimates do not take into account any recoveries from the underlying collateral or any reimbursement from our partners.
−Removed: As of October 31, 2019 , the estimated aggregate fair value of the guarantees provided by us related to debt and other obligations of certain unconsolidated entities was approximately $ 5.6 million .
+Added: Information with respect to certain of the Company’s unconsolidated entities’ outstanding debt obligations, loan commitments and our guarantees thereon are as follows ($ amounts in thousands):
+Added: October 31, 2020
+Added: Loan commitments in the aggregate $ 1,508,300
+Added: Our maximum estimated exposure under repayment and carry cost guarantees if the full amount of the debt obligations were borrowed $ 229,300
+Added: Debt obligations borrowed in the aggregate $ 1,024,700
+Added: Our maximum estimated exposure under repayment and carry cost guarantees of the debt obligations borrowed $ 179,100
+Added: Estimated fair value of guarantees provided by us related to debt and other obligations $ 6,100
+Added: Terms of guarantees 1 month - 3.5 years
+Added: The maximum exposure estimates presented above do not take into account any recoveries from the underlying collateral or any reimbursement from our partners.
We have not made payments under any of the guarantees, nor have we been called upon to do so.
Variable Interest Entities
−Removed: At October 31, 2019 and 2018 , we determined that 18 and 11 , respectively, of our joint ventures were VIEs under the guidance within ASC 810.
−Removed: For 13 and 10 of these VIEs as of October 31, 2019 and 2018 , respectively, we concluded that we were not the primary beneficiary of these VIEs because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIEs’ other partners or such activities were controlled by our partner.
−Removed: For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all members.
−Removed: Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and other members.
−Removed: The information presented below regarding the investments, commitments, and guarantees in unconsolidated entities deemed to be VIEs is also included in the information provided above.
−Removed: As of October 31, 2019 , we have consolidated five Rental Property Joint Ventures.
−Removed: We had one consolidated Rental Property Joint Venture as of October 31, 2018.
−Removed: The carrying value of these joint ventures’ assets totaled $ 145.8 million and $ 19.7 million as reflected in “Receivables, prepaid expenses, and other assets” in our Consolidated Balance Sheet as of October 31, 2019 and 2018, respectively.
−Removed: Our partners’ interests aggregating $ 41.0 million and $ 2.8 million in the joint ventures are reflected as a component of “Noncontrolling interest” in our Consolidated Balance Sheet as of October 31, 2019 and 2018, respectively.
−Removed: These joint ventures were determined to be VIEs due to their current inability to finance their activities without additional subordinated financial support as well as our partners’ inability to participate in the significant decisions of the joint venture and their lack of substantive kick-out rights.
−Removed: We further concluded that we are the primary beneficiary of these VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures.
+Added: The table below provide information as of October 31, 2020 and 2019, regarding our unconsolidated joint venture-related variable interests in VIEs ($ amounts in thousands):
+Added: October 31, 2020 October 31, 2019
+Added: Number of Joint Venture VIEs that the Company is not the Primary Beneficiary (“PB”)
+Added: Investment balance in unconsolidated Joint Venture VIEs included in Investments in unconsolidated entities in our Consolidated Balance Sheets $ 63,100 $ 37,000
+Added: Our maximum exposure to losses related to loan guarantees and additional commitments provided to unconsolidated Joint Venture VIEs $ 122,100 $ 84,300
+Added: Our ownership interest in the above unconsolidated Joint Venture VIEs ranges from 20 % to 50 %.
+Added: The table below provide information as of October 31, 2020 and 2019, regarding our consolidated joint venture-related variable interests in VIEs ($ amounts in thousands):
+Added: Balance Sheet Classification October 31, 2020 October 31, 2019
+Added: Number of Joint Venture VIEs that the Company is the PB and consolidates
+Added: Carrying value of consolidated VIEs assets Receivables prepaid expenses, and other assets $ 163,000 $ 145,800
+Added: Our partners’ interests in consolidated VIEs Noncontrolling interest $ 46,200 $ 41,000
+Added: Our ownership interest in the above consolidated Joint Venture VIEs ranges from 50 % to 98 %.
+Added: As shown above, we have concluded we are the PB of certain VIEs due to our controlling financial interest in such ventures as we have the power to direct the activities that most significantly impact the joint ventures’ performance and the obligation to absorb expected losses or receive benefits from the joint ventures.
The assets of these VIEs can only be used to settle the obligations of the VIEs.
In addition, in certain of the joint ventures, in the event additional contributions are required to be funded to the joint ventures prior to the admission of any additional investor at a future date, we will fund 100% of such contributions, including our partner’s pro rata share, which we expect would be funded through an interest-bearing loan.
−Removed: At October 31, 2019 and 2018 , our investments in our unconsolidated entities deemed to be VIEs, which are included in “Investments in unconsolidated entities” in our Consolidated Balance Sheets, totaled $ 37.0 million and $ 33.8 million , respectively.
−Removed: At October 31, 2019 , the maximum exposure of loss to our investments in these entities was limited to our investments in the unconsolidated VIEs, except with regard to $ 76.0 million of loan guarantees and $ 8.3 million of additional commitments to fund the VIEs.
−Removed: Of our potential exposure for these loan guarantees, $ 76.0 million is related to repayment and carry cost guarantees, of which $ 76.0 million was borrowed at October 31, 2019 .
−Removed: At October 31, 2018 , the maximum exposure of loss to our investments in these entities was limited to our investments in the unconsolidated VIEs, except with regard to $ 70.0 million of loan guarantees and $ 10.8 million of additional commitments to fund the VIEs.
−Removed: Of our potential exposure for these loan guarantees, $ 70.0 million is related to repayment and carry cost guarantees, of which $ 70.0 million was borrowed at October 31, 2018 .
+Added: For other VIEs, we have concluded that we are not the PB because the power to direct the activities of such VIEs that most significantly impact their performance was either shared by us and such VIEs’ other partners or such activities were controlled by our partner.
+Added: For VIEs where the power to direct significant activities is shared, business plans, budgets, and other major decisions are required to be unanimously approved by all members.
+Added: Management and other fees earned by us are nominal and believed to be at market rates, and there is no significant economic disproportionality between us and other members.
+Added: Subsequent events
+Added: In November 2020, we entered into a joint venture with an unrelated party to develop a for-rent residential apartment project in Cambridge, Massachusetts.
+Added: Prior to the formation of this venture, we acquired the property and incurred approximately $ 60.1 million of land and land development costs.
+Added: Our partner acquired a 75 % interest in this entity for approximately $ 49.2 million, of which $ 44.0 million was distributed to us.
+Added: Our initial investment is $ 16.4 million.
+Added: Concurrent with its formation, the joint venture entered into a $ 141.7 million construction loan agreement to finance the development of this project.
+Added: We and an affiliate of our partner provided certain guarantees under the construction loan agreement.
+Added: We estimate that our maximum exposure under recourse guarantees, if the full amount of the loan commitment was borrowed, would be the $ 28.3 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.
+Added: In December 2020, a Rental Property Joint Venture that we previously formed in fiscal 2018 secured a $ 160.0 million construction loan to finance the development of a project located in Washington, D.C.
+Added: We and an affiliate of our partner provided certain guarantees under the construction loan agreement.
+Added: We estimate that our maximum exposure under recourse guarantees, if the full amount of the loan commitment was borrowed, would be $ 24.0 million without taking into account any recoveries from the underlying collateral or any reimbursement from our partner.
Joint Venture Condensed Financial Information
3 unchanged sentences
Land Develop-
−Removed: Rental Property Joint Ventures
+Added: Ventures Home
+Added: Rental Property Joint Ventures Gibraltar
+Added: Ventures Total
Cash and cash equivalents $ 24,330 $ 18,106 $ 64,244 $ 2,798 $ 109,478
+Added: Inventory 303,960 198,260 — 8,780 511,000
Loan receivables, net — — — 78,576 78,576
2 unchanged sentences
Real estate owned — — — 6,752 6,752
+Added: Other assets 108,289 21,930 38,851 298 169,368
+Added: Total assets $ 436,579 $ 238,296 $ 2,014,392 $ 97,204 $ 2,786,471
Debt, net of deferred financing costs $ 117,342 $ 30,116 $ 1,220,607 $ — $ 1,368,065
4 unchanged sentences
Company’s net investment in unconsolidated entities (1)
+Added: $ 127,690 $ 33,819 $ 247,049 $ 22,143 $ 430,701
October 31, 2019
Land Develop-
−Removed: Rental Property Joint Ventures
+Added: Ventures Home
+Added: Rental Property Joint Ventures Gibraltar
+Added: Ventures Total
Cash and cash equivalents $ 23,669 $ 38,115 $ 20,647 $ 3,388 $ 85,819
+Added: Inventory 247,866 313,991 — 17,369 579,226
Loan receivables, net — — — 56,545 56,545
2 unchanged sentences
Real estate owned — — — 12,267 12,267
+Added: Other assets 96,602 78,916 36,879 364 212,761
+Added: Total assets $ 368,137 $ 431,022 $ 1,614,571 $ 89,933 $ 2,503,663
Debt, net of deferred financing costs $ 88,050 $ 132,606 $ 1,006,201 $ — $ 1,226,857
4 unchanged sentences
Company’s net investment in unconsolidated entities (1)
−Removed: Differences between our net investment in unconsolidated entities and our underlying equity in the net assets of the entities are primarily a result of impairments related to our investments in unconsolidated entities;
+Added: $ 110,306 $ 60,512 $ 174,292 $ 21,142 $ 366,252
+Added: (1) Differences between our net investment in unconsolidated entities and our underlying equity in the net assets of the entities amounted to $ 29.4 million and $ 30.9 million as of October 31, 2020 and 2019, respectively, and are primarily a result of other than temporary impairments related to our investments in unconsolidated entities;
interest capitalized on our investments;
6 unchanged sentences
Land Develop-
−Removed: Rental Property Joint Ventures
+Added: Ventures Home
+Added: Rental Property Joint Ventures Gibraltar
+Added: Ventures Total
+Added: $ 87,174 $ 139,587 $ 111,122 $ 26,781 $ 364,664
Cost of revenues 64,810 124,899 37,770 15,762 243,241
2 unchanged sentences
Gain on disposition of loans and REO
+Added: — — — 1,053 1,053
Income (loss) from operations 19,416 ( 1,043 ) ( 44,067 ) 10,567 ( 15,127 )
+Added: Other income (loss) 3,061 536 ( 448 ) — 3,149
Income (loss) before income taxes 22,477 ( 507 ) ( 44,515 ) 10,567 ( 11,978 )
−Removed: Income tax provision
+Added: Income tax provision (benefit) 188 ( 254 ) — — ( 66 )
Net income (loss) including earnings from noncontrolling interests
−Removed: income attributable to noncontrolling interest
+Added: 22,289 ( 253 ) ( 44,515 ) 10,567 ( 11,912 )
+Added: loss attributable to noncontrolling interest — — — 48 48
Net income (loss) attributable to controlling interest
+Added: $ 22,289 $ ( 253 ) $ ( 44,515 ) $ 10,615 $ ( 11,864 )
Company’s equity (deficit) in earnings of unconsolidated entities (2)
+Added: $ 11,412 $ ( 3,424 ) $ ( 9,389 ) $ 2,349 $ 948
For the year ended October 31, 2019
Land Develop-
−Removed: Rental Property Joint Ventures
+Added: Ventures Home
+Added: Rental Property Joint Ventures Gibraltar
+Added: Ventures Total
+Added: Revenues $ 261,677 $ 374,587 $ 99,401 $ 21,377 $ 757,042
Cost of revenues (3) 246,980 323,764 68,502 13,234 652,480
2 unchanged sentences
Gain on disposition of loans and REO
+Added: — — — 4,383 4,383
Income (loss) from operations 9,945 26,190 ( 28,029 ) 10,646 18,752
−Removed: Income before income taxes
+Added: Other income 3,079 6,144 16,651 12,793 38,667
+Added: Income (loss) before income taxes 13,024 32,334 ( 11,378 ) 23,439 57,419
Income tax provision
−Removed: Net income including earnings from noncontrolling interests
+Added: 193 457 — — 650
+Added: Net income (loss) including earnings from noncontrolling interests 12,831 31,877 ( 11,378 ) 23,439 56,769
income attributable to noncontrolling interest
−Removed: Net income attributable to controlling interest
−Removed: Company’s equity in earnings of unconsolidated entities (2)
+Added: — — — ( 9,593 ) ( 9,593 )
+Added: Net income (loss) attributable to controlling interest $ 12,831 $ 31,877 $ ( 11,378 ) $ 13,846 $ 47,176
+Added: Company’s equity (deficit) in earnings of unconsolidated entities (2) $ 6,160 $ 17,004 $ ( 824 ) $ 2,528 $ 24,868
For the year ended October 31, 2018
Land Develop-
−Removed: Rental Property Joint Ventures
+Added: Ventures Home
+Added: Rental Property Joint Ventures Gibraltar
+Added: Ventures Total
+Added: $ 351,397 $ 148,002 $ 121,276 $ 19,592 $ 640,267
Cost of revenues (3) 317,103 109,357 74,946 17,817 519,223
2 unchanged sentences
Gain on disposition of loans and REO
+Added: — — — 53,192 53,192
Income (loss) from operations 24,909 26,903 ( 15,172 ) 51,766 88,406
−Removed: Income (loss) before income taxes
+Added: Other income 5,939 2,134 222,744 1,937 232,754
+Added: Income before income taxes 30,848 29,037 207,572 53,703 321,160
Income tax provision
−Removed: Net income (loss) including earnings from noncontrolling interests
+Added: 86 767 — — 853
+Added: Net income including earnings from noncontrolling interests 30,762 28,270 207,572 53,703 320,307
income attributable to noncontrolling interest
−Removed: Net income (loss) attributable to controlling interest
+Added: — — — ( 28,297 ) ( 28,297 )
+Added: Net income attributable to controlling interest 30,762 28,270 207,572 25,406 292,010
Company’s equity in earnings of unconsolidated entities (2)
−Removed: Differences between our equity in earnings of unconsolidated entities and the underlying net income (loss) of the entities are primarily a result of a basis difference of an acquired joint venture interest;
−Removed: distributions from entities in excess of the carrying amount of our net investment;
+Added: $ 3,392 $ 14,069 $ 62,204 $ 5,575 $ 85,240
+Added: (2) Differences between our equity in earnings of unconsolidated entities and the underlying net income (loss) of the entities are primarily a result of distributions from entities in excess of the carrying amount of our investment;
+Added: other than temporary impairments related to our investments in unconsolidated entities;
recoveries of previously incurred charges;
unrealized gains on our retained joint venture interests;
+Added: gained recognized from the sale of our investment to our joint venture partner;
and our share of the entities’ profits related to home sites purchased by us which reduces our cost basis of the home sites acquired.
+Added: (3) Effective October 31, 2020, we reclassified sales commissions paid to third-party brokers from home sales cost of revenues to selling, general and administrative expense.
+Added: Prior year periods have been reclassified to conform to the 2020 presentation.
Receivables, Prepaid Expenses, and Other Assets
5 unchanged sentences
Prepaid expenses 28,104 26,041
+Added: Right-of-use asset (1) 105,004 —
+Added: Other 90,293 74,439
+Added: $ 956,294 $ 715,441
+Added: (1) On November 1, 2019, we adopted ASU 2016-02 which resulted in the establishment of a right-of-use (“ROU”) asset on our Consolidated Balance Sheet as of October 31, 2020.
+Added: The Consolidated Balance Sheet as of October 31, 2019 does not reflect any changes resulting from the adoption of the new standard.
+Added: See Note 1, “Significant Accounting Policies – Recent Accounting Pronouncements” for additional information regarding the adoption of ASU 2016-02.
See Note 7, “Accrued Expenses,” for additional information regarding the expected recoveries from insurance carriers and others.
7 unchanged sentences
Deferred issuance costs ( 3,302 ) ( 3,128 )
+Added: $ 1,147,955 $ 1,111,449
Senior Unsecured Term Loan
−Removed: At October 31, 2019 , we had a $ 800.0 million , five -year senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks.
−Removed: On November 1, 2018 , we amended the Term Loan Facility to, among other things, (i) increase the size of the outstanding term loan from $ 500.0 million to $ 800.0 million ;
−Removed: (ii) extend the maturity date from August 2021 to November 1, 2023 (which was subsequently extended to November 1, 2024 ), with no principal payments being required before the maturity date;
−Removed: (iii) provide an accordion feature under which we may, subject to certain conditions set forth in the agreement, increase the Term Loan Facility up to a maximum aggregate amount of $ 1.0 billion ;
−Removed: (iv) revise certain provisions to reduce the interest rate applicable on outstanding borrowings;
−Removed: and (v) modify certain provisions relating to existing financial maintenance and negative covenants.
−Removed: We subsequently amended the maturity date on October 31, 2019 to extend it to November 1, 2024 .
−Removed: We and substantially all of our 100 % -owned home building subsidiaries are guarantors under the Term Loan Facility.
−Removed: Under the terms of the Term Loan Facility, at October 31, 2019 , our maximum leverage ratio, as defined, may not exceed 1.75 to 1.00, and we are required to maintain a minimum tangible net worth, as defined, of no less than approximately $ 2.70 billion .
−Removed: Under the terms of the Term Loan Facility, at October 31, 2019 , our leverage ratio was approximately 0.50 to 1.00, and our tangible net worth was approximately $ 5.02 billion .
−Removed: Based upon the limitations related to our repurchase of common stock in the Term Loan Facility, our ability to repurchase our common stock was limited to approximately $ 3.53 billion as of October 31, 2019 .
−Removed: In addition, our ability to pay cash dividends was limited to approximately $ 2.32 billion as of October 31, 2019 .
+Added: At October 31, 2020, we had an $ 800.0 million, five -year senior unsecured term loan facility (the “Term Loan Facility”) with a syndicate of banks.
+Added: The Term Loan Facility provides an accordion feature under which we may, subject to certain conditions set forth in the agreement, increase the Term Loan Facility up to a maximum aggregate amount of $ 1.5 billion.
+Added: On October 31, 2020, we entered into term loan extension agreements with the banks which extended the maturity date of all $ 800.0 million of outstanding term loans under the Term Loan Facility from November 1, 2024 to November 1, 2025, with no payments being required before the maturity date.
Under the Term Loan Facility, as amended, we may select interest rates equal to (i) London Interbank Offered Rate (“LIBOR”) plus an applicable margin, (ii) the base rate (as defined in the agreement) plus an applicable margin, or (iii) the federal funds/Euro rate (as defined in the agreement) plus an applicable margin, in each case, based on our leverage ratio.
3 unchanged sentences
Revolving Credit Facility
−Removed: We have a $ 1.905 billion senior unsecured, five -year revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks that is scheduled to expire on November 1, 2024 .
−Removed: On October 31, 2019 , we amended our Revolving Credit Facility to replace our existing $ 1.295 billion revolving credit facility, which was scheduled to mature in May 2021 .
+Added: We have a $ 1.905 billion senior unsecured, five -year revolving credit facility (the “Revolving Credit Facility”) with a syndicate of banks that was scheduled to expire on November 1, 2024.
+Added: On October 31, 2020, we entered into extension letter agreements (the “Revolver Extension Agreements”) with respect to the Revolving Credit Facility.
+Added: In connection with the Revolver Extension Agreements, the Company extended the maturity date of $ 1.850 billion of the revolving loans and commitments under the Revolving Credit Agreement from November 1, 2024 to November 1, 2025, with the remainder of the revolving loans and commitments continuing to terminate on November 1, 2024.
+Added: On October 31, 2019, we amended our Revolving Credit Facility to replace our then existing $ 1.295 billion revolving credit facility.
Under the amended terms, up to 100 % of the commitment is available for letters of credit.
8 unchanged sentences
Under the terms of the Revolving Credit Facility, at October 31, 2020, our leverage ratio was approximately 0.49 to 1.00 and our tangible net worth was approximately $ 4.81 billion.
−Removed: Based upon the limitations related to our repurchase of common stock in the Revolving Credit Facility, our ability to repurchase our
−Removed: common stock was limited to approximately $ 3.53 billion as of October 31, 2019 .
+Added: Based upon the limitations related to our repurchase of common stock in the Revolving Credit Facility, our ability to repurchase our common stock was limited to approximately $ 3.18 billion as of October 31, 2020.
In addition, under the provisions of the Revolving Credit Facility, our ability to pay cash dividends was limited to approximately $ 2.56 billion as of October 31, 2020.
6 unchanged sentences
Interest rate range 0.20% - 7.00% 1.26% - 7.00%
−Removed: 1.26% - 7.00%
−Removed: 1.15% - 7.87%
Loans secured by assets
1 unchanged sentence
Carrying value of assets securing loans $ 947,989 $ 850,381
−Removed: The contractual maturities of “Loans payable – other” as of October 31, 2019 , ranged from two months to 27 years .
+Added: The contractual maturities of “Loans payable – other” as of October 31, 2020, ranged from one month to 30 years .
At October 31, 2020 and 2019, senior notes consisted of the following (amounts in thousands):
−Removed: 4.00% Senior Notes due December 31, 2018
−Removed: 6.75% Senior Notes due November 1, 2019
5.875% Senior Notes due February 15, 2022 $ 419,876 $ 419,876
6 unchanged sentences
Bond discounts, premiums, and deferred issuance costs, net ( 8,158 ) ( 9,978 )
+Added: $ 2,661,718 $ 2,659,898
The senior notes are the unsecured obligations of Toll Brothers Finance Corp., our 100 %-owned subsidiary.
9 unchanged sentences
The Company received $ 396.4 million of net proceeds from the issuance of these senior notes.
−Removed: On September 15, 2017 , we redeemed all $ 287.5 million aggregate principal amount of the 0.5 % Exchangeable Senior Notes for cash at a redemption price of 100 % of their principal amount, plus accrued and unpaid interest.
−Removed: The 0.5 % Exchangeable Senior Notes were exchangeable into shares of our common stock at an exchange rate of 20.3749 shares per $ 1,000 principal amount of notes, corresponding to an initial exchange price of approximately $ 49.08 per share of common stock.
−Removed: If all of the 0.5 % Exchangeable Senior Notes were exchanged, we would have issued approximately 5.9 million shares of our common stock.
−Removed: Shares issuable upon conversion of the 0.5 % Exchangeable Senior Notes were included in the calculation of diluted earnings per share.
Mortgage Company Loan Facility
1 unchanged sentence
The Warehousing Agreement is accounted for as a secured borrowing under ASC 860, “Transfers and Servicing.” In December 2018, the Warehousing Agreement was amended to provide for loan purchases up to $ 75.0 million, subject to certain sublimits.
−Removed: In addition, the Warehousing Agreement, as amended, provides for an accordion feature under which TBI Mortgage may request that the aggregate commitments under the Warehousing Agreement be increased to an amount up to $ 150.0 million for a short period of time.
−Removed: Prior to the December 2018 amendment, the Warehousing Agreement was operating pursuant to the December 2017 amendment which had substantially similar terms to the December 2018 amendment.
+Added: In addition, the Warehousing Agreement, as amended, provides for an accordion feature under which TBI Mortgage
+Added: may request that the aggregate commitments under the Warehousing Agreement be increased to an amount up to $ 150.0 million for a short period of time.
+Added: In December 2019, the Warehousing Agreement was amended to extend the expiration date on substantially the same terms as the existing agreement.
The Warehousing Agreement, as amended, expires on December 4, 2020 , and borrowings thereunder bear interest at LIBOR plus 1.90 % per annum.
2 unchanged sentences
Borrowings under this facility are included in the fiscal 2021 maturities.
−Removed: At each of October 31, 2019 and 2018 , there was $ 150.0 million outstanding under the Warehousing Agreement, which are included in liabilities in our Consolidated Balance Sheets.
+Added: At each of October 31, 2020 and 2019, there was $ 148.6 million and $ 150.0 million, respectively, outstanding under the Warehousing Agreement, which are included in liabilities in our Consolidated Balance Sheets.
At October 31, 2020 and 2019, amounts outstanding under the agreement were collateralized by $ 219.4 million and $ 208.6 million, respectively, of mortgage loans held for sale, which are included in assets in our Consolidated Balance Sheets.
1 unchanged sentence
There are several restrictions on purchased loans under the agreement, including that they cannot be sold to others, they cannot be pledged to anyone other than the agent, and they cannot support any other borrowing or repurchase agreements.
−Removed: Subsequent event
−Removed: In December 2019, TBI Mortgage amended the Warehousing Agreement to extend the expiration date to December 4, 2020 on substantially the same terms as the existing agreement.
+Added: Subsequent events
+Added: In November 2020, we entered into five interest rate swap transactions to hedge $ 400.0 million of the Term Loan Facility through October 2025.
+Added: The interest rate swaps effectively fix the interest cost on the $ 400.0 million at 0.369 % plus the spread set forth in the pricing schedule in the Term Loan Facility, which was 1.3 % as of October 31, 2020.
+Added: These interest rate swaps were designated as cash flow hedges.
+Added: In December 2020, TBI Mortgage amended the Warehousing Agreement to extend the expiration date to January 18, 2021 on substantially the same terms as the existing agreement.
As of October 31, 2020, the annual aggregate maturities of our loans and notes during each of the next five fiscal years are as follows (amounts in thousands):
+Added: 2021 $ 260,635
+Added: 2022 $ 453,134
+Added: 2023 $ 452,691
+Added: 2024 $ 306,070
+Added: 2025 $ 59,151
Accrued Expenses
4 unchanged sentences
Self-insurance 215,884 193,405
+Added: Warranty 157,351 201,886
+Added: Lease liabilities (1) 124,756 —
Deferred income 34,096 51,678
+Added: Interest 38,446 31,307
Commitments to unconsolidated entities 8,928 9,283
+Added: Other 53,920 55,536
+Added: $ 1,110,196 $ 950,932
+Added: (1) On November 1, 2019, we adopted ASU 2016-02, which resulted in the establishment of lease liabilities on our Consolidated Balance Sheet as of October 31, 2020.
+Added: The Consolidated Balance Sheet as of October 31, 2019 does not
+Added: reflect any changes resulting from the adoption of the new standard.
+Added: See Note 1, “Significant Accounting Policies – Recent Accounting Pronouncements” for additional information regarding the adoption of ASU 2016-02.
At the time each home is closed and title and possession are transferred to the home buyer, we record an initial accrual for expected warranty costs on that home.
1 unchanged sentence
Adjustments to our warranty liabilities related to homes delivered in prior periods are recorded in the period in which a change in our estimate occurs.
−Removed: The table below provides a reconciliation of the changes in our warranty accrual during fiscal 2019 , 2018 , and 2017 as follows (amounts in thousands):
+Added: The table below provides a reconciliation of the changes in our warranty accrual during fiscal 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
Balance, beginning of year $ 201,886 $ 258,831 $ 329,278
2 unchanged sentences
Increase in accruals for homes closed in prior years 6,711 6,023 6,162
−Removed: Reclassification from other accruals
+Added: Decrease to water intrusion accrual ( 24,400 ) — —
Charges incurred ( 63,139 ) ( 99,298 ) ( 113,654 )
Balance, end of year $ 157,351 $ 201,886 $ 258,831
−Removed: Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware (which are in our Mid-Atlantic region).
+Added: Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware (which are in our North region).
During fiscal 2020, we continued to receive water intrusion claims from homeowners in this region, mostly related to older homes, and we continue to perform review procedures to assess, among other things, the number of affected homes, whether repairs are likely to be required, and the extent of such repairs.
9 unchanged sentences
We also monitor legal developments relating to these types of claims and review the volume, relative merits and adjudication of claims in litigation or arbitration.
−Removed: As of October 31, 2019, our recorded aggregate estimated repair costs to be incurred for known and unknown water intrusion claims was $ 324.4 million , which was unchanged from October 31, 2018, and our recorded aggregate expected recoveries from insurance carriers and suppliers were approximately $ 152.6 million , which was also unchanged from October 31, 2018.
+Added: From October 31, 2016 through the second quarter of fiscal 2020, our recorded aggregate estimated repair costs to be incurred for known and unknown water intrusion claims was $ 324.4 million and our recorded aggregate expected recoveries from insurance carriers and suppliers were approximately $ 152.6 million.
+Added: Based on trends in claims experience over several years and lower than anticipated repair costs, in the second fiscal quarter of 2020, we reduced the estimate of the aggregate estimated repair costs to be incurred for known and unknown water intrusion claims by $ 24.4 million.
+Added: Because this reduction was associated with periods in which we expect our insurance deductibles and self-insured retentions to be exhausted, we reduced our aggregate expected recoveries from insurance carriers and suppliers by a corresponding $ 24.4 million.
Our recorded remaining estimated repair costs, which reflects a reduction for the aggregate amount expended to resolve claims, were approximately $ 79.5 million at October 31, 2020 and $ 124.6 million at October 31, 2019.
1 unchanged sentence
As noted above, our review process includes a number of estimates that are based on assumptions with uncertain outcomes, including, but not limited to, the number of homes to be repaired, the extent of repairs needed, the repair procedures employed, the cost of those repairs, outcomes of litigation or arbitrations, and expected recoveries from insurance carriers and suppliers.
−Removed: Due to the degree of judgment required in making these estimates and the inherent uncertainty in potential outcomes, it is reasonably possible that our actual costs and recoveries could differ from those recorded and such
−Removed: differences could be material.
+Added: Due to the degree of judgment required in making these estimates and the inherent uncertainty in potential outcomes, it is reasonably possible that our actual costs and recoveries could differ from those recorded and such differences could be material.
In addition, due to such uncertainty, we are unable to estimate the range of any such differences.
3 unchanged sentences
Based on the legal merits that support our pending insurance claims, review by legal counsel, our history of collecting significant amounts funded by our primary carrier under policies that are substantially the same, and the high credit ratings of our insurance carriers, we believe collection of our remaining recorded insurance receivables is probable.
−Removed: However, due to the complexity of the underlying claims and the variability of the other factors described above, it is reasonably possible that our actual insurance recoveries could materially differ from those recorded.
+Added: However, due to the complexity of the underlying claims and the variability of the other factors described above, it is reasonably possible that our actual insurance
+Added: recoveries could materially differ from those recorded.
Resolution of these known and unknown claims is expected to take several years.
The following table provides a reconciliation of our effective tax rate from the federal statutory tax rate for the fiscal years ended October 31, 2020, 2019, and 2018 ($ amounts in thousands):
+Added: 2020 2019 2018
+Added: $ %* $ %* $ %*
Federal tax provision at statutory rate 123,249 21.0 165,306 21.0 217,914 23.3
4 unchanged sentences
Accrued interest on anticipated tax assessments
+Added: 404 0.1 453 0.1 737 0.1
Increase in unrecognized tax benefits — — 2,153 0.3 1,122 0.1
−Removed: Valuation allowance — reversed
Changes in tax law — — ( 523 ) ( 0.1 ) ( 38,740 ) ( 4.1 )
Excess stock compensation benefit ( 3,339 ) ( 0.6 ) ( 2,143 ) ( 0.3 ) ( 4,236 ) ( 0.5 )
+Added: Energy tax credits ( 11,467 ) ( 2.0 ) ( 3,123 ) ( 0.4 ) ( 3,231 ) ( 0.4 )
+Added: Other 2,631 0.5 ( 2,376 ) ( 0.3 ) ( 9,643 ) ( 1.0 )
Income tax provision* 140,277 23.9 197,163 25.0 185,765 19.9
−Removed: Due to rounding, amounts may not add.
+Added: * Due to rounding, percentages may not add
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law, which changed many longstanding foreign and domestic corporate and individual tax rules, as well as rules pertaining to the deductibility of employee compensation and benefits.
2 unchanged sentences
Our blended tax rate for our fiscal year ending October 31, 2018 was 23.3 %.
−Removed: Thereafter, the applicable statutory rate will be 21 % .
+Added: Thereafter, the applicable statutory rate is 21 %.
ASC 740, “Income Taxes” (“ASC 740”), requires all companies to reflect the effects of the new law in the period in which the law was enacted.
6 unchanged sentences
The following table provides information regarding the provision (benefit) for income taxes for each of the fiscal years ended October 31, 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
+Added: Federal $ 114,204 $ 161,904 $ 157,836
+Added: State 26,073 35,259 27,929
+Added: $ 140,277 $ 197,163 $ 185,765
+Added: Current $ 42,497 $ 94,399 $ 207,695
+Added: Deferred 97,780 102,764 ( 21,930 )
+Added: $ 140,277 $ 197,163 $ 185,765
The components of income taxes payable at October 31, 2020 and 2019 are set forth below (amounts in thousands):
+Added: Current $ 6,591 $ 7,897
+Added: Deferred 192,383 95,074
+Added: $ 198,974 $ 102,971
The following table provides a reconciliation of the change in the unrecognized tax benefits for the years ended October 31, 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
Balance, beginning of year $ 7,897 $ 12,222 $ 16,993
5 unchanged sentences
The statute of limitations has expired on our federal tax returns for fiscal years through 2016.
+Added: The statue of limitations for our major state tax jurisdictions remains open for examination for fiscal year 2015 and subsequent years.
Our unrecognized tax benefits are included in the current portion of “Income taxes payable” on our Consolidated Balance Sheets.
15 unchanged sentences
State tax, net operating loss carryforwards 68,705 67,718
+Added: Other 1,830 18
+Added: Total assets 239,080 245,033
Deferred tax liabilities:
2 unchanged sentences
Expenses taken for tax purposes not for book 5,346 3,571
+Added: Depreciation 23,567 5,024
Deferred marketing 13,264 10,311
4 unchanged sentences
Accordingly, at October 31, 2020 and 2019, we did not have valuation allowances recorded against our federal or state deferred tax assets.
−Removed: During fiscal 2017, due to improved operating results, we reversed $ 32.2 million of state deferred tax asset valuation allowances.
We file tax returns in the various states in which we do business.
7 unchanged sentences
On February 21, 2017, our Board of Directors approved the initiation of quarterly cash dividends to shareholders.
−Removed: During the fiscal years ended October 31, 2019 and October 31, 2018 , we declared and paid aggregate cash dividends of $ 0.44 and $ 0.41 per share, respectively, to our shareholders.
−Removed: Subsequent to October 31, 2019 , we declared a quarterly cash dividend of $ 0.11 per share which will be paid on January 24, 2020 to shareholders of record on the close of business on January 10, 2020.
+Added: During the fiscal years ended October 31, 2020 and 2019, we declared and paid aggregate cash dividends of $ 0.44 and $ 0.44 per share, respectively, to our shareholders.
Stock Repurchase Program
In each year since fiscal 2017, our Board of Directors has renewed its authorization to repurchase up to 20 million shares of our common stock in open market transactions, privately negotiated transactions (including accelerated share repurchases), issuer tender offers or other financial arrangements or transactions for general corporate purposes, including to obtain shares for the Company’s equity award and other employee benefit plans.
−Removed: Most recently, on December 11, 2019, our Board of Directors authorized the repurchase of 20 million shares of our common stock and terminated, effective the same date, the existing
−Removed: authorization that had been in effect since December 12, 2018.
+Added: Most recently, on March 10, 2020, our Board of Directors authorized the repurchase of 20 million shares of our common stock and terminated, effective the same date, the existing authorization that had been in effect since December 11, 2019.
The Board of Directors did not fix any expiration date for this repurchase program.
The following table provides information about the share repurchase programs for the fiscal years ended October 31, 2020, 2019, and 2018:
+Added: 2020 2019 2018
Number of shares purchased (in thousands) 15,952 6,619 12,108
1 unchanged sentence
Remaining authorization at October 31 (in thousands) 19,984 13,953 10,989
−Removed: Subsequent to October 31, 2019 , we repurchased approximately 3.6 million shares of our common stock at an average price of $ 39.58 per share, substantially all of which were purchased under the repurchase program authorized by our Board of Directors on December 11, 2019.
+Added: Subsequent to October 31, 2020 and through December 21, 2020, we repurchased approximat ely 2.4 million shares of our common stock at an average price of $ 45.04 per sh are, substantially all of which were purchased under the repurchase program authorized by our Board of Directors on March 10, 2020.
Transfer Restriction
4 unchanged sentences
Stock-Based Benefit Plans
−Removed: We grant stock options, restricted stock, and various types of restricted stock units to our employees and our nonemployee directors under our stock incentive plans.
+Added: We grant stock options, restricted stock, and various types of restricted stock units to our employees and our non-employee directors under our stock incentive plans.
On March 12, 2019, shareholders approved the Toll Brothers, Inc.
2 unchanged sentences
Stock Incentive Plan for Non-Executive Directors (2016) with respect to prospective equity awards, and no additional equity awards may be granted under such prior plans.
−Removed: As a result, the Omnibus Plan is the sole plan that new equity awards may be granted to employees (including executive officers), directors and other eligible participants under the plan.
+Added: As a result, the Omnibus Plan is the sole plan out of which new equity awards may be granted to employees (including executive officers), directors and other eligible participants under the plan.
The Omnibus Plan provides for the granting of incentive stock options (solely to employees) and nonqualified stock options with a term of up to 10 years at a price not less than the market price of the stock at the date of grant.
1 unchanged sentence
At October 31, 2020, 2019, and 2018, we had 6.7 million;
−Removed: 5.1 million ;
−Removed: and 5.8 million shares, respectively, available for grant under the Omnibus Plan.
+Added: and 5.1 million shares, respectively, available for grant under the plans.
Prior to the adoption of the Omnibus Plan, the Company had granted equity awards under four separate stock incentive plans for employees, officers, and directors with respect to which equity awards remained outstanding as of October 31, 2020.
1 unchanged sentence
Stock options granted under these plans were made with a term of up to 10 years at a price not less than the market price of the stock at the date of grant.
−Removed: Stock options and restricted stock units granted under these plans generally vested over a four-year period for employees and a two-year period for nonemployee directors.
+Added: Stock options and restricted stock units granted under these plans generally vested over a four-year period for employees and a two-year period for non-employee directors.
The following table provides information regarding the amount of total stock-based compensation expense recognized by us for fiscal 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
Total stock-based compensation expense recognized $ 24,326 $ 26,180 $ 28,312
4 unchanged sentences
Stock options granted to employees generally vest over a four-year period, although certain grants may vest over a longer or shorter period.
−Removed: Stock options granted to nonemployee directors generally vest over a two-year period.
+Added: Stock options granted to non-employee directors generally vest over a two-year period.
Shares issued upon the exercise of a stock option are either from shares held in treasury or newly issued shares.
3 unchanged sentences
The ranges set forth below result from certain groups of employees exhibiting different behaviors.
−Removed: The risk-free rate for periods within the contractual life of the option is based on the U.S.
+Added: The risk-free rate for periods within the expected life of the option is based on the U.S.
Treasury yield curve in effect at the time of grant.
The following table summarizes the weighted-average assumptions and fair value used for stock option grants in each of the fiscal years ended October 31, 2020, 2019, and 2018:
−Removed: Expected volatility
2020 2019 2018
−Removed: 27.66% - 31.83%
−Removed: 29.93% - 41.05%
+Added: Expected volatility 27.42% - 28.30% 28.61% - 31.34% 27.66% - 31.83%
Weighted-average volatility 27.42 % 30.46 % 30.33 %
Risk-free interest rate 1.72% - 1.78% 2.65% - 2.76% 2.17% - 2.35%
−Removed: 2.65% - 2.76%
−Removed: 2.17% - 2.35%
−Removed: 1.96% - 2.52%
Expected life (years) 4.64 - 5.76 4.63 - 8.50 5.00 - 8.50
+Added: Dividends 1.11 % 1.36 % none
Weighted-average fair value per share of options granted
+Added: $ 9.68 $ 10.22 $ 16.09
The fair value of stock option grants is recognized evenly over the vesting period of the options or over the period between the grant date and the time the option becomes nonforfeitable by the employee, whichever is shorter.
Information regarding the stock compensation expense related to stock options for fiscal 2020, 2019 and 2018 was as follows (amounts in thousands):
+Added: 2020 2019 2018
Stock compensation expense recognized - options $ 3,144 $ 5,181 $ 7,497
1 unchanged sentence
The following table summarizes stock option activity for our plans during each of the fiscal years ended October 31, 2020, 2019, and 2018 (amounts in thousands, except per share amounts):
+Added: 2020 2019 2018
+Added: options Weighted-
+Added: options Weighted-
+Added: options Weighted-
Balance, beginning 4,780 $ 30.59 5,503 $ 28.84 6,120 $ 27.60
+Added: Granted 118 39.51 344 32.42 210 47.84
+Added: Exercised ( 1,284 ) 24.50 ( 1,044 ) 21.87 ( 797 ) 24.16
+Added: Canceled ( 54 ) 33.83 ( 23 ) 34.47 ( 30 ) 33.08
Balance, ending 3,560 $ 33.03 4,780 $ 30.59 5,503 $ 28.84
4 unchanged sentences
The following table provides information pertaining to the intrinsic value of options outstanding and exercisable at October 31, 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
Intrinsic value of options outstanding $ 34,058 $ 45,551 $ 30,477
1 unchanged sentence
Information pertaining to the intrinsic value of options exercised and the fair market value of options that became vested or modified in each of the fiscal years ended October 31, 2020, 2019, and 2018, is provided below (amounts in thousands):
+Added: 2020 2019 2018
Intrinsic value of options exercised $ 23,281 $ 16,491 $ 18,165
12 unchanged sentences
The number of shares earned for Performance-Based RSUs are based on the attainment of certain operational performance metrics approved by the Executive Compensation Committee in the year of grant.
−Removed: The number of shares underlying the Performance-Based RSUs that may be issued to the recipients ranges from, 0 % to 150 % for grants awarded in fiscal 2019 and 0 % to 110 % for grants awarded in fiscal 2018 and prior, of the base award depending on actual achievement as compared to the target performance goals.
+Added: The number of shares underlying the Performance-Based RSUs that may be issued to the recipients ranges from, 0 % to 150 % for grants awarded in fiscal 2020 and 2019 and 0 % to 110 % for grants awarded in fiscal 2018, of the base award depending on actual achievement as compared to the target performance goals.
Shares earned based on actual performance generally vest pro-rata over a four-year period provided the recipients continue to be employed by us as specified in the award document.
−Removed: The value of the Performance-Based RSUs was determined to be equal to the estimated number of shares of our common stock to be issued multiplied by the closing price of our common stock on the New York Stock Exchange (“NYSE”) on the date the Performance-Based RSU awards were approved by the Executive Compensation Committee (“Valuation Date”).
+Added: The value of the Performance-Based RSUs was determined to be equal to the estimated number of shares of our common stock to be issued multiplied by the closing price of our common stock on the New York Stock Exchange (“NYSE”) on the date the Performance-Based RSU awards were approved by the Executive Compensation Committee (“Valuation Date”), adjusted for post-vesting restrictions applicable to retirement eligible participants.
We evaluate the performance goals quarterly and estimate the number of shares underlying the Performance-Based RSUs that are probable of being issued.
The following table provides information regarding the issuance, valuation assumptions, and amortization of the Performance-Based RSUs issued in fiscal 2020, 2019, and 2018:
+Added: 2020 2019 2018
Number of shares underlying Performance-Based RSUs to be issued 116,423 158,721 135,554
Aggregate number of Performance-Based RSUs outstanding at October 31 579,115 645,538 786,857
−Removed: Closing price of our common stock on Valuation Date
+Added: Weighted-average fair value per share of Performance-Based RSUs $ 32.55 $ 34.86 $ 47.84
Aggregate grant date fair value of Performance-Based RSUs issued (in thousands) $ 3,790 $ 5,533 $ 6,485
10 unchanged sentences
The specified performance periods are as follows:
−Removed: Performance Period
−Removed: Target Number of TSR RSUs issued
−Removed: November 1, 2018 to October 31, 2021
−Removed: November 1, 2017 to October 31, 2020
−Removed: November 1, 2016 to October 31, 2019
+Added: Performance Period Target Number of TSR RSUs issued
+Added: Fiscal 2020 November 1, 2019 to October 31, 2022 37,527
+Added: Fiscal 2019 November 1, 2018 to October 31, 2021 48,710
+Added: Fiscal 2018 November 1, 2017 to October 31, 2020 39,411
The TSR RSUs generally vest at the end of a 3 -year period provided the recipients continue to be employed by us as specified in the award document.
−Removed: Based upon our ranking in the performance peer group, the recipient of the TSR RSUs may earn a total award ranging from 0 % to 150 % for awards granted in fiscal 2019 and 0 % to 200 % for awards granted in fiscal 2018 and prior, of the target number of TSR RSUs granted.
+Added: Based upon our ranking in the performance peer group, the recipient of the TSR RSUs may earn a total award ranging from 0 % to 150 % for awards granted in fiscal 2020 and 2019 and 0 % to 200 % for awards granted in fiscal 2018, of the target number of TSR RSUs granted.
In fiscal 2020, recipients of the fiscal 2018 TSR RSUs earned 0 % of the target based on total shareholder return ranking in the performance peer group during the three-year period ending October 31, 2020.
+Added: In fiscal 2019, recipients of the fiscal 2017 TSR RSUs earned 0 % of the target based on total shareholder return ranking in the performance peer group during the three-year period ending October 31, 2019.
In fiscal 2018, recipients earned 76.81 % of the 52,679 target TSR RSUs awarded in fiscal 2016 based upon our total shareholder return ranking in the performance peer group during the three-year period ended October 31, 2018.
−Removed: In fiscal 2017, recipients of earned 83.05 % of the 57,230 target TSR RSUs awarded in fiscal 2016 based upon our total shareholder return ranking in the performance peer group during the two-year period ended October 31, 2017.
We estimated the fair value of the TSR RSUs at the grant date using a Monte Carlo simulation.
The following table summarizes the assumptions used in the Monte Carlo simulation and the fair value per share of the TSR RSUs granted in fiscal 2020, 2019, and 2018:
+Added: 2020 2019 2018
Weighted-average volatility 27.96 % 29.06 % 26.58 %
Risk-free interest rate 1.66 % 2.64 % 1.92 %
+Added: Dividends none none none
Weighted-average fair value per share of TSR RSUs $ 37.66 $ 36.46 $ 52.62
1 unchanged sentence
The following table provides information on expense recognized and the unamortized value of our TSR RSUs for fiscal 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
TSR RSUs expense recognized $ 2,264 $ 1,673 $ 2,502
1 unchanged sentence
Our stock incentive plans permit us to withhold from the total number of shares that otherwise would be issued to a TSR RSU recipient upon distribution that number of shares having a fair value at the time of distribution equal to the applicable income tax withholdings due and remit the remaining shares to the restricted stock unit recipient.
−Removed: The following table provides
−Removed: information regarding the number of shares withheld, the income tax withholding due, and the remaining shares issued to the recipients for fiscal 2019 and 2018 :
+Added: The following table provides information regarding the number of shares withheld, the income tax withholding due, and the remaining shares issued to the recipients for fiscal 2019:
Number of shares withheld 16,643
2 unchanged sentences
Time-Based Restricted Stock Units:
−Removed: In fiscal 2019 , 2018 , and 2017 , we issued time-based restricted stock units (“RSUs”) to various officers, employees, and nonemployee directors.
−Removed: These RSUs generally vest in annual installments over a two- to four-year period.
−Removed: The value of the RSUs was determined to be equal to the number of shares of our common stock underlying the RSUs multiplied by the closing price of our common stock on the NYSE on the date the RSUs were awarded.
−Removed: The following table provides information regarding these RSUs for fiscal 2019 , 2018 , and 2017 :
+Added: In fiscal 2020, 2019, and 2018, we issued time-based restricted stock units (“Time-Based RSUs”) to various officers, employees, and non-employee directors.
+Added: These Time-Based RSUs generally vest in annual installments over a two- to four-year period.
+Added: The value of the Time-Based RSUs was determined to be equal to the number of shares of our common stock underlying the Time-Based RSUs multiplied by the closing price of our common stock on the NYSE on the date the Time-Based RSUs were awarded, adjusted for post-vesting restrictions applicable to retirement eligible participants.
+Added: The following table provides information regarding these Time-Based RSUs for fiscal 2020, 2019, and 2018:
+Added: 2020 2019 2018
Time-Based RSUs issued:
−Removed: Number of RSUs issued
−Removed: Weighted average closing price per share of our common stock on date of issuance
−Removed: Aggregate fair value of RSUs issued (in thousands)
+Added: Number of Time-Based RSUs issued 461,280 449,380 296,790
+Added: Weighted-average fair value per share of Time-Based RSUs $ 37.43 $ 33.04 $ 47.84
+Added: Aggregate fair value of Time-Based RSUs issued (in thousands) $ 17,267 $ 14,848 $ 14,198
Time-Based RSU expense recognized (in thousands):
+Added: $ 12,744 $ 13,627 $ 11,193
+Added: 2020 2019 2018
At October 31:
1 unchanged sentence
Cumulative unamortized value of Time-Based RSUs (in thousands)
+Added: $ 10,972 $ 8,694 $ 8,818
Our stock incentive plans permit us to withhold from the total number of shares that otherwise would be issued to a restricted stock unit recipient upon distribution that number of shares having a fair value at the time of distribution equal to the applicable income tax withholdings due and remit the remaining shares to the restricted stock unit recipient.
The following table provides information regarding the number of shares withheld, the income tax withholding due, and the remaining shares issued to the recipients for fiscal 2020, 2019, and 2018:
+Added: 2020 2019 2018
Number of shares withheld 58,356 29,681 23,289
6 unchanged sentences
The following table provides information regarding our employee stock purchase plan for fiscal 2020, 2019, and 2018:
+Added: 2020 2019 2018
Shares issued 54,235 41,744 35,471
3 unchanged sentences
Information pertaining to the calculation of earnings per share for each of the fiscal years ended October 31, 2020, 2019, and 2018, is as follows (amounts in thousands):
+Added: 2020 2019 2018
Net income as reported $ 446,624 $ 590,007 $ 748,151
−Removed: Interest and costs attributable to 0.5% Exchangeable Senior Notes, net of income tax benefit (a)
−Removed: Numerator for diluted earnings per share
Basic weighted-average shares 130,095 145,008 151,984
−Removed: Common stock equivalents (b)
−Removed: Shares attributable to 0.5% Exchangeable Senior Notes (a)
+Added: Common stock equivalents (a) 1,152 1,493 2,217
Diluted weighted-average shares 131,247 146,501 154,201
Other information:
−Removed: Weighted-average number of antidilutive options and restricted stock units (c)
+Added: Weighted-average number of antidilutive options and restricted stock units (b) 2,141 1,156 813
Shares issued under stock incentive and employee stock purchase plans 1,541 1,394 1,066
−Removed: On September 15, 2017, we redeemed these notes.
−Removed: Common stock equivalents represent the dilutive effect of outstanding in-the-money stock options using the treasury stock method and shares expected to be issued under our restricted stock units programs.
−Removed: Weighted-average number of antidilutive options and restricted stock units are based upon the average of the average quarterly closing prices of our common stock on the NYSE for the year.
+Added: (a) Common stock equivalents represent the dilutive effect of outstanding in-the-money stock options using the treasury stock method and shares expected to be issued under our restricted stock units programs.
+Added: (b) Weighted-average number of antidilutive options and restricted stock units are based upon the average of the average quarterly closing prices of our common stock on the NYSE for the year.
Fair Value Disclosures
1 unchanged sentence
A summary of assets and (liabilities) at October 31, 2020 and 2019, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (amounts in thousands):
−Removed: Financial Instrument
−Removed: Fair value hierarchy
−Removed: October 31, 2019
−Removed: October 31, 2018
−Removed: Residential Mortgage Loans Held for Sale
−Removed: Forward Loan Commitments – Residential Mortgage Loans Held for Sale
−Removed: Interest Rate Lock Commitments (“IRLCs”)
−Removed: Forward Loan Commitments – IRLCs
+Added: Financial Instrument Fair value hierarchy October 31, 2020 October 31, 2019
+Added: Residential Mortgage Loans Held for Sale Level 2 $ 231,797 $ 218,777
+Added: Forward Loan Commitments – Residential Mortgage Loans Held for Sale Level 2 $ ( 31 ) $ 298
+Added: Interest Rate Lock Commitments (“IRLCs”) Level 2 $ 628 $ 964
+Added: Forward Loan Commitments – IRLCs Level 2 $ ( 628 ) $ ( 964 )
At October 31, 2020 and 2019, the carrying value of cash and cash equivalents and customer deposits held in escrow approximated fair value.
3 unchanged sentences
We recognize the difference between the fair value and the unpaid principal balance of mortgage loans held for sale as a gain or loss.
−Removed: In addition, we recognize the fair value of our forward loan commitments as a gain or loss.
+Added: In addition, we recognize the change in fair value of our forward loan commitments as a gain or loss.
These gains and losses are included in “Other income – net” in our Consolidated Statements of Operations and Comprehensive Income.
1 unchanged sentence
The table below provides, for the periods indicated, the aggregate unpaid principal and fair value of mortgage loans held for sale as of the date indicated (amounts in thousands):
−Removed: At October 31,
−Removed: Aggregate unpaid
−Removed: principal balance
+Added: At October 31, Aggregate unpaid
+Added: principal balance Fair value Excess
+Added: 2020 $ 225,826 $ 231,797 $ 5,971
+Added: 2019 $ 216,280 $ 218,777 $ 2,497
IRLCs represent individual borrower agreements that commit us to lend at a specified price for a specified period as long as there is no violation of any condition established in the commitment contract.
11 unchanged sentences
As further discussed in Note 1, determining the fair value of a community’s inventory involves a number of variables, many of which are interrelated.
−Removed: If we used a different input for any of the various unobservable inputs used in our impairment analysis, the results
−Removed: of the analysis may have been different, absent any other changes.
−Removed: The table below summarizes, for the periods indicated, the ranges of certain quantitative unobservable inputs utilized in determining the fair value of impaired communities:
+Added: If we used a different input for any of the various unobservable inputs used in our impairment analysis, the results of the analysis may have been different, absent any other changes.
+Added: The table below summarizes, for the periods indicated, the ranges of certain quantitative unobservable inputs utilized in determining the fair value of impaired operating communities:
Three months ended:
Selling price per unit
−Removed: ($ in thousands)
−Removed: Sales pace per year
−Removed: Discount rate
−Removed: 12.5% - 15.8%
−Removed: 12.0% - 26.0%
−Removed: 13.8% - 14.5%
−Removed: 13.8% - 19.0%
−Removed: 13.5% - 16.3%
−Removed: The impairment charges recognized were related to our decisions to sell lots in a bulk sale in certain communities rather than sell and construct homes as previously intended.
−Removed: The sale price per lot used in the fair value determination for these bulk sales ranged from $ 10,000 to $ 155,000 .
+Added: ($ in thousands) Sales pace per year
+Added: (in units) Discount rate
+Added: January 31 — — —
+Added: April 30 613 - 789 9 14.3%
+Added: July 31 — — —
+Added: October 31 — — —
+Added: January 31 836 - 13,495 2 - 12 12.5% - 15.8%
+Added: April 30 372 - 1,915 2 - 19 12.0% - 26.0%
+Added: July 31 530 - 1,113 2 - 9 7.8% - 13.0%
+Added: October 31 478 - 857 2 - 5 13.8% - 14.5%
+Added: In fiscal 2020, we recognized $ 31.7 million of impairment charges on land owned for future communities relating to nine communities.
+Added: As of the period the impairment charges were recognized, the estimated fair value of these communities in the aggregate, net of impairment charges, was $ 21.8 million.
+Added: For the majority of these communities, the estimated fair values were determined based upon the expected sales price per lot in a community sale to another builder.
+Added: The range of sales price per lot utilized in determining fair values in fiscal 2020 was approximately $ 33,000 - $ 180,000 per lot.
+Added: There were no impairment charges on land owned for future communities in 2019 and $ 2.2 million recognized in fiscal 2018.
The table below provides, for the periods indicated, the number of operating communities that we reviewed for potential impairment, the number of operating communities in which we recognized impairment charges, the amount of impairment charges recognized, and, as of the end of the period indicated, the fair value of those communities, net of impairment charges
2 unchanged sentences
Three months ended:
−Removed: communities tested
−Removed: Number of communities
−Removed: Fair value of
+Added: communities tested Number of communities Fair value of
communities, net
−Removed: of impairment charges
−Removed: Impairment charges recognized
+Added: of impairment charges Impairment charges recognized
+Added: January 31 65 — $ — $ —
+Added: April 30 80 1 $ 2,754 300
+Added: July 31 66 — $ — —
+Added: October 31 53 1 $ 1,113 375
+Added: January 31 49 5 $ 37,282 $ 5,785
+Added: April 30 64 6 $ 36,159 17,495
+Added: July 31 69 3 $ 5,436 1,100
+Added: October 31 71 7 $ 18,910 6,695
+Added: January 31 64 5 $ 13,318 $ 3,736
+Added: April 30 65 4 $ 21,811 13,325
+Added: July 31 55 5 $ 43,063 9,065
+Added: October 31 43 6 $ 24,692 4,025
The table below provides, as of the dates indicated, the book value and estimated fair value of our debt at October 31, 2020 and 2019 (amounts in thousands):
−Removed: Fair value hierarchy
−Removed: Loans payable (a)
−Removed: Senior notes (b)
−Removed: Mortgage company loan facility (c)
−Removed: The estimated fair value of loans payable was based upon contractual cash flows discounted at interest rates that we believed were available to us for loans with similar terms and remaining maturities as of the applicable valuation date.
−Removed: The estimated fair value of our senior notes is based upon their market prices as of the applicable valuation date.
−Removed: We believe that the carrying value of our mortgage company loan borrowings approximates their fair value.
+Added: Fair value hierarchy Book value Estimated
+Added: fair value Book value Estimated
+Added: Loans payable (a) Level 2 $ 1,151,257 $ 1,157,315 $ 1,114,577 $ 1,112,040
+Added: Senior notes (b) Level 1 2,669,876 2,888,822 2,669,876 2,823,043
+Added: Mortgage company loan facility (c) Level 2 148,611 148,611 150,000 150,000
+Added: $ 3,969,744 $ 4,194,748 $ 3,934,453 $ 4,085,083
+Added: (a) The estimated fair value of loans payable was based upon contractual cash flows discounted at interest rates that we believed were available to us for loans with similar terms and remaining maturities as of the applicable valuation date.
+Added: (b) The estimated fair value of our senior notes is based upon their market prices as of the applicable valuation date.
+Added: (c) We believe that the carrying value of our mortgage company loan borrowings approximates their fair value.
Employee Retirement and Deferred Compensation Plans
1 unchanged sentence
We maintain salary deferral savings plans covering substantially all employees.
−Removed: We recognized an expense, net of plan forfeitures, with respect to the plans of $ 14.1 million , $ 12.6 million , and $ 12.3 million for the fiscal years ended October 31, 2019 , 2018 , and 2017 , respectively.
+Added: We recognized an expense, net of plan forfeitures, with respect to the plans of $ 6.1 million, $ 14.1 million, and $ 12.6 million for the fiscal years ended October 31, 2020, 2019, and 2018, respectively, which is included in “Selling, general and administrative” expense in the Consolidated Statements of Operations and Comprehensive Income.
Deferred Compensation Plan
1 unchanged sentence
The deferred compensation, together with certain of our contributions, earns various rates of return depending upon when the compensation was deferred.
−Removed: A portion of the deferred compensation and interest earned may be forfeited by a participant if he or she elects to withdraw the compensation prior to the end of the deferral period.
+Added: A portion of the deferred compensation and interest earned may be forfeited by a
+Added: participant if he or she elects to withdraw the compensation prior to the end of the deferral period.
We accrued $ 35.1 million and $ 31.1 million at October 31, 2020 and 2019, respectively, for our obligations under the plan.
8 unchanged sentences
Information related to our retirement plans for each of the fiscal years ended October 31, 2020, 2019, and 2018, is as follows (amounts in thousands):
+Added: 2020 2019 2018
+Added: Service cost $ 453 $ 403 $ 568
Interest cost 1,158 1,416 1,198
1 unchanged sentence
Amortization of unrecognized losses 23 — 17
+Added: $ 3,102 $ 2,325 $ 2,719
Projected benefit obligation:
1 unchanged sentence
Plan amendments adopted during year 2,600 4,956 —
+Added: Service cost 453 403 568
Interest cost 1,158 1,416 1,198
12 unchanged sentences
The table below provides, based upon the estimated retirement dates of the participants in the retirement plans, the amounts of benefits we would be required to pay in each of the next five fiscal years and for the five fiscal years ended October 31, 2030 in the aggregate (in thousands):
−Removed: Year ending October 31,
+Added: Year ending October 31, Amount
November 1, 2025 – October 31, 2030 $ 17,289
2 unchanged sentences
The tables below provide, for the fiscal years ended October 31, 2020, 2019 and 2018, the components of accumulated other comprehensive (loss) income (amounts in thousands):
+Added: 2020 2019 2018
Balance, beginning of period $ ( 5,831 ) $ 694 $ ( 1,910 )
Other comprehensive (loss) income before reclassifications
+Added: ( 3,329 ) ( 9,094 ) 3,115
Gross amounts reclassified from accumulated other comprehensive income
+Added: 1,491 304 953
Income tax benefit (expense) 471 2,265 ( 1,142 )
2 unchanged sentences
Balance, end of period $ ( 7,198 ) $ ( 5,831 ) $ 694
−Removed: During the first quarter of fiscal 2018, we elected to reclassify the stranded tax effects resulting from the Tax Act related to employee retirement plans from accumulated other comprehensive income to retained earnings.
−Removed: See Note 1, “Significant Accounting Polices,” for additional information regarding the adoption of ASU 2018-02.
Reclassifications for the amortization of the employee retirement plans are included in “Other income – net” in the Consolidated Statements of Operations and Comprehensive Income.
15 unchanged sentences
Unconsolidated entities that the Company has investments in 10,097 10,826
+Added: Total $ 2,640,225 $ 2,360,726
Deposits against aggregate purchase commitments $ 223,571 $ 168,778
−Removed: Credits to be received from unconsolidated entities
Additional cash required to acquire land 2,416,654 2,191,948
+Added: Total $ 2,640,225 $ 2,360,726
Amount of additional cash required to acquire land included in accrued expenses $ 19,590 $ 14,620
22 unchanged sentences
We believe that these investors have adequate financial resources to honor their commitments to our mortgage subsidiary.
+Added: Mortgage loans are sold to investors with limited recourse provisions derived from industry-standard representations and warranties in the relevant agreements.
+Added: These representations and warranties primarily involve the absence of misrepresentations by the borrower or other parties, the appropriate underwriting of the loan and in some cases, a required minimum number of payments to be made by the borrower.
+Added: The Company generally does not retain any other continuing interest related to mortgage loans sold in the secondary market.
Information regarding our mortgage commitments at October 31, 2020 and 2019, is provided in the table below (amounts in thousands):
Aggregate mortgage loan commitments:
+Added: IRLCs $ 381,116 $ 565,634
+Added: Non-IRLCs 1,688,801 1,364,972
+Added: Total $ 2,069,917 $ 1,930,606
Investor commitments to purchase:
+Added: IRLCs $ 381,116 $ 565,634
Mortgage loans receivable 217,876 208,591
+Added: Total $ 598,992 $ 774,225
Lease Commitments
−Removed: We lease certain facilities, equipment, and properties held for rental apartment operation or development under non-cancelable operating leases which, in the case of the rental properties, are 99-year leases.
−Removed: Rental expenses incurred by us under these operating leases were (amounts in thousands):
−Removed: Year ending October 31,
−Removed: At October 31, 2019 , future minimum rent payments under our operating leases were (amounts in thousands):
−Removed: Year ending October 31,
+Added: We lease certain facilities, equipment, and properties held for rental apartment operation or development under non-cancelable operating leases which, in the case of certain rental properties, have an initial term of 99 years.
+Added: We recognize lease expense for these leases on a straight-line basis over the lease term.
+Added: ROU assets and lease liabilities are recorded on the balance sheet for all leases with an expected term over one year.
+Added: A majority of our facility lease agreements include rental payments based on a pro-rata share of the lessor’s operating costs which are variable in nature.
+Added: Our lease agreements do not contain any residual value guarantees or material restrictive covenants.
+Added: ROU assets are classified within “Receivables, prepaid expenses, and other assets” and the corresponding lease liability is included in “Accrued expenses” in our Consolidated Balance Sheet.
+Added: We elected the short-term lease recognition exemption for all leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that we are reasonably certain to exercise.
+Added: For such leases, we do not recognize ROU assets or lease liabilities and instead recognize lease payments in our Consolidated Statements of Operations and Comprehensive Income on a straight-line basis.
+Added: At October 31, 2020, ROU assets and lease liabilities were $ 105.0 million and $ 124.8 million, respectively.
+Added: Payments on lease liabilities totaled $ 16.6 million for the year ending October 31, 2020.
+Added: Lease expense includes costs for leases with terms in excess of one year as well as short-term leases with terms of one year or less.
+Added: For the fiscal years ending October 31, 2020, 2019 and 2018, our total lease expense was $ 21.6 million, $ 20.2 million, and $ 15.8 million, respectively, inclusive of variable lease costs of approximately $ 3.1 million and short-term lease costs of approxima tel y $ 3.5 million in fiscal 2020.
+Added: S ublease income was de minimis.
+Added: Information regarding our remaining lease payments as of October 31, 2020 is provided in the table below (amounts in thousands):
+Added: Year ended October 31,
+Added: 2021 $ 19,942
+Added: Thereafter 204,509
+Added: Total lease payments (a) $ 280,658
+Added: Interest (b) 155,902
+Added: Present value of lease liabilities $ 124,756
+Added: (a) Lease payments include options to extend lease terms that are reasonably certain of being exercised
+Added: (b) Our leases do not provide a readily determinable implicit rate.
+Added: Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.
+Added: The majority of our facility leases give us the option to extend the lease term.
+Added: The exercise of lease renewal options is at our discretion.
+Added: For several of our facility leases we are reasonably certain the option will be exercised and thus the renewal term has been included in our calculation of the ROU asset and lease liability.
+Added: The weighted average remaining lease term and weighted average discount rate used in calculating these facility lease liabilities, excluding our land leases, were 8.81 years and 4.1 %, respectively, at October 31, 2020.
+Added: We have a small number of land leases with initial terms of 99 years.
+Added: We are not reasonably certain that, if given the option, we would extend these leases.
+Added: We have therefore excluded the renewal terms from our ROU asset and lease liability for these leases.
+Added: The weighted average remaining lease term and weighted average discount rate used in calculating these land lease liabilities were 93.9 years and 4.5 %, respectively, at October 31, 2020.
Other Income – Net
The table below provides the components of “Other income – net” for the years ended October 31, 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
Interest income $ 10,009 $ 19,017 $ 8,570
3 unchanged sentences
Income from land sales — — 6,331
+Added: Directly expensed interest ( 2,440 ) — —
+Added: Other ( 1,052 ) ( 1,031 ) 1,190
Total other income – net $ 35,693 $ 81,502 $ 62,460
1 unchanged sentence
In addition, retained customer deposits are presented in home sales revenues on our Consolidated Statement of Operations and Comprehensive Income.
−Removed: Because we elected to apply the modified retrospective method of adoption, prior periods have not been restated to reflect these
−Removed: changes in presentation.
+Added: Because we elected to apply the modified retrospective method of adoption, prior periods have not been restated to reflect these changes in presentation .
See Note 1, “Significant Accounting Policies – Recent Accounting Pronouncements” for additional information regarding the impact of the adoption of ASC 606.
4 unchanged sentences
The table below provides revenues and expenses for these ancillary businesses for the years ended October 31, 2020, 2019, and 2018 (amounts in thousands):
+Added: 2020 2019 2018
+Added: Revenues $ 118,855 $ 150,114 $ 158,051
+Added: Expenses $ 106,285 $ 132,823 $ 132,359
+Added: Other income $ 12,970 $ 36,277 $ —
+Added: In fiscal 2020, we sold one of our golf club properties to a third party for $ 15.6 million and recognized a gain of $ 9.1 million.
+Added: In addition, we recognized a previously deferred gain of $ 3.8 million related to the sale of a golf club property from fiscal 2019.
In fiscal 2019, we sold seven of our golf club properties to third parties for $ 64.3 million and we recognized a gain of $ 35.1 million during the year ended October 31, 2019 as a result of these sales.
1 unchanged sentence
In addition, in fiscal 2018, we recognized a $ 3.5 million write-down of a commercial property operated by Toll Brothers Apartment Living, which is included in income from ancillary businesses above.
−Removed: The table below provides revenues and expenses recognized from land sales for the years ended October 31, 2018 , and 2017 (amounts in thousands):
−Removed: Deferred gains recognized
+Added: The table below provides revenues and expenses recognized from land sales for the year ended October 31, 2018 (amounts in thousands):
+Added: Revenue $ 134,327
+Added: Expense 127,996
Land sale revenues for the year ended October 31, 2018 included $ 80.3 million related to sale transactions with four Rental Property Joint Ventures in which we have interests ranging from 25 % to 50 %.
2 unchanged sentences
We will recognize the deferred gain into income as the guarantees provided expire.
−Removed: Land sale revenues for the year ended October 31, 2017 included $ 257.8 million related to sale transactions with two Home Building Joint Ventures and a Rental Property Joint Venture in which we have interests ranging from 20 % to 25 % .
−Removed: No gain or loss was realized on the sales related to the Home Building Joint Ventures.
−Removed: The deferred gains recognized in the fiscal 2017 period relate to the sale of a property in fiscal 2015 to a Home Building Joint Venture in which we had a 25 % interest.
−Removed: Due to our continued involvement in this unconsolidated entity through our ownership interest and guarantees provided on the entity’s debt, we deferred the $ 9.3 million gain realized on the sale.
−Removed: We recognized the gain as units were sold to the ultimate home buyers, which is included in deferred gains recognized above.
−Removed: In the fourth quarter of fiscal 2017, we purchased the remaining inventory from this Home Building Joint Venture.
−Removed: The remaining unamortized deferred gain was used to reduce the basis of the inventory acquired.
See Note 4, “Investments in Unconsolidated Entities,” for more information on these transactions.
1 unchanged sentence
The table below summarizes revenue and income (loss) before income taxes for our segments for each of the fiscal years ended October 31, 2020, 2019, and 2018 (amounts in thousands).
−Removed: Income (loss) before income taxes
+Added: In the first quarter of fiscal 2020, we made certain changes to our Traditional Home Building regional management structure and realigned certain of the states falling among our five geographic segments.
+Added: Amounts for fiscal 2019 and 2018 have been restated to reflect this change.
+Added: Revenue Income (loss) before income taxes
+Added: 2020 2019 2018 2020 2019 2018
+Added: (Restated) (Restated) (Restated) (Restated)
Traditional Home Building:
+Added: North $ 1,364,750 $ 1,484,430 $ 1,517,917 $ 57,826 $ 81,350 $ 98,233
+Added: Mid-Atlantic 845,597 804,342 775,676 50,621 50,737 59,254
+Added: South 1,041,204 991,915 868,580 108,399 106,082 99,920
+Added: Mountain 1,535,757 1,130,874 1,126,580 167,687 112,979 136,163
+Added: Pacific 2,029,851 2,416,629 2,533,506 352,831 509,760 571,353
Traditional Home Building 6,817,159 6,828,190 6,822,259 737,364 860,908 964,923
+Added: City Living 120,946 253,188 320,999 29,679 70,133 78,149
Corporate and other ( 748 ) ( 999 ) ( 180,142 ) ( 143,871 ) ( 109,156 )
−Removed: Total home sales revenue
−Removed: Land sales revenue
−Removed: Total revenue
+Added: 6,937,357 7,080,379 7,143,258 586,901 787,170 933,916
+Added: Land sales and other revenue 140,302 143,587 —
+Added: Total $ 7,077,659 $ 7,223,966 $ 7,143,258 $ 586,901 $ 787,170 $ 933,916
“Corporate and other” is comprised principally of general corporate expenses such as the offices of our executive officers;
5 unchanged sentences
Traditional Home Building:
+Added: North $ 1,427,523 $ 1,487,012
+Added: Mid-Atlantic 918,641 854,470
+Added: South 1,176,962 1,165,974
+Added: Mountain 1,961,348 1,769,649
+Added: Pacific 2,226,685 2,627,417
Traditional Home Building 7,711,159 7,904,522
+Added: City Living 539,750 529,507
Corporate and other 2,814,824 2,394,109
+Added: $ 11,065,733 $ 10,828,138
“Corporate and other” is comprised principally of cash and cash equivalents, restricted cash, income tax receivable, investments in our Rental Property Joint Ventures, expected recoveries from insurance carriers and suppliers, our Gibraltar investments and operations, manufacturing facilities, and our mortgage and title subsidiaries.
Inventory for each of our segments, as of the dates indicated, is shown in the table below (amounts in thousands):
−Removed: Land controlled for future communities
−Removed: Land owned for future communities
−Removed: Operating communities
+Added: Land controlled for future communities Land owned for future communities Operating communities Total
Balances at October 31, 2020
Traditional Home Building:
+Added: North $ 40,753 $ 155,737 $ 1,140,833 $ 1,337,323
+Added: Mid-Atlantic 31,572 142,196 647,481 821,249
+Added: South 13,964 122,671 847,360 983,995
+Added: Mountain 8,811 38,370 1,840,830 1,888,011
+Added: Pacific 128,425 379,916 1,656,682 2,165,023
Traditional Home Building 223,525 838,890 6,133,186 7,195,601
−Removed: Balances at October 31, 2018
+Added: City Living — 197,953 265,352 463,305
+Added: $ 223,525 $ 1,036,843 $ 6,398,538 $ 7,658,906
+Added: Balances at October 31, 2019 (Restated)
Traditional Home Building:
+Added: North $ 32,712 $ 99,947 $ 1,233,234 $ 1,365,893
+Added: Mid-Atlantic 50,534 76,682 705,763 832,979
+Added: South 10,326 118,830 845,590 974,746
+Added: Mountain 18,973 34,165 1,651,792 1,704,930
+Added: Pacific 70,384 353,186 2,115,531 2,539,101
Traditional Home Building 182,929 682,810 6,551,910 7,417,649
+Added: City Living — 185,391 270,008 455,399
+Added: $ 182,929 $ 868,201 $ 6,821,918 $ 7,873,048
The amounts we have provided for inventory impairment charges and the expensing of costs that we believed not to be recoverable for each of our segments, for the years ended October 31, 2020, 2019, and 2018, are shown in the table below (amounts in thousands):
+Added: 2020 2019 2018
+Added: (Restated) (Restated)
Traditional Home Building:
+Added: North $ 28,352 $ 25,472 $ 20,675
+Added: Mid-Atlantic 17,905 1,535 11,839
+Added: South 2,869 8,452 720
+Added: Mountain 790 984 176
+Added: Pacific 5,967 1,117 879
Traditional Home Building 55,883 37,560 34,289
+Added: City Living — 4,800 98
Corporate and other — — 769
+Added: $ 55,883 $ 42,360 $ 35,156
The net carrying value of our investments in unconsolidated entities and our equity in earnings (losses) from such investments, for each of our segments, as of the dates indicated, are shown in the table below (amounts in thousands):
−Removed: Investments in unconsolidated entities
−Removed: Equity in earnings (losses) from
+Added: Investments in unconsolidated entities Equity in earnings (losses) from
unconsolidated entities
−Removed: At October 31,
−Removed: Year ended October 31,
+Added: At October 31, Year ended October 31,
+Added: 2020 2019 2020 2019 2018
+Added: (Restated) (Restated) (Restated)
Traditional Home Building:
+Added: Mid-Atlantic $ 33,523 $ 8,525 $ ( 11 ) $ — $ ( 4,000 )
+Added: South 93,734 91,956 14,012 19,098 12,263
+Added: Mountain — — 381 — ( 63 )
+Added: Pacific 433 9,825 1,280 ( 37 ) 2,404
Traditional Home Building 127,690 110,306 15,662 19,061 10,604
+Added: City Living 33,819 60,512 ( 7,674 ) 4,103 6,857
Corporate and other 269,192 195,434 ( 7,040 ) 1,704 67,779
+Added: $ 430,701 $ 366,252 $ 948 $ 24,868 $ 85,240
“Corporate and other” is comprised of our investments in the Rental Property Joint Ventures and the Gibraltar Joint Ventures.
1 unchanged sentence
The following are supplemental disclosures to the Consolidated Statements of Cash Flows for each of the fiscal years ended October 31, 2020, 2019 and 2018 (amounts in thousands):
+Added: 2020 2019 2018
Cash flow information:
4 unchanged sentences
Cost of inventory acquired through seller financing, municipal bonds, or accrued liabilities, net
−Removed: Financed portion of land sale
−Removed: (Increase) decrease in inventory for capitalized interest, our share of earnings, and allocation of basis difference in land purchased from unconsolidated entities
+Added: $ 158,435 $ 213,824 $ 185,633
+Added: Increase in inventory for capitalized interest, our share of earnings, and allocation of basis difference in land purchased from unconsolidated entities $ 215 $ 5,300 $ 1,320
+Added: Increase in receivables, prepaid expenses, and other assets and accrued expenses related to the adoption of ASU 2016-02 $ 122,269 $ — $ —
Reclassification from inventory to property, construction, and office equipment, net due to the adoption of ASC 606
+Added: $ — $ 104,807 $ —
Net decrease in inventory and retained earnings due to the adoption of ASC 606
+Added: $ — $ 8,989 $ —
Net increase in accrued expenses and decrease in retained earnings due to the adoption of ASC 606
+Added: $ — $ 6,541 $ —
Net decrease in investment in unconsolidated entities and retained earnings due to the adoption of ASC 606
+Added: $ — $ 2,457 $ —
Cost of inventory acquired through foreclosure
−Removed: Reclassification of deferred income from inventory to accrued liabilities
+Added: $ — $ — $ 4,609
Cancellation of treasury stock $ — $ 895,517 $ —
Non-controlling interest $ 7,092 $ 38,134 $ 2,801
−Removed: Reclassification of inventory to property, construction, and office equipment
+Added: Reclassification of inventory to property, construction, and office equipment, net $ 16,558 $ — $ —
Decrease (increase) in unrecognized gain in defined benefit plans
+Added: $ 729 $ 4,138 $ ( 3,115 )
Defined benefit plan amendment
−Removed: Deferred tax decrease related to stock-based compensation activity included in additional paid-in capital
+Added: $ 2,600 $ 4,956 $ —
Income tax benefit (expense) recognized in total comprehensive income
+Added: $ 471 $ 2,265 $ ( 1,141 )
Transfer of other assets to inventory, net
+Added: $ — $ 7,100 $ 16,763
+Added: 2020 2019 2018
Transfer of inventory to investment in unconsolidated entities $ 13,690 $ — $ —
−Removed: Transfer of investment in unconsolidated entities to inventory
Transfer of other assets to investment in unconsolidated entities, net
+Added: $ 52,345 $ 44,139 $ 60,971
Reclassification of deferred income from accrued expenses to investment in unconsolidated entities
+Added: $ — $ — $ 5,995
Increase in investments in unconsolidated entities for change in the fair value of debt guarantees
−Removed: Miscellaneous (decreases) increases to investments in unconsolidated entities
+Added: $ 25 $ 928 $ 623
+Added: Miscellaneous increases (decreases) to investments in unconsolidated entities $ 645 $ ( 1,876 ) $ 1,776
Business Acquisitions:
1 unchanged sentence
Liabilities assumed $ 3,505 $ 11,143 $ —
+Added: Cash paid $ 60,349 $ 162,373 $ —
At October 31,
+Added: 2020 2019 2018
Cash, cash equivalents, and restricted cash
1 unchanged sentence
Restricted cash and cash held by our captive title company included in receivables, prepaid expenses, and other assets
+Added: $ 25,660 $ 33,629 $ 34,215
Total cash, cash equivalents, and restricted cash shown in the Consolidated
Statements of Cash Flows $ 1,396,604 $ 1,319,643 $ 1,216,410
−Removed: Supplemental Guarantor Information
−Removed: Our 100 % -owned subsidiary, Toll Brothers Finance Corp.
−Removed: (the “Subsidiary Issuer”), has issued the following Senior Notes (amounts in thousands):
−Removed: Original amount issued and amount outstanding at October 31, 2019
−Removed: 5.875% Senior Notes due February 15, 2022
−Removed: 4.375% Senior Notes due April 15, 2023
−Removed: 5.625% Senior Notes due January 15, 2024
−Removed: 4.875% Senior Notes due November 15, 2025
−Removed: 4.875% Senior Notes due March 15, 2027
−Removed: 4.350% Senior Notes due February 15, 2028
−Removed: 3.80% Senior Notes due November 1, 2029
−Removed: The obligations of the Subsidiary Issuer to pay principal, premiums, if any, and interest are guaranteed jointly and severally on a senior basis by us and substantially all of our 100 % -owned home building subsidiaries (the “Guarantor Subsidiaries”).
−Removed: The guarantees are full and unconditional.
−Removed: Our non-home building subsidiaries and several of our home building subsidiaries (together, the “Nonguarantor Subsidiaries”) do not guarantee the debt.
−Removed: The Subsidiary Issuer generates no operating revenues and does not have any independent operations other than the financing of our other subsidiaries by lending the proceeds from the above-described debt issuances.
−Removed: The indentures under which the Senior Notes were issued provide that any of our subsidiaries that provide a guarantee of the Revolving Credit Facility will guarantee the Senior Notes.
−Removed: The indentures further provide that any Guarantor Subsidiary may be released from its guarantee, so long as (1) no default or event of default exists or would result from release of such guarantee, (2) the Guarantor Subsidiary being released has consolidated net worth of less than 5% of our consolidated net worth as of the end of our most recent fiscal quarter, (3) the Guarantor Subsidiaries released from their guarantees in any fiscal year comprise in the aggregate less than 10% (or 15% if and to the extent necessary to permit the cure of a default) of our consolidated net worth as of the end of our most recent fiscal quarter, (4) such release would not have a material adverse effect on our and our subsidiaries home building business, and (5) the Guarantor Subsidiary is released from its guarantee under the Revolving Credit Facility.
−Removed: If there are no guarantors under the Revolving Credit Facility, all Guarantor Subsidiaries under the indentures will be released from their guarantees.
−Removed: Separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented because management has determined that such disclosures would not be material to investors.
−Removed: Supplemental consolidating financial information of Toll Brothers, Inc., the Subsidiary Issuer, the Guarantor Subsidiaries, the Nonguarantor Subsidiaries, and the eliminations to arrive at Toll Brothers, Inc.
−Removed: on a consolidated basis is presented below ($ amounts in thousands).
−Removed: Consolidating Balance Sheet at October 31, 2019
−Removed: Cash and cash equivalents
−Removed: Property, construction, and office equipment, net
−Removed: Receivables, prepaid expenses, and other assets
−Removed: Mortgage loans held for sale
−Removed: Customer deposits held in escrow
−Removed: Investments in unconsolidated entities
−Removed: Investments in and advances to consolidated entities
−Removed: Income taxes receivable
−Removed: LIABILITIES AND EQUITY
−Removed: Loans payable
−Removed: Mortgage company loan facility
−Removed: Customer deposits
−Removed: Accounts payable
−Removed: Accrued expenses
−Removed: Advances from consolidated entities
−Removed: Income taxes payable
−Removed: Total liabilities
−Removed: Stockholders’ equity
−Removed: Additional paid-in capital
−Removed: Retained earnings (deficit)
−Removed: Treasury stock, at cost
−Removed: Accumulated other comprehensive loss
−Removed: Total stockholders’ equity
−Removed: Noncontrolling interest
−Removed: Consolidating Balance Sheet at October 31, 2018
−Removed: Cash and cash equivalents
−Removed: Property, construction, and office equipment, net
−Removed: Receivables, prepaid expenses, and other assets
−Removed: Mortgage loans held for sale
−Removed: Customer deposits held in escrow
−Removed: Investments in unconsolidated entities
−Removed: Investments in and advances to consolidated entities
−Removed: LIABILITIES AND EQUITY
−Removed: Loans payable
−Removed: Mortgage company loan facility
−Removed: Customer deposits
−Removed: Accounts payable
−Removed: Accrued expenses
−Removed: Advances from consolidated entities
−Removed: Income taxes payable
−Removed: Total liabilities
−Removed: Stockholders’ equity
−Removed: Additional paid-in capital
−Removed: Retained earnings (deficit)
−Removed: Treasury stock, at cost
−Removed: Accumulated other comprehensive loss
−Removed: Total stockholders’ equity
−Removed: Noncontrolling interest
−Removed: Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2019
−Removed: Land sales and other
−Removed: Cost of revenues:
−Removed: Land sales and other
−Removed: Selling, general and administrative
−Removed: Income (loss) from operations
−Removed: Income from unconsolidated entities
−Removed: Other income - net
−Removed: Intercompany interest income
−Removed: Interest expense
−Removed: Income from consolidated subsidiaries
−Removed: Income (loss) before income taxes
−Removed: Income tax provision (benefit)
−Removed: Net income (loss)
−Removed: Other comprehensive income
−Removed: Total comprehensive income (loss)
−Removed: Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2018
−Removed: Cost of revenues
−Removed: Selling, general and administrative
−Removed: Income (loss) from operations
−Removed: Income from unconsolidated entities
−Removed: Other income - net
−Removed: Intercompany interest income
−Removed: Interest expense
−Removed: Income from consolidated subsidiaries
−Removed: Income (loss) before income taxes
−Removed: Income tax provision (benefit)
−Removed: Net income (loss)
−Removed: Other comprehensive income
−Removed: Total comprehensive income (loss)
−Removed: Consolidating Statement of Operations and Comprehensive Income (Loss) for the fiscal year ended October 31, 2017
−Removed: Cost of revenues
−Removed: Selling, general and administrative
−Removed: Income (loss) from operations
−Removed: Income from unconsolidated entities
−Removed: Other income - net
−Removed: Intercompany interest income
−Removed: Interest expense
−Removed: Income from consolidated subsidiaries
−Removed: Income (loss) before income taxes
−Removed: Income tax provision (benefit)
−Removed: Net income (loss)
−Removed: Other comprehensive income
−Removed: Total comprehensive income (loss)
−Removed: Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2019
−Removed: Net cash provided by (used in) operating activities
−Removed: Cash flow provided by (used in) investing activities:
−Removed: Purchase of property and equipment — net
−Removed: Investment in unconsolidated entities
−Removed: Return of investments in unconsolidated entities
−Removed: Investment in distressed loans and foreclosed real estate
−Removed: Return of investments in distressed loans and foreclosed real estate
−Removed: Proceeds from sales of golf club properties and an office building
−Removed: Acquisitions of businesses
−Removed: Investment paid intercompany
−Removed: Intercompany advances
−Removed: Net cash provided by (used in) investing activities
−Removed: Cash flow (used in) provided by financing activities:
−Removed: Proceeds from issuance of senior notes
−Removed: Proceeds from loans payable
−Removed: Debt issuance costs
−Removed: Principal payments of loans payable
−Removed: Redemption of senior notes
−Removed: Proceeds from stock-based benefit plans
−Removed: Purchase of treasury stock
−Removed: Dividends paid
−Removed: Receipts related to noncontrolling interest
−Removed: Investment received intercompany
−Removed: Intercompany advances
−Removed: Net cash (used in) provided by financing activities
−Removed: Net increase in cash, cash equivalents, and restricted cash
−Removed: Cash, cash equivalents, and restricted cash, beginning of period
−Removed: Cash, cash equivalents, and restricted cash, end of period
−Removed: Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2018
−Removed: Net cash provided by (used in) operating activities
−Removed: Cash flow provided by (used in) investing activities:
−Removed: Purchase of property and equipment — net
−Removed: Investment in unconsolidated entities
−Removed: Return of investments in unconsolidated entities
−Removed: Investment in distressed loans and foreclosed real estate
−Removed: Return of investments in distressed loans and foreclosed real estate
−Removed: Intercompany advances
−Removed: Net cash provided by (used in) investing activities
−Removed: Cash flow (used in) provided by financing activities:
−Removed: Proceeds from issuance of senior notes
−Removed: Proceeds from loans payable
−Removed: Debt issuance costs
−Removed: Principal payments of loans payable
−Removed: Proceeds from stock-based benefit plans
−Removed: Purchase of treasury stock
−Removed: Payments related to noncontrolling interest
−Removed: Dividends paid intercompany
−Removed: Dividends paid
−Removed: Intercompany advances
−Removed: Net cash (used in) provided by financing activities
−Removed: Net increase (decrease) in cash, cash equivalents, and restricted cash
−Removed: Cash, cash equivalents, and restricted cash, beginning of period
−Removed: Cash, cash equivalents, and restricted cash, end of period
−Removed: Consolidating Statement of Cash Flows for the fiscal year ended October 31, 2017
−Removed: Net cash provided by (used in) operating activities
−Removed: Cash flow (used in) provided by investing activities:
−Removed: Purchase of property and equipment — net
−Removed: Sale and redemption of marketable securities and restricted investments - net
−Removed: Investment in unconsolidated entities
−Removed: Return of investments in unconsolidated entities
−Removed: Investment in distressed loans and foreclosed real estate
−Removed: Return of investments in distressed loans and foreclosed real estate
−Removed: Acquisition of a business
−Removed: Investment paid intercompany
−Removed: Intercompany advances
−Removed: Net cash (used in) provided by investing activities
−Removed: Cash flow (used in) provided by financing activities:
−Removed: Net proceeds from issuance of senior notes
−Removed: Proceeds from loans payable
−Removed: Debt issuance costs
−Removed: Principal payments of loans payable
−Removed: Redemption of senior notes
−Removed: Proceeds from stock-based benefit plans
−Removed: Purchase of treasury stock
−Removed: Dividends paid
−Removed: Investment received intercompany
−Removed: Intercompany advances
−Removed: Net cash (used in) provided by financing activities
−Removed: Net increase (decrease) in cash, cash equivalents, and restricted cash
−Removed: Cash, cash equivalents, and restricted cash, beginning of period
−Removed: Cash, cash equivalents, and restricted cash, end of period
Summary Consolidated Quarterly Financial Data (Unaudited)
1 unchanged sentence
Three Months Ended
+Added: October 31 July 31 April 30 January 31
+Added: Home sales $ 2,495,974 $ 1,627,812 $ 1,516,234 $ 1,297,337
+Added: Land sales and other $ 49,693 $ 23,677 $ 32,838 $ 34,094
Gross profit:
+Added: Home sales (a) $ 502,079 $ 341,704 $ 295,256 $ 264,215
+Added: Land sales and other $ 4,798 $ 1,418 $ 6,420 $ 1,812
Income before income taxes $ 266,991 $ 151,865 $ 102,113 $ 65,932
−Removed: Earnings per share (a)
+Added: Net income $ 199,317 $ 114,761 $ 75,670 $ 56,876
+Added: Earnings per share (b)
+Added: Basic $ 1.57 $ 0.91 $ 0.59 $ 0.41
+Added: Diluted $ 1.55 $ 0.90 $ 0.59 $ 0.41
Weighted-average number of shares
+Added: Basic 127,310 126,722 128,205 138,145
+Added: Diluted 128,892 127,399 128,809 139,889
+Added: Home sales $ 2,292,044 $ 1,756,970 $ 1,712,057 $ 1,319,308
+Added: Land sales and other $ 86,956 $ 8,721 $ 4,037 $ 43,873
+Added: Home sales (a) $ 478,262 $ 391,653 $ 373,183 $ 303,064
+Added: Land sales and other $ 658 $ 2,489 $ 1,116 $ 9,620
Income before income taxes $ 272,649 $ 186,916 $ 176,159 $ 151,446
−Removed: Earnings per share (a)
+Added: Net income $ 202,315 $ 146,318 $ 129,324 $ 112,050
+Added: Earnings per share (b)
+Added: Basic $ 1.43 $ 1.01 $ 0.88 $ 0.76
+Added: Diluted $ 1.41 $ 1.00 $ 0.87 $ 0.76
Weighted-average number of shares
−Removed: Due to rounding, the sum of the quarterly earnings per share amounts may not equal the reported earnings per share for the year.
+Added: Basic 141,909 144,750 146,622 146,751
+Added: Diluted 143,567 146,275 148,129 148,032
+Added: (a) Effective October 31, 2020, we reclassified sales commissions paid to third-party brokers from home sales cost of revenues to selling, general and administrative expense.
+Added: Prior periods have been reclassified to conform to the 2020 presentation.
+Added: (b) Due to rounding, the sum of the quarterly earnings per share amounts may not equal the reported earnings per share for the year.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.